Debate lacked fresh ideas
Did you catch the Republican presidential debate? I did, and the experience was comparable to having one’s teeth drilled. Let me recap for those who missed it. Blah … blah … blahblah … blahblahblah … You’re now caught up on all the fresh ideas offered.
I have a suggestion for the Republican Party. Actually, my suggestion applies to both parties because I assume that if the Democrats decide to debate, the outcome will be identical. The only exception will be that a different yet equally absurd doomed-to-fail ideology will be offered.
Here’s my suggestion: instead of wasting money “debating” just stick up cardboard cutouts of the candidates and prerecord your propaganda. Take the saved expenses and donate it to pay down the debt. The country would be ahead of the game.
What irks me most about politicians is how little they know about business and economics. That includes the empty suit known as Mitt Romney. The few that have some business experience – like Herman Cain – usually lack two things: an understanding of the economic landscape beyond the confines of business and an understanding that presidents have less authority than CEOs. Actually, the later point doesn’t just apply to non-politicians like Mr. Cain.
Take for example Michele Bachmann’s ridiculous pledge not to rest until Obama-care is repealed. Earth to Michele – presidents don’t make laws, they can only veto proposed legislation. Ipso facto: you have zero authority to repeal Obama-care.
Only the legislature can do that and it would require that a 60-vote majority in the Senate and that a majority in the House be held by – in this case – the Republicans. As president, can you explain to me how you propose to make that happen?
Beyond making promises that they are powerless to deliver, the subpar seven spent most of the two-hour debate proclaiming the obvious. President Barack Obama is incompetent. We need to create jobs – particularly in manufacturing. And taxes must be cut. Well, one out for three is pretty good for a politician.
I always find the discussion of manufacturing jobs amusing. This is especially true when Republicans are involved because they’re not exactly champions of unions, which are strongly represented in the manufacturing sector.
Here’s the problem with politicians pandering to the populace about increasing manufacturing jobs: it shows his or her ignorance about not only the manufacturing environment, but global economics.
I’ve said this before but it bears repeating: our manufacturing output is greater today than during any other time in our history. The problem isn’t that our manufacturing output is diminishing, it’s that as a consequence of productivity gains and automation far fewer people are required to produce the same output. That’s one reason the number of manufacturing jobs have declined. The other is – for many products where quality is not paramount – we cannot compete with cheap labor markets such as China. And we never will, no matter what some politicians promise.
Face it: some products simply lend themselves to cheap labor markets. Why do you think Nike manufactures most of its products abroad? If you were in the costume jewelry business where do you think you’d make your product? It’s a different story for sophisticated products, but for many consumer products, we can’t compete. That may change in the future if transportation costs escalate and labor costs begin approaching equilibrium, but those factors are uncontrollable.
Someone who understood global economics and business would know that instead of looking backward, we need to look forward. We need to leverage our strengths not attempt to perpetuate areas of weakness.
The Blockbuster/Netflix saga is a good example. Blockbuster should have been Netflix. Instead they’re bankrupt. They refused to cannibalize their existing brick- and-mortar business by developing online distribution. But their refusal to be forward-thinking didn’t mean someone else wouldn’t seize the opportunity. The moral of the story: It is better to eat your own young than to let a stranger feast at your expense. The same holds true on a macro level.
As for cutting taxes, the answer isn’t as simplistic as reducing taxes on the rich so they can reinvest the capital. That dog won’t hunt anymore. It’s not that I advocate soaking the rich but there must be balance.
Some estimates claim that the tax code has ballooned to 70,000 pages. Thanks to our political leaders’ desire to redistribute wealth while simultaneously placating special interests, many of those pages have little to do with promoting a healthy economic environment. The tax code has become so complex that for the last two years GE has filed a 24,000-page tax return. Does that sound like a productive use of time and resources?
The tax code needs an overhaul. It needs to be drastically simplified. We need to find a happy medium in taxing the various income strata. In order to attract international companies, it should be competitive to the tax code of other countries. And most importantly, it needs to facilitate the growth of small- to medium-sized companies and not just boost the earnings of the Fortune 500.
That’s hard to squeeze into a sound bite so don’t hold your breath. But take heart, things could be worse. We could be the EU grabbling with the Greeks.
Author, professor, entrepreneur, radio and TV commentator, Tony Paradiso is a marketing and management expert and CEO of Phoenix Finishings.