To Heck with Entrepreneurship…. Profits are Bad

Okay, the my title is heavily laced with sarcasm and I certainly don’t believe this but if you watch the video enclosed below you’ll find that this sentiment is something that some people do believe. Me… well I’ve kept silent as long as I can. When I saw this video in a brief flash I got a picture of what our country might be like in another decade unless the silent majority starts stepping up to the plate and helping to lead. My next comments are neither Democratic or Republican in nature – they are squarely American… as in I believe in freedom, free markets and personal responsibility (novel idea).

Thanks to a friend, I saw this YouTube video post included below from a gentlemen that went to one of the recent national political conventions and talked up a bunch of people about an idea he had to ban or cap corporate profits. His commentary on the front-end of the video I could have done without but the overall Q&A was pretty startling. When I saw this I thought that’s crazy, who could possibly support such a crazy idea. But guess what, people agreed….

As a business owner now, and at varying times in the past, sometimes successful and sometimes not, the necessity, the imperative, one of the base-line goals was to always turn a profit. In my lexicon profit is a good thing. Profit shouldn’t be a bad word. After watching the video I feel like somewhere along the line this word has become ammunition in a nasty political fight that tries to boil down the nation into have and have-nots.

I could drone on but any half-way intelligent person is going to quickly grasp the concept that corporate profits are the life-blood of our economy. Anybody that argues otherwise doesn’t understand economics or probably needs to head back to school. Healthy businesses that are able to make profits from their efforts, risk, good management and well paid team members (i.e. employees) is what our nation not only needs but wants.

In a properly functioning corporate entity that is market incentivized to innovate and deliver great products and services, the company wants to invest, innovate, grow, and hire the best talent. When these things happen our nation benefits in a variety of ways, some of which includes:

  1. Jobs – Companies growing with profits can hire more people, duh…?
  2. Community Growth – New jobs in communities have a cascading effect and drive the local economy
  3. Investment – Companies use corporate profits to build infrastructure (materials, equipment, contractors, etc.)
  4. Dividends – Companies growing sometimes distribute earnings in the form of dividends
The idea that people could be so uneducated or so jaded to believe that corporate profits are evil shows that whatever path we are on as a nation needs to be calibrated back to reality.  I’m sure in North Korea and other places the idea of centrally planned enterprises might work just fine but not here.
I hope that each voting person in the US can put aside the partisan politics and realize that when corporations and individuals do well that’s a good thing.
Here is an example of 2 large corporations and how they spent their profits in 2011.  Imagine if the government capped their profits?  What would then happen?  Let me know your thoughts via comments.

EXXON
2011 Fiscal Profits: $40 Billion
Full Time Employees: 82,000
2011 Profits / Cash in 2012 Spent On:
*Inventory ~ ($2.2 B)
*Capital Projects ~ ($31 B)
*Dividends ~ ($9.3 B)

APPLE
2011 Fiscal Profits: $25.9 Billion
Full Time Employees: 60,400
2011 Profits / Cash in 2012 Spent On:
*Inventory ~ ($275 Million)
*Capital Projects & Investments ~ ($36.8 B)

The Affordable Health Care for America Act (HR3962) Trades Our Collective Liberty for Security (FYI…that’s bad)

No matter where you stand on the political “aisle” of life, be it Republican, Democrat, or Independent the current bill that was just recently passed by Congress is an absolute disgrace.  In fact, let us start on the right frame work from which to view this abomination.  Instead of pigeon holing ourselves into a nice category like conservative, republican, etc. how about we try a new name for our collective selves.  Guess what that name is?

A-M-E-R-I-C-A-N !

USA
“He who trades liberty for security deserves neither and will lose both.” (picture courtesy of USAA)

With that common understanding now well established let’s proceed.  The disgraceful part of the current bill is that is throws out the common themes and ideals that have identified us as the greatest nation on Earth for the better part of two centuries.

Ideals and values such as freedom of choice, hard work, honest day’s pay for an honest day’s work, entrepreneurship, and oh by the way did I say freedom & liberty? If not let me say it again…. FREEDOM…LIBERTY.  You see in today’s mass media market values like FREEDOM & LIBERTY have been watered down and commoditized.  Some how these words are now just part of the common toolkit of career politicians and political hacks, used to fight battles of popularity and power.

It seems that somehow overtime our country’s collective memory of how hard won our individual liberties and freedoms were have been forgotten.  Let’s face it getting the rights we have today and the lifestyle we enjoy was not a god-given right.  It was, and is, a gift that requires us to be vigilant and protect this wonderful thing we have been given.  I believe in America we have forgotten that liberty and security are two very different ideals.  The vote that was passed in Congress is a vote that by and large passed using persuasive arguments that appealed to constituents “security” side.  I like to be secure as well but not at the expense of my liberty.  To put this in extremely basic terms I’ve created a simple analogy: (see below)

You move in with your parents as a 35 year old adult after suffering a job loss, etc.  Your parents provide you “security” – roof over your head, food, transportation, comfort, conversation, etc.  However, it comes with a price.  You see your Mom is a strict Southern Baptist and doesn’t agree with your late night carousing, drinking, video game playing, farting, texting on your cell phone and she vehemently disagrees with this whole thing she calls the “world wide web”.  So guess what she does? That’s right, she restricts you.  Mom and Dad agree that you can no longer go out past 6pm, you can only drink Schwepps Ginger Ale (on special occasions you can have O’Doul’s), the only games you can play are checkers (good news is your Mom has a friend named Hilda that rocks at checkers), gaseous substance releases have to be done outside and last but not least she confiscates your laptop calling it the “gateway to hell”.

And there you have it folks.  You’ve achieved your security and in the process you have traded your liberty.  Sucks doesn’t it?

Make no mistake about it.  This is the path we are on.  You see, we can’t have it both ways.  I hope that sooner, rather than later, we as Americans understand the differences and the tradeoffs that are involved.

Thomas Jefferson nailed it a very long time ago when he said the following:

“He who trades liberty for security deserves neither and will lose both.”

On this Veteran’s Day let us not only honor those great men and women who have honorably served but also be reminded that their sacrifices were to guard the liberty and freedom of choice that we have today.

http://www.opencongress.org/bill/111-h3962/show >  Visit this link to learn more about HR 3962

Foreshadowing the Federal Path, Is New Jersey a Proxy for Extreme Democratic Policies?

Could there be any better example of government largesse than the great state of New Jersey?  Boasting one of the highest tax rates in the union and boasting an even higher amount of government hand-outs it has to be one of the poster children for what life may resemble in the rest of our beloved union if we continue to let this current Democratic power-grab continue unabated. Before you believe that I’m some Southern Conservative that doesn’t have a clue about life in the North let me preface my comments by saying that I met my wonderful wife in New Jersey and went to undergrad in New York.

Okay…with that being said as they like to say in baseball – “Batter Up!”.  Today, I came across an article that was discussing President Obama’s visit to New Jersey to lobby the states democratic base to vote Governor Corzine in for another term.  In fact, in this event it appeared the Dems were pulling out the heavy artillery and actually had to change the venue from Rutgers to PNC Stadium to accommodate the flood of people wanting to get a chance to see President Obama.  In a show of the popularity of Obama versus Corzine, they even gave Obama top billing on Corzine’s event (see picture below of the campaign poster).  All of this is somewhat laughable in a state that boasts some of the highest taxes in the union and has shown a continued propensity to operate its government machine on the backs of hard-paying property owners.

My key question, if Corzine and Obama are such great buds and have such an awesome thing going with their democratic policies then why is New Jersey in such a hole.  Property owners are getting the shaft and the state makes it very difficult to attract new businesses, and in turn new residents.

I think the challenge is expectations.  Like most things in life, and as my wife likes to tell me,  if you set expectations realistically it generally makes life more enjoyable.  It seems that some residents of New Jersey have an expectation that amounts to a hand-out.  Nothing in life is free. It is cleche’ but absolutely correct.  Can you have “free” healthcare ? can you live in nice accommodations without working ?- the answer is yes…  BUT …. it comes from somewhere.  The business owner, the land owner, etc. that has to support the “free” healthcare adjusts his cost of doing business calculations by factoring in this new cost.  He then looks for ways to adjust.  These adjustments include – shedding work force, raising prices on his products, moving overseas to a lower cost environment, etc.

At the end of the day, New Jersey helps to serve as a window into what our federal government and other states may resemble if we let these “expectations” go unchecked.  Business owners, workers, citizens, legislatures – we all have a choice.  One a decision is made we also have a choice.  I hope the citizens of New Jersey exercise their choice and vote Corzine out of office.  However, caution exists.  The new person filling his shoes has to be like the doctor – delivering realistic news, setting realistic expectations and making us take the right medicine which may taste bad but will have the appropriate effect.

Obama gets top billing at Corzine event

http://www.nj.com/news/index.ssf/2009/07/president_obama_link_to_gov_co.html

Video Clip of the crowd arriving at PNC Bank Arts Center for President Obama

US Needs to Go on a Budget Diet

Whether it is losing that spare tire, giving up that daily latte, or taking that prized ten year old flannel shirt to good will, losing and the idea of doing without is never one that is very easy.  Let’s face it most of us are programmed in almost the same way. Give us something that we didn’t need and we say thank you.  Try to take it away and good luck.  Our US economic policy has proven this phenomenon transcends personal borders and actually manifests on a national scale as well. 

This phenomenon has never been more apparent than in the face of the current economic crisis that the United States faces.  President Obama has rallied his troops, and politicians from Seattle to Secaucus have all sung the praises of budget cutting and fiscal responsibility.  Interestingly enough though it appears that all politicians are on board for budget cuts at a macro perspective, but when it comes to actually cutting “THEIR” budgets – the consensus and collegial penny-pinching bureaucrats seem to lose it.  Effectively, all are ready for budget cuts so long as they don’t have to sacrifice any of their hard earned federal hand-outs. 

Take for instance the case of Mayor Pagliughi who is fighting proposed federal and state budget cuts to his tourism budget for the Cape May, New Jersey area.  It seems Mr. Pagliughi believes that proposed federal and state budget cuts will slow the nearly $5 Billion annually that is spent in Cape May County each year.

I’m certain that both state and federal funds have helped to ensure job stability and continued tourism revenues to Cape May County but the real question is what is the demarcation line for “have to have” versus “nice to have”.  

My approach to the issue of federal budget belt-tightening is quite simple, I parallel the budgeting process to my own simple family budgeting process.  If we only have X amount of income in a month and I know that we are going to have X+10% in expense…then guess what?  That’s right, like most American families I scour through the budget and cut the fluff for that month to ensure that we don’t spend ourselves into oblivion.  This expense cutting is certainly not pleasant but it is the responsible thing to do.  Often times the things that get cut are those that are most fatty in nature and are not core to keeping our household operating. For instance, maybe we cut back on our entertainment budget and don’t go to a museum or zoo, or maybe we eat out a few less times that month.  

Certainly I’m not naive, and I recognize that cutting jobs and federal programs is not as easy as cutting my daily latte, but, at the end of the day the approach is the same.  The idea that we can continue to spend without cutting back is flawed.  Cutting back by its very nature is a painful process and one that makes all involved uncomfortable and sometimes anxious.  However, the alternative to not cutting back now is that current politicians put an even greater weight on our future generations in terms of debts and delaying the very real, and hard decision making that is required by persons in power. 

So, let’s get real with ourselves and call a family meeting, sit-down, talk about it and get it done.  The current turf-protecting that is taking place in Washington and elsewhere is a recipe for more years of the same and a continued bloated and flawed federal budget.