Tuesday's Democratic meltdown should suggest that Americans are not stupid: they have fired the 2010 government and want a new one. For the Democrats, the lesson is in a tough economy you can't claim to want jobs while assaulting job creators. You can't cut the deficit while ridiculing every effort made to suggest cuts in spending. It's not just business leaders who don't trust or even understand the 2010 political leadership, it's the hard-working employees at tens of thousands of companies who don't understand why their government demonizes business while supporting the nearly half of Americans who no longer work or pay taxes.
The Republicans should hear a lesson also. Most of their election votes probably came from people voting against their opponents rather than voting for them. Americans are tired of 2,000-page bills that were voted on without any chance to read, amend or debate. Furthermore, they did not want the government creating new liabilities when the deficit was already getting larger. Not every dissatisfied American is a Tea Party member nor did the Tea Party generate all the Republican votes, but Americans' anger with out-of-control, irresponsible government is real, palpable, and shared by a large segment of thinking Americans.
President Obama needs a new approach if he is to move our nation forward. I suggest he start by embracing business as part of America and part of the solution to our shared challenges. If he shifts from connecting corporations, Wall Street and various industries with pejorative words such as "reckless," "shortsighted," greedy, and "outsourcing," then he can heal a rift between corporate leaders and the Democratic party.
Just Monday I received a pre-election day email from President Obama imploring his followers to vote Democratic. Let me use the president's own words:
"We will fight efforts to privatize Social Security, and stop the other side from handing over the retirement savings of a generation to Wall Street. We refuse to go back to the days when big oil and insurance companies wrote their own rules and ran up record profits, while you paid for it at the pump or faced bankruptcy as health bills piled up."
What's this about privatizing Social Security? The idea hasn't even surfaced in years, yet it was the battle cry of campaigning Democrats. The fact is the Social Security system is in major trouble, and anyone who can read a balance sheet knows that Medicare, Medicaid, Social Security and other entitlements need to be addressed. What have Republicans done in the last four years while the Democrats controlled Congress? Almost nothing. One Republican Congressman, Paul Ryan, suggested that we slow the growth in Social Security spending by easing up the retirement age and cost of living adjustments. Did the president embrace this modest but noble stand to deal with an impending crisis? No. Instead he attacked Ryan repeatedly as somehow trying to destroy Social Security. So much for leadership.
"Handing over retirement savings over a generation to Wall Street," Obama stated. I am not sure what this means, but the deficit is inter-generational theft stealing from our children. I am not sure why - but the president bailed out a few Wall Street firms. When did Wall Street become evil? Thousands of great companies are traded on Wall Street stock exchanges. Somehow business is now stealing our savings. If the anti-business rhetoric ends, perhaps corporate leaders will feel confident enough in the future to make investments in jobs. As it is, our slower national growth compared to other regions of the world, highly regulated business environment and high corporate taxes (with the threat of more on the way) make doing business and expanding in America very problematic. The anti-business rhetoric from the top simply makes it worse.
The Republicans did not use their time controlling government to address major problems. But the Democrats have simply made our problems worse. The Democrats claim of progress is factually misstated. They passed a pork-laden, union-pleasing stimulus package, expanded health care without any real reform, and further regulated financial markets without addressing the Fannie Mae and Freddie Mac elephant-size liabilities in the room.
Our nation faces real challenges that anyone with basic accounting skills can understand. Almost all of our national leaders have zero business experience, have never met a payroll and don't understand that entrepreneurs and businesses -- not government -- creates job. Our political leaders have failed to pursue opportunities to grow our economy through trade agreements while other nations are signing many agreements lowering trade tariffs to zero.
We pay our politicians to make tough choices among competing priorities, but instead they give us rosy scenarios. Leaders in Britain, Spain and other countries have recently confronted similar crises. However, our politicians - of both parties - refuse to address them. The Republicans say no taxes and suggest no spending cuts and the Democrats say no cuts in spending and are eager to squelch investment with new tax increases.
Our nation is facing a certain economic crisis. It's not just the seven million lost jobs in the private sector these past two years - it's that government employment has risen by six figures. It's that our deficit has doubled in a few short years. It's that our infrastructure is crumbling and all our investment money is being borrowed from our children and spent so that the poor, the unemployed and the union pensioners will be certain to get paid. Schools go to four-day weeks so that retired teachers get the benefits they were promised.
Rather than address these issues and take fundamental actions to encourage investment and job creation such as providing tax rate stability, allowing repatriation of dollars taxed overseas and reducing the federal deficit, we have a government led-campaign against the very businesses that create the jobs we need. Sadly, many now extrapolate from the sins of a few bad apples like Enron and Countrywide to blame big companies for America's fall from grace.
Every new attack on U.S. companies, every threatened increase in taxes, every new entitlement/burden from health care to so-called financial reform that ignores the real issues is another disincentive for businesses to invest in America. Until and unless our political leaders of both parties focus on growth strategies encouraging exports, trade, attracting the best and brightest and deficit reduction, our nation will experience a chokehold on our strength in innovation and lose our the advantage of American exceptionalism.
Americans voted Tuesday for a change in government. Let us hope that our new leaders will stop jockeying for the next election and start honestly confronting the biggest challenges our nation faces. President Obama can and must set the tone. If he can shift from campaign leader to leader of the greatest free market economy in the world, we can come back and provide our children what our parents provided us: a better life in the best nation on earth.
Gary Shapiro is the president and CEO of the Consumer Electronics Association, which represents more than 2,000 U.S. technology companies. CEA sponsors the Innovation Movement, a grassroots organization of Americans who believe innovation will power future U.S. economic growth. To join the Innovation Movement, visit: http://innovation-movement.com/
Follow Gary Shapiro on Twitter: www.twitter.com/GaryShapiro
1) "One Republican Congressman, Paul Ryan, suggested that we slow the growth in Social Security spending by easing up the retirement age and cost of living adjustments."
Actually the largest change Ryan suggested was to apply the payroll tax to company's medical benefits:
Reduction in long range OASDI actuarial deficit (% of payroll).
1.13 % Payroll Tax Coverage of Employer Sponsored Group Health Insurance
1.04 % Progressive Price Indexing
0.41 % Accelerate Increase and Index the Normal Retirement Age
And also proposed private accounts as detailed in the Goss actuarial review of the Ryan proposal found at:
http://house.gov/budget_republicans/press/2007/042710ryanbillletterfinal.pdf
2) "They passed a pork-laden, union-pleasing stimulus package"
Except that a big hunk of the stimulus was tax cuts and revenue transfer to the states.
Shapiro is right on all counts, and particularly so in his specific recommendations for a growth strategy. The only question I would have is why he posts such deserving material here.
Everyone is on the political angle of the story. No one in charge cares because if they did they would realize that the small business cant get a $20,000 loan nor any help. Stimulus or otherwise. Obama gives stimulus that are supposed to help small business, yet they dont (I can write a 10 page article on this subject). The answer from the Republicans is to give tax breaks. They are both wrong. If there is money there just give it to the people like Bush did. I'm no fan of W. He sucked. But the check he gave to every American was spent in the USA and it did allot more than giving billions of dollars to Citybank, Chase etc.... Anyway Shapiro belongs to Audiovox, Best Buy, DELL, HP, Sony, Apple, etc...He represents small companies but he is not their voice (that I can assure you all) His views are the same as most fortune 500.
The charge that Obama has "demonized" business is nonsense. Obama somehow created "uncertainty"? What in business is 'certain?'
I recently read where Monsanto was flying high one quarter and then tanked. It had nothing to do with Obama.
One minute everyone wants plasma and then poof! They want LCDs. Blame it on Obama?
Privatizing Social Security hasn't come up "in years?" I've seen the idea floated by plenty of Tea Baggers. Obama administration called Wall Street evil? How can you even make that charge next to the sentence about Obama bailing out Wall Street?
What's evil is making Social Security a private account that people can use to make personal investments on Wall Street. That would be a really stupid idea, yet it's what Bush wanted and what Republicans still want.
These attacks on big business you've hallucinated, where did they come from? Show them to us. I didn't see any, except maybe BP.
Shall we explode the deficit by making the Bush tax cuts permanent? You know, the ones that created ZERO jobs over the last decade? Why should we? They won't create any more jobs now. They won't be stimulative either.
Our infrastructure is crumbling? Well that requires government spending and government jobs but you're against that!
Frankly this editorial makes no sense whatsoever. In that regard it resembles most Republican party platforms. Congratulations.
Main Street still believes the basic truth that Wall Street is "reckless," "shortsighted," greedy, and "outsourcing," and will do nothing to grow the US economy.
Face it, the financial community is a PARASITIC drag on America, not a stimulus.