American Industry: Saddle Up
Who needs government? Here’s how we fix this economic mess ourselves. (This is part two of a two-part series. Read part one here.)
Fourth, don’t work for failures. If politicians “rescue” your company and put themselves on the board, go find another job as quickly as you can and take your best people with you. Nobody inside or outside the firm will respect your contributions if you stay. If you somehow rise to CEO, you’re just another government employee with less clout than the average Hillary staffer. Was it worth it?
Have no illusions — these bailout firms will fail, fail, and fail again. You don’t want that on your resume, and you don’t want to build a professional network out of people who settle for failure. Beware of even having these firms as a customer, as decisions will not be made on price or product quality, but on one’s ability to help a politician secure re-election.
Fifth, move — or at least consider it. Its no shock that politicians in eternal denial on economic issues also don’t understand that investors and employees have choices and that hundreds of locales are competing for us. Now is the time to hammer that reality home.
One single press release announcing hundreds of job transfers down south or overseas in response to the latest blunder in the name of social justice will get more attention than a hundred speeches. Less jobs means less money for the workforce, the community, and the tax collectors, and that can’t be ignored. Give your best employees relocation and let the rest suffer the consequences of higher taxes and more regulation.
And if you do move overseas, don’t let anyone call you a Benedict Arnold. We have responsibilities to our investors, our customers, and our own families, and it’s a false patriotism that demands that we shirk those duties. Be open and honest as to why the transfer is happening, and what our elected officials could have done, and could still do, to help keep American exceptionalism at home rather than drive it elsewhere.
Finally, keep building. Let others spend their days trading T-bills and munis and currency swaps and shares in state-owned enterprises as the prices bounce around in response to the latest speech, Fed minutes, or legislative roll call. That’s a sucker’s game for those who think they are insiders, run by those who actually are.
We, more than anyone else, understand the real, productive economy, which is the efficient delivery of products and services to the people who want and need them. Despite the greens’ efforts to drag us back to the false utopia of deprivation, billions of people on this planet want more housing, food, clothing, transportation, health care, and education for their families and are willing to work hard to get it, and the most productive live right here in America.
Now maybe it is destiny for exceptionalism to bloom elsewhere, and for people like us to take our wealth, experience, entrepreneurship, and values to places like Abu Dhabi, Hong Kong, Mumbai, Colón, Santiago, Shenzen, Singapore, and Zurich and build anew. America becomes a nice place to visit with a few healthy industries, but just a shadow of its former self. Some say that day has already come, and that the financial crisis is simply the reckoning for our past arrogance and independence.
Not so fast. The American people not only deserve better than that, they are better than that. Show them that their incompetent government is standing in the way of prosperity, and they will obliterate it without a second thought. Ask Gray Davis.
But even if the citizenry remains convinced that they should tack on an extra 80-150 percent to the pre-tax cost of the American dream to fund a failed welfare state and corpulent public sector, efficiency and productivity will still matter. They always matter, and that’s why we need to keep building.
The laws of a financially irresponsible government will be no match for the laws of economics. Of that there can be no doubt. Ultimately the question for us both as individuals and as a group is whether we have the moral stamina to hasten its passing and then to get to work cleaning up the mess.
It’s not a burden we should wish for ourselves, yet others in this country’s great history have faced burdens far weightier. Thanks to their efforts, we have all of the tools at our disposal that we need — the Constitution, the Bill of Rights, and the political process.
We are the cavalry, and it’s time to saddle up and rescue the country.
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Tristan Yates is a management and investment analyst and the author of Enhanced Indexing Strategies. His articles and research have appeared in the Wall Street Journal, Yahoo! Finance, and many other publications.
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17 Comments
1. alex:Well written and intentioned article;
1) the American economy will not recover until the Federal Reserve is placed on a very short Leash, under intense and fully transparent scrutiny.
2) The American Dollar is under intense international attack by Europe, Russia and China. The Euro and Chinese yuan seek to displace the USD as settlement currency. Russia just wants to see the USD fail.
Our Government has historically allowed the situation to worsen and collapse until it is forced to make a decision. We enable this by acting in partisan manner and allowing govt to point the finger at the other side of the aisle. We must stop this behavoir, the legislative branch must be held accountable foy refusing to act, the executive branch must be held for acting in irresponsible manner.
To rebuild the USD, see note 1), in addition the US must stop exporting trade products that are heavily subsidized ( mainly weaponry) and support exports that do not require massive subsidies. So far our biggest non subsidized exports are franchise companies to China such as KFC and Starbucks, this is ridiculous.
I left the USA in 2005 for greener pastures in Asia. Until last year my friends and associates in Business thought i was crazy. Now they want to know how they can join me, these are mainly self employed individuals that own companies with 20 – 50 employees. The USA is losing its backbone; small self employed families. This alone should ignite US govt to take a hard look at itself.
Jul 13, 2009 - 4:24 am 2. uburoisc:The Alt-A and Option ARM loans are about to start blowing up, and, when they do, it will make the sub-prime look like small potatoes. The financial corruption goes far deeper than ACORN and sub-prime, and the Feds cannot possibly cover the losses the banks have on their off-balance sheet accounts. And I do not see a single indication that anyone is going to be held to account for the fraud that went on over the past decade and now threatens to drown the whole financial system. It’s going to get worse.
Jul 13, 2009 - 7:16 am 3. "progressive"watch:Yates has a good plan and should be tried. The big obstacle is that lots of big business are in cahoots with the government. They are in it for boodles for themselves. Forget the economy,forget capitalism,forget the country.
Jul 13, 2009 - 9:11 am 4. Avitar:First, the Private sector needs to standup and defend itself. How many shows have you watched where the bad guy on “Law and Order” or “CSI” was doing human drug trials on unsuspecting “poor” people? Has that ever happen outside of a liberal administration? Pro-life administrations simply will not stand for it and Parasitical companies should instruct their media buyers that they are unemployed if they sponsor a network that structure their shows around the fevered fantasy desires of a leftist.
This summer’s new show “Royal Pains” while very good attacks a straw man culture of “the Hamptons rich” which does not exist. It encourages the robbery by Civil Servants of the “ideal rich.” When the “ideal rich” are robed throughout history it is always the working poor who wind up without a paycheck.
The opposite is also missing. Even in the leftist crazed post-Watergate days of the Carter administration, there was some humor about the irrational Government employees. “Barney Miller,” “Green Acres,” “Carter Country” all deliberately minded the irrational bureaucrat on a regular basis. Who does Government employee humor today?
Jul 13, 2009 - 10:48 am 5. Anonymous:If they succeed in raising the max aggregate tax rate to 70%, their stated intent, then there will be mass business closures…not failures…closures. This happened during the depression. Yates’ plan has merit, but if the tax rate is outlandish, then it won’t happen. Prepare to form the ‘Turtle.’
Jul 13, 2009 - 10:49 am 6. xqqme:“When plunder becomes a way of life for a group of men living together in society, they create for themselves, in the course of time, a legal system that authorizes it and a moral code that glorifies it.”
- Frédéric Bastiat
We’ve reached the tipping point. The looters are large and in charge. Small business cannot be part of ‘central planning’ because they are too independent. Raising taxes beyond sustainable measures will do the trick by eliminating the competition of Corporations that may come from some upstart.
Jul 13, 2009 - 11:01 am 7. Dissenter:Large Corporations do best with Big Government. Goldman Sachs upgraded to BUY!
Well-written article, but I must disagree.
As long as there are those willing to fight against the plunderers, they will be aiding the plunderers’ cause.
Those that loot from the public (the government) cannot survive without those who produce. The only way to shut down the looters is to cease to participate, and let the system fail.
Then we can start anew.
Jul 13, 2009 - 11:20 am 8. karlinsync:Right on. It is long over due that people need to start lashing out at minority groups dictating to the majority. This country is in a free fall because our Congress leaders refuse to lead for all of America! The environmentalist are taking our land. We buy oil from hostile countries when our US reserves would make us less dependent. It is just an insane Democratic agenda to kiss up to the minority. Look at California as your guide.
Jul 13, 2009 - 12:45 pm 9. Gozer the Carpathian:There’s an interesting thought. A kind of reverse boycot if you will. All of the businesses who are fed up with all of this crap just close. One week would probably be enough. But you get enough people just closing up shop and saying, “I’m not serving anyone I’m closed.” People wake up and realize that, “Hey those evil business people are where I get everything I have!”
Could you imagine the chaos that would cause? No way it’d happen but it’s an interesting idea.
Jul 13, 2009 - 6:01 pm 10. Brian:Good article, I bailed out of CA about 2 years ago because while I loved the State which had always been my home I could see where it was heading. I only wish I had sold the property there at a better time, now I am still linked to the “Golden State” through their ability to tax my property. But at least I got there hands off my income and sales tax revenue.
Jul 13, 2009 - 6:22 pm 11. Jimbo:I know why Alex moved to Asia, I spend a good chunk of time for work there as well and I can tell you competition is alive and well here and its amazing what it can produce. Asia will soon beat the US at its own game by a health use of capitalism, while the US takes the course through socialism. In addition taxation where I am at in Asia is very low. Taxation is just a modern method of turning citizens into slaves for the government.
One good way to force the government to avoid socialism is to boycott GM and Chrysler. Americans need to understand that it is wrong to force taxpayers to subsidize loser companies with overpaid union workers. One very easy patriotic act any American can do is to swear off buying any GM or Chrysler products until they are denationalized. These companies desperately need to increase their market share in order to become profitable enough enable the govermnet to sell their shares. You can bet that the Treasury department will go all out to use hidden, unfair subsidies to make GM profitable at the expense of their more efficient competition. We can’t let that happen. The best way to crush our arrogant bureaucrats is to boycott “Government Motors”!
Jul 13, 2009 - 6:43 pm 12. Eric:I’ve often complained that business, with the exception of small business, doesn’t take a more active role in politics. I used to work for FedEx and Fred Smith wojld often complain loudly about the mess Washington made of the economy but Fred would NEVER talk to FedEx employees and customers about the impact of anti-business legislation. If I were Fred I would have actively talked to my employees about the negative impact an Obama administration would have on FedEx and by extension their jobs.
Jul 13, 2009 - 8:08 pm 13. Brian:Instead of quietly retreating offshore, stalling growth, laying people off or sleeping with the enemy (GE, Duke Energy) business needs to aggressively confront the socialist politicians who don’t seem to have any clue as to where the money for their social programs comes from. I simply cannot understand how a company’s employees vote for politicians whose agendas are harmful to their employers. Heck, just look at what the UAW did to Detroit.
GM has some very advanced state of the art plants which are as good or better than anything their competition has, the problem is the plants are located outside of the USA, because to construct such a plant within the US would put lots of UAW workers out work. Dont assume that the GM management doesnt know how to compete, the problem is they are trying to compete when their hands are tied. GM hasnt been allowed by the government to run their plants autonomously for decades.
Jul 13, 2009 - 8:47 pm 14. Kay:The media reports that GM produces cars no one wants is lunacy. The are the 2nd largest producer of vehicles in the world last I checked… Toyota only just recently overtook them.
Brian, that’s the power of fleet sales…Even Lyons of FoMoCo congratulated this achievement by GM (while Ford was downsizing their company for inevitable recession 2 years ago)-for being the number one manufacturer of rental cars in the world…
Jul 14, 2009 - 8:06 am 15. Old Soldier:Eric – Government is the biggest customer in the country. Most business leaders aren’t brave enough or stupid enough to take them on.
Jul 14, 2009 - 10:26 am 16. Clayton E. Cramer:The problem is that most businessmen, at least once they get above a certain size, are pretty committed leftists (or more accurately, fascists in Birkenstocks).
Jul 15, 2009 - 8:05 am 17. Zeke:“The greens’ efforts to drag us back to the false utopia of deprivation”
Well put.
Jul 16, 2009 - 8:33 pm