Category: US business

After some assuming music …

… Gallup CEO Jim Clifton:

During my 40 years at Gallup, I’ve observed that one of the main reasons very talented leaders fail is because their thinking failed them. Not their leadership or management skills, which in many cases are just fine, but their thinking. Specifically, failed leaders in business and politics are usually wrong about a core premise that drives all their strategies. …

Many people in the highest levels of U.S. government think that 1.5 billion Muslims are uncomfortable with the West because they “hate us for our freedom” and that “religion divides us.” So, leaders build policy — war, economic sanctions, and anti-terror campaigns — around these assumptions. But Gallup World Poll data tell another story entirely.

The world’s Muslims don’t hate us because of our freedom or our way of life or because they’re religious fanatics. Gallup finds that their discomfort comes predominantly from a hopelessness rooted in economic despair and joblessness. This is an economic problem, not a religious one. Yet too often, policies are created around these wrong assumptions. …

Correct assumption No. 1: Entrepreneurship trumps innovation

Many thinkers and leaders in the U.S. and around the world have reviewed decades of America’s global economic dominance and concluded that the country has been a colossus because of superior innovation. That is the global conventional wisdom, the core assumption. Thousands of conferences around the world have been organized around this assumption. Some countries are even building “innovation cities.”

In my view, rooted in decades of Gallup research and our company’s work with many multinational corporations and city and national governments, this assumption is dead wrong. And I believe that America has stopped growing because leaders are governing from this faulty premise.

The U.S. cannot innovate its way out of its stagnant growth. It must enterprise its way to prosperity. Simply put, when it comes to fostering long-term economic growth, entrepreneurship trumps innovation. Put another way: An innovative product or service has no commercial value until a talented businessperson finds a customer for it. ,,,

The U.S. has no peer at high-level intellectual development. The country has many of the best universities in the world. And the best of America’s private and public K-12 schools do a marvelous job at intellectual development, which is nurtured systematically and intentionally. But entrepreneurial development is completely left to chance. Right now, if you’re a 12th–grader blessed with an unusually high IQ — perhaps even in an inner-city neighborhood like California’s Compton or Watts — testing will find you. And if you’re really brilliant, you’ll get extra special treatment and possibly scholarships to the best schools in the country. You may even get financial help all the way to a Ph.D. at MIT, then go off to NASA, the National Institutes of Health, or the like. If you’re blessed with real talent to think and learn, the system likely will find you. …

However, if you were born with rare entrepreneurial talent — unusual determination, optimism, and problem-solving skills — the system has no way of finding you, certainly not in Compton or Watts. Nothing finds you. There is no formal identification system. There are no formal special classes, no colleges bidding for you, no evening classes with the best teachers, and nothing sent to your parents that identifies you as gifted. Colleges and universities place tremendous weight on SAT or ACT scores. But nobody asks about the applicant’s ability to start a company, build an organization, or create millions of customers. America leaves that to chance. …

The U.S. Department of Education should lead the creation and passing of a bill that requires all high schools and middle schools to test every student for entrepreneurial aptitude. Gallup is working with some of the best test makers in the world now, and we are confident that the intellectual attributes of entrepreneurship are as testable as IQ, athletic “40 speed,” or vertical jump height. …

Correct assumption No. 2: Small businesses are the key to America’s economic revival

When small businesses boom, jobs boom, GDP booms, and exports boom.

There are approximately 6 million small businesses in the United States, and they are the very backbone of the country’s democracy. Those businesses fund significantly more American jobs and GDP than big business does. Here is something you likely don’t know: Of the 6 million small businesses out there, 75% of the owners or proprietors aren’t in business to build something big. They aren’t trying to build the next Intel or Waste Management. They’re not even in it for the money. Most small-businesspeople are in it for one reason: freedom. Almost no leader in the world knows that.

Three out of four entrepreneurs get up each morning with the simple yearning for total, complete, unimpeded independence. They must be their own boss or they can’t cope with the day. They cannot be employed at IBM or even at a local car dealership because they are like the coyote — they can never be domesticated. So let’s not try. Instead, let’s say, “God bless you for all the jobs and economic energy you create. It’s great to have you here.”

The remaining 25% of these small businesses do want to build something big. They do get up every day dreaming of creating an empire of customers and services. They are the most important people on the planet because when they win, America wins — and when America wins, so does the global economy.

When these 1.5 million businesses boom, jobs boom, GDP booms, and exports boom. In my view, nothing is more heroic in America right now than creating a customer abroad. The White House should give medals every Monday morning to small-business owners who are booming because they have found foreign customers to export to, and those exports are crucial to creating American jobs. It’s not too hard to believe that whether the U.S. goes broke or is prospering in 10 years lies predominantly in the American cultural phenomenon of small business — the 1.5 million empire builders.

Correct assumption No. 3: Entrepreneurship must be fostered at the city level

Let me narrow that 1.5 million number down to 1 million, because that’s probably a more accurate estimate of high-potential small-business boomers and empire builders. And I’d rather use a more conservative figure.

Here is an intervention that would help those 1 million small-businesspeople prosper and thrive and thus drive a resurgence of the U.S. economy: Cities should dedicate one great coach — a local star senior adviser, an executive or entrepreneur with a proven track record of success — for every 10 high-potential small businesses. This is not an activity for Washington or for the states. This must happen city by city.

What we need at the national level is a campaign that asks every single mayor and city councilperson in the country this question: What is your plan to boom high-potential small businesses? Although, in my opinion, many mayors and city council members likely will have little grasp of the subject of entrepreneurship. Still, they’re the place to start because the future of their cities depends on the degree to which they make their cities attractive to entrepreneurs. Those city leaders may think their job is negotiating union contracts and government-employee benefits, but they won’t be able to pay their employees, much less help their cities prosper and thrive, without a growing and thriving entrepreneurial sector. …

To jump-start a stagnant U.S. economy and put the country on a path toward long-term economic growth and prosperity — even global dominance once again — leaders must get their assumptions right. They must understand that entrepreneurship trumps innovation and that finding the next generation of great entrepreneurs means cultivating them in middle schools, high schools, and colleges and universities, just as surely and intentionally as the country cultivates innovators.

The college role in cultivating entrepreneurs is explained by Syracuse University Prof. Carl Schramm:

If one manages, using Facebook and other social media, to establish celebrity status, however restricted the province in which it is achieved, pre-college adolescents come to believe the world has deemed them somehow accomplished.  Narcissism is the result of a theorem of social engagement that sees successfully establishing a unique identity as the goal of life.  The achievement of objectively important things that are judged important because they advance the welfare of others – seems a terribly old fashioned, outdated and irrelevant way to order one’s life.  Beyoncé bests Ben Carson!

Thus, aspiring entrants are asked to write about, among other things, how something they have done has changed the world!  Anticipating such questions, and either affirming the values that are presumed to underlie them or knowing that their students have to play this game to successfully apply to college, something on the order of 80 percent of school districts require students to do “community service” projects as a condition for graduation. …

Given that getting into college no longer brings with it the expectation of a good job in an economy that is starting to appear as if it discriminates against too much education in entry-level positions, maybe an alternative question should be substituted.  Why not ask aspiring students if they ever started a business, worked in a new business, know an entrepreneur, or might themselves want to create a new business?  This simple change or addition to the required essays could be the first great lesson colleges might teach.

For one, it might cause students to think that their role in the economy is more up to them to make than for their college education to preordain.  Increasingly, in an economy that is changing in profound ways not the least of which is that productivity in all industries is reducing the demand for even highly trained labor, everyone will be more and more responsible for the opportunities they can make.  Perhaps the most successful applicants will write that their goal is to “make a job, not take a job.”  Come to think about it, the phrase has a faint community service ring to it.  Maybe existing jobs should go to those who can’t make their own.

Second, it would force high school students to consider that perhaps business is not such a bad career choice.  In fact 90 percent of graduates work in the private sector.  Surely they are creative people who have dreams of changing the world for the better.  And, can anyone say that working at Apple or Genentech, or Johnson and Johnson is not changing the world for the better?

Speaking of making jobs, a third benefit comes to mind.  Most of the new jobs made in America are in new firms.  About eighty percent of all new jobs are found in firms less than five years old.  So could it just be that entrepreneurs are doing the very best community service?  What does a phi beta kappa graduate starting an all night basketball league accomplish that is somehow more beneficial to society than the “B-“ graduate who undertakes the risk of starting a company that brings a needed new product to the world, and in the course of doing so gives ten unemployed people jobs that never before existed?  With employment these people can go on to earn dignity and support families and help break the cycle of poverty.

Finally, if colleges required students to write about their entrepreneurial aspirations, maybe high schools and universities might learn something about how to structure education in ways that really improve what students learn and need to learn.  The college that sets its sights on helping more of its graduates start businesses that can help the society become more robust economically might think twice about developing courses in any number of fields where students will never find meaningful work; teaching high school seniors how to write their community service essays being one.

My favorite demographer, Joel Kotkin:

In the wake of the 2012 presidential election, some political commentators have written political obituaries of the “red” or conservative-leaning states, envisioning a brave new world dominated by fashionably blue bastions in the Northeast or California. But political fortunes are notoriously fickle, while economic trends tend to be more enduring.

These trends point to a U.S. economic future dominated by four growth corridors that are generally less dense, more affordable, and markedly more conservative and pro-business: the Great Plains, the Intermountain West, the Third Coast (spanning the Gulf states from Texas to Florida), and the Southeastern industrial belt.

Overall, these corridors account for 45% of the nation’s land mass and 30% of its population. Between 2001 and 2011, job growth in the Great Plains, the Intermountain West and the Third Coast was between 7% and 8%—nearly 10 times the job growth rate for the rest of the country. Only the Southeastern industrial belt tracked close to the national average.

Historically, these regions were little more than resource colonies or low-wage labor sites for richer, more technically advanced areas. By promoting policies that encourage enterprise and spark economic growth, they’re catching up.

“Policies that encourage enterprise and spark economic growth”?

While California, Illinois, New York, Massachusetts and Minnesota have either enacted or pursued higher income taxes, many corridor states have no income taxes or are planning, like Kansas and Louisiana, to lower or even eliminate them.

The result is that corridor states took 11 of the top 15 spots in Chief Executive magazine’s 2012 review of best state business climates. California, New York, Illinois and Massachusetts were at the bottom. The states of the old Confederacy boast 10 of the top 12 places for locating new plants, according to a recent 2012 study by Site Selection magazine.

Energy, manufacturing and agriculture are playing a major role in the corridor states’ revival. The resurgence of fossil fuel–based energy, notably shale oil and natural gas, is especially important.

Wisconsin certainly has manufacturing and agriculture. Not sure about energy, although keep that  thought in mind during the frac sand mining debates.

The corridors’ growing success is a testament to the resiliency and adaptability of the American economy. It also challenges the established coastal states and cities to reconsider their current high-tax, high-regulation climates if they would like to join the growth party.

Wisconsin is not joining the “growth party,” and Wisconsin’s refusal to reconsider our “current high-tax, high-regulation climates” is the reason.

CNS News reports that gun manufacturers are putting their money where their mouths are:

A growing number of firearm and firearm-related companies have stated they will no longer sell items to states, counties, cities and municipalities that restrict their citizens’ rights to own them.

According to The Police Loophole, 34 companies have joined in publicly stating that governments who seek to restrict 2^nd Amendment rights will themselves be restricted from purchasing the items they seek to limit or ban. …

Bravo Company USA states:

“The people at Bravo Company USA and BCM support responsible private individuals having access to the same tools of civilian Law Enforcement to affect the same ends … As such Bravo Company’s policy is that law enforcement officials and departments will be restricted to the same type of products available to responsible private individuals of that same city or state.”

This is an interesting converse of a trend that started in the 1970s and 1980s, when activists hectored companies to abandon their operations in South Africa because of its apartheid policies. The most prominent of those companies may have been General Motors, which after passage of the Comprehensive Anti-Apartheid Act sold off its South African subsidiary in 1987, only to repurchase 49 percent of it a decade later and the rest in 2004.

The concept is pretty simple: Businesses should be able to choose, or not choose, their own customers. This is not a decision made lightly in the case of refusing to sell to a unit of government. It is, however, telling that businesses have more respect for the rights of American citizens than government does.

Quality Arms has this on its website:

We at Quality Arms build semi auto sporting rifles (so called assault rifles) used by members of the public and law enforcement agencies of the free world and because of recent events find ourselves under attack from liberal minded individuals who feel we are the problem of today’s society.

These elected officials have their own agenda to circumnavigate the truth and destroy the constitution of the United States of America. Any rifle, pistol, knife, baseball bat is an inanimate object and therefore is useless as a weapon until a person whether mentally unstable or of a criminal mind decides to use that object in a criminal way.

These liberal politicians are jumping on the band wagon to bolster their own ego’s and have little or any respect for anybody or any laws passed by the founding fathers of this once great nation and wish to destroy the very existence as to how and why those laws came about.

They must not be allowed to destroy the 2^nd amendment because if they succeed what other laws will they wish to change in the name of the people.

We at Quality Arms are against any Politician, Law enforcement official, and any other organization who feel it is their right and purpose to destroy the freedoms and liberties of the citizens of this Country.

As such we consider such acts as TREASONABLE.

The U.S. Constitution has the Second Amendment. Wisconsin’s Constitution has Article I, section 25: “The people have the right to keep and bear arms for security, defense, hunting, recreation or any other lawful purpose.”

Which seems to lead to an opportunity for this state. A number of firearms manufacturers are based in states such as New York and Connecticut, which have more stringent gun laws than the spirit of the Second Amendment suggests.  (As we’ve seen from mass shootings, the only people who follow firearms laws are those who follow the law generally.) State government is also trying to jump-start the state’s moribund economy (in a nation whose economy is worse than Wisconsin’s).

Unlike in some states, the La Crosse Tribune reports:

Amid continuing debate over cutting gun violence, Republicans in control of the Wisconsin Legislature say it’s unlikely the state will pass any gun-control legislation this session.

While some other states and Congress mull bans on assault weapons or high-capacity magazines, or tighter background checks on buyers, Wisconsin Republicans say they will focus instead on potential gaps in the state’s mental health system.

“I’d be really surprised if anything passes here in Wisconsin that would restrict gun access,” said state Sen. Glenn Grothman, R-West Bend. “We haven’t talked about it because we’re not going to do it.”

Grothman, a gun owner and member of the National Rifle Association, said he is against most, if not all, of the measures President Barack Obama’s administration is pushing since a gunman killed 20 first-grade students and six educators in December at Sandy Hook Elementary in Newtown, Conn. …

“They looked at the isolated incident in Connecticut, which a horrible thing, and all of a sudden say we have to change our constitution,” Grothman said. “We have more guns but less problems in Wisconsin.”

Federal data show Wisconsin had 80 firearm murders in 2011, down from 97 the year before. Nationally, firearm murders have dropped in recent years; the number was in 8,583 in 2011, down from 10,129 in 2007. Calculating the level of gun ownership in Wisconsin is more difficult since the state doesn’t require firearm registration. …

Assembly Majority Leader Scott Suder, a Republican from Abbotsford, said he’ll listen to ideas on cutting gun violence but “they can’t go too far.”

“We’re not going to limit how many ammunition clips people can have,” Suder said. “That is a red herring and cannot solve any gun crime.”

Gov. Scott Walker and the Wisconsin Economic Development Corp. should send out Lt. Gov. Rebecca Kleefisch, who apparently has the role of the state’s number one business recruiter, to firearms manufacturers in states with unduly restrictive (not to mention ineffective, as Newtown, Conn., demonstrates) gun laws to move their companies to Wisconsin. This state is well known for its hard-working skilled workforce, which would fit in well with the precision manufacturing requirements of firearms. The gunmakers can work in a state with a lot of firearms enthusiasts, a lot of hunters, and, with a few exceptions (the Madison–Milwaukee axis), people who would welcome them here. And thanks to the Obama administration, firearms manufacturers are having banner years.

Companies this might apply to include Charter Arms, based in Sheldon, Conn.; Smith & Wesson, based in Springfield, Mass.; Ruger, with corporate headquarters in Southport, Conn.; Colt, of West Hartford, Conn.; ArmaLite, of Geneseo, Ill.; Rock River Arms of Colona, Ill.; and others.

Kleefisch need simply argue that businesses should go where they’re wanted. Based on the actions of their home states’ governors and legislatures, they don’t appear to be welcome where they are now.

The Republican Party, controlling half of Congress, appears to have no theme and no guiding principles besides opposing Barack Obama.

Robert Zubrin suggests some guiding principles for the GOP:

It should be clear by now that merely waging guerrilla warfare against the Obama administration on a miscellaneous set of peripheral issues won’t do. Rather, what is needed is an independent agenda organized around a central theme that is readily comprehensible to the American people and designed to deal with the critical problems facing the nation. That agenda can only be economic growth.

Economic growth must be the central issue because it is only through growth that the devastating threat of national bankruptcy can be averted. Furthermore, it is only by reviving American economic growth that the West’s global predominance can be sustained, and peace and freedom kept secure around the world. Finally, it is only through economic growth that we can provide the millions of jobs for which Americans are crying out.

The choice that must be set before the body politic is between a set of policies that offer the prospect of real economic growth and a set that is inimical to that end. These can be laid out in a number of areas.

1. Stop red-tape strangulation. The proliferation of bureaucracy, regulations, and red tape at every level of government has been a problem for some time. But it has become especially onerous during President Obama’s tenure, to the extent that it has crippled the administration’s own efforts to build anything through its stimulus bill’s public-works projects. For companies and individuals, the impositions have been even worse, with the worst culprit being the EPA. It has denied or delayed millions of construction permits, on pretexts ranging from preserving imaginary rest-stops for migratory wildlife to halting suburban sprawl. It has prevented innumerable individuals from improving their own property, even when improvements — such as draining disease-spreading swamps — are necessary for public health and safety. It has created mountains of unjustifiable, indecipherable, and fundamentally unknowable regulations and imposed trillions of dollars in cumulative compliance and litigation costs on businesses of every description, thereby preventing their expansion or even driving them into bankruptcy.

2. Make energy plentiful and cheap. Energy powers our economy, both literally and figuratively. The more that energy costs, the less economic activity there can be. This is shown dramatically in the figure below, which compares U.S. unemployment rates with oil prices over the past four decades. Notice that every time the price of oil rises, American unemployment rates shoot up shortly thereafter.

The policy of the Obama administration is to employ regulatory strangulation to drive up the price of energy. This must be exposed and opposed for what it is: a policy of forced economic contraction. Items to be identified as part of this policy include:

• Efforts to impede the development of oil resources by impeding exploration, discouraging drilling, or holding up the building of infrastructure required for transport. The U.S. is the world’s leading oil importer; our adversaries are the world’s leading exporters. Any policy that restricts our oil production and thereby protects the ability of the Islamist-led OPEC cartel to rig high oil prices hurts the U.S. and helps our adversaries.
• Efforts to impede the development of natural gas by creating regulatory obstacles to fracking and other technologies.
• Efforts to constrict the nuclear industry. …
• Efforts to kill coal-fired power generation. Nuclear power accounts for 20 percent of American electricity, while coal produces 40 percent. Obama’s EPA recently set forth new regulations that will, at a minimum, vastly increase the price of coal-generated power, and that will most likely, as is their clear intent, wipe the industry out altogether. …

Beyond opposing the destructive efforts of the Obama administration to constrict our energy production, the GOP needs to take the lead in forcing open the transportation-fuel market to non-petroleum resources. In particular, this means methanol, a very clean-burning liquid fuel that can be cheaply made from coal or natural gas — both resources that the U.S. possesses in abundance. Methanol is currently selling for $1.30 per gallon, without any subsidy. Nearly all cars sold in America for the past five years have flex-fuel capabilities that can be enabled by a properly skilled mechanic at little expense, and that would allow them to be driven with equal facility on gasoline, methanol, ethanol, or any mixture of the three, thereby opening the fuel market to free-market competition that would drive prices down across the board. Unfortunately, the EPA currently bans the commercial marketing of such conversions, as well as the sale of motor-vehicle methanol fuel in concentrations above 5.4 percent. These artificial regulatory obstacles to making full use of our own fuel resources are causing immense economic harm to America and need to be removed.

3. Defeat the war on carbon. This is closely related to the energy issue, but it has a broader aspect as well. President Obama has declared that a central goal of his second term will be to reduce humanity’s use of carbon. Yet as can be seen in figure 2, below, which graphs the advance in human well-being over the past 200 years (as measured by average global per capita GDP, in inflation-adjusted 2010 dollars), a sizable portion of the world’s population has managed an almost miraculous escape from poverty over the past two centuries.

As the graph shows, this has been driven largely by carbon use. But with the average human being still surviving on less than $9,000 per year, it is clear that we still have a long way to go. If the bulk of the human race is to have the opportunity for a decent life, it is clear that the world needs to use a lot more carbon. …

4. Hold the line on taxes. Given the massive federal deficits, there is little prospect for any tax cuts that might contribute significantly to economic recovery. Even if there were, such a program would likely not be comprehensible to the public. Consequently, the emphasis must be on deregulation as the key strategy for enabling economic growth. At the same time, however, economy-depressing tax increases must be avoided. In particular, now that the issue of general income-tax rates has been settled, ideologues associated with the Democratic party are advancing proposals for collecting new government revenue through carbon taxes. These need to be opposed not just as efforts to continue to fund the cancerous growth of economy-strangling government bureaucracy (which they are) but as ultra-regressive measures that place a disproportionate burden on the poor, the working class, the middle class, and businesses that produce real things. Carbon taxes are much more regressive even than sales taxes, because high-priced prestige items, such as high-fashion dresses, generally involve no more carbon in their production than their low-priced counterparts. Furthermore, while sellers of junk stock or real-estate derivatives need use no carbon, those who make their money producing steel, food, plastics, paper, fabrics, cars, airplanes, buildings, or energy — in short, nearly everything making up the material basis of society — do indeed use carbon. In short, there could be no worse taxes than carbon taxes, nor any better means conceivable by which to harm the economy and the average American. …

In any case, the central issue is … the freedom to use technology — new or old — to create wealth. At every turn, the administration’s policy is to restrict such freedom, thereby constricting the nation’s potential for economic growth. Such a “limits to growth” strategy is not just an attack on enterprising businessmen. It is a betrayal of the hopes of all, but most particularly the poor, who counted on Obama to lead them to the Promised Land.

I’ve written before here about how economic growth is dependent on energy. Suggesting that economic growth can take place while less energy is produced is completely wrong. If generating more energy also means the destruction of OPEC, well, that’s what you call positive unintended consequences.

The budget deficit is simply too large to cut or tax away. We will never achieve anything in this country if we do not substantially increase economic growth far beyond this Recovery In Name Only (until the feds figure out we’re actually in a recession, which will be later this spring). We need to increase business profits (all businesses, not merely those on the S&P 500) and family incomes.

That growth theme is something that Gov. Scott Walker should have made a central theme of his State of the State speech last night. Wisconsin’s unemployment rate is less than the state average, but not enough jobs are being created. That is because Walker and the Legislature haven’t done nearly enough to undo the Doyle administration, beginning with the $2.1 billion tax increase and excessive regulators (both in number and what they do). It’s not enough to get elected; you have to actually do something once in office, like tax cuts you’d actually notice.