America’s economic situation needs an emergency heart transplant, but Obama and the Democrats keep offering band-aids instead. We need a major change in government economic, tax, and fiscal policies not more government bailouts. Yet the president is doing nothing to reverse the enormous uncertainty fostered by his own administration’s aggressive anti-business and pro high-tax initiatives and rhetoric.

In the latest indication that our president has no clue why businesses are struggling and unwilling to hire, Obama is trying to force through another $30 billion government bailout program to “help banks boost lending to small businesses.” Unfortunately, it’s not the lack of available funds that are stopping businesses from expanding and generating new jobs. It’s the massive economic uncertainty and instability created by misguided government mandates (especially the oppressive regulations of ObamaCare), coupled with the massive tax increases coming in January 2011, that have spooked companies and forced them into defensive economic positions.

A few months ago, Steve Wynn, the American entrepreneur and casino resort/real-estate developer, warned that our government’s own unpredictable and irresponsible policies had created a “frightening” business climate in America and brought about an atmosphere of uncertainty for everyone.

“So when you ask me today about predictability and uncertainty in China compared to Washington, I take China. Washington is unpredictable these days. Washington is… No one in the business community from one coast to the other has any idea what’s next. And what’s even worse, the people that do business with us that buy our bonds in other countries don’t even know what’s next. The uncertainty of the business climate in America is frightening, frightening to everybody. And it’s delaying the recovery.”

Since 2006, under the “leadership” of the Democrat controlled Congress we have witnessed the unthinkable, communist China now has lower corporate rates (25%), more stable regulatory policies, and a more business-friendly economic environment than the “free-market” United States. Even the communists understand how capitalism works and what governments must do to help stimulate economic activity and encourage private sector job creation.

Meanwhile our own ivory-tower president, who has never started a company or created one private sector job in his life, continues to deny reality and blame the Republicans for refusing to go along with more socialist “solutions” and endless government bailouts; “A partisan minority in the Senate has been standing in the way of giving our small business people a simple up or down vote on this bill,” said the president. “Small business owners… don’t have time for political games.”

Ironically, it is the very “political games” and hundreds of billions of dollars in government “stimulus” programs, forced through by Obama and the Democrats, that have scared small businesses and negatively influenced economic activity, while simultaneously increasing economic risks and fiscal instability.

Small businesses, responsible for approximately two-thirds of all new jobs in the United States, are not expanding and hiring because they are frightened by what the government has done and promises to continue doing. Offering them more bank loans will do little to persuade them to ignore reality and endanger their positions. Unless and until President Obama and Congress address the threats of higher taxes, militant and oppressive government regulations, and increasing levels of deficit spending, no amount of easy money and government bailouts will ever motivate businesses to expand in the increasingly unstable and turbulent economic waters of America. They are seeing the mounting risks all around us and are correctly refusing to budge.

Originally posted at American Thinker Blog and Chris Banescu.com

Steve Wynn

6/25/2010 – Chris Banescu –

Steve Wynn, the American entrepreneur and casino resort/real-estate developer, was recently interviewed by CNBC for the opening of his new Encore Beach Club in Las Vegas. During the questions and answers session with the correspondent, the billionaire business owner addressed some of the most serious problems American companies face and the incompetent manner in which politicians in Washington, DC are handling the economic situation and the unpredictable manner in which they continue to aggressively punish US businesses.

In the interview Wynn talks about the lack of common sense that has disappeared in Washington and the completely out-of-control spending that is fueling the massive national debt:

“It’s common sense that’s disappeared in Washington DC. It’s common sense that’s disappeared in the years of 7 and 8 in America. We’re inheriting the awful results, both in our government … of wild, uncontrolled spending, unbelievable, unsustainable debt.

And yet, here we are, doing it again, $20 billion a month to the FHA. On top of what happens to Fannie Mae and Freddie Mac. We’re doing it again today for $20 billion a month! We’re destroying the housing market, again; under the name of a stimulus, phony misrepresented names.”

Steve then explains how China now offers more opportunities and a more stable and business-friendly environment than the United States:

Interviewer:
“What about the regulation and government oversight of working there [Macau, China] as opposed to here?”

Steve Wynn:
“Macau has been steady. The shocking, unexpected government is the one in Washington. That’s where we get surprises every day. That’s where taxes are changed every five minutes. That’s where you don’t know that to expect tomorrow. To compare political stability and predictability in China to Washington is like comparing Mount Everest to an anthill.

Macau and China is stable, Washington is not!

Is there a businessman or a media person in America that isn’t frightened about the next crazy idea that is coming from Washington. The financial institutions, the cars, the businessmen, the taxes, the health care, everything is Coo Coo. And God knows what’s next?

Regarding the massive health care bill that was passed earlier this year, Wynn correctly predicts that it will have the exact opposite effect that Washington lawmakers promised, it will raise the costs of health care and make things worse for everyone.

View more of the interview script on the Chris Banescu website.

Did Carnegie, Mellon, Rockefeller and Guggenheim start out rich? Andrew Carnegie worked as a bobbin boy, changing spools of thread in a cotton mill 12 hours a day, six days a week, earning $1.20 a week. A young John D. Rockefeller worked as a clerk. Meyer Guggenheim started out as a peddler. Andrew Mellon did have a leg up; his father was a lawyer and banker. Sam Walton milked the family’s cows, bottled the milk and delivered it and newspapers to customers. Richard Sears was a railroad station agent. Alvah Roebuck began work as a watchmaker. Together, they founded Sears, Roebuck and Company in 1893. John Cash Penney (founder of JCPenny department stores) worked for a local dry goods merchant.

It wasn’t just whites who went from rags to riches through open markets; there were a few blacks. Madam C.J. Walker, born Sarah Breedlove, just two years after the end of slavery, managed to build an empire from developing and selling hair products. John H. Johnson founded Johnson Publishing Company, which became an international media and cosmetics empire. There are many modern-day black millionaires who, like other millionaires, black and white, found the route to their fortunes mostly through the open, highly competitive and more free market end of our economy.

Restricted, regulated and monopolized markets are especially handicapping to people who are seen as less preferred, latecomers and people with little political clout. For example, owning and operating a taxi is one way out of poverty. It takes little skills and capital. But in most cities, one has to purchase a license costing tens of thousands of dollars. New York City’s taxicab licensing law is particularly egregious, requiring a person, as of May 2007, to pay $600,000 for a license to own and operate one taxicab. Business licensing laws are not racially discriminatory as such, but they have a racially discriminatory effect.

The Davis-Bacon Act of 1931, still on the books today, had a racially discriminatory intent and has a racially discriminatory effect. The Davis-Bacon Act is a federal law that mandates “prevailing wages” be paid on all federally financed or assisted construction projects and as such discriminates against non-unionized black construction contractors and black workers. During the 1931 legislative debate, quite a few congressmen expressed racist motives in their testimony in support of the law, such as Rep. Clayton Allgood, D-Ala., who said, “Reference has been made to a contractor from Alabama who went to New York with bootleg labor. This is a fact. That contractor has cheap colored labor that he transports, and he puts them in cabins, and it is labor of that sort that is in competition with white labor throughout the country.” Today’s supporters of the Davis-Bacon Act use different rhetoric, but its racially discriminatory effects are the same.

The market is a friend in another unappreciated way. In poor black neighborhoods, one might see some nice clothing, some nice food, some nice cars but no nice schools. Why not at least some nice schools? Clothing, food and cars are distributed by the market mechanism while schools are distributed by the political mechanism.

We hear people speak of “business” and “capitalism” as being somehow evil, including comments about capitalists victimizing employees and customers in pursuit of the goal of “maximizing profits”.

In conversations with supposedly educated people who lean to the left, the concept is an accepted axiom, that maximizing profits – at the expense of everything good in the world – is the one and only purpose of business. It is the socialist rallying cry these days.

This really frosts me. I have been in business for 35 years, and there are many shades of business management styles, and only one puts “maximizing profits” first. In my opinion, “maximizing profits” as a management goal is the most ill-conceived and destructive business management style. It causes loss, not gain.

Survival is the first objective of any business. Profit is not the goal of running a business, it is the result of running a business well. Through the business cycles, profits are never a constant, you make hay while the sun shines and hunker down during the winter. Real profit comes in two forms, increase in total value and cash in the bank.

In today’s parlance, running a business “to maximize profits” means to run it to maximize short-term profits, disregarding the long term best interests of the stockholders as well as the employee. Short term profits really only benefit the management, and only if their reward system (salary and bonuses) is structured in a manner based upon short term profits.

Example: I recently had a situation where two suppliers (both NYSE listed companies) showed completely different ways of doing business.

Company A is much larger and has an enormous customer base. They provide a service with complex billing, hidden fees and 3 year contracts based upon the customer’s responsibilities, not theirs. They are “milking” their customer base for short-term profits. The high pressure environment, misleading marketing and dog-eat-dog management style make this a lousy place to work. They are losing customers, but making very good short-term profits. The upper level management is making enormous salaries and bonuses as the company, in reality, slowly shrinks. The stockholders don’t see much benefit, but the financial reports look good.

Company B is growing quickly, picking up the customers who become disgusted with Company A. They have lower prices for an identical product, no contracts, no fees or surcharges, simple billing and good service. It is a nice place to work and the stockholders are seeing a slow but steady increase in the value of their investment.

Now on the face of it, company A is doing better, but which one would you rather invest in or work for? Which one would you rather be an executive for?

Bad management don’t look bad all the time, but good management is unmistakable.

Look at General Motors. This is a classic example of a company run into the ground by bad management. This is not the fault of the evils of capitalism, it is the fault of the evils of bad management. Communism is the ultimate form of bad management, not a solution to capitalism’s ills.

If you think capitalism is at fault for bad management, you know nothing of human nature. To paraphrase Steve Forbes – If government run business was better than privately run business, then Communist Russia would have won the Cold War.

HT: American Thinker

Bill Gates is the world’s richest person, but what kind of power does he have over you? Can he force your kid to go to a school you do not want him to attend? Can he deny you the right to braid hair in your home for a living? It turns out that a local politician, who might deny us the right to earn a living and dictates which school our kid attends, has far greater power over our lives than any rich person.

Rich people can gain power over us, but to do so, they must get permission from our elected representatives at the federal, state or local levels. For example, I might wish to purchase sugar from a Caribbean producer, but America’s sugar lobby pays congressmen hundreds of thousands of dollars in campaign contributions to impose sugar import tariffs and quotas, forcing me and every other American to purchase their more expensive sugar.

Politicians love pitting us against the rich. All by themselves, the rich have absolutely no power over us. To rip us off, they need the might of Congress to rig the economic game. It’s a slick political sleight-of-hand where politicians and their allies amongst the intellectuals, talking heads and the news media get us caught up in the politics of envy as part of their agenda for greater control over our lives.

The sugar lobby is just one example among thousands. Just ask yourself: Who were the major recipients of the billions of taxpayer bailout dollars, the so-called Troubled Asset Relief Program (TARP)? The top recipients of TARP handouts included companies such as Citibank, AIG, Goldman Sachs and General Motors. Their top management are paid tens of millions dollars to run companies that were on the verge of bankruptcy, were it not for billions of dollars in taxpayer money. Politicians preach the politics of envy whilst reaching into the ordinary man’s pockets, through the IRS, and handing it over to their favorite rich people and others who make large contributions to their election efforts.

Thomas Sowell explains economics in a way that rings with clarity and truth – don’t miss his book “Basic Economics: A Common Sense Guide to the Economy”

The bottom line is that it is politicians first and their supporters amongst intellectuals who pose the greatest threat to liberty. Dr. Thomas Sowell amply demonstrates this in his brand-new book, “Intellectuals and Society,” in which he points out: “Scarcely a mass-murdering dictator of the 20th century was without his intellectual supporters, not simply in his own country, but also in foreign democracies. … Lenin, Stalin, Mao and Hitler all had their admirers, defenders and apologists among the intelligentsia in Western democratic nations, despite the fact that these dictators each ended up killing people of their own country on a scale unprecedented even by despotic regimes that preceded them.”

While American politicians and intellectuals have not reached the depths of tyrants such as Lenin, Stalin, Mao and Hitler, they share a common vision. Tyrants denounce free markets and voluntary exchange. They are the chief supporters of reduced private property rights, reduced rights to profits, and they are anti-competition and pro-monopoly. They are pro-control and coercion, by the state. These Americans who run Washington, and their intellectual supporters, believe they have superior wisdom and greater intelligence than the masses. They believe they have been ordained to forcibly impose that wisdom on the rest of us. Like any other tyrant, they have what they consider good reasons for restricting the freedom of others. A tyrant’s primary agenda calls for the elimination or attenuation of the market. Why? Markets imply voluntary exchange, and tyrants do not trust that people behaving voluntarily will do what the tyrant thinks they should do. Therefore, they seek to replace the market with economic planning and regulation, which is little more than the forcible superseding of other people’s plans by the powerful elite.

We Americans have forgotten founder Thomas Paine’s warning that “Government, even in its best state, is but a necessary evil; in its worst state, an intolerable one.”

HT: WND

Imagine a politician announcing: we are going to raise the Social Security age to 66. We are going to freeze and cut spending until we balance the budget within three years, and then with surpluses pay down the debt within 6 years. We are going to build 100 new nuclear power plants and open up the country and its shores to oil and gas production. We are going to cut back all federal entitlements and subsidies by 20% immediately. We are going to ensure enough water for agriculture. We are …

[...]

The Greek Lesson
No, I don’t mean the classical Greeks, but their present-day counterparts.

Economists have given us all the usual diagnoses of what went wrong in a now bankrupt Greece — high taxes, tax cheating, too generous retirements, unsustainable entitlements, government corruption, and anemic demography.

Add to such socialism the natural foreign policy and collective expressions that always follow statism in the modern Western world — increased pacifism, utopian pretension, moral equivalence, cheap anti-Americanism — and we have the foreign policy expression of Greece (and much of the EU) of the last 30 years. (A citizen who believes by birthright that he is to be taken care of by the state always hates the state that can never do enough, in the fashion that the country who is taken care of militarily always hates its protector.)

In other words, Greece is the canary in the mine of the impending crack-up of the modern welfare state. It is a great gift to us all, this example. A year ago, the socialists, even as they were juggling and falsifying their books, were bragging that the Wall Street meltdown was a referendum — and capitalism was doomed. Now, the entire socialist dream is exposed and even the most ardent statist knows that there is no longer enough “others” to pay the tab.

The poor EU learned that the Greek siesta, the 10PM Athenian dinners, the state power company vans at the beaches in the workday afternoons, the kafenions full of 50-year-old men at 11AM, the angry students perpetually in the streets at each hinted reform, and the moonlighting telephone employees all came at the expense of far harder-working Scandinavian and German socialists, who apparently now realize a nice two weeks each year on Santorini or Crete aren’t worth billions of their own Euros in rescue bailouts.

We Are All Greeks Now?
Here in California we see the symptoms of the same Greek malady as we go from one budget shortfall to the next — dream-like borrowing, raising taxes, and furloughing, in lieu of the tough medicine of cutting government payrolls, changing pension payouts, and freezing the pay of state-workers until their compensation mirror images those in the private sector.

Postmodern Western society will soon witness a real showdown, analogous to the teenager who rebels and either accepts that he is still dependent on his parents and therefore subject to the rules of the house, or runs away and implodes in a sea of drugs and street-life.

In short, how will an entitled society react when the money runs out and it learns that it must change or wither away — and all the whining rhetoric about “social justice” and “a green future” and “spread the wealth” and “redistributive change” won’t bring another barrel of oil or bushel of wheat or Douglas fir 2” x 4”?

Two Forks in the Road Ahead — California as Greece
On the one hand, the money is vanishing. Income, state and federal, as well as payroll, taxes here in California may soon top 60% on top incomes (10% state, 15% plus payroll on most of one’s self-employed income, 39% federal). Add in property and sales taxes and we’ve reached the point where the lemon can no longer be squeezed without either more than the current 3,500 a week leaving the state, or going the Greek route of endemic cheating.

(Indeed, as I wrote not long ago: I go to Greece every other summer, and lived in the country for over two years. I come away with one overriding observation: almost every Greek I met in some way either cheated on his tax obligation or conned a way to get some state subsidy — or both, while furiously damning “them.” [“Them” if one were poorer, meant the rich; and if richer, the state; and for both, also meant the United States.])

Bottom line: I don’t see how the state or federal government can up taxes much more and still find wealth-producing, law-abiding, motivated job creators.

On the other hand, as the money runs out, will state workers, pensioners, and entitlement recipients accept that there are too few wealth-creators to fund their pay-outs, or, as in Greece, hit the streets in protest, teenager style, each time some adjustments are necessary?

So if we can’t raise taxes and we can’t cut expenditures what is left? There is no Germany to bail us out? Cut defense? Keep borrowing from the Chinese and Japanese?

Modern Drones
Where did all the wealth go? Modern Western society is in some sense becoming drone-like, its entitled sensitive citizens assuming ceremonial roles and attitudes about the very landscape they inherited from their industrious predecessors.

Here in California we idle farmland, though we have the water, expertise, and soil to produce far more food than we do. We put vast swaths of both land and sea off limits to gas and oil production, though we could produce far more petroleum and natural gas than we do. We snub nuclear power, though our population steadily increases and its desire for electronic appurtenance grows, not shrinks. We like “wilderness areas” (who doesn’t?) where we build no roads, harvest no timber, and build no dams. We strangle Silicon Valley with all sorts of labor and business regulations until it fabricates and outsources abroad. In other words, we are creating no real new sources of concrete wealth as we nuance the shrinking capital we inherited.

We Are Still Humans For a Bit Longer
Hollywood is great. Tourism keeps San Francisco alive. Napa Valley produces great wines. We have strong finance, insurance and plenty of regulators. But ultimately our generation lost sight of the fact that we must eat and therefore grow food; we must clothe ourselves and therefore need fibers; we must move from place to place and therefore need fuel; and we must have shelter and therefore have wood, cement and glass.

Yes, we can import all this from the Chinese or the Canadians or the South Americans, but at some point one needs the real capital created by real wealth to pay for it all — not nuancing and adjusting and tinkering with money. Money is simply a representation of stored capital that comes from real production of some sort. Talking about “millions of green jobs” and “a wind and solar future” and “high-tech sector” is well and good. But ultimately Western man has not yet (as we learn from his consumptive habits) evolved to some sort of ethereal existence. Even Harvard Review grandees need real fuel to power Air Force One to get to Copenhagen.

So for a while longer, we need the miner, the oil pumper, the farmer, the fabricator, the carpenter, the road-builder, the railroad guy, the cement layer, the chemist, the computer engineer — and the system that allows them all to create wealth unimpeded by government and in an environment in which the citizen who benefits from their labor appreciates their industry.

The 11th Hour
Yes, before we have the actor, the writer, the professor, the insurer, the investor, the regulator, and the politicians, we need the elemental among us to find or create material wealth. We, the sloganeering class, forgot that, and so subsidize our high living either on borrowed money or the prior productive investment of those now in the grave yards.

And the tab is coming due faster than we ever dreamed. All the soaring, teleprompted rhetoric, the Ivy-League credentials, and the social justice boilerplate will no more create wealth than ceremonial fifth-century AD consuls and robed bishops could fabricate the glory of Rome.

PS. Why am I not too optimistic right now? Our President, who submitted the largest deficits in recent memory, and who is on track to nearly double the national debt in record time, continues to blame Bush — not just for Bush’s lamentable deficits, but for Obama’s own new unsustainable ones. I think his weird logic is: “Bush’s bad deficits made me trump them by a factor of four.” When the Commander-in-Chief expects the populace to believe that, or drops real unemployment figures and talks instead of theoretical jobs saved, or flip-flops on everything from evil Wall Street bankers now suddenly good, or bad nuclear power now vital, then we have about as much hope as we would have under Jimmy Carter.

Remember January 2009? In the era of Democratic supermajorities in Congress, a new JFK in the White House, and a media proclaiming Obama “a god,” we were all grass-roots saints, who threw out the Bush bums and had at last a great workable Congress and White House — and were a daring electorate eager for hope and change from a non-traditional president. Yes, life was good and we, in the pre-tea-party age, were the salt of the earth that earned an Obama.

Now? Suddenly in our media and politics the people are stupid, full of ingratitude, often racist, the system broken, the Congress bankrupt, all of us undeserving of our one chance in a lifetime state agenda. Yes, the petulant liberal attitude in 12 months went from “We, the People” to “You stupid idiots” — and all because some Democratic congresspeople discovered that the more they went out on the limb on Obama stimulus, health care, cap and trade, higher taxes, bigger government, bailouts and endless deficits, the more they were going to get sawed off in November by the ungrateful people. So naturally instead blame the filibuster, the people, the clingers — anything other than the self-preservation instincts of the political class of your own party.

HT: PajamasMedia.com

Doug Flutie, one of the most inspirational players in college football history, and Curt Schilling, a great Red Sox pitcher who won a World Series for his team, both supported Scott Brown for the Senate. There is no reason to doubt that these popular, respected men helped bring attention and support to the Brown campaign.

Tim Tebow is appearing in an ad during the Super Bowl which has a profoundly life-affirming statement — the sort of personal arguments against abortion which it is impossible to contradict. Other college football superstars have made the same sort of appeal. Colt McCoy and Sam Bradford, superstar quarterbacks during the week before the huge O.U.-Texas game, co-produced a video titled “I am second,” which makes it clear to all their fans that God, and not sports, is the center of their lives. Kurt Warner, whose inspirational life as a pro quarterback is the stuff of legends, would give all his laurels without a second thought to the God who made his wonderful life possible.

Great black athletes, from the late Reggie White, the “Minister of Defense,” to Lynn Swann, one of the greatest receivers in the history of the game, have shown how serious faith takes God-given talent and transforms that into God-inspired lives. J.C. Watts, a man of the cloth and football star, is one black man who has a plan for hope and change which really works, and without more government or huge federal expenditures: Change the man and open hearts and minds to the reality of the infinite love of a Blessed Creator, and so many once-overwhelming problems shrink to the size of an anthill. In this crucial area of conservatism — deep faith in a loving and true God — blacks are among the most conservative people in the world.

Why is there such a strong connection between sports’ greatness and conservatism? There are no atheists in foxholes. Perhaps there are no atheists on the line of scrimmage either. Success in sports permits no shortcuts. Competition is very intense in professional sports; the difference between greatness and failure is nearly always work, practice, study, and team loyalty. The leftist notion that our success in life is the result of dumb luck would outrage those sports heroes who know personally just how many hours of sweat and how much hard study of game films were the difference between victory and defeat.

Sports are genuinely post-racial in a way that Obama’s presidency is not. The best players play, whatever their race, and the mediocre players sit on the bench, whatever the color of their skin. Meritocracy used to be the guiding principle of nearly every aspect of American life. Today, sadly, meritocracy exists in only a handful of areas of our life — sports, classical musical performances, chess matches, software development, and perhaps a few other areas.

Even science, with the abomination of man-made global warming, is pocked with referees on the take. Academic requirements for admission to colleges have been watered down to allow less qualified white, brown, and black students to step in front of more qualified yellow students. Sports, though, remains an oasis of unregulated results — a world in which the social agenda is constructed long before the first action on the agenda has begun.

In all of television today — which has entertainment programs with the villains and victims so clearly scripted based upon gender, race, faith, and other factors — there are few surprises. In television news, the same tired, recycled propaganda is played over and over, and virtually nothing actually new or exciting ever reaches our ears. Schools teach the same boring mush of politically correct lies and rhetoric dressed up as knowledge. Everywhere one looks, dull sameness reigns unchallenged.

Everywhere, that same blandness rules — except in sports. Excitement, change, and actual victories (and very real defeats) are allowed by the system of athletics to happen. Unlike other areas of our life, not everything in team sports is prearranged according to the needs of social balance, gender fairness, racial equivalence, and the like. Young men pray — quite openly! — to God and then throw all that they have into a fierce battle that leaves broken arms, sprained knees, concussions, and many other wounds of war.

Sports are the last part of our free-enterprise system that is not maligned as being run by plutocrats. Sports are the last part of our public rituals of popular events which are connected closely to the divine. Sports have produced true American heroes, like Pat Tillman, the Cardinals defense back who left his professional career and millions of dollars to serve, and sadly, to die, for his country. In a nation filled with shady business bosses cutting deals with pols behind closed doors, in a land in which academic freedom is stillborn in textbooks and curricula constructed to enslave minds, in an America which has surrendered its liberties so often, so quickly, and without any reflection, our values do survive, thrive, and provide champions — like with Greek Olympic athletes, the serious but playful ritual of true competition replenishes us.

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