President-Elect Obama's First Big Mistake
Its great to see President-elect Obama aggressively taking on the economy prior to his taking office. Unfortunately, the economic advisory team that he has put together looks more like a semester's worth of great guest speakers for an MBA class than an economic advisory team that can truly help him.
There are a lot of great minds on the list:
Robert Rubin, Larry Summers, Laura Tyson, who served as Clinton's top economic adviser; former Fed Vice Chairman Roger Ferguson; Time Warner Inc. Chairman Richard Parsons; former Securities and Exchange Commission chairman William Donaldson and Xerox Corp. Chief Executive Officer Anne Mulcahy.
Google Inc. CEO Eric Schmidt, Michigan Governor Jennifer Granholm and Roel Campos, an ex-SEC commissioner, and Warren Buffett are also on the advisory board.
Notice anything missing?
Not a single entrepreneur. Yes Warren Buffett started a business, but he will be the first to tell you that he "doesn't do start ups". Which means there isn't a single person advising PE Obama that we know of that knows what it's like to start and run a business in this or any economic climate. That's a huge problem.
If we are going to solve our current economic problems, our president needs to get first hand information on the impact his proposed policies will have on real Joe the Plumbers. People who are 1-person companies living job to job, hoping they get paid on time. We need to know what the impact of his policies will be on the individually owned Chrysler Dealership in Iowa. The bodega in Manhattan. The mobile phone software startup out of Carnegie Mellon. The event planner in Dallas. The barbershop in L.A. The restaurant in Boston.
Entrepreneurs that start and run small businesses will be the propellant in this economy. PE Obama needs to have the counsel of those who will take the real risk inherent in creating companies and jobs. Those who put their money and lives on the line with their business.
Without it, the rules of unintended consequences of any economic policy could hit you in the mouth in ways you never expected. Things like forcing companies from being taxpayers to the underground cash economy, or forcing new hires to be independent contractors to avoid having to pay their insurance or higher matching social security amounts. Your current group has no one with 100% of their net worth on the line. I promise you that the possibility of losing it all will provide a completely different perspective than any of the "knowledge" the esteemed, learned members of his current advisory team offer.
PE Obama, I'm always available to help, but my recommendation would be to randomly go through the new incorporation filings and ask for volunteers to give feedback. Ask the people who are actually starting new businesses what they need.
Entrepreneurs will lead us out of this mess. Talk to them.
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Good Advice. If Obama is to succeed, we all need to succeed together. This isn't about him, but our country's future. Inviting the sparks of ingenuity that create great enterprise is sorely needed as we move forward. Asking entrepreneaurs from the emerging green economy is his best play to your advice. He then can gain in two arenas and make good on his leadership to a new economic future and energy policy. They are interlinked and are important to our future. We don't just need new jobs, but new industries that create a better world, not just a richer one.
First of all the economic crisis we face is not one of lack of entrepreneurship. It is a global systemic financial failure and requires some very bold and probably unconventional macro economic policies. I hardly think entrepreneurs are generally qualified in this arena. Certainly they have a stake in the process, but so does everyone else.
In any case, with the likes of Mark Warner, Warren Buffet, and Eric Schmidt at the table I don't think they are under-represented.
Taking this advice from a guy who traded Steve Nash is like wanting Bush to stay on Obama's cabinet as Secretary of the Treasury.
National Championship wins for you...0,Na
Mark, I totally agree with you. I'm an independent contractor, I file Schedule C, and have for years. I'm a writer/producer, and folks like us aren't usually on staff, but our skills are needed. We go from job to job, just like handymen or consultants or anyone who fixes things -- we are essential small business. I'm also in transition, I'm helping three other people with a start-up; we're forming a Green Business, specializing in Home Energy Performance. We're a grass roots group, we know we're a vital element of the greater economy, and people like us should have a voice in this process.
(I'm also trying to get divorced from my husband, the one with the salaried job who has the health insurance. I so hope the Health Care solution addresses the outdated requirement that attaches health insurance to jobs you have with an employer. Affordable coverage, that is. I know I can buy it on my own, but there should be an easy, cost effective solution that's uncomplica
Mark, how can we get this concern to the decision makers working with PE Obama? Where do we make our point, besides the Huffington Post?
Thanks, and I'm so glad you brought this up!
You could drop a line at http://cha
The entrepreneurs should definitely have a seat at the table. But I don't think the set of skills required to start a successful business are the same as those required to influence the direction of a national economy.
My analogy would be that of a flowing river where money is water. Figuring out how to get a position downstream to maximize the flow to oneself is very different from organizing a project to divert the river for the general welfare. And frequently the two involve conflicting interests. For example, the general welfare would be better served, if there were high rate of employment. Successful entrepreneurial enterprises often have it in their individual interests that there be an abundant supply of cheap labor.
(and furthermor
Shifting my animal metaphor a little, it just doesn't work to put foxes in charge of the henhouse.
Remember when a certain political party decided to put the biggest polluters (and their loyal minions) in charge of environmental policy? I mean they had a lot "on the line, " right? Doesn't work so good in practice, though. Had environmental policy been guided by experts in ecology and macroeconomics rather than quick-buck artists, Detroit would now lead the world in intelligent personal transportation and the means to produce it, we would be far less dependant on foreign energy for that and a host of other reasons and we wouldn't be making entrepreneurial war profiteers wealthy at such an alarming clip.
When you hurt your foot playing basketball, do you consult a Doctor, or do you consult your team-mate's foot, because it, like your foot, has "100% on the line"?
If the car dealers had a whiff of a clue they would have clamored--
So you think Joe the Chrysler Dealer knows best what the effects will be on his business of various possible national and international financial policy options?
Is this because running a car dealership is so easy that it allows the owners an infinite amount of spare time in which to stay sharp and up-to-date on macroeconomics generally as well as the particular economies and politics of their market and every other intersecting and non-intersecting market? The economies and politics of every nation in the world whose economy may effect or be effected by ours?
No. The guys you recommend would be, by and large, stupid choices for the posts you're talking about.
We've given the lions of the business world free reign to dictate policy long enough. Here's what they said: "The Market is a benevolent and just God. Remove all encumbrances from it (except barriers to entry for my potential competitors) and it will reward Good, punish Evil, and peace and plenty will surely result."
Here's what they did: ate everything in sight, ate as many of each other as possible, then came begging for billion-dollar handouts because they couldn't find anything else to eat in the landscape they'd savaged and the den they'd been crapping in for so long.
I disagree with Cuban-
Entrepreneurs got us into this mess!
Cuban still wants everyone to keep their crayons, while the American public pays for them.
We need "smart" people to get us out of this,
not ex "hedge fund" managers and the people who first profitted
from this mess-
Who says he won't eventually talk to entrepreneurs? I'm not sure that entrepreneurs are the people he needs most to be consulting with right now, since this isn't a crisis of entrepreneurship - small businesses are only one piece of this giant mess, and they're largely on the victim side, not the perpetrators. It's the very structure of the economy that's the key problem - simply talking to people who own their own businesses and have survived tough times isn't necessarily going to address the underlying issues, and I disagree that economic policy should be written by entrepreneurs! What percentage of Americans own their own business anymore? I have no idea, but I'm willing to bet it isn't that many overall. Let's stop thinking there are any silver bullets here; Cuban just seems put out that Obama didn't immediately recognize him as someone who could help save the economy.
It sounds like Obama is mostly being advised by the mainstream Democratic wing of the Business Party, the same people who worked with the Republicans to create this mess. He is not including people like Joseph Stiglitz and Paul Krugman who offer a new perspective. As far as entrepreneurs are concerned, too often they have to compromise any moral values that they might have. Their businesses all too often don't benefit society and in fact are very expensive as the current crisis demonstrates.
One thing that could really help small businesses is to disentangle health care from your job. This idiotic and archaic notion that the employer should provide health insurance is one of the biggest and costliest problems small businesses face. I am a one man small business but I can't afford to hire people in the state of MA because under state law I would have to provide them with health care coverage even if they are part time and frankly I can't afford it. I could expand my business and put people to work if I did not have that financial and paperwork impediment.
Scooterliberal: As a small businessman in Massachusetts, please provide me the section in the new Massachusetts health care law that says an employer with under 11 part-time or full-time employees has to provide health insurance for their employees. If so, the form the state has been sending me for 24 years is wrong--let's not spread disinformation about so-called small businesses. and their obligations under the new Commonwealth Health Care Law. I think you are referring to worker's compensation insurance, which of course I provide for ALL employees regardless of status. That's been on the books for years and is not considered "health" insurance.
Sorry, this would be a bad idea.
As a class, entrepreneurs should not form policy, but be left to do what entrepreneurs do; seek and capitalize on deficiencies and opportunities in the market.
Unfortunately, at this time of the day I can only conjure up the slightly pejorative metaphor of having a fox help design a chicken coop, but then again an entrepreneur may not find it pejorative.
Senator Elect Mark Warner, former Governor of Virginia, is a highly succesful Entrepreneur. He gave a very impressive speech at the Democratic National Convention for Obama.
Cuban's point is spot on. The Obama plan offers two odd solutions for small business: a capital gains cut and $500 employee tax credit. Neither of these ideas help day to day operations for entrepreneurs and demonstrate a lack of understanding on Obama's part.
Furthermore, Obama's plan to fund $250M for incubators in low income neighborhoods to spark entrepreneurship is unproven.
Truthfully, entrepreneurs need only one thing to be successful: less government.
you contradict yourself in two sentences like most capitalists:
First you criticize his plans as not helping entrepeneurs. Then you loudly pronounce the cliche that entrepeneurs needs less government. How can you criticize his plans for not helping you- then say you need less government? what you actually want is for the government to help you and not other people. that's what you want and it's very obvious.
i would have thought that the endless procession of begging capitalists trying to get money for another big vacation out of the idiot congress- that still itself believes that business needs less government as they trowel out billions to private businessmen- would have demonstrated that they never could have made a dime or done a deal without flipping some government agency with a few junkets or favors. what it shows is you can't get anywhere but in debt UNLESS THE GOVERNMENT PROVIDES an endless array of services at the very least. we are all learning that now.
I would agree that he should have an entrepreneur(s) giving advice on this issue. However, your comment that "[T]truthfully, entrepreneurs need only one thing to be successful: less government" is vastly too broad. I hope that I am just taking you to literally. I have only seen one "entrepreneur" out of thousands who even came close to making the efforts necessary to protect his employees and environment. The employees are generally the reason why entrepreneurs are successful. Certainly, the idea is the genesis, however, it is the employees who who usually make it happen. And they are very rarely compensated fairly.
It makes it tough to be sympathethic with Mr. Cuban's point when you know that entrepreneur's rarely share the "wealth" that they accumulate at the expense of the employees, and the environmen
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