Free Markets, Free People

Ken Langone


Stop the war on business

That’s the central theme of a Ken Langone op/ed in the Wall Street Journal. Langone is a co-founder of Home Depot who gives Obama a lecture he’s long deserved. He does a good job of summarizing the absurd rhetoric used by Obama and his administration and the attitude they project that has done nothing to help and everything to hurt the recovery:

Your insistence that your policies are necessary and beneficial to business is utterly at odds with what you and your administration are saying elsewhere. You pick a fight with the U.S. Chamber of Commerce, accusing it of using foreign money to influence congressional elections, something the chamber adamantly denies. Your U.S. attorney in New York, Preet Bahrara, compares investment firms to Mexican drug cartels and says he wants the power to wiretap Wall Street when he sees fit. And you drew guffaws of approving laughter with your car-wreck metaphor, recently telling a crowd that those who differ with your approach are "standing up on the road, sipping a Slurpee" while you are "shoving" and "sweating" to fix the broken-down jalopy of state.

That short-sighted wavering—between condescending encouragement one day and hostile disparagement the next—creates uncertainty that, as any investor could tell you, causes economic paralysis. That’s because no one can tell what to expect next.

Again we confront the difference between a politician in a permanent campaign and a leader.  And we see the result.

Obama seems mystified by the role of the president.  He seems not to understand that leaders don’t use the old, divisive and politically charged rhetoric of the campaign trail, but instead have the job of doing (and saying) what is necessary to move things in a positive direction.  That has not been something Obama has done at all when it comes to business.

There’s another point Langone made that is worth featuring:

A little more than 30 years ago, Bernie Marcus, Arthur Blank, Pat Farrah and I got together and founded The Home Depot. Our dream was to create (memo to DNC activists: that’s build, not take or coerce) a new kind of home-improvement center catering to do-it-yourselfers. The concept was to have a wide assortment, a high level of service, and the lowest pricing possible.

We opened the front door in 1979, also a time of severe economic slowdown. Yet today, Home Depot is staffed by more than 325,000 dedicated, well-trained, and highly motivated people offering outstanding service and knowledge to millions of consumers.

If we tried to start Home Depot today, under the kind of onerous regulatory controls that you have advocated, it’s a stone cold certainty that our business would never get off the ground, much less thrive. Rules against providing stock options would have prevented us from incentivizing worthy employees in the start-up phase—never mind the incredibly high cost of regulatory compliance overall and mandatory health insurance. Still worse are the ever-rapacious trial lawyers.

Regulations, taxes, compliance and mandates cost businesses billions each year.  That’s billions that aren’t spent on employees, customers, expansion or growth.  And it is especially stupid to increase all of those in a recession – yet that’s precisely what is going on now.  And it keeps the market unsettled and at least defers or may in fact kill any possible action by businesses which may benefit the overall economy.

Obama’s actions and rhetoric are a case study of someone who doesn’t understand his job, doesn’t understand the power of the words he utters (because he doesn’t understand his job) and has been very irresponsible with his rhetoric at a time when the damage that rhetoric can do are compounded by the situation (recession).

OJT is not something a president should be doing – especially in a recession.  And for the supposed “smartest guy in the room”, he sure seems like a slow learner when it comes to his job and the requirements of leadership.

~McQ

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