Monday, May 25, 2015

Clinton, Business and Oxymorons

To concurrently think of a politician and business is tough. But to think that Hillary Clinton is somehow a business guru is plain impossible. Now that you don't have to take my word for it. On May 21st, Hillary's handlers wrote an Influencer post for the LinkedIn audience. The topic? Business.
picture of Hillary Clinton in front of local small business owners.
Is she thinking about what advice to give you or
how to destroy you and your business?
Let alone the fact that LinkedIn Influencer posts are reserved for those with authority on a given subject; Hillary's own account of her expertise were her experience as a daughter of a once business person. Nonetheless, no one was impressed by the fact that this was her only Influencer post ever.
In a nutshell, Hillary and her team somehow think that using the platitude-ridden shallow-message style commonly deployed by her and Obama would be effective with an educated audience. Well, based on the comments, their calculations seriously failed. Aside from the many hardcore feminists, the left faithful or those who simply felt sympathy for the attempt, most saw the post for what it was: a failed attempt at voter pandering. 
But why not let you decide for yourself. Here is a transcript of what she wrote. Then, you will get a chance to read my comments to her main points. Yes, I am being a little picky. While I would allow a new manager to get away with similar comments. I have little patience with those who have access to the best minds in the world yet opt to instead make a half-hearted attempt. In essence, I feel their message is "here is what you want to hear but which I just don't care about". In my opinion, this is totally unacceptable.

When I was growing up, my father owned a small business. And when I say small, I mean small: It was my father and an occasional day laborer. My mother, brothers, and I would help do the silkscreen printing on the drapery fabrics he sold. We were an all-hands-on-deck operation, guided by my father’s belief that if you worked hard and did what you were supposed to do, opportunities would be there for you. 
Despite generations of progress on so many other fronts, it’s still too hard to get a business started today. Hard work is no longer enough to guarantee opportunity. Credit is too tough to come by. Too many regulatory and licensing requirements are uneven and uncertain.
And yet, as I travel around the country, I hear signs of optimism. Just yesterday, I sat down with a group of small business owners at Bike Tech in Cedar Falls, Iowa. I met a young man named Brad Magg. He started his first catering business at 15 with a loan from a local bank — they were willing to take a chance on a very young entrepreneur after years of watching him sell baked goods while in elementary school. At 20, Brad decided he wanted to start a restaurant — just as the owner of the local ice cream shop, Goldie's, was getting ready to retire. He bought the business from Goldie herself (and liked the name so much he kept it). Like many business owners, Brad struggled to make ends meet during the Great Recession, so he sought help from a Small Business Administration program in his town. With support and sheer determination, he was able to save his business. Today Goldie's Ice Cream Shoppe has grown from one and a half employees to almost 30.
That’s the spirit that got Americans through the Great Recession. And as we come back from the crisis, potential new business owners and entrepreneurs from Silicon Valley to Des Moines to Brooklyn are ready to seize the moment. All they need are policies that help them get ahead instead of holding them back.
That’s why I want to be a small business president. Throughout this campaign, I’ll be proposing specific ways to help jump-start small business, including:
1. Cutting the red tape that holds back small businesses and entrepreneurs. 
It should not take longer to start a business in the U.S. than it does in Canada, Korea, or France. 
2. Expanding access to capital.
Small business owners need access to financing and credit to build, grow, expand, and hire. Lending has recovered since the crisis, but it’s still hard for new firms to get credit. A Federal Reserve Survey found that the current market is especially hard for the smallest firms and startups. And despite the fact that millions more women have opened businesses and become their own boss in recent years, they're still starting out with about half the financial capital as their male counterparts.
3. Providing tax relief and tax simplification for small business.
The smallest businesses, with one to five employees, spend 150 hours and $1,100 per employee on federal tax compliance. That’s more than 20 times higher than the average for far larger firms. We’ve got to fix that. 
4. Expanding access to new markets.
Every American small business should be able to tap new markets — whether they are across their city, across their state, or around the world. Some American businesses are already doing this through new platforms, such as Etsy and Ebay.
The early lessons I learned about hard work and entrepreneurship have stuck with me all my life — a sentence my father would be thrilled to read. In the weeks and months to come, I want to have more conversations with people on the frontlines — people like Brad in Iowa, who have seen firsthand what’s working and what isn’t. Then, we need to build their experiences into our policies —because small businesses are the backbone of our economy, and they have as much to teach us as ever.

And now my reply:

"1. Cutting the red tape that holds back small businesses and entrepreneurs" 
I love the idea of less government. It is well documented that a few smart central managers will never outperform us all. Yes, I am talking about the many studies about the wisdom of crowds. Despite whatever your friend Barry says about the fact that business owners are simply the recipients of hand-me-downs from society, I ask for no more Nanny-state please. Business owners can fend for themselves if government gets out of the way. Just remember that before there was big business in this country, small business was pervasive despite the dog-eat-dog environment of the era. Anything is better than the predatory redistributionist government that we now have; which punishes small business. Just think of it, tax collections have accelerated at the same time that business profits have collapsed. And of course I am talking about business in general and not just about the financially engineered P&L's of the Blue-chips. For further insight Ms. Clinton, just check the St. Louis Fed's website. It's all transparently there.

"2. Expanding access to capital" 
image of a male's empty pocket
When big government crowds out small business
If only you understood that it is big government that's crowding small businesses out of capital markets by its unsustainable borrowing. Yes, I know that this comment is esoteric and that it may go over the head of many, but government and its many so called brilliant advisers should know better. Despite of where the Fed may fix interest rates at, risk aversion has made it impossible for small businesses to borrow at reasonable rates. For all intents and purposes, small businesses have been kicked out of capital markets since the recession ended. And considering that capital is always needed to fuel small business growth and that all marginal employment growth is 100% levered to small business innovation driven growth, it is not surprising that employment has been stagnant, in spite of the book-cooking taking place around headline data. Just look below the headline, Ms. Clinton, and you will see the facts elegantly connect. If big government stops living beyond its means, it will borrow less. Capital will then be available for long term capital investment, the kind used by small business. But don't just take my word. Besides looking at the St. Louis Fed's website, I suggest you review all recent public presentations by Greenspan. It seems that now that he has been out of government for a few years he has totally reformed. He is starting to make sense again.

"3. Providing tax relief and tax simplification for small business" 
Tell that to your friend Barry. We already knew it.

"4. Expanding access to new markets"
Image of long line of dissatisfy customers
Ms. Clinton misses the whole point
about small business.
Ms. Clinton, no doubt that you miss the whole point about small business. By definition, small business structures are not sophisticated or large enough to viably sustain operations that are excessively diversified. Focus is always the better advice for small business. There are just not enough bodies around the office to handle customers with diverging needs. And if you think that a business can become large by setting up an eBay account, just ask the many who have tried to see how difficult it is to profitably serve every little picky request by customers who hold you hostage to your public ranking. No, small business reach new markets not by fiat, which is clearly the only way you know, but through innovation. It is their innovative approach to unsolved needs that allows small business owners to serve diverse customers. Different customers are all bonded together by their common need. Thus, a small group of one can build a viable business before she has to worry about HR and the many business regulatory needs. To help us all, I ask that you and the rest of Washington stop getting in the way of small business. Clearly the relevant concepts elude you all.  

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