Free Markets, Free People

Daily Archives: July 21, 2011


Blunt talk from Bernie Marcus about Obama and economy

This has been a week for CEOs speaking out against the Obama administration.   This time it’s someone I actually admire.  Bernie Marcus, co-founder and CEO of Home Depot, has given an interview to Investors Business Daily and it is a pretty frank denunciation of the policies this administration has followed since coming into power.  It’s one of the things I admire about Marcus – he pulls no punches:

IBD: What’s the single biggest impediment to job growth today?

Marcus: The U.S. government. Having built a small business into a big one, I can tell you that today the impediments that the government imposes are impossible to deal with. Home Depot would never have succeeded if we’d tried to start it today. Every day you see rules and regulations from a group of Washington bureaucrats who know nothing about running a business. And I mean every day. It’s become stifling.

If you’re a small businessman, the only way to deal with it is to work harder, put in more hours, and let people go. When you consider that something like 70% of the American people work for small businesses, you are talking about a big economic impact.

Remember that Home Depot was launched during the then worst recession in 40 years and Marcus took it public 3 years later.   He’s built a business from the ground up and created thousands of jobs.   He actually understands what it takes.  He also clearly understands what will kill it. 

Here is one of the key points one has to understand about this administration and Marcus is on it:

IBD: President Obama has promised to streamline and eliminate regulations. What’s your take?

Marcus: His speeches are wonderful. His output is absolutely, incredibly bad. As he speaks about cutting out regulations, they are now producing thousands of pages of new ones. With just ObamaCare by itself, you have a 2,000 page bill that’s probably going end up being 150,000 pages of regulations.

We’ve been warning you from the beginning  to pay no attention to the man’s words and instead scrutinize his deeds.  Often they are the opposite of what he has said he’d do.  For example:

In January, however, he issued an executive order requiring federal agencies to review their regulations, looking for rules that are inefficient or outdated. His aim, he explained on The Wall Street Journal‘s op-ed page, was to "root out regulations that conflict, that are not worth the cost, or that are just plain dumb."

But there’s a catch: All those new regulations Obama put in place will not be subject to review. Just days after the president issued his order, an anonymous administration official conceded to the Journal that "new regulations will not be priorities for the look back." Meanwhile, more than a dozen federal bureaucracies—including the Securities and Exchange Commission, the Federal Communications Commission, and the National Labor Relations Board—are exempt from the review because they are independent agencies.

That’s another in a long list of many examples of him saying one thing and doing something else.  His speeches are politically driven and designed to give him political cover while his actions are ideologically driven and part of an agenda.

Marcus is then asked about the debt talks:

IBD: Washington has been consumed with debt talks. Is this the right focus now?

Marcus: They are all tied together. If we don’t lower spending and if we don’t deal with paying down the debt, we are going to have to raise taxes. Even brain-dead economists understand that when you raise taxes, you cost jobs.

With all the talk about tax increases it means we have a lot of zombie politicians who haven’t a clue, unfortunately.  I mean how difficult is this?   When you raise taxes in a recession, many businesses are going to have to make a decision aren’t they?  Use the money to pay the tax or hire.   Any guess which will win out?  You can’t go to jail for not hiring.

Finally, and this one is devastating in its forthrightness, Marcus is asked what he’d tell Obama if he could sit down with him and talk about job creation.   His answer is a classic:

IBD: If you could sit down with Obama and talk to him about job creation, what would you say?

Marcus: I’m not sure Obama would understand anything that I’d say, because he’s never really worked a day outside the political or legal area. He doesn’t know how to make a payroll, he doesn’t understand the problems businesses face. I would try to explain that the plight of the businessman is very reactive to Washington. As Washington piles on regulations and mandates, the impact is tremendous. I don’t think he’s a bad guy. I just think he has no knowledge of this.

One can only wish Contessa Brewer was around to ask about economic degrees.  Marcus is right about Obama’s lack of knowledge.  He’s surrounded by a lack of knowledge in this area if his policies are any indication.  As has been pointed out repeatedly, a president who was really concerned about jobs would be green lighting oil and gas exploration as fast as he could make it happen.  And he’s certainly made speeches about doing just that, but as usual, his actions betray his words.

Marcus has got a bead on this administration and this president.  As long as they are in power and continue with the course of their regulatory policies,  the economic malaise that has settled over this country will continue.  

~McQ

Twitter: @McQandO


I come to bury Caesar, not praise him

Conor Friedersdorf takes a look at an essay in Esquire that is simply astounding in its delusional aspects.  It is by Stephen Marche who seems to hav come untethered from reality.  The essay’s base question is:

"Before the policy choices have to be weighed and the hard decisions have to be made, can we just take a month or two to contemplate him the way we might contemplate a painting by Vermeer or a guitar lick by the early-seventies Rolling Stones or a Peyton Manning pass or any other astounding, ecstatic human achievement?" he writes. "Because twenty years from now, we’re going to look back on this time as a glorious idyll in American politics, with a confident, intelligent, fascinating president riding the surge of his prodigious talents from triumph to triumph."

“Glorious idyll in American politics”?  Where on earth has this man been for the past 3 years?  If this is glorious wouldn’t you hate to see terrible?

And correct me if I’m wrong, but I’ve seen very little to indicate this president was the least bit fascinating or confident.  And while he may be intelligent, he’s certainly not led during his presidency.  In fact, if anything he’s been led.  And led badly. 

Friedersdorf correctly points out that Obama isn’t the first president to be so unabashedly, obsequiously and shamelessly worshiped, nor is that only a trait of the left.  But you have to wonder at what level Marche must set his own internal bar to find himself able to write that paragraph without upchucking on his keyboard.

Luckily we find out fairly quickly where he sets the bar:

"The turning point came that glorious week in the spring when, in the space of a few days, he released his long-form birth certificate, humiliated Donald Trump at the White House Correspondents’ Dinner, and assassinated Osama bin Laden," Marche writes. "The effortlessness of that political triptych — three linked masterpieces demonstrating his total command over intellectual argument, low comedy, and the spectacle of political violence — was so overwhelmingly impressive that it made political geniuses of the recent past like Reagan and Clinton seem ham-fisted."

Good lord … those are “triumphs”?  A “turning point”.  Highlights of his presidency?   He released a paper, ordered a monster assassinated (and had no real choice to do otherwise) and humiliated a political opponent who is roundly recognized by all as a dufus.

Wow.  Bow down, all ye mere mortals.

Friedersdorf:

This is how little we now expect of our leaders. A man showed his birth certificate to scattered kooks, and the release of that bureaucratic form is deemed "a masterpiece." As is humiliating Donald Trump — a man who is perhaps the easiest to mock of all the reality TV stars!

Exactly.  So how does someone find those events so compelling and enthralling that he writes an essay extolling them?  Well I’m as clueless as you are on that front.   But to be honest, when it comes to this president and his sycophants, nothing much surprises me any more (see Nobel Peace Prize).  Well, almost nothing:

"In 2011, it is possible to be a levelheaded, warmhearted, cold-blooded killer who can crack a joke and write a book for his daughters. It is possible to be many things at once. And even more miraculous, it is possible for that man to be the president of the United States. Barack Obama is developing into what Hegel called a ‘world-historical soul,’ an embodiment of the spirit of the times. He is what we hope we can be."

You have to check numerous times while reading dreck like this to be sure that you haven’t really linked to the Onion.  You keep peeking at different parts of the page hoping you finally spot that which will let you know this is a joke piece.  But you never find it.

Is “a levelheaded, warmhearted, cold-blooded killer who can crack a joke and write a book for his daughters” really the “embodiment of the spirit of the times” and what “we hope we can be”?  Really?  Or does it sound like a character from a Brad Thor novel?

Friedersdorf does a credible job of destroying Marche’s premise with facts.  A terrible thing in the fantasy world Marche has constructed.  Friedersdorf makes it clear that Obama is just another of many ordinary politicians that have come to power and we shouldn’t glorify him (or them).  He ends his fisking with:

This is no time to enjoy Obama, as the Esquire writer asserts, or to treat him deferentially, as if he has earned our trust.

In all administrations, Congress is a necessary check, as is the Fourth Estate, as are the people. Our current Congress is failing spectacularly. It is filled with Republicans who’ve no idea how to govern and Democrats whose civil liberties bona fides evaporated as soon as their party came into power.

Thus a greater burden is imposed on the media and the people. To cast Obama as the living embodiment of the zeitgeist is as absurd as imagining him to be a shadow outsider who hates America. He is a normal politician, one whose behavior in office often times conflicts with the ideals that put him there. What we ought to do, insofar as it’s possible, is be skeptical, vigilant and demand better.

Although Friedersdorf might disagree with me, I contend that the media too is “failing spectacularly” – at least the establishment media.  And the Esquire piece is simply the visible tip of a very large media iceberg that first came to the public’s attention during the 2008 presidential election when many in the media gave up all pretense of objectivity or being unbiased.   It was particularly shameful, and for the most part, hasn’t changed. It is one of the reasons someone like Marche feels comfortable penning this absurdly silly essay.  What was left of the media’s credibility went the way of the Dodo after that performance and they haven’t yet regained it.

That’s left it up to the people as the final check.  The people, who are now routinely attacked and dissed by both politicians and the elite media.  The one “check” on this runaway freight train of government power is the most powerless and confused.  If one want’s a reason for the 3 past wave elections we’ve had, the confusion and dissatisfaction of the electorate is the answer.   And that hasn’t changed a bit, despite Marche’s paean to his political god.

~McQ

Twitter: @McQandO


Why aren’t we seeing a jobs recovery? Maybe it’s ObamaCare’s fault

So you’re wondering why the “recovery” stalled?  Well we all know that correlation is not causation, but this sure looks suspicious doesn’t it?

 

Heritage-Chart

 

So looking at the chart, we see job growth starting to pick up at an average of 67,000 a month.  Not earth shattering, but much better than the average (ten times less) after the passage of ObamaCare.

Why, people wonder, would something like that happen with the passage of a bill that is supposed to improve health care and make it cheaper to boot?  Wouldn’t that encourage people to hire and expand.

Well … no.  Because we had to pass the bill to find out what was in the bill.  And what we’ve found out is none to pleasing.

As Tina Korb points out at Hot Air:

As the report states, correlation cannot prove causation — but the change in course is statistically measurable and testing reveals a structural break between April and May of 2010. Moreover, small-business owners have said Obamacare is a deterrent to hiring. Take Scott Womack, the owner of 12 IHOP restaurants in Indiana and Ohio, as just one example. Before Obamacare became law, he had development plans in Ohio. Now, he’s worried he won’t be able to carry out his original plans unless Obamacare is repealed. Those restaurants he planned to open would provide jobs not only for his future employees, but also for everyone involved in the construction of the restaurant buildings themselves.

But … and you knew there was one, this threw a wrench into everyone’s works.  Why?  The Heritage Foundation points out 3 reasons businesses are discouraged from doing so by the law:

  • Businesses with fewer than 50 workers have a strong incentive to maintain this size, which allows them to avoid the mandate to provide government-approved health coverage or face a penalty;
  • Businesses with more than 50 workers will see their costs for health coverage rise—they must purchase more expensive government-approved insurance or pay a penalty; and
  • Employers face considerable uncertainty about what constitutes qualifying health coverage and what it will cost. They also do not know what the health care market or their health care costs will look like in four years. This makes planning for the future difficult.

Korb provides the link between what that law is doing and the current debt and deficit talks going on in Congress:

The Heritage report recommends repeal — and comes as a welcome reminder that the health care law can’t be ignored as the president and Congress attempt to address the debt and deficit or as the nation attempts to right the still-struggling economy. Nor can it be ignored in the upcoming presidential election. Likely U.S. voters have said jobs and the economy are their No. 1 issue. That means the repeal of Obamacare should be a top priority, too.

Couldn’t agree more.  I’ve seen any number of people saying “yeah, repeal it” but then asking “what are you going to replace it with”?

Uh, personal responsibility?  How about we try that for a change?   It is each citizen’s job to care for themselves and do (and pay for) those things necessary to see that they aren’t a burden on the rest of the citizenry.

What a concept, huh?

~McQ

Twitter: @McQandO


Bill Gates lays out ground truth on energy subsidies

I don’t think I have to remind regular readers here that I’m not a fan of subsidies – any kind of subsidies.  That being said, and the fact that despite my desires, we seem bound and determined – or at least our politicians are – to subsidize “green energy”.

Gates lays it out for our big government greenies in a way that at least would send subsidies to the right place vs. how they’re being planned as we speak.

There’s the “right way” (again disclaimer in place) and, as Gates puts it, the cute way (aka the “wrong way”):

If you’re going for cuteness, the stuff in the home is the place to go. It’s really kind of cool to have solar panels on your roof. But if you’re really interested in the energy problem, it’s those big things in the desert….despite often-heard claims to the contrary, ethanol has nothing to do with reducing CO2; it’s just a form of farm subsidy. If you’re using first-class land for biofuels, then you’re competing with the growing of food. And so you’re actually spiking food prices by moving energy production into agriculture. For rich people, this is OK. For poor people, this is a real problem, because their food budget is an extremely high percentage of their income. As we’re pushing these things, poor people are driven from having adequate food to not having adequate food…

You could have the government throw money at the most politically favored guy in the country to go build a battery factory. And there are billions of dollars that have been assigned to that waste…. I think people deeply underestimate what a huge problem this day-night issue is if you’re trying to design an energy system involving solar technology that’s more than just a hobby. You know, the sun shines during the day, and people turn their air conditioners on during the day, so you can catch some of that peaking load, particularly if you get enough subsidies. It’s cute, you know, it’s nice. But the economics are so, so far from making sense. And yet that’s where subsidies are going now. We’re putting 90 percent of the subsidies in deployment—this is true in Europe and the United States—not in R&D. And so unfortunately you get technologies that, no matter how much of them you buy, there’s no path to being economical.

So he’s right – it’s R&D where money should be going, not picking winners and losers all while disrupting markets and punishing poor people because government is economically ignorant of markets.

The unfortunate part about the Gates statement is it accepts subsidies as a good thing even if misdirected.

Apparently how he gained his billions was because government somehow subsidized it in some ways.  No markets.  No venture capitalists seeing a good idea, visualizing a market for it and funding the research necessary to cash in on it.  

Nope, gotta have subsidies and all the negative effects it brings to the markets I guess.

Anyway, he’s right about the meta-picture – if we want to get serious about “green energy” then R&D is where the game is now.   Not “deployment” as Gates calls it – the stuff is not ready for prime time.

Oh, and government?  Get out of the freakin’ way, will you?  The government is so scared that someone will make billions off of a good idea in a free market that they’ve invented this myth that the job is just too big for private markets.

Nonsense.

Get out of the way.

~McQ

Twitter: @McQandO

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