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  • Bernie Marcus on the Administration and the Economy

    Posted by David Foster on July 22nd, 2011 (All posts by )

    Home Depot co-founder Bernie Marcus, talking to Investors Business Daily about the dismal state of the economy, was asked by the interviewer what advice he would give Obama about job creation. His response:

    I’m not sure Obama would understand anything that I’d say, because he’s never really worked a day outside the political or legal area. He doesn’t know how to make a payroll, he doesn’t understand the problems businesses face. I would try to explain that the plight of the businessman is very reactive to Washington. As Washington piles on regulations and mandates, the impact is tremendous. I don’t think he’s a bad guy. I just think he has no knowledge of this.

    When asked “why don’t more businesses speak out,” Marcus responded:

    They are frightened to death — frightened that they will have the IRS or SEC on them. In my 50 years in business, I have never seen executives of major companies who were more intimidated by an administration.

    The above two statements do not, IMO, go very well together. A president who establishes a climate of intimidation directed against American citizens is certainly not a good guy.

    Marcus is clearly right about the effect of this administration’s policies and attitudes on job creation and economic growth. If you are in a manufacturing business that is energy-intensive, are you going to want to invest in new U.S. facilities with a president who has asserted that when his plans are implemented, electricity prices will “necessarily skyrocket?” If your business is one of the broad array of those which use industrial boilers, are you going to feel comfortable expanding given the EPA’s proposed extremist regulations on this kind of equipment? Whatever kind of business you are in, how sure can you be that your industry will not soon be added to the long list of industries attacked and demonized by Obama? Unless you have strong political connections with the Administration, how sure can you be that the U.S. government will not establish policies giving preferential treatment to a competitor who does have such connections? And if you’re an individual thinking of investing your savings in a business making toys, science kits, or children’s apparel..do you really want to take this risk given what the “Consumer Product Safety Improvement Act” has done to many such businesses?

    The really frightening thing is that the problem is not just Obama, although he has obviously made it much, much worse. Obama is only the point man for the large, well-funded, and influential “progressive” movement which now dominates the Democratic Party, along with much of academia and the tax-exempt “nonprofit” world, and the economy will grievously underperform until the power of this movement is broken.

    The full Marcus interview here; link via JammieWearingFool and Instapundit.

     

    12 Responses to “Bernie Marcus on the Administration and the Economy”

    1. Jonathan Says:

      The idea that the economy won’t recover until Obama leaves office is becoming conventional.

      I wonder if the idea that the 3-4% annual GDP growth we experience during typical recoveries is low will ever become conventional. Our economy might grow much faster than that if we could enact substantial regulatory and tax reforms at the federal level.

    2. Michael Kennedy Says:

      The only industry that has done OK is financial services which is very connected to this bunch and which is rolling in money. They also have virtually nothing in terms of physical plants.

    3. Michael Kennedy Says:

      For an example of the difference between the financial services industry and the rest of us, see this.

      At the height of the financial crisis, the Federal Reserve evoked emergency powers to make loans to Wall Street firms without bothering to adequately explain the legal grounds for those loans.

      And nearly three years after the loans were made, the Fed still hasn’t provided a satisfying answer for why it made loans to the London-based broker-dealer subsidiaries of Merrill Lynch, Goldman Sachs , Morgan Stanley , and Citigroup , as well as the U.S. broker-dealer subsidiaries of Merrill Lynch, Goldman Sachs, and Morgan Stanley, according to the Government Accounting Office’s newly released audit of the Federal Reserve’s financial crisis activities.

      In September and November of 2008, the Federal Reserve extended credit to the affiliates of these Wall Street firms under terms very similar to those it was making under the Primary Dealer Credit Facility. But because these affiliates were not actually primary dealers, loans under that facility were not officially available.

      Darrell Issa is going to have fun in 2013 when he can get these people under subpeona. Unless someone assassinates him.

    4. Eddie Says:

      Going after what Marcus is saying, would it be better for negotiations now and in the fall to then emphasize deregulation and sunsetting/suspending regulations (as Mitch Daniels, Huntsman, McDonnell and Barbour have all argued for) rather than fixating on taxes at this point? Could that not be more helpful and the political ground be much more fertile for job-creators (rather than taxes where a supermajority of the public wants to soak the rich)?

      It seems the cost of employing someone has skyrocketed in the past 10 years. The President cannot ignore that in an argument with the GOP for very long, and he would lose 10-20 senators up for re-election next year on that subject.

    5. Authentic Spam Says:

      Eine kleine Back Story ist notwendig …… Ich bestellte meinen ersten Zahnkranz und hatte es overnighted so würde es hier sein, bevor ich auf Urlaub fuhr eine Überraschung für meine Frau …. ich zu spät aufgewacht in der am (I ‘m einer Nachtschicht cop) zu finden, meine titan auf

      [remainder of comment deleted by Jonathan]

    6. Shannon Love Says:

      A Lesson From Spam: Apparently German doesn’t have it’s own phrase for “overnighted”.

    7. Shannon Love Says:

      I think the real problem here is that Obama and friends have absolutely no understanding that business people are actual active decision makers who make individual detailed decisions about the resources they manage. Leftism is about dehumanizing the economic-creatives.

      In Marxism, the industrial creation of wealth arises in a predetermined fashion from the effects of natural forces. Human actions and decisions, especially on the detail level, have little to do with it. Unfortunately, the current Left in even America is heavily influenced by crypto-marxist ideas even though most don’t realize it.

      Worse, even with non-Marxist ideas like Keynesian theory, business people are considered to be little better than conditioned rats in a cage who will mindlessly respond to macro-economic signals. (Robots following a program might be a better analogy.)

      I’d say the current Democratic party is a mishmash of the two ideas: Wealth just kinda “happens” and business people don’t do to much but to the extent they do something, they will respond only to macro economic signals and will ignore all other inputs. Politicians can say any thing without affecting business. Politicians can even do anything as long as it doesn’t have a direct and broad macro-economic effect.

      They simply see no connection between what they say and what business does because they don’t respect business people. Since they see economic matters as being more about broad forces, they don’t understand that business is about managing uncertainty. They don’t stop to think about how individuals, listening to all this, will think about how the leftwing blathering will increase the uncertainty they have to manage and cause them to take fewer economic risk.

    8. Michael Kennedy Says:

      Shannon, I think you are looking for the analogies in this essay.

      Yet they do have one major thing in common, and that is the belief that, regardless of what the ruler does, the polity he rules must necessarily continue. This is perhaps the most essential, if seldom acknowledged, insight of the post-modern “liberal” mind: that if you take the pillars away, the roof will continue to hover in the air.

      Gorbachev seemed to assume, right up to the fall of the Berlin Wall and then beyond it, that his Communist Party would recover from any temporary setbacks, and that the long-term effects of his glasnost and perestroika could only be to make it bigger and stronger.

      There is a corollary of this largely unspoken assumption: that no matter what you do to one part of a machine, the rest of the machine will continue to function normally.

      A variant of this is the frequently expressed denial of the law of unintended consequences: the belief that, if the effect you intend is good, the actual effect must be similarly happy.

      Very small children, the mad, and certain extinct primitive tribes, have shared in this belief system, but only the fully college-educated liberal has the vocabulary to make it sound plausible.

    9. David Foster Says:

      MK…”the belief that, regardless of what the ruler does, the polity he rules must necessarily continue.”

      This fallacy is not limited to liberals & postmodernists. If you look at a company that has had a very good run but now has serious product/market/strategy issues and declining revenues/profitability to match, you will often find that the people in the company…from the most junior employees right up through the board of directors..really don’t believe in their heart of hearts that the place can ever really disappear. The buildings, the equipment, the cash balances, the well-known name…all of these things combine to give a fallacious impression of invincibility.

    10. Michael Kennedy Says:

      David, George Bush I was quoted as saying to his staff a week before the 1992 election, “Am I the only who still thinks I can win this election?”

      Yes, he was.

    11. Shannon Love Says:

      Michael Kennedy ,

      The Communist were trapped by their unquestioned but completely immersive hard Marxist world-view. In Marxism, the communist utopia is created by deterministic natural forces. They literally believe that the end point of all biological, technological, economic and social evolution is to produce the Communist utopia. The idea that Communism could fail was as hard for them to believe as the idea that gravity would suddenly stop working.

      This ideological immersion is far greater than the unquestioned confidence that all to often follows a long line of successes. It is more akin to religious faith. It defines not just politics but an entire cosmology. Gorbechev et al couldn’t see the possibility couldn’t see the possibility of the failure of Communism because doing so would require him to restructure his entire cosmology from the big bang forward.

      Less extreme Leftists have the same problem. They have a less concretely defined ideology than the communist but they nevertheless have the firm faith that they always know what is right and that the world will also work as they command it to.

      They never face a real, unambiguous test of their ideas. They can always construct a plausible story for themselves for why this or that political idea or policy didn’t work and its always someone else’s fault. Since they don’t create themselves, they simply don’t understand that the world is not arbitrary.

      They think the world just happens and that bright people show up, give some orders and things get better. The idea that their actions could be counterproductive, much less actively destructive, is simply unthinkable.

    12. cjm Says:

      leftist “elites” don’t care about results, because they never personally suffer the consequences of their actions — they will always get theirs, and they know it. the other 95% of the population will suffer, but that’s their problem. that’s what’s so f****** funny about the low level idiots who support leftist take overs — they are the first ones to go into camps.