American business managers and executives offer skills and perspectives often missing in the federal government. However, many are discouraged from serving because they are forewarned they will face a dishonest political establishment and unprincipled media intent on destroying their reputation.
Respected, successful business women and men nominated for cabinet positions are subjected to venal nitpicking, loathsome character assassinations and the demonization of their former employers. That is their reward for having the audacity to volunteer to serve in Washington.
Democratic Party senators are the most notorious practitioners of the politics of personal destruction. Armed with unsubstantiated dossiers, they bully any business leader put forward as a cabinet nominee. Exhibit A is the hectoring of Steven Mnuchin, the nominee for Treasury secretary.
From the opening of the ongoing Senate hearings, it was clear Democrats had two problems with Mnuchin. First, he is a multi-millionaire. Democrats loath wealthy business leaders, unless they are donors to their party. Affluent Democrats are compassionate, while rich Republicans are greedy.
Secondly, Mnuchin had the misfortune of having careers in banking and hedge funds. Ever since the financial collapse, Democrats have smeared anyone connected with Wall Street. Yet the party collects millions in political donations from these Manhattan aristocrats. Talk about hypocrisy.
During the hearings last week, Democrats pounced on what they considered an egregious example of the Treasury nominee's predatory business practices. The charge involved a company called OneWest, which was a sub-prime mortgage lender once operated by Mnuchin.
Democrats attacked Mnuchin over the foreclosure on a Lakeland, Florida, homeowner who made a 27-cent payment error. The incident was even more inflammatory because the homeowner was a 90-year old woman with a reverse mortgage.
Obviously, Democrats had tipped off the media in advance of the hearing. Reporting on the alleged foreclosure was dripping with indignation. "Bank Owned By Trump's Top Treasury Pick Foreclosed On A 90-year-Old Over 27-Cents," screamed headlines on The Huffington Post.
The charge was repeated in numerous media, including CBS, CNN, the New York Daily News, Vanity Fair, Yahoo News and many others. Mnuchin's former firm was branded the 'foreclosure machine.' The nominee was chided for being 'ethically challenged', 'shady' and 'the ultimate Wall Street insider.'
The mud-slinging soiled Mnuchin's once pristine business image, while ruining his reputation and irreparably damaging his character.
However, facts have now surfaced, exposing the Democrats' intentional use of false information to cripple the nominee's chances for confirmation. It turns out Mnuchin had nothing to do with the foreclosure on the elderly homeowner. He had sold his stake in OneWest at the time of the incident.
An investigation shows that OneWest did file for foreclosure in November, 2014, but dropped the matter once it discovered the homeowner had bungled the paperwork. Lost in all the fake news about the incident was the fact that OneWest had worked behind the scenes to help the homeowner.
In 2011, the mortgage firm found the homeowner was deficient in coverage for hazard insurance. OneWest advanced the woman a $1,883.30 line of credit to maintain coverage and satisfy the loan covenant. The elderly homeowner eventually paid off the loan, but only after four years.
After the clarification, there were no apologies from the media or Democrats, even after Mnuchin told Senators his bank had extended over 100,000 loan modifications to borrowers who had fallen behind on their payments. They were not interested in the truth. They wanted a scalp.
The experience of the Treasury nominee is a cautionary tale for any business leader who might be mulling a cabinet position. You must be willing to sacrifice your good name on the altar of crass political partisanship. That explains why many well-intentioned women and men demur.
The American people are the losers in this shoddy political gamesmanship. Their government is robbed of the leadership and managerial skills business people have to offer. In Washington, the insiders prefer academicians, cronies and political hacks who will do their bidding.
Showing posts with label Business and Politics. Show all posts
Showing posts with label Business and Politics. Show all posts
Monday, January 30, 2017
Monday, July 25, 2011
Obama Grounds Corporate Jet Industry
President Obama's penchant for carpet bombing successful businesses with class-warfare rhetoric reached new lows during the recent debt reduction negotiations. Using the bully pulpit afforded him by a pliant media, the president harangued tax breaks for corporate jets and their "fat cat" owners.
In what is becoming an all too familiar refrain, Obama admonished Republicans for supporting tax incentives for the rich. The president called for ending these "egregious loopholes," which allow aircraft owners faster depreciation for tax purposes.
By scrapping the tax advantage, Obama would raise $3 billion over the next 10 years, a minuscule fraction of the $4 trillion in deficit reduction that most economists agree is needed. Obviously, this wasn't about the money, but scoring political points with gullible, uniformed voters.
While the media remained silent, Obama hid the fact that his administration provided the tax incentive as part of his stimulus package in 2009. Now Obama wants to take it away while trying to portray himself as an opponent of tax breaks for corporate jet owners. It is the height of hypocrisy.
In demonizing business aviation, the president has bludgeoned one of the few successful American manufacturing sectors that has withstood the lure of moving jobs to a low wage country.
Business aviation is a $150 billion business which employs 1.2 million U.S. workers. However, the industry has suffered along with the rest of the economy. Last year the industry cranked out nearly one-third fewer planes than it manufactured in 2008. Removing tax benefits will further depress sales.
Contrary to the president's characterizations, about 85 percent of business aircraft operators are small to mid-size companies with a single plane. Only three percent of the approximately 15,000 business aircraft operating in the U.S. are registered to Fortune 500 companies. The facts don't support the president's claims of fat cat jet owners.
From a jobs perspective, the vast majority of general aviation aircraft used for business purposes are manufactured, operated, serviced and maintained in the U.S. There are thousands of jobs created by the industry at small, local firms across the country.
The president's attacks on business aviation are at odds with his public support of U.S. manufacturing. It isn't the first time that Obama has railed against corporate jets, famously scolding automobile executives for traveling to Washington on private aircraft for testimony before Congress a few years back.
Ed Bolen, president and chief executive officer for the National Business Aviation Association, was less than pleased with Obama's recent finger wagging. "The president is promoting a caricature of the industry that is very much at odds with reality of who the industry is," he said.
An official with the industry's largest union, the International Association of Machinists and Aerospace Workers, made his group's position clear, calling the president's attacks "insulting." "...I don't think he realizes how many people that this industry employs and how much revenue is brought in here from those types of aircraft," union leader Steve Rooney said.
Obama has often boasted of his goal of doubling U.S. exports in five years. Yet general aviation is one of the few manufacturers that can claim 62 percent of its business is tied to exports, according to trade and labor groups. Those exports support American jobs.
General aviation needs an improved economy to jump start sales. Instead of offering his support, the president's damaging words are adding to the woes of one of the country's manufacturing stalwarts.
Defaming whole industries is far easier than finding ways to facilitate business growth. It proves once again that President Obama cares more about agitating class envy than he does about the country's economic recovery.
In what is becoming an all too familiar refrain, Obama admonished Republicans for supporting tax incentives for the rich. The president called for ending these "egregious loopholes," which allow aircraft owners faster depreciation for tax purposes.
By scrapping the tax advantage, Obama would raise $3 billion over the next 10 years, a minuscule fraction of the $4 trillion in deficit reduction that most economists agree is needed. Obviously, this wasn't about the money, but scoring political points with gullible, uniformed voters.
While the media remained silent, Obama hid the fact that his administration provided the tax incentive as part of his stimulus package in 2009. Now Obama wants to take it away while trying to portray himself as an opponent of tax breaks for corporate jet owners. It is the height of hypocrisy.
In demonizing business aviation, the president has bludgeoned one of the few successful American manufacturing sectors that has withstood the lure of moving jobs to a low wage country.
Business aviation is a $150 billion business which employs 1.2 million U.S. workers. However, the industry has suffered along with the rest of the economy. Last year the industry cranked out nearly one-third fewer planes than it manufactured in 2008. Removing tax benefits will further depress sales.
Contrary to the president's characterizations, about 85 percent of business aircraft operators are small to mid-size companies with a single plane. Only three percent of the approximately 15,000 business aircraft operating in the U.S. are registered to Fortune 500 companies. The facts don't support the president's claims of fat cat jet owners.
From a jobs perspective, the vast majority of general aviation aircraft used for business purposes are manufactured, operated, serviced and maintained in the U.S. There are thousands of jobs created by the industry at small, local firms across the country.
The president's attacks on business aviation are at odds with his public support of U.S. manufacturing. It isn't the first time that Obama has railed against corporate jets, famously scolding automobile executives for traveling to Washington on private aircraft for testimony before Congress a few years back.
Ed Bolen, president and chief executive officer for the National Business Aviation Association, was less than pleased with Obama's recent finger wagging. "The president is promoting a caricature of the industry that is very much at odds with reality of who the industry is," he said.
An official with the industry's largest union, the International Association of Machinists and Aerospace Workers, made his group's position clear, calling the president's attacks "insulting." "...I don't think he realizes how many people that this industry employs and how much revenue is brought in here from those types of aircraft," union leader Steve Rooney said.
Obama has often boasted of his goal of doubling U.S. exports in five years. Yet general aviation is one of the few manufacturers that can claim 62 percent of its business is tied to exports, according to trade and labor groups. Those exports support American jobs.
General aviation needs an improved economy to jump start sales. Instead of offering his support, the president's damaging words are adding to the woes of one of the country's manufacturing stalwarts.
Defaming whole industries is far easier than finding ways to facilitate business growth. It proves once again that President Obama cares more about agitating class envy than he does about the country's economic recovery.
Monday, July 4, 2011
Texas & California: A Cautionary Tale of Two States
Texas and California are two states rocked by economic earthquakes that are pulling each in opposite directions. California, once a growth powerhouse, is languishing in the throes of economic upheaval, while Texas is shaking up its economy with unparalleled business development.
This state of economic affairs was well documented in a recent USA Today article which marveled at Texas' business gains, calling the growth "one of the biggest economic shifts in the past half-century." Based on federal data, Texas has leapfrogged New York and is now the country's second-largest economy behind only California. And the gap is narrowing.
The newspaper relied on recently released data from the Bureau of Economic Analysis for its analysis. The verdict underscores how tax, labor and regulatory laws created by state legislatures directly impact economic growth in ways both harmful and helpful.
Despite the obvious factors shaping each state's business environment, USA Today viewed the differences as little more than luck. In its article, the newspaper quoted an economic forecaster from academia who accounted for Texas growth as equal parts "good planning and good fortune."
In a classic case of numbing stupidity or journalistic bias, the national newspaper concluded that the "economic winners of the last decade are states that focus on raw materials, government and senior citizens." Really? Apparently, the folks at USA Today are clueless about what drives business expansion.
States like Texas, where Republicans hold big legislative majorities, have outperformed the rest of the pack by making it easier for businesses to relocate, operate and prosper in the state. The losers, like Democrat Party controlled California, are heaping onerous regulation, taxes and labor laws upon the backs of business, stifling economic growth.
USA Today ignored these facts because an honest analysis would have exposed the Democratic Party's propensity for tax, labor and regulatory policies that are crippling economic development, both regionally and on the national level. With a little digging, here's what the newspaper would have found:
Texas is one of 22 states with right-to-work laws, which prevent employees from being forced to join a union as a condition of employment. This not only safeguards employees' rights, but attracts businesses suffering under the iron fist of union rules. On the other hand, California is one of 28 states that have bowed to union pressure to outlaw right-to-work rules. As a result, the Bureau of Labor reports that 17.2 percent of California workers belong to unions, even higher than the national average of 12 percent. Only 5.1 percent of the Texas workforce is represented by a union. Studies have shown that right-to-work states enjoy higher job growth. That research helps explain why unemployment in Texas was 8.0 percent at the end of May according to the Labor Bureau, while the jobless rate was 11.7 percent in California, significantly above the 9.1 percent national average.
Texas is one of seven states with no personal income tax, leaving consumers with more discretionary income to spend on goods and services. A family of three with a household income of $50,000 in Los Angeles pays the government 10.6 percent of their income. Tack on sales taxes and the burden becomes even worse. California's state sales tax is 9.25 percent with some cities and counties piling on local sales taxes on top of that, making it the highest in the nation. Texas is among the lowest at 6.25 percent. High taxes raise the cost of living for families, leaving households with less money to spend with local businesses.
Texas has no corporate profits tax, although it collects franchise fees. In 2006, the Texas legislature overhauled the tax structure providing for $3 billion in tax relief for business, reducing their tax burden by 33 percent. In contrast, the California legislature has saddled businesses with a 8.84 percent tax on profits. Banks and financial institutions pay an even higher rate of 10.84 percent. In weighing corporate tax burdens, the nonpartisan Tax Foundation ranked Texas 13th for its business friendly system, while California was nearly dead last at 48. It is no wonder that California's share of the national economy shrank faster than all but three states from 2000 to 2010, according to Bureau of Economic Analysis figures. Meanwhile, Texas' historic growth spurt during that same period has hiked the state's share of the U.S. economy to 8.3 percent.
Regulations on Texas businesses pale in comparison to California's bloated system of legal handcuffs. The governor's office in California released a study in 2009 that calculated the total cost of business regulation in the state at an astounding $492.994 billion. In addition, the analysis estimated that over regulation of business had robbed California of nearly 4 million jobs. Another California state-sponsored study this year, dubbed the "Commission on the 21st Century Economy," determined that the cost of doing business in California was almost 23 percent higher (on average) than other states.
Clearly, by any objective measurement California is overtaxed, overregulated, over unionized and overrated as a place to do business. The state will continue to shed jobs and spiral deeper into economic decline as a result of Democrats' tax and spend policies that have driven California to the brink of bankruptcy.
Don't expect any sympathy from Texas, which has targeted California businesses as part of its economic development program. With an economic output valued at more than $1 trillion annually and expanding, Texas has set its sights on wrestling away the No. 1 ranking from California.
When that happens, as it surely will, perhaps Californians will finally tire of the Democratic Party's anti-business policies in the once Golden State.
This state of economic affairs was well documented in a recent USA Today article which marveled at Texas' business gains, calling the growth "one of the biggest economic shifts in the past half-century." Based on federal data, Texas has leapfrogged New York and is now the country's second-largest economy behind only California. And the gap is narrowing.
The newspaper relied on recently released data from the Bureau of Economic Analysis for its analysis. The verdict underscores how tax, labor and regulatory laws created by state legislatures directly impact economic growth in ways both harmful and helpful.
Despite the obvious factors shaping each state's business environment, USA Today viewed the differences as little more than luck. In its article, the newspaper quoted an economic forecaster from academia who accounted for Texas growth as equal parts "good planning and good fortune."
In a classic case of numbing stupidity or journalistic bias, the national newspaper concluded that the "economic winners of the last decade are states that focus on raw materials, government and senior citizens." Really? Apparently, the folks at USA Today are clueless about what drives business expansion.
States like Texas, where Republicans hold big legislative majorities, have outperformed the rest of the pack by making it easier for businesses to relocate, operate and prosper in the state. The losers, like Democrat Party controlled California, are heaping onerous regulation, taxes and labor laws upon the backs of business, stifling economic growth.
USA Today ignored these facts because an honest analysis would have exposed the Democratic Party's propensity for tax, labor and regulatory policies that are crippling economic development, both regionally and on the national level. With a little digging, here's what the newspaper would have found:
Texas is one of 22 states with right-to-work laws, which prevent employees from being forced to join a union as a condition of employment. This not only safeguards employees' rights, but attracts businesses suffering under the iron fist of union rules. On the other hand, California is one of 28 states that have bowed to union pressure to outlaw right-to-work rules. As a result, the Bureau of Labor reports that 17.2 percent of California workers belong to unions, even higher than the national average of 12 percent. Only 5.1 percent of the Texas workforce is represented by a union. Studies have shown that right-to-work states enjoy higher job growth. That research helps explain why unemployment in Texas was 8.0 percent at the end of May according to the Labor Bureau, while the jobless rate was 11.7 percent in California, significantly above the 9.1 percent national average.
Texas is one of seven states with no personal income tax, leaving consumers with more discretionary income to spend on goods and services. A family of three with a household income of $50,000 in Los Angeles pays the government 10.6 percent of their income. Tack on sales taxes and the burden becomes even worse. California's state sales tax is 9.25 percent with some cities and counties piling on local sales taxes on top of that, making it the highest in the nation. Texas is among the lowest at 6.25 percent. High taxes raise the cost of living for families, leaving households with less money to spend with local businesses.
Texas has no corporate profits tax, although it collects franchise fees. In 2006, the Texas legislature overhauled the tax structure providing for $3 billion in tax relief for business, reducing their tax burden by 33 percent. In contrast, the California legislature has saddled businesses with a 8.84 percent tax on profits. Banks and financial institutions pay an even higher rate of 10.84 percent. In weighing corporate tax burdens, the nonpartisan Tax Foundation ranked Texas 13th for its business friendly system, while California was nearly dead last at 48. It is no wonder that California's share of the national economy shrank faster than all but three states from 2000 to 2010, according to Bureau of Economic Analysis figures. Meanwhile, Texas' historic growth spurt during that same period has hiked the state's share of the U.S. economy to 8.3 percent.
Regulations on Texas businesses pale in comparison to California's bloated system of legal handcuffs. The governor's office in California released a study in 2009 that calculated the total cost of business regulation in the state at an astounding $492.994 billion. In addition, the analysis estimated that over regulation of business had robbed California of nearly 4 million jobs. Another California state-sponsored study this year, dubbed the "Commission on the 21st Century Economy," determined that the cost of doing business in California was almost 23 percent higher (on average) than other states.
Clearly, by any objective measurement California is overtaxed, overregulated, over unionized and overrated as a place to do business. The state will continue to shed jobs and spiral deeper into economic decline as a result of Democrats' tax and spend policies that have driven California to the brink of bankruptcy.
Don't expect any sympathy from Texas, which has targeted California businesses as part of its economic development program. With an economic output valued at more than $1 trillion annually and expanding, Texas has set its sights on wrestling away the No. 1 ranking from California.
When that happens, as it surely will, perhaps Californians will finally tire of the Democratic Party's anti-business policies in the once Golden State.
Sunday, January 30, 2011
GE In The Tank for Obama's Agenda
In spending the first two years of his presidency bashing big business, President Obama made it clear that chief executives were anathema. As a result of his open hostility, he earned many enemies in the boardrooms of corporate America.
However, with the presidential election now two years away, the President has done an about two-face. He wants us to believe he has shed his anti-business suit and cloaked himself in American free enterprise. Of course, no one would dare suggest that perhaps the President is motivated by the need to raise an estimated $900 million for his re-election campaign.
In his latest show of corporate love, the President named General Electric CEO Jeffrey Immelt to head up the new Council on Jobs and Competitiveness. As expected, the lap-dog news media hailed the announcement as another sign of the President's pro-business agenda.
However, the media failed to report what's behind the selection of Immelt.
For starters, General Electric was one of the top donors to President Obama's election campaign in 2008. In addition, Immelt dug into his own silk-lined pockets and made generous donations from his personal funds. As a result, Immelt is one of the few executives who has Obama's elephantine ears.
In the months since Obama's election, Immelt has been the president's constant cheerleader, even supporting the toxic cap-and-trade scheme most businesses opposed. While many corporate leaders and their industries have been bludgeoned by the President's rhetoric, General Electric has honeymooned its way to an enviable position.
It also hasn't hurt that GE has used its ownership of NBC and MSNBC to slather on praise for the President. Those two networks can always be counted on to find the silver lining in the President's every dark cloud. Now that GE has relinquished control of the media division to Comcast, it will be interesting to watch if the fawning coverage continues.
Make no mistake about it, GE has benefited from its media position as well as its corporate largess.
General Electric Energy-Industrial Solutions is busy developing electric vehicle charging stations. Much of the initial testing was done on the Chevrolet Volt, which just happens to be a General Motors product. At the time this research and development was underway, the Obama Government was majority owner of GM.
After GM began full production of Volt, guess which company announced it would purchase up to 10,000 of the new electric cars? That would be General Electric. As a result of GE's commitment, the Volt is almost guaranteed to meet its sales goals which will allow the President to claim success for the government bailout of GM.
As more electric cars are purchased, GE builds more charging stations. It is a classic case of quid-pro-quid political-business behavior.
But that's only the tip of the corporate iceberg. GE is one of the world's largest manufacturers of clean energy and related technologies that have been extolled by the president. The firm makes everything from large wind turbines to solar panels. Let's not forget GE also plays a huge role in health care and defense.
And it doesn't stop there. Hardly any journalistic eyebrows were raised by the fact General Electric received $80 billion in TARP funds during the financial crisis. The mega billion dollar firm was granted the loans by taking advantage of its ownership of two tiny banks in Utah.
No one in the media has had the temerity to connect all the dots. The Amen Chorus in print and broadcast is sticking to its song sheet, which has no sour notes when it comes to President Obama.
Instead, a vigilant media should be waving the red flag, warning of potential conflicts of interest. GE's current and future profits are closely intertwined with the policies of the Obama Administration. Small wonder that President Obama and Jeffrey Immelt have practically worn out their hands scratching each other's back.
However, with the presidential election now two years away, the President has done an about two-face. He wants us to believe he has shed his anti-business suit and cloaked himself in American free enterprise. Of course, no one would dare suggest that perhaps the President is motivated by the need to raise an estimated $900 million for his re-election campaign.
In his latest show of corporate love, the President named General Electric CEO Jeffrey Immelt to head up the new Council on Jobs and Competitiveness. As expected, the lap-dog news media hailed the announcement as another sign of the President's pro-business agenda.
However, the media failed to report what's behind the selection of Immelt.
For starters, General Electric was one of the top donors to President Obama's election campaign in 2008. In addition, Immelt dug into his own silk-lined pockets and made generous donations from his personal funds. As a result, Immelt is one of the few executives who has Obama's elephantine ears.
In the months since Obama's election, Immelt has been the president's constant cheerleader, even supporting the toxic cap-and-trade scheme most businesses opposed. While many corporate leaders and their industries have been bludgeoned by the President's rhetoric, General Electric has honeymooned its way to an enviable position.
It also hasn't hurt that GE has used its ownership of NBC and MSNBC to slather on praise for the President. Those two networks can always be counted on to find the silver lining in the President's every dark cloud. Now that GE has relinquished control of the media division to Comcast, it will be interesting to watch if the fawning coverage continues.
Make no mistake about it, GE has benefited from its media position as well as its corporate largess.
General Electric Energy-Industrial Solutions is busy developing electric vehicle charging stations. Much of the initial testing was done on the Chevrolet Volt, which just happens to be a General Motors product. At the time this research and development was underway, the Obama Government was majority owner of GM.
After GM began full production of Volt, guess which company announced it would purchase up to 10,000 of the new electric cars? That would be General Electric. As a result of GE's commitment, the Volt is almost guaranteed to meet its sales goals which will allow the President to claim success for the government bailout of GM.
As more electric cars are purchased, GE builds more charging stations. It is a classic case of quid-pro-quid political-business behavior.
But that's only the tip of the corporate iceberg. GE is one of the world's largest manufacturers of clean energy and related technologies that have been extolled by the president. The firm makes everything from large wind turbines to solar panels. Let's not forget GE also plays a huge role in health care and defense.
And it doesn't stop there. Hardly any journalistic eyebrows were raised by the fact General Electric received $80 billion in TARP funds during the financial crisis. The mega billion dollar firm was granted the loans by taking advantage of its ownership of two tiny banks in Utah.
No one in the media has had the temerity to connect all the dots. The Amen Chorus in print and broadcast is sticking to its song sheet, which has no sour notes when it comes to President Obama.
Instead, a vigilant media should be waving the red flag, warning of potential conflicts of interest. GE's current and future profits are closely intertwined with the policies of the Obama Administration. Small wonder that President Obama and Jeffrey Immelt have practically worn out their hands scratching each other's back.
Wednesday, December 22, 2010
FCC Decision: Another Government Power Grab
Most Americans likely stifled a yawn when they heard the news that the Federal Communications Commission (FCC) laid down new rules regarding the Internet. Consumers won't notice any immediate changes in the way they use the web, so the ruling will be quickly forgotten.
However, people need to pay more attention because this is just another attempt by the federal government to extend its tentacles into private enterprise. Whenever the government decides to place the heavy hand of regulation on an industry, the consequences usually end up harming consumers and adding to the price of services.
In its ruling, the FCC approved new guidelines for something called "net neutrality." The rules place additional burdens on telecommunications and cable companies for broadband, while offering little in the way of consumer protection.
Of course, President Obama supported the decision. No surprise there. He campaigned on a pledge to "preserve the freedom and openness" that have allowed the Internet to flourish. It didn't hurt that one of his campaign's biggest contributors, the evil empire known as Google, championed FCC intervention on "net neutrality."
Let's set aside the arcane technical aspects of the ruling for this article. No matter your position on the issue of "net neutrality," the FCC's foray into regulation of the Internet signals the commission's intent to expand its ever increasing role into every nook of communications.
Even those like Google, who are applauding the decision today, will come to rue the day the FCC ventured into Internet regulation. Once the President leaves office and a new FCC is installed, the Evil Empire will get a taste of what its like to be on the receiving end of bureaucratic meddling. Google will be the first to scream foul.
It defies logic that the FCC would tamper with arguably one of the greatest American business success stories. Left unfettered, the Internet has grown from a tiny industry into a behemoth that circles the globe, connecting people and businesses in ways once thought unimaginable. Innovation and massive investments by private companies have been responsible for the growth.
Why then does the Internet market need government regulation? What failures exist that can only be solved by Washington bureaucrats? Unless someone can show irreparable harm, then the rationale for regulation is non existent. Furthermore, the federal courts have already determined that the FCC has no jurisdiction over the Internet.
The FCC's eleventh hour decision at the end of a lame duck Congress is simply a pay-off to Google. There is no other way to view the action. With Democrats about to lose their grip on Congress, this was one last desperate grab for power that also allowed the President to placate his supporters in the Evil Empire.
It is easy to predict what will happen as a result of the FCC's action. The decision will make cable and telecommunications firms more reluctant to invest billions in broadband until all the rules are promulgated to implement the decision. With billions in dollars already sitting on the sidelines, this is just another example of the anti-business attitude in Washington that is clouding investment.
This decision will also add another industry to the growing list of businesses controlled by the federal government (automobiles, banks, investment firms, housing, student loans, etc.) As the government extends its regulatory footprint, the costs to taxpayers keeps mounting.
For instance, the FCC has already requested a $19.4 million increase in funding for 2011. In its proposal, the commission said it wanted to increase its payroll by 75 people. In 2009, the FCC's budget was $466 million. The commission had 1,899 full time employees.
To be fair, the FCC gets 90 percent of its budget funded by fees charged those its regulates. Still, those fees are simply passed on to consumers through higher prices for services. In the end, consumers always pay for the excesses of regulation, which goes unreported in the media.
The incoming Congress should haul the FCC commissioner into a hearing room and demand justification for his decision on regulating the Internet. After politely listening to his drivel, the Congress needs to defund the FCC, an agency established by the Federal Communications Act of 1934.
It is just one of many federal agencies that have outlived their usefulness. With budget axes looking for targets in 2011, we suggest the FCC should be the first bureaucracy to fall.
However, people need to pay more attention because this is just another attempt by the federal government to extend its tentacles into private enterprise. Whenever the government decides to place the heavy hand of regulation on an industry, the consequences usually end up harming consumers and adding to the price of services.
In its ruling, the FCC approved new guidelines for something called "net neutrality." The rules place additional burdens on telecommunications and cable companies for broadband, while offering little in the way of consumer protection.
Of course, President Obama supported the decision. No surprise there. He campaigned on a pledge to "preserve the freedom and openness" that have allowed the Internet to flourish. It didn't hurt that one of his campaign's biggest contributors, the evil empire known as Google, championed FCC intervention on "net neutrality."
Let's set aside the arcane technical aspects of the ruling for this article. No matter your position on the issue of "net neutrality," the FCC's foray into regulation of the Internet signals the commission's intent to expand its ever increasing role into every nook of communications.
Even those like Google, who are applauding the decision today, will come to rue the day the FCC ventured into Internet regulation. Once the President leaves office and a new FCC is installed, the Evil Empire will get a taste of what its like to be on the receiving end of bureaucratic meddling. Google will be the first to scream foul.
It defies logic that the FCC would tamper with arguably one of the greatest American business success stories. Left unfettered, the Internet has grown from a tiny industry into a behemoth that circles the globe, connecting people and businesses in ways once thought unimaginable. Innovation and massive investments by private companies have been responsible for the growth.
Why then does the Internet market need government regulation? What failures exist that can only be solved by Washington bureaucrats? Unless someone can show irreparable harm, then the rationale for regulation is non existent. Furthermore, the federal courts have already determined that the FCC has no jurisdiction over the Internet.
The FCC's eleventh hour decision at the end of a lame duck Congress is simply a pay-off to Google. There is no other way to view the action. With Democrats about to lose their grip on Congress, this was one last desperate grab for power that also allowed the President to placate his supporters in the Evil Empire.
It is easy to predict what will happen as a result of the FCC's action. The decision will make cable and telecommunications firms more reluctant to invest billions in broadband until all the rules are promulgated to implement the decision. With billions in dollars already sitting on the sidelines, this is just another example of the anti-business attitude in Washington that is clouding investment.
This decision will also add another industry to the growing list of businesses controlled by the federal government (automobiles, banks, investment firms, housing, student loans, etc.) As the government extends its regulatory footprint, the costs to taxpayers keeps mounting.
For instance, the FCC has already requested a $19.4 million increase in funding for 2011. In its proposal, the commission said it wanted to increase its payroll by 75 people. In 2009, the FCC's budget was $466 million. The commission had 1,899 full time employees.
To be fair, the FCC gets 90 percent of its budget funded by fees charged those its regulates. Still, those fees are simply passed on to consumers through higher prices for services. In the end, consumers always pay for the excesses of regulation, which goes unreported in the media.
The incoming Congress should haul the FCC commissioner into a hearing room and demand justification for his decision on regulating the Internet. After politely listening to his drivel, the Congress needs to defund the FCC, an agency established by the Federal Communications Act of 1934.
It is just one of many federal agencies that have outlived their usefulness. With budget axes looking for targets in 2011, we suggest the FCC should be the first bureaucracy to fall.
Monday, June 14, 2010
Oily Residue Covers President and Hayward
The two principal players in the Gulf of Mexico oil spill saga are vying for the title of "Most Incompetent." President Obama and British Petroleum CEO Tony Hayward have dithered, dallied and danced their way around one of the worst environmental disasters in modern times. As the drama drags on and on, the two leaders have done everything but lead. Their collective ineptitude is staggering.
Let's start with Hayward, BP's beleaguered chief executive officer. His performance has gone from bad to worse since the oil rig explosion on April 20 that killed 11 workers. He was practically invisible in the early days of the crisis. When the heat was turned up on BP, the jaunty Hayward told reporters all the criticism of his company's handling of the spill hadn't fazed him because he maintained a "stiff upper lip." Not exactly comforting words to a world waiting for answers.
Then Hayward proceeded to put both feet in his mouth. Asked by reporters about his schedule, he half-hearted complained the crisis had intruded on his life. That incensed the relatives of the workers killed in the explosion. Hayward may be burning the midnight oil, but their husbands and fathers were gone forever. It didn't play very well on the evening news.
That's when Hayward turned to a "crisis management" firm for help in buffing his image. Their recommendations were standard public relations fare: run a bunch of self-congratulatory ads on the clean-up efforts and use social media to tell the world about BP's laudable record for environmental protection. As the advertising broke, it was greeted with an unanimous chorus of boos from everyone, including the President. Hayward had blown another opportunity for leadership.
By comparison, Hayward actually comes off better than President Obama. Fearing a Katrina-like backlash, the President has made numerous appearances in the affected states and flown over the disabled oil rig in the Gulf of Mexico. The news footage has shown a deeply troubled president, his shirtsleeves rolled up as he examines the damage. He has looked the part of a leader. But that's where any similarities with leadership have ended.
Instead of putting the entire resources of the federal government and military at BP's disposal, Obama laid sole responsibility for stopping the leaking oil on BP's doorstep. He adopted a hands-off attitude. Then he named a retired Coast Guard admiral as the official government point man instead of a cabinet-level person with more clout.
As the crisis dragged on, Obama quickly resorted to name calling like a school yard bully. He said he was "angry and frustrated". A lynch mob mentality gripped the administration. Attorney General Holder skipped the formalities of due process and announced his office was preparing to file criminal charges against BP. Forget quaint ideas like innocent until proven guilty.
That started a feeding frenzy in Congress where committees began competing to see which one could launch hearings the fastest. Television coverage in an election year was just the tonic that senators and representatives needed to boost their flagging popularity with voters. The President called for BP to set up an escrow account to pay for damages. A figure of $20 billion was bandied about. Congress drafted a letter to Hayward essentially repeating the President's demands. Then the President upped the ante, saying he wasn't worried about BP's profitability.
That ticked off our friends in Britain. The Mayor of London called the "anti-British" rhetoric unseemly and urged cooler heads rather than name-calling. He complained that this "great British company is being continually beaten up on the airwaves." Meanwhile, there is a growing backlash against Prime Minister David Cameron's failure to intervene with Obama on behalf of the petroleum giant. That led to a hastily arranged telephone conversation between the leaders.
Despite all the words, the posturing and finger-pointing, oil continues to flow into the Gulf of Mexico. Every day brings a new promise of a fix. That is followed by another disappointment. The rhetoric ratchets up another notch, but solutions are as hard to find as effective leadership.
Instead of school yard bantering, Hayward and Obama should have met face-to-face on Day 2 of the spill, pledging all their collective resources to stop the well from spewing oil. They needed to present a united front to the public. A high-ranking government official, reporting to the President and Hayward, should have been tapped to lead the cleanup effort. Then the government and the oil industry should have mobilized all their resources and mapped a plan for best case and worst case scenarios.
Hayward should have left the cushy comfort of his offices in the United Kingdom and set up a BP crisis center in the gulf region. His on site directing of BP's efforts would have at least given the appearance that he was engaged and in charge. Instead he sought shelter in his offices across the pond. That didn't exactly inspire confidence.
For his part, the President spent all his energy haranguing BP, its CEO and the oil business in general. Apparently, his advisers think the public would rather hear him beat up on Big Business rather than actually solve the catastrophe. His sporadic flyovers along the Gulf Coast have been nothing more than PR stunts. Where are the town meetings with affected businesses that he has become so famous for? Perhaps, the President doesn't want to face the music.
Even worse, the President has turned a deaf ear to offers from other nations and oil industry businesses that have offered ships, oil dredging equipment, well-capping services and similar resources to help stem the leak. It is almost as if he would rather watch BP fail at any cost than lend a hand.
The two bumbling leaders have covered themselves in words while the crisis remains unchecked. According to the latest government estimates, 40 to 100 million gallons of oil have already gushed into the Gulf of Mexico. As the crisis has worsened, BP has lost $140 billion in stock market value as investors try to assess the forthcoming damage to the company's earnings. The President's approval ratings are sinking too as voters become more frustrated with the lack of progress.
Looks like it is a tie between Obama and Hayward for the "Most Incompetent" title. However, American voters and the board of British Petroleum will have the last word on their leadership performance. That can't be a comforting thought for either man.
Let's start with Hayward, BP's beleaguered chief executive officer. His performance has gone from bad to worse since the oil rig explosion on April 20 that killed 11 workers. He was practically invisible in the early days of the crisis. When the heat was turned up on BP, the jaunty Hayward told reporters all the criticism of his company's handling of the spill hadn't fazed him because he maintained a "stiff upper lip." Not exactly comforting words to a world waiting for answers.
Then Hayward proceeded to put both feet in his mouth. Asked by reporters about his schedule, he half-hearted complained the crisis had intruded on his life. That incensed the relatives of the workers killed in the explosion. Hayward may be burning the midnight oil, but their husbands and fathers were gone forever. It didn't play very well on the evening news.
That's when Hayward turned to a "crisis management" firm for help in buffing his image. Their recommendations were standard public relations fare: run a bunch of self-congratulatory ads on the clean-up efforts and use social media to tell the world about BP's laudable record for environmental protection. As the advertising broke, it was greeted with an unanimous chorus of boos from everyone, including the President. Hayward had blown another opportunity for leadership.
By comparison, Hayward actually comes off better than President Obama. Fearing a Katrina-like backlash, the President has made numerous appearances in the affected states and flown over the disabled oil rig in the Gulf of Mexico. The news footage has shown a deeply troubled president, his shirtsleeves rolled up as he examines the damage. He has looked the part of a leader. But that's where any similarities with leadership have ended.
Instead of putting the entire resources of the federal government and military at BP's disposal, Obama laid sole responsibility for stopping the leaking oil on BP's doorstep. He adopted a hands-off attitude. Then he named a retired Coast Guard admiral as the official government point man instead of a cabinet-level person with more clout.
As the crisis dragged on, Obama quickly resorted to name calling like a school yard bully. He said he was "angry and frustrated". A lynch mob mentality gripped the administration. Attorney General Holder skipped the formalities of due process and announced his office was preparing to file criminal charges against BP. Forget quaint ideas like innocent until proven guilty.
That started a feeding frenzy in Congress where committees began competing to see which one could launch hearings the fastest. Television coverage in an election year was just the tonic that senators and representatives needed to boost their flagging popularity with voters. The President called for BP to set up an escrow account to pay for damages. A figure of $20 billion was bandied about. Congress drafted a letter to Hayward essentially repeating the President's demands. Then the President upped the ante, saying he wasn't worried about BP's profitability.
That ticked off our friends in Britain. The Mayor of London called the "anti-British" rhetoric unseemly and urged cooler heads rather than name-calling. He complained that this "great British company is being continually beaten up on the airwaves." Meanwhile, there is a growing backlash against Prime Minister David Cameron's failure to intervene with Obama on behalf of the petroleum giant. That led to a hastily arranged telephone conversation between the leaders.
Despite all the words, the posturing and finger-pointing, oil continues to flow into the Gulf of Mexico. Every day brings a new promise of a fix. That is followed by another disappointment. The rhetoric ratchets up another notch, but solutions are as hard to find as effective leadership.
Instead of school yard bantering, Hayward and Obama should have met face-to-face on Day 2 of the spill, pledging all their collective resources to stop the well from spewing oil. They needed to present a united front to the public. A high-ranking government official, reporting to the President and Hayward, should have been tapped to lead the cleanup effort. Then the government and the oil industry should have mobilized all their resources and mapped a plan for best case and worst case scenarios.
Hayward should have left the cushy comfort of his offices in the United Kingdom and set up a BP crisis center in the gulf region. His on site directing of BP's efforts would have at least given the appearance that he was engaged and in charge. Instead he sought shelter in his offices across the pond. That didn't exactly inspire confidence.
For his part, the President spent all his energy haranguing BP, its CEO and the oil business in general. Apparently, his advisers think the public would rather hear him beat up on Big Business rather than actually solve the catastrophe. His sporadic flyovers along the Gulf Coast have been nothing more than PR stunts. Where are the town meetings with affected businesses that he has become so famous for? Perhaps, the President doesn't want to face the music.
Even worse, the President has turned a deaf ear to offers from other nations and oil industry businesses that have offered ships, oil dredging equipment, well-capping services and similar resources to help stem the leak. It is almost as if he would rather watch BP fail at any cost than lend a hand.
The two bumbling leaders have covered themselves in words while the crisis remains unchecked. According to the latest government estimates, 40 to 100 million gallons of oil have already gushed into the Gulf of Mexico. As the crisis has worsened, BP has lost $140 billion in stock market value as investors try to assess the forthcoming damage to the company's earnings. The President's approval ratings are sinking too as voters become more frustrated with the lack of progress.
Looks like it is a tie between Obama and Hayward for the "Most Incompetent" title. However, American voters and the board of British Petroleum will have the last word on their leadership performance. That can't be a comforting thought for either man.
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