Washington, Your Vote and the Business Next Door

This week in Business has been particularly focused. The Business Council of Alabama hosted noted political contributor, author and speaker, Fred Barnes, for their 2010 Annual Meeting and Luncheon held at the Harbert Center. As a Beltway Boy who also is the Executive Director of the Weekly Standard, Barnes was the usual great choice by BCA to bring cutting edge, real time information to the business community. I look forward to enjoying the signed copy of his book The Rebel and Chief about his behind-the-scenes look at the George Bush Presidency.


Barnes positioned his discussion of the election outcomes by recalling Reagan’s Washington assessment, as an “island surrounded on all sides by reality.” As Barnes noted, you don’t always get what you expect during an election, and this year was no different for many and exhilarating for others. He noted that interestingly our very conservative state of Alabama had similar election outcomes to the very liberal state of Wisconsin. My goodness, New York even picked a lot of Republicans. According to the Hoover Institute, we are indeed a much more conservative country than we were a few years ago and our concerns over healthcare, spending and debt are more important now than ever. This may not be a welcomed message to remind our Washington front office about at this time, but certainly someone has to break them the news. According to Barnes, it is of striking interest that the Republican Party has emerged as the party of “Hope and Change,” and it is incumbent on the party not to blow it.

Barnes posed the question, “Can the Republican Party maintain the coalition?” Time will certainly tell, but a good beginning will be stick to the drivers that business is recommending which are: putting the break on spending and loosen up on the healthcare demands on small business for a good start. Citing Germany as an example, he revealed that not surprisingly, our current economic policies are to the left of many European countries. Germany has unemployment on the decline at 7.8%, and they did it by decreasing spending, decreasing the length and generosity of unemployment, and decreasing the size of government. The big message here that Washington just seems to have a tough time getting the old brain around is that the New Deal did not work. It did not work for FDR and it will not work for the current administration. All it achieves is creating a stronger government power base.

We know the answer, and it sounds easy at least. Tax cuts and incentives work. Just ask any business owner who is trying to keep the doors open. Looking at business founders from across the globe with at least $1 million in annual revenue, Sally Ernst working for Entrepreneurs Organization (EO) tracks their attitude. These are the business leaders whose hiring and layoff decisions are most likely to drive the economy. Her findings are interesting. U. S. businesses were doing more hiring and making more money in the period from May to October 2010 than they were prior to the last Global Indicator Survey, released in May by EO. It seems that business isn’t bad for U. S. entrepreneurs with over half in the survey reporting a higher profit. However, Ernst said, “Things are improving in terms of their businesses although they see things around them as quite dire.” Continued difficult credit conditions and huge uncertainty over whether the U.S. economic recovery can sustain itself have left entrepreneurs worried. Compare this to half of global entrepreneurs who expect that it will be easier to obtain credit in the coming months. A full 57 percent of American entrepreneurs think it will become more difficult to obtain bank loans.

So where are the most excited entrepreneurs in the world today then, if not the U.S.? According to Ernst, we should look to the East. In the Asia-Pacific region, 78 percent of entrepreneurs are optimistic about the economy, 50 percent plan to increase their borrowing, 70 percent have seen profits rise since the spring, 60 percent have been creating jobs for the past year, and 79 percent expect to create still more jobs in the next quarter. And as we have discussed here  before, their Millennial Generation kids don’t mind doing the tough work, are ready to work and less concerned with work/life balance (NJNews 11/13/10).

So what’s a gloomy U.S. entrepreneur to do? Certainly you can look abroad, but let’s not forget to do a little house cleaning here at home. Work to prevent those Bush tax cuts from expiring by contacting your representative or congressman. That would be a nice start. Get informed, stay involved, and remember, take care of your customers, or someone else will.

Pick your Ally to Change the Change: BCA, US Chamber, NAM

            Change.  Not just a buzzword during the Presidential elections, but a word that rose to a frenzied mantra.  Now that the smoke is clearing from our  recent mid-term elections, we are beginning to get the clear picture that something really has changed in the collective conscience of the country, and it may not be what some in Washington had hoped for or envisioned.  It would seem that previous to the 2008 elections, it was enough to ask the civic minded person to engage and vote.  Now that is just not enough.  Gone are the days of passive involvement, and trust in leadership whether it would be corporate leadership (with a now 20% approval rating) or political leadership (with a now 11% approval.)  Enter the Watchdog.  Welcome the Self-Advocate.  All Hail the civic minded, highly engaged voter who not only shows up on Election Day, but is highly informed and ready to get involved.  

I want to share this thought with you on the heels of my participation in the recent Committee Days for the Business Council of Alabama (BCA).  Committee days are key to driving the Pro-Business Agenda that BCA supports for our state.  In their commitment to our legislative process, BCA looks to the business volunteer leadership who has led BCA for over a quarter of a century with vision, courage, integrity and commitment.  This weeks Committee days were filled with heavy hitter leadership participation from all business sectors for Alabama.  If your company supports BCA, your organization has taken a serious step toward not only civic engagement, but having personal ownership in driving the drivers of legislation and leadership. 

            Two key speakers supported the Committee days this week, and their messages were on target with the mission of BCA.  In attendance to support this event were Jay Timmons, Executive Vice President of the National Manufacturers Association (NAM) and Katie Hays, Executive Director of Congressional and Public Affairs for the US Chamber of Commerce. 

Timmons spoke to the need for “clearing the bureaucratic brush”.  According to Timmons, American companies want to compete and win in the aggressive war of competition, and do not need to be encumbered by taxes and legislation that is a functional anvil on the backs of manufacturing.  The United States is second now to Japan, but soon to be the highest in corporate tax rate with a cost to do business in the US at 17% higher than other countries.  NAM supports better policies to create jobs and bring us out of the recession, and it advocates for the Free Market System.  Timmons expressed concern that voters are less and less educated on benefits of a free market.  “We will not survive as a service economy alone, and a manufacturing economy born in innovation, advancement and competition is crucial to building tangible wealth and strength for us,” said Timmons.

Hayes gave an election recap with recognition that there is certainly a lot of new blood in office with 13 new senators and 30 new governors.  “The role of the new governors is clearly significant as they work to interpret for the state what is happening at the national level and as well they should,” said Hayes.  As we exit this week from our Lame Duck Session with only one more session this year, there is a lot to accomplish in a very short period of time.  According to Hayes and the US Chamber of Commerce, President Obama must signal openness to compromise.  If the 2001/2003 Bush tax cuts expire, we will experience one of the largest tax hikes in America’s history.  $3.8 Trillion will be placed in the government’s hands only 45 days from now unless action is taken.   There is a lot of legislation in limbo in addition to the expiring tax cuts.  Other business tax provisions that are a priority for businesses are card check legislation, climate change legislation, transportation funding (SAFETEA-LU) reauthorization, discussion of the Debt Commission's budget report suggestions, immigration legislation (the DREAM Act), cyber security bill, trade legislation, and Medicare insurance legislation. 

The list is daunting, but chins up; Washington is listening now and now is our time to change the change.  We are the small-business bloc which is code for the “hardworking voter” or the “everyman.”  It is rare to find a small business person that does not complain about competition against the Big Box Company so here is your word of caution.  Politics is now truly big business.  More money from outside groups has been spent on the 2010 midterms than was spent in 2004, which was a presidential election year.  Don’t think about this as money spent buying votes, but think instead of the broadcasters, publications, campaign ads, event companies, restaurants, and the political consultants that help to bring it all together.  It may continue to be a tough fight for the small business bloc to compete with big politics in this type of financial arena, so square up with some good allies.  BCA may be that great lineman to your business big or small when it comes to the pro-business grid iron.

The More Things Stay The Same.......

Our recent remembrance of 9/11 brought back many stories of courage. It is an event in our collective memory that will not soon fade as we recall tales of ordinary people doing extraordinary things. Something struck me as very compelling as I watched the news coverage off and on last week on 9/11. Looking at the economic indicators for 9/11/2010 they were remarkably similar to the benchmarks recorded on 9/10/2001, the day before our attack. The Dow closed on 9/10/01 at 9605.41, and closed on 9/11 of this year a bit above 10,000. Not that far off. People were coming and going to work and school much in the same way that we are doing today.

But there are some differences that are striking though. In 2001, home ownership was common and existed as the primary savings investment of the average American. Financial crisis was triggered then by some business excess inventory or the more typical corporate malfunction or malfeasance. Now it is different. Now the instability is of a different nature. Now 1 in 7 homeowners are at risk of loosing their home. Now we have pervasive mistrust of government and its ability to put us back on track. There is pervasive mistrust of the ability of our fiscal policy to right any looming financial wrongs. According to Mort Zuckerman, CEO of Boston Properties and interviewed on Fox News (9/11/10), “The country has not forgotten. But we have lost our sense of unity. Now is not the time for everyman for himself.”
Listen to Bill Johnson, CEO of HJ Heinz, with his direct, no nonsense perspective on the effects this has on business. According to Johnson, put simply, there remains a lack of consumer confidence. Business is not buying. Business is waiting on concrete, structural change from leadership that will encourage spending. Short term policy fixes just do not work. Look at the 2003 Bush Taxcut effects for example. As businesses knew these cuts would be around 7-8 years, we saw the economy rise. It is not surprise that the economy stalls when there is discussion of removing those cuts. Consumers have basically gone underground and are looking for long term, predictable, sustainable policies. We would be wise and advised to remember this if short term economic stimulus is put into place to put a nice blush on the rose just in time for election only to see it whither and fall as soon as the ballot box closes.

According to previous Attorney General Alberto Gonzalez, we are indeed safer because of the Patriot Act and cooperation around the world, but mainly because of the work of individual men and women like you and me. Men and women, who work hard, take care of their families and each other remaining constantly vigilant and engaged. The alert individual, paying attention to the daily details as we have learned, is more valuable than any government agency or watchdog. The big message here: if you find yourself in the next big storm, don’t wait for someone to pluck you from your roof. Prepare for the storm in advance. Now is the time to take inventory of your financial house and work to educate yourself. It is okay to demand more of yourself, and I would submit that it is okay to demand more of our politicians. And perhaps now is a good time for our politicians to demand more from themselves.

And remember, take care of your customers, or someone else will.

BCA: Looking Forward to the Business of Business

I was able to attend the 2010 Governmental Affairs Conference hosted by the Business Council of Alabama. With the title of “Looking Forward to the Business of Business,” I knew that it would be time well spent. I was not disappointed, and the opportunity to meet many of our Alabama Legislatures up close and personal was a rare opportunity. Many of our representatives were present, and please know that they are hard at work for all of us here in the North Jefferson area.

BCA remains committed to a pro-business legislative agenda, and the content of this event maintained that position. While key information filtered through multiple conversations, one point was loud and clear, the business community must take a lead in the political arena. The members of the business community create the jobs, not the government anyway, so why would you not step up to the plate. The bottom-line challenge here is to remind business leaders that it is our responsibility to drive the synergy of post-election leadership and stridently remind them of their need to support business now.

The event moved quickly forward with Governor Riley presenting at the breakfast event on Saturday morning. The Honorable Bob Riley reminded the audience of his consistent platforms to seek funding and support for economic development, to reform education needed to prepare the work force, and to seek ethics reform laws which foster healthy, sustainable partnership and growth. The Governor also reminded the group that economic development is grounded in the creation of a product, adding value to that product and then selling it. Making his point that economic development is not gambling, he received strong applause.

I have always been told to begin with the end in mind, and sharing insight into that effort were key note speakers Peter Hart and Frank Luntz. As a leading pollster and public policy expert, Mr. Hart has a legacy of shaping trends and is noted for representing 40 United States Senators and 30 governors. Frank Luntz has been named the “Nostradamus of Polls” and is one of the most honored communications professionals in the country. The end that we should have in mind here is having our chosen candidate win the election. To insure that outcome, we must first step back and understand the mood of the country. As I have written here before, you can not lead where you will not go, and you need to know where you want to end up. According to Hart and Luntz, there are some important feelings a float out here, and now is the time to take note.

Turning on the news you are certain to hear about the oil spill, health reform and the occasional story about Lindsey Lohan, but polls show that the issues of importance are really jobs at 55%, energy and oil at 38%, and a big desire to cut government spending at 29%. Healthcare only hits the radar with 19% stating that it is a key issue, and 44% of those are not happy that Healthcare Legislation has passed. There are a multitude of concerns floating out there that have the attention of the voter base. Think about the 36% that feel the recession will persist another 2 years, or the 33% that are concerned that they may loose their job. If you factor in immigration issues, it begins to get tough to see the end at all.

The mood is very anti-incumbent with 57% favoring someone, anyone, new. About 50% just want a third party and to start up fresh. So many issues, so little time, but one thing is certain, the needle on the magnet is starting to polarize in a big way toward the independents. Just who are these 23% of party neutral new voters? The Holy Grail of voter this year is the highly coveted disenchanted independent voter. Is that you? Even more key, are you the coveted disenchanted independent who is pro-business? Not sure what good pro-business policy looks like? You can find some strong pro-business direction by going to www.bcatoday.org where they weigh in on tax policy, right-to-work, public education, environmental and energy legislation, and common sense health reform that will take care of current problems and not create new ones.

Where is Paul Revere when you need him for a call to action? What we need now is a call to become an informed voter for once and for all. Don’t mark that box or pull that lever or hang that chad until you do a little open minded research on your candidates. And if you don’t vote, for goodness sake, don’t complain.

Remember, stay informed to better take care of your customers, or someone else will.

The next meeting of the Fultondale Chamber will be held for lunch on August 24th with Logan Hinkle, Attorney with Burr and Forman presenting on Health Reform Legislation and how to prepare your business for the impact. Location and sponsorship by the Comfort Suites in Fultondale. Logan is an Adjunct Professor at Cumberland School of Law and teaches a course on ERISA and Employee Benefits. Good Stuff. Please join us. Email to visemedical@bellsouth.net