Crossposted from The Pacific Gate Post
The developed world, and most of the struggling third world, as much as it may pretend otherwise for politically expedient reasons, is depending on an American economic turnaround. This means that the world is in fact awaiting, not for Washington to solve its debt crisis, not for a forestalling of Obama’s armageddon, not for resolutions of budget deficits, but for the resurgence of America’s unique brand of entrepreneurialism.
American entrepreneurs have always been the consummate optimists, whose innovation, creativity, ingenuity, resourcefulness, and financial diligence, have produced the most successful economic engine in history. Entrepreneurs have independently created companies, big and small, that have sustained the tests of time and market adversities, and some have gone on to become international behemoths.
Today, America is spinning and twisting under leadership that vilifies businesses and maligns corporate America. It imposes laws, and institutes structural dictates that push entrepreneurship into the realm of the nearly impossible. An administration that promotes a climate of government growth and government dependence, is promoting the destruction of the fundamental and positive core of the human spirit that makes for a dynamic society.
When government grows faster than the private sector, net productivity shrinks. Such is the trend in America. It would be a complete waste of time to look to Washington for ideas or programs that might actually be helpful to any advancement of the entrepreneurial exercise. Furthermore, let’s not look to those glad-handers, who’ve gravitated to the beltway to rub shoulders with this Administration, for any answers. The agenda is being manipulated by less than a handful of ideologues behind Obama. Everything else is showcasing and pretense for the masses, accomplishing nothing positive toward improving productivity or increasing GDP.
Not everyone is cut out to become an entrepreneur, however, the urgent need for supporting entrepreneurship is now more manifest than at any time in the past century. Far too broad a swath of the MSM has been supportively trumpeting the Obama Administration’s ideological convictions and hostility toward corporate America. Too many Americans are sliding into the slothful perception that heaping taxation on those who “have,” is an answer to deficits produced by bloated government spending.
Since America’s earliest days, entrepreneurs have disseminated enthusiasm and passion for success which has been contagious. American entrepreneurs champion the work ethic while playing by the country’s rules and laws that much of the world may not emulate, but furtively admires. I say “may not emulate” because, as we have discovered in so many other socio-political environments including China, laws and decency don’t often matter.
In high schools, colleges and universities, students should be encouraged to break new ground for themselves as new entrepreneurs, rather than to go out and “find a job.” It’s always easier and is the default to pursue the latter, but some encouragement is required to attempt the former. Educational institutions should place more emphasis on the stimulation of entrepreneurial thinking, and should allocate class time and courses to the encouragement of new entrepreneurs. You may not be able to “teach” entrepreneurialism, but you can certainly induce its discovery, and inspire its actualization.
Some entrepreneurs may be born, but entrepreneurialism is also a mindset that can be ignited and nurtured, and its required skills developed. More effort should be addressed to cultivating the perception that entrepreneurs are among the most positive contributors to a vibrant and successful society. They are critical to the economic health of America. The entrepreneurial attitude is the antithesis of the union led bureaucratic morass that has grown out of control, and clogged the wheels of progress and the financial well being of companies.
Typically the entrepreneurs who grab public attention are those who cut new trails in technology, however, any new business, in any industry, that can be formed to employ at least one person, is a step in the right direction. America has no choice but to reverse the current trend toward disaster. The Nation must enthusiastically promote entrepreneurialism and its optimistic perseverance.
The world looks forward to America’s new entrepreneurs and the energy they will inject into the world’s most consequential economy.
A constituent of the vast baby boomer generation with a career which has been fortunate to know the ponderous corporate worlds, as well as the intimately pressurized, and invigorating entrepreneurial domains of high tech and venture capital, I have harvested my share of mistakes meandering through corridors of enterprise from Silicon Valley, to London and endless, colourful, sometimes praetorian points in between. The voyage has provided an abundance of fodder for a pen yielding to an inquisitive keyboard, a foraging mind, and a passionate spirit.
Whether political or business or social or economic or personal, is it not all political? It is a privilege to write, and an even greater privilege to be read by anyone, and sometimes with the wind at my back the writing may occasionally be legible. I do not write to invite scorn, nor to invite respect, but if I get really lucky the writing can stimulate thinking. I also write for the very selfish purpose of animating my own processes, and engaging the best of what life offers. Above all, whether biting fire or swatting shadows, I am grateful to be gifted the freedom to write and publish whatever flows down to the keyboard. To all those who enabled this freedom, and to all those standing guard to preserve it, I am indebted.
I would say there are two problems that are keeping up the U.S. in a rut.
One is the lack of world customers. Outside the U.S., extreme poverty is rampant. Half the world population live in households that make less than a dollar a day. If you live in a building with a working refrigerator, you are in the top 20% in terms of world wealth. The U.S. gets beat because it produce high tech expensive stuff that the rest of the world can’t afford. India is coming out with a $8,000 “luxury” car that is street legal in the U.S. and the Indian model sells for about $2,000. The guy that runs that vehicle company, Tata Motors, is a multi-billionare and the company recently bought the Jaguar name. In Africa, U.S. made portable electric generators are priced about three times that of their Chinese counterparts. The Africans buy the Chinese versions and then slightly modify them so they are as sturdy as the U.S. made ones. Also keep in mind that countries such as Mexico maybe thought of as making inexpensive goods, but all those Latin American countries are running massive trade deficits with China. If the U.S. is going to actually produce things, it will have to out price China and India while keeping the quality.
An advantage the U.S. has is money. The problem is the money is tied up into selling to the U.S. market, because that is where the money is. That is a world wide thing. Most of Chinese GNP is tied up in exports and not the internal economy which is practically non existant. That could be used to the U.S. advantage, but the lack of drive by Americans and protectionism in those countries is keeping the U.S. out of building stores and other businesses inside other countries. For about $100, you can start a small business in most countries in the world. For about $10,000 you can open a supermarket in most parts of the world. I believe this money advantage is where it’s at if the government would get involved. China and other nations just can’t compete, because they lack the money to go to other countries and set up shop and by the time they have the money, it would be too late because of market saturation.
@Gregory_Dittman: #1,
Thoughtful comments, thanks.
Re:
“If the U.S. is going to actually produce things, it will have to out price China and India while keeping the quality.”
I think you’ll find that many companies are finally waking up to the sour realities of sourcing in China. China cannot and will not break out of its communist, centralized, control of both its economy and its 1.3+ billion people. The “cheap Chinese labour” is also no longer the differentiating factor it once was. America’s abilities in such things as innovation and quality control are already resulting in companies returning to manufacturing to its own shores.
It is also not enough for a country to have cheap labour in order for it to become a “source” over the long term. A country also must have an infrastructure, a system of laws, and an adherence to international intellectual property laws, for it to be considered a viable “supplier.” Admittedly, even with its systemic corruption, China has been able to take advantage of its strengths, and with America’s help, organized its labour, improved its “mold making,” and its distribution infrastructure. But, . . . communist systems cannot stimulate real entrepreneurship of the American kind. Plus, it cannot continue to steal America’s intellectual property without repercussion.
One thing that concerns me is we might be seeing a reverse brain drain. Companies that develop new stuff and get it to the prototype stage may go overseas for the set up and the financing of production plant or system. I was just reading about that possibility on the traveling way nuclear power plant linked by Instapundit. A lot of big companies have moved headquarters overseas to avoid the tax and regulatory penalties of the current regime in Washington.
On another site I read that the US is now one of the biggest exporters of scrap that gets reprocessed. It used to be fairly common to find people with humanities degrees working at Starbucks, I fear now it will soon be engineering graduates.
@toadold: #3,
“Companies that develop new stuff and get it to the prototype stage may go overseas for the set up and the financing of production plant or system.”
Your concern is well founded, however, the Chinese government and the most powerful families in China will not and cannot change their stripes. Here for example, is a recent calamitous event for a major American company who’s leadership believed it could safely and profitably partner up for manufacturing the best shredding equipment in China:
Fellowes, American Stationery Giant, Brought to Its Knees in China
And here is the related – testimony of James Fellowes, CEO of Fellowes, Inc. before the House Foreign Affairs Committee.
You know one thing, . . . this Administration, and this Congress will do nothing about this grand theft of American intellectual property, nor will they do anything about the major theft of a whole corporation and its principal assets.
The above story is a theft and a fraud perpetrated in broad daylight, but pathetically, it is not an anomaly.
It may take time, but American businesses are waking up to the realities of China, . . . slowly but surely.
James Raider @ 4.
So True, numerous companies thought they could go into China, set up and perhaps take an initial loss to become established in the market and then do a turn around. Never worked, but you still find companies that try it after decades of Western companies getting out hustled by the East, (my apologies to Kipling). Some companies went in twice, the new management thought they were smarter than the old management, you just had to structure the contracts just right, the corporate lawyers said so. Dudes! the law in China is what ever the party heads say it is, even if they bother to acknowledge the concept 0f law for foreign devils. I had one person familiar with China tell me, being shafted on a business deal is sop even with overseas Chinese and even between family members, brother will ream brother in a deal and then they’ll go out for diner together, nothing personal, just business. One fellow said he does business in Hong Kong but he always allows for extra money to be lost, as it is better he said, to plan and allow for the small shaft rather than struggle and get the big one.
Be that as it may, there are countries that are struggling toward implementing business law or beefing up what they have in place. Investment money is getting hard to come by these days. A factory in Ireland financed with out of country money and with the techies on contract from the US might be possible.
In parts of the USA people can get up in the morning one day with a great idea and open a brand new business pushing that idea out there within the month.
Not true of other parts of the USA.
In May, 2011, Andrew Puzder, CEO of CKE Restaurants, which owns Carl’s Jr., said he is considering moving its headquarters from Ventura County to Texas and to halt expansion in the Golden State. Three hundred new Carl’s Jr. restaurants are scheduled to be built in Texas, while none are planned in California.
WHY?
1. REGULATIONS are stifling!
California’s business climate has been rated time and time again as one of the worst in the nation. Our state’s rules and regulations make starting a business more of an exercise in bureaucratic paperwork than in entrepreneurship. The permitting process alone can take up to two years, while in Texas it can be done in as few as 6 weeks!
2. LAWSUITS are waiting for you!
In California if you own a restaurant and your bartender chooses to forgo a break to collect extra tips, you can be sued for wage-and-hour violations. If your trash can is moved by someone else in your store, you can be sued under the Americans with Disabilities Act. If you try to bring renewable energy to the desert, you can be sued by environmentalists and unions.
Over 1 million lawsuits are brought against CA businesses every year!
We have lots of people with an entreprenrurial spirit here in California.
But they are either leaving the state or waiting for a better business climate.
The Governor of Texas just signed into law another legal reform on top of the limit to punitive damages in civil suits.
“AUSTIN (AP) — Gov. Rick Perry signed into law Monday a measure that will limit frivolous lawsuits by levying some fees on plaintiffs and allowing meritless suits to be dismissed early in the process.
Perry designated the “loser pays” bill a top priority of the legislative session, saying Texas needs to crack down on junk lawsuits.
Some plaintiffs who sue and lose will be required to pay the court costs and attorney fees of those they are suing. The law also creates expedited civil actions for cases less than $100,000. It goes into effect Sept. 1.”
I live in Texas and I’m starting to think that it is almost like living in another country not another state.
@Nan G: #6,
“LAWSUITS are waiting for you! . . . Over 1 million lawsuits are brought against CA businesses every year!”
You’ve nailed 2 big movements against entrepreneurs. Your second one is spreading like a disease across the country. Judges & Lawyers have become a huge problem, but they will not dealt with by any legislation since they control them. Since the Nation’s founding, Lawyers have been the principal animal elected into political positions.
The judicial system has created an environment where Judges have lost all common sense. Theirs is no longer to protect society, but to promulgate an atmosphere within the system that encourages its growth. I’ve not done research on this but my feeling is that 1/3 of all cases that see light of day, should never, ever be heard in any American court. Judges are doing their best to turn America into the epitome of a “banana republic.”
I can attest to this, based on personal experience, having owned businesses in California, Texas, Florida and New York. I can also attest to this based on some of the insanity I have observed friends’ companies being subjected to, particularly in California.
The mindset I have first hand experienced with judges is something like, “you own a company, you can afford to pay,” as if they these judges were implementing the Obama mantra of “spreading the wealth.”
@Nan G: #6,
“We have lots of people with an entreprenrurial spirit here in California.
But they are either leaving the state or waiting for a better business climate.”
. . . Again, from experience, I’ve found much of that entrepreneurial spirit and willingness to participate in new projects in California than anywhere else, however, I have found Texas a much more inviting place to “do business.”