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Obama Wars Title: Dear Mr. President: Why We Are Not Hiring Dear Mr. President: Why We Are Not Hiring By C. Edmund Wright Mr. President, did I really hear you say that businesses aren't hiring because they can't get bank loans? Are you kidding me? Please indulge me for a moment, and we can get to the actual reasons. But first, I must add that every time you step up to the microphone -- for example, your impromptu presser on Tuesday -- the painful decision to shut down my business of eighteen years is validated by your words. And I should thank you for that. For the record, that decision was formalized on November 5, 2008. Check your calendar. Some fifteen months later, I can say that it was the best business decision I have ever made. With your hands on the levers of the government and the economy, I wanted to have as little at risk as possible. Don't get me wrong -- it was a torturous and gut-wrenching decision that went against every fiber of my being. I had to betray deeply rooted entrepreneurial instincts and set some more mundane material goals. And while it might seem extreme, I think my mindset speaks to the real reason businesses are not hiring now. So what is that mindset? It's not complicated. I am neither a swooning David Brooks enamored of your pant crease nor a silver-spoon trust-fund baby like Christopher Buckley. I've simply had some twenty-five entrepreneurial ventures -- with a good number of strikeouts to be honest -- and real-world experience told me exactly who you are and exactly what the business climate under your rule would be like. And I was exactly right. Consider: Eighteen years ago, I was statistically in poverty, but I had dreams and plans. At the time, Reaganomics still set the economic tone, and a fired-up Newt Gingrich was forcing conservatism on the Clinton White House. There were actually politicians who praised business-owners and profits. Against that backdrop, I've beaten some long odds and had a pretty good run. It's been extremely hard, and the move up was not a straight line. There were times I wanted to quit. Without a doubt, though, I am better off than I was eighteen years ago, before I started under Bush 41 -- and ten years ago, when Bush 43 was elected -- and six years ago, when he was reelected. And so are all of the folks who have been on this ride with me. Having said that, my business is not better off than it was just three years ago. That's when decades of liberal energy policy came home to roost, and four-dollar gas took several hundred thousand from my bottom line faster than I could possibly react. That same gas price slammed my customers -- and my customers' customers -- forcing our company into a vice of rapidly rising costs and rapidly dropping revenues. Oh, and for fun, there were also slower payments from our customers. Thank you, environmental wackos! We were not alone. The fuel price domino nudged the subprime mortgage domino -- itself an outgrowth of liberal lending policies -- and we have all seen the unraveling of a financial system underpinned by real estate values. Those valuations were the basis for any number of derivatives and credit default swaps and so on. Putting the Wall Street talk aside, the net result to business of this massive wealth-destruction is that employees are more desperate for money, and customers are less willing to buy and slower to pay when they do. This is the Main Street carnage of "unfettered government" on small business and families. It is the destructive fruit of environmental leftists, the Fannie-Freddie cronies in government, and other corrupt liberals and crony capitalists in positions of unmerited influence. It crushes the bank account and the spirit of the entrepreneur -- and it is all caused by government incompetence from beltway bureaucrats with zero business experience...you know, like you and practically your entire administration. And sadly, this is also the result of many Republicans giving in to the Democrat liberals all too often. One of the worst, ironically, is John McCain, who was always "reaching across the aisle" to vote against tax cuts and vote for energy restrictions and so on. I'll admit that the prospect of running a small business under a McCain administration with Reid and Pelosi running Congress was not all that enticing, either. But it was your election that inspired me to pull the plug. After all, I saw how your Illinois buddies refused to let Republic Window even close down on their own terms, so I figured I better get out before your government and some union figured out a way to prevent me from quitting a business that I dreamed up, financed, created, and built from scratch. You weren't lying when you told that Chicago public radio station in 2001 that the Constitution constrained your vision for government, were you? Things were getting bad enough with Bush and other Republicans unable or unwilling to fight the encroaching liberal governmental infestation of our lives, but the thought of having a president who believes in that infection -- who would champion it and push it -- just scared the hell out of me. It beat the entrepreneurial spirit out of me, too. So I decided to sit the risk-reward world of business ownership out for a while. Like many, we are no longer willing to take all of the financial and legal risks and aggravation of owning and running a business...not with even higher taxes, more regulation, more litigation, and more emboldened bureaucrats on the horizon. People who have a dream to build a better life by taking risks and starting a business instinctively know when those principles are under attack. And with you, Sir, in the White House, these principles are indeed under attack. Why this surprises anyone is a mystery to me. Jeremiah Wright hates these principles. So did Saul Alinsky. So do Van Jones and Bill Ayers and Andy Stern. I don't know any "structural feminists," but I bet they hate them too. And so do you. This is part of the America that you promised to "fundamentally transform." I knew what that meant. I could sense the bulls-eye on my back. This is who you are. And since you clearly do not understand business at all, let me give you a short primer: Any business idea, from the first day it is hatched, is nothing more than a series of cost-benefit analyses that the idea-holder either acts on or passes on. Sometimes the first decision is to forget the idea. Sometimes the first decision is to move ahead and invest some cash. Perhaps a few million cost-benefit analyses later, you might have Microsoft or Home Depot or ESPN. Or you might have Bill's Plumbing or Johnson's Quality Homes or a café or an electrical wholesaler, and so on. And those businesses still operate on a constant stream of risk-reward decisions. In the business world, there is no neutral gear. (There: Now you have more useful information than Jamie Gorelick or Franklin Raines got from Harvard.) And when we have a president and ruling class who are clueless about and hostile towards business, the risk-reward equation shifts dramatically against further investment of time, talent, and capital. And that's where we are today. I never really doubted my decision. Yet when I see you hold job summits featuring environmentalists and unions, lawyers, and poverty pimps, I am even more thrilled to be out of the game. When I hear you fantasize that the only reason businesses won't hire is that they can't get a loan, my decision is further validated. And when you say that small business is clamoring for you to pass health care, I know that you have taken total leave of your senses. So again, thank you, Mr. President. Even without your teleprompter, you are convincing. You have convinced me I made the right decision and convinced others not to hire. I only hope and pray that the midterms of 2010 might reverse my decision. That is what every fiber of my being is hoping for. Until then, don't blame George Bush and the banks. Feel free to blame me -- and all the other "Atlas Shrugged" entrepreneurs -- who are now on the sidelines, hoping Storm Obama will pass.
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#2. To: Badeye (#0)
(Edited)
President Obama: All right. All right, it’s a man’s turn. I’m going to call on that big guy right there with a little hair. [Laughter.] Since the microphone is right next to him. Steve Gordon: Thank you. I’m from Clearwater. And I own a small company, environmental company. I manufacture the Instant-Off water-saving device that fits on any faucet worldwide. I’m frustrated because I can create 500 jobs. I’ve gone to the banks; I can’t get a loan. And I speak for all businesses in the United States. [Applause.] We are tired of dealing with banks. And I don’t understand — I know you care; I know you’re trying. And I appreciate the pledge of $30 billion to small businesses. But lending it to the banks to lend to us is not the answer. It’s just not. What I suggest, and the question is, why can’t you use the S.B.A. just like you lent directly to Wall Street, you lent directly to the automakers, you lent directly to the banks? Why can’t the government make small-business [loans] available directly to us? [Applause.] President Obama: Well, this is a good question. First of all, you should be aware that we have increased S.B.A. loans during the course of this year by 70 percent in some cases. So some of the key programs for businesses like yours we have massively increased their lending. And by the way, we’ve waived some of the fees and red tape that are associated with you getting a loan from the S.B.A.. Now, it’s not enough. I know you’re shaking your head here. I understand it’s not enough because you still want a loan. I just want you to know, it’s not like we haven’t thought of why don’t we use the S.B.A. We have. The challenge that we’ve got is that even S.B.A. loans are generally run not by the S.B.A.; the S.B.A. essentially works with local banks, community banks, neighborhood banks, to process the loan. And essentially the S.B.A. underwrites the loan. And so the S.B.A. does not have the infrastructure to go all across the country in every region and process loans to small businesses directly because they don’t have enough people — somebody yelled, “Why not?” The S.B.A. doesn’t have the staff to do it. Keep in mind, a small-business loan of any sort, or a large-business loan of any sort, requires some sense of, what’s the business plan? What are your projected earnings, etc., etc.? Somebody has got to do that. Now, if the S.B.A. were to suddenly take over that entire function, we’d have to stand up a massive bureaucracy — a huge one. And we’d have to train all those people, and it would take too long, and you’d be frustrated — why is it that this big government agency can’t seem to run anything? So what we’ve decided to do instead is to take $30 billion that was repaid by the banks and make that available under criteria that will encourage small banks to give those loans to you. And if we do that effectively, we can potentially get that money out the door more quickly. But I am absolutely sympathetic to what you’re saying because I’m hearing it everywhere I go. That’s why I mentioned it last night in my speech. You’ve got a lot of small-business owners who are ready to grow, ready to hire, but they just can’t get financing. So we’re going to use the S.B.A. as one tool; this $30 billion is going to help. Ultimately, though, the vast majority of small businesses, their loans are going to come from the private sector. And we’ve got to get the private sector to think differently. What happened here was that everybody was making loans without thinking of the risk at all. They were just sending out money out the door. That’s how a lot of overdevelopment happened here in Florida, in Nevada, in California — because people were just saying, “You know what, we’re making money, we’re not going to ask a lot of questions.” Suddenly the bottom falls out, and the pendulum has shifted too far in the other direction so that even if you’ve got a good business plan, you’ve got a good model and you’re making profits and a good product, now banks are reluctant to lend at all. And what we’re trying to do is to encourage them to get that happy medium, where they’re not taking such exorbitant risks that they threaten the entire system, but they’re also open to enough risk that America’s dynamic free enterprise system is actually able to work. One aspect of this is also getting regulators who oversee the banks — which aren’t under my supervision; these are independent bank regulators — to at least take a closer look at their policies, because a lot of bankers will tell you they want to loan you the money but they suffered all these losses because of some of the mortgage stuff going belly up. So what they’ll tell you is, “I’ve got a bank regulator breathing down my neck making sure that I’m keeping my capital levels high enough.” And we’re going to have to make some adjustments there. But that’s not something the administration can do directly. We can just encourage these independent regulators to take a closer look at it. I’m confident you’re going to succeed, though. And you can give Reggie Love here your business card so we can find out about your terrific business. [Applause.]
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