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Posts For: November 15, 2008

What About Small Businesses?

Billionaire Mark Cuban, owner of the Dallas Mavericks, spots something missing in President-elect Obama’s economic advisory team:

If we are going to solve our current economic problems, our president needs to get first hand information on the impact his proposed policies will have on real Joe the Plumbers. People who are 1-person companies living job to job, hoping they get paid on time. We need to know what the impact of his policies will be on the individually owned Chrysler Dealership in Iowa. The bodega in Manhattan. The mobile phone software startup out of Carnegie Mellon. The event planner in Dallas. The barbershop in L.A. The restaurant in Boston.

Entrepreneurs that start and run small businesses will be the propellant in this economy. PE Obama needs to have the counsel of those who will take the real risk inherent in creating companies and jobs. Those who put their money and lives on the line with their business.

Without it, the rules of unintended consequences of any economic policy could hit you in the mouth in ways you never expected. Things like forcing companies from being taxpayers to the underground cash economy, or forcing new hires to be independent contractors to avoid having to pay their insurance or higher matching social security amounts. Your current group has no one with 100% of their net worth on the line. I promise you that the possibility of losing it all will provide a completely different perspective than any of the “knowledge” the esteemed, learned members of his current advisory team offer.

In the closing weeks of the campaign, John McCain gamely tried to explain the impact of Obama’s policies on entrepreneurs. But not enough voters seemed convinced that Obama was really going to enact policies that would adversely impact small businesses. Now we will see if a tax hike (both income and payroll), health care mandates, and other anti-business plans (e.g. abolishing secret union ballot elections) are really on the agenda. If so, the economy will be the worse for it, although Republicans will have an “I told you so” opportunity.

Just as Phil Gramm had “Dickie Flatt” and John McCain had “Joe the Plumber,” the Congressional Republicans could use some real-world small business people to illustrate the impact of the new administration’s policies. Now there is always the possibility that the President Elect would take Cuban’s suggestion, solicit some advice from small business leaders and modify his economic policies with an eye toward growing, rather than burdening, small businesses. That might entail junking his tax hike, rethinking his health care plans, and stiffing some liberal interest groups (e.g. unions and trial lawyers).

Well, that doesn’t seem all that likely — which suggests that our economic outlook may not brighten anytime soon.

Billionaire Mark Cuban, owner of the Dallas Mavericks, spots something missing in President-elect Obama’s economic advisory team:

If we are going to solve our current economic problems, our president needs to get first hand information on the impact his proposed policies will have on real Joe the Plumbers. People who are 1-person companies living job to job, hoping they get paid on time. We need to know what the impact of his policies will be on the individually owned Chrysler Dealership in Iowa. The bodega in Manhattan. The mobile phone software startup out of Carnegie Mellon. The event planner in Dallas. The barbershop in L.A. The restaurant in Boston.

Entrepreneurs that start and run small businesses will be the propellant in this economy. PE Obama needs to have the counsel of those who will take the real risk inherent in creating companies and jobs. Those who put their money and lives on the line with their business.

Without it, the rules of unintended consequences of any economic policy could hit you in the mouth in ways you never expected. Things like forcing companies from being taxpayers to the underground cash economy, or forcing new hires to be independent contractors to avoid having to pay their insurance or higher matching social security amounts. Your current group has no one with 100% of their net worth on the line. I promise you that the possibility of losing it all will provide a completely different perspective than any of the “knowledge” the esteemed, learned members of his current advisory team offer.

In the closing weeks of the campaign, John McCain gamely tried to explain the impact of Obama’s policies on entrepreneurs. But not enough voters seemed convinced that Obama was really going to enact policies that would adversely impact small businesses. Now we will see if a tax hike (both income and payroll), health care mandates, and other anti-business plans (e.g. abolishing secret union ballot elections) are really on the agenda. If so, the economy will be the worse for it, although Republicans will have an “I told you so” opportunity.

Just as Phil Gramm had “Dickie Flatt” and John McCain had “Joe the Plumber,” the Congressional Republicans could use some real-world small business people to illustrate the impact of the new administration’s policies. Now there is always the possibility that the President Elect would take Cuban’s suggestion, solicit some advice from small business leaders and modify his economic policies with an eye toward growing, rather than burdening, small businesses. That might entail junking his tax hike, rethinking his health care plans, and stiffing some liberal interest groups (e.g. unions and trial lawyers).

Well, that doesn’t seem all that likely — which suggests that our economic outlook may not brighten anytime soon.

Read Less

Do No Harm

Looking over the potential agenda for the G-20 summit the Washington Post editors conclude with these words of warning:

The assembled leaders can also help by not making things worse. A pledge to keep trade free or even to expand it by reviving the Doha round of liberalization talks would go a long way toward that goal. At times like this, political leaders tend to focus on the disasters of the moment rather than on the less spectacular but much more substantial growth of the past. The temptation is strong to heed those who say today’s crisis proves capitalism’s fatal flaws — rather than its need for modernization and reform. In fact, over time, maximum economic freedom, responsibly regulated, delivers maximum economic welfare. The summiteers should carve out some time today to rededicate themselves to that basic principle.

This is sage advice during a week in which American officials and politicians have lurched from one idea to the next. Buying toxic assets is out –bank equity is in. Car bailouts? Oh definitely yes — but not until more Democrats come on board. Now let’s work on consumer debt. Or maybe a stimulus package. Or all of the above. It is obvious that those in positions of authority really don’t have a clue what will work and what to do. As one CNBC commentator put it, economic officials these days resemble ten-year olds sketching football plays in the dirt at a neighborhood pick up game. Sure –let’s try this!

In such circumstances it might be best to stop. Stop stirring the pot, stop raising expectations that another bailout is around the corner. And for goodness sakes, stop racking up more debt. (Sooner or later the American people will find out the money in their pockets is being devalued.) Less is more. Deliver a tax cut, avoid protectionism, and allow businesses and individuals to resume making decisions based on something other than “Will the government help me out?”

It is not a recipe for a painless or quick recovery. But the other options entail greater longterm risks to the health of the economy. Now there’s a politically attractive slogan: “Do nothing!” Which is why politicians are unlikely to follow this course of (in)action — and which is why things are likely to get much worse before they get better.

Looking over the potential agenda for the G-20 summit the Washington Post editors conclude with these words of warning:

The assembled leaders can also help by not making things worse. A pledge to keep trade free or even to expand it by reviving the Doha round of liberalization talks would go a long way toward that goal. At times like this, political leaders tend to focus on the disasters of the moment rather than on the less spectacular but much more substantial growth of the past. The temptation is strong to heed those who say today’s crisis proves capitalism’s fatal flaws — rather than its need for modernization and reform. In fact, over time, maximum economic freedom, responsibly regulated, delivers maximum economic welfare. The summiteers should carve out some time today to rededicate themselves to that basic principle.

This is sage advice during a week in which American officials and politicians have lurched from one idea to the next. Buying toxic assets is out –bank equity is in. Car bailouts? Oh definitely yes — but not until more Democrats come on board. Now let’s work on consumer debt. Or maybe a stimulus package. Or all of the above. It is obvious that those in positions of authority really don’t have a clue what will work and what to do. As one CNBC commentator put it, economic officials these days resemble ten-year olds sketching football plays in the dirt at a neighborhood pick up game. Sure –let’s try this!

In such circumstances it might be best to stop. Stop stirring the pot, stop raising expectations that another bailout is around the corner. And for goodness sakes, stop racking up more debt. (Sooner or later the American people will find out the money in their pockets is being devalued.) Less is more. Deliver a tax cut, avoid protectionism, and allow businesses and individuals to resume making decisions based on something other than “Will the government help me out?”

It is not a recipe for a painless or quick recovery. But the other options entail greater longterm risks to the health of the economy. Now there’s a politically attractive slogan: “Do nothing!” Which is why politicians are unlikely to follow this course of (in)action — and which is why things are likely to get much worse before they get better.

Read Less

Kilcullen on Afghanistan

David Kilcullen — a former Australian army officer who has advised General David Petraeus and Secretary of State Condoleezza Rice — is one of the world’s top counterinsurgency strategists. So it is no surprise that his thoughts on the course of the Afghanistan war are worth a read. In this Q&A
with the New Yorker’s George Packer, he makes a number of valuable suggestions, above all the need to apply classic counterinsurgency doctrine by switching from targeting insurgents to controlling population centers. To wit:

There has been an emphasis on fighting the Taliban, which has led us into operations (both air and ground-based) that do a lot of damage but do not make people feel safer. Similarly, we have a lot of troops in rural areas-small outposts-positioned there because it’s easier to bring firepower to bear on the enemy out in these areas. Meanwhile, the population in major towns and villages is vulnerable because we are off elsewhere chasing the enemy main-force guerrillas, allowing terrorist and insurgent cells based in the populated areas to intimidate people where they live. As an example, eighty per cent of people in the southern half of Afghanistan live in one of two places: Kandahar city, or Lashkar Gah city. If we were to focus on living amongst these people and protecting them, on an intimate basis 24/7, just in those two areas, we would not need markedly more ground troops than we have now (in fact, we could probably do it with current force levels). We could use Afghan National Army and police, with mentors and support from us, as well as Special Forces teams, to secure the other major population centers. That, rather than chasing the enemy, is the key.

He also pours some cold water on the dream of negotiating with an undefeated Taliban-that “is totally not in the cards,” as he puts it. As an alternative he suggests “community engagement” to win over local areas that are “tacitly supporting the Taliban by default (because of lack of an alternative).”

Read, as they say, the whole thing.

David Kilcullen — a former Australian army officer who has advised General David Petraeus and Secretary of State Condoleezza Rice — is one of the world’s top counterinsurgency strategists. So it is no surprise that his thoughts on the course of the Afghanistan war are worth a read. In this Q&A
with the New Yorker’s George Packer, he makes a number of valuable suggestions, above all the need to apply classic counterinsurgency doctrine by switching from targeting insurgents to controlling population centers. To wit:

There has been an emphasis on fighting the Taliban, which has led us into operations (both air and ground-based) that do a lot of damage but do not make people feel safer. Similarly, we have a lot of troops in rural areas-small outposts-positioned there because it’s easier to bring firepower to bear on the enemy out in these areas. Meanwhile, the population in major towns and villages is vulnerable because we are off elsewhere chasing the enemy main-force guerrillas, allowing terrorist and insurgent cells based in the populated areas to intimidate people where they live. As an example, eighty per cent of people in the southern half of Afghanistan live in one of two places: Kandahar city, or Lashkar Gah city. If we were to focus on living amongst these people and protecting them, on an intimate basis 24/7, just in those two areas, we would not need markedly more ground troops than we have now (in fact, we could probably do it with current force levels). We could use Afghan National Army and police, with mentors and support from us, as well as Special Forces teams, to secure the other major population centers. That, rather than chasing the enemy, is the key.

He also pours some cold water on the dream of negotiating with an undefeated Taliban-that “is totally not in the cards,” as he puts it. As an alternative he suggests “community engagement” to win over local areas that are “tacitly supporting the Taliban by default (because of lack of an alternative).”

Read, as they say, the whole thing.

Read Less

“New Politics” — What’s That?

Word comes that the Obama transition team is chock full of bundlers and lobbyists. The New York Times tells us:

Among the full roster of about 150 staff members being assigned to government agencies between now and Inauguration Day are dozens of former lobbyists and some who were registered as recently as this year. Many more are executives and partners at firms that pay lobbyists, and former government officials who work as consultants or advisers to those seeking influence.

Welcome to reality. For some of us, the whole “New Politics” pitch was always a canard, a cynical sales pitch. Barack Obama didn’t eschew misleading ads. He didn’t keep to his word on public financing. And he hasn’t chased those dreaded lobbyists out of Washington. This should come as no surprise. This is how politics is done.

This duplicity might have annoyed Obama’s opponents –both Hillary Clinton and John McCain — who were often on the receiving end of his barbs about Washington insiders. They may have rolled their eyes in disgust as he presented himself, the willing ally of the Daley machine, as politically holier-than-thou. But he won, and now we will see if the President-elect will cater to those special interests he railed against and which now infest his transition team.

Can he say no to Big Labor? We will be able to judge if the Employee Free Choice Act reaches his desk, or if he goes forward with economically perilous protectionist measures. And we also will get a hint when education reform comes up and the teachers’ unions scream about school choice. We will see if the trial lawyers must suffer any setbacks in health care reform, accepting limits on malpractice suits. And if the new President shushes the environmental lobby and insists that offshore drilling must indeed be part of an energy plan, we will know he has risen to the occasion.

The more cynical among us suspect he has just changed “their” lobbyists for “his,” and that a new crew of equally self-interested and self-dealing officials is moving in to replace the old crew. The election is over — it is back to reality.

Word comes that the Obama transition team is chock full of bundlers and lobbyists. The New York Times tells us:

Among the full roster of about 150 staff members being assigned to government agencies between now and Inauguration Day are dozens of former lobbyists and some who were registered as recently as this year. Many more are executives and partners at firms that pay lobbyists, and former government officials who work as consultants or advisers to those seeking influence.

Welcome to reality. For some of us, the whole “New Politics” pitch was always a canard, a cynical sales pitch. Barack Obama didn’t eschew misleading ads. He didn’t keep to his word on public financing. And he hasn’t chased those dreaded lobbyists out of Washington. This should come as no surprise. This is how politics is done.

This duplicity might have annoyed Obama’s opponents –both Hillary Clinton and John McCain — who were often on the receiving end of his barbs about Washington insiders. They may have rolled their eyes in disgust as he presented himself, the willing ally of the Daley machine, as politically holier-than-thou. But he won, and now we will see if the President-elect will cater to those special interests he railed against and which now infest his transition team.

Can he say no to Big Labor? We will be able to judge if the Employee Free Choice Act reaches his desk, or if he goes forward with economically perilous protectionist measures. And we also will get a hint when education reform comes up and the teachers’ unions scream about school choice. We will see if the trial lawyers must suffer any setbacks in health care reform, accepting limits on malpractice suits. And if the new President shushes the environmental lobby and insists that offshore drilling must indeed be part of an energy plan, we will know he has risen to the occasion.

The more cynical among us suspect he has just changed “their” lobbyists for “his,” and that a new crew of equally self-interested and self-dealing officials is moving in to replace the old crew. The election is over — it is back to reality.

Read Less

The Obama Agenda

Come January, when Barack Obama takes the oath of office as our 44th president and the Democrats formally take possession of two-thirds of our government, many people will wonder just what the Obama administration will do. What will be its priorities? What legislation will become most important?

Those who are even slightly familiar with Obama’s record ought to have a firm grasp of what is to come: whatever Majority Leader Reid and Speaker Pelosi think is most important to them will be pushed first.

Obama, in his entire political career, has lived by one overarching philosophy: “go along to get along.” He has never once bucked the leadership of his party, never publicly disagreed with those who hold the reins of the Democratic party, never once put principle ahead of partisanship.

And it certainly has not been for lack of opportunity. Obama came up through the ranks of the Chicago Democratic machine, an institution so ripe with corruption and cronyism and back-room deals and whatnot that only Louisiana, with its storied (and broadly ecumenical) legends of rogues and villains and scoundrels, could hope to rival it.

There are some who say that Obama, now that he is the titular head of his party, its highest elected official, will take the lead role and determine the course of events. He has served his time “in the trenches,” as it were, played the “go along to get along” game, and now that he has won the presidency, he is finally in place to command the same loyalty that he displayed.

Those who say that weren’t paying attention during the final Obama-McCain debate.

In that debate, John McCain asked Obama to cite one time he had stood up to the leaders of his party on a single major issue. Obama’s response?

Well, there’s a lot of stuff that was put out there, so let me try to address it. First of all, in terms of standing up to the leaders of my party, the first major bill that I voted on in the Senate was in support of tort reform, which wasn’t very popular with trial lawyers, a major constituency in the Democratic Party. I support… I support charter schools and pay for performance for teachers. Doesn’t make me popular with the teachers union. I support clean coal technology. Doesn’t make me popular with environmentalists. So I’ve got a history of reaching across the aisle.

A classic political move: when asked a question you can’t answer or don’t want to answer, instead reply to a question not asked. In this case, Obama can’t cite an example of his crosssing his party’s leadership — he has been a faithful and loyal drone and lackey his entire career. So, instead, he cites times he has taken positions that might have alienated an element of the Democrats’ core constituencies.

McCain challenged Obama to cite a time he had stood against those above him in the hierarchy of his party. Obama responded about his disagreements with those below him. This does not merely deflect the question about his fealty to the system, it reinforces it.

Come January, Senator Obama will most likely outline his agenda in broad strokes, filled with lofty ideals and abstract promises and soaring rhetoric. And then he will step back and let the House and Senate conduct their traditional wrangling, content to let the leadership decide which bills will be pushed, which will be left to their own devices, and which might try to be slipped past the national radar. Obama will content himself with attempting to undo many of the actions taken by the Bush administration both within the Executive branch and on the world stage, basking in the warm glow the world has given him.

At least until the first disastrously bad bill crosses his desk, or we face the inevitable international crisis that Joe Biden predicted. At which point, we will see if it takes President Obama as long as it took President Bush to find the veto stamp.

The smart money says longer.

Come January, when Barack Obama takes the oath of office as our 44th president and the Democrats formally take possession of two-thirds of our government, many people will wonder just what the Obama administration will do. What will be its priorities? What legislation will become most important?

Those who are even slightly familiar with Obama’s record ought to have a firm grasp of what is to come: whatever Majority Leader Reid and Speaker Pelosi think is most important to them will be pushed first.

Obama, in his entire political career, has lived by one overarching philosophy: “go along to get along.” He has never once bucked the leadership of his party, never publicly disagreed with those who hold the reins of the Democratic party, never once put principle ahead of partisanship.

And it certainly has not been for lack of opportunity. Obama came up through the ranks of the Chicago Democratic machine, an institution so ripe with corruption and cronyism and back-room deals and whatnot that only Louisiana, with its storied (and broadly ecumenical) legends of rogues and villains and scoundrels, could hope to rival it.

There are some who say that Obama, now that he is the titular head of his party, its highest elected official, will take the lead role and determine the course of events. He has served his time “in the trenches,” as it were, played the “go along to get along” game, and now that he has won the presidency, he is finally in place to command the same loyalty that he displayed.

Those who say that weren’t paying attention during the final Obama-McCain debate.

In that debate, John McCain asked Obama to cite one time he had stood up to the leaders of his party on a single major issue. Obama’s response?

Well, there’s a lot of stuff that was put out there, so let me try to address it. First of all, in terms of standing up to the leaders of my party, the first major bill that I voted on in the Senate was in support of tort reform, which wasn’t very popular with trial lawyers, a major constituency in the Democratic Party. I support… I support charter schools and pay for performance for teachers. Doesn’t make me popular with the teachers union. I support clean coal technology. Doesn’t make me popular with environmentalists. So I’ve got a history of reaching across the aisle.

A classic political move: when asked a question you can’t answer or don’t want to answer, instead reply to a question not asked. In this case, Obama can’t cite an example of his crosssing his party’s leadership — he has been a faithful and loyal drone and lackey his entire career. So, instead, he cites times he has taken positions that might have alienated an element of the Democrats’ core constituencies.

McCain challenged Obama to cite a time he had stood against those above him in the hierarchy of his party. Obama responded about his disagreements with those below him. This does not merely deflect the question about his fealty to the system, it reinforces it.

Come January, Senator Obama will most likely outline his agenda in broad strokes, filled with lofty ideals and abstract promises and soaring rhetoric. And then he will step back and let the House and Senate conduct their traditional wrangling, content to let the leadership decide which bills will be pushed, which will be left to their own devices, and which might try to be slipped past the national radar. Obama will content himself with attempting to undo many of the actions taken by the Bush administration both within the Executive branch and on the world stage, basking in the warm glow the world has given him.

At least until the first disastrously bad bill crosses his desk, or we face the inevitable international crisis that Joe Biden predicted. At which point, we will see if it takes President Obama as long as it took President Bush to find the veto stamp.

The smart money says longer.

Read Less




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