Nearly every election year, a series of analysts and candidates suggest to American voters that the election that year may be the most important of its age. In retrospect, few can argue that the election of Obama has not been momentous. The midterm election of 2010 may be a turning point as well – especially for American business.
For decades, American business has wined, dined and lobbied the American politicians. Some have sought preferential tax benefits for themselves or their industries. Others have sought preferential regulations or corporate welfare for the same reasons. Still others feed the alligator that is government in hopes that it will be kind to them in the future while it consumes others today.
Perhaps no greater example of the latter mentality exists in California. Year after year, business interests donate millions of dollars to Democrats in the hope that they will act reasonably. The coup de grace of which was the 2002 election for Governor between then Governor Gray Davis and challenger, and business man, Bill Simon. Under no uncertain terms, Simon campaigned on lower taxes and regulations. Davis offered record deficits and coming tax increases – not to mention an ever increasing regulatory burden. Incredibly, Big Business gave to Davis three to one over Simon. They did so because they did not give Simon much of a chance and they wanted to curry favor with Davis – hoping he would be kind to them when he won.
Without a doubt there were two losers in that election. Simon lost by less than 5 points (far closer than business imagined) and California businesses now face the highest combined tax and regulatory burdens in American history. In other words, California businesses have received a very poor return on their investments into California Democrat politicians – so much so that California’s desert neighbor, Nevada, leads the nation in new business development.
The same story, of course, could be told nationally. Businesses around the country have been feeding the giant alligator which is now our government for decades. Until the 1960’s, government was less than a $100 billion enterprise ($600 billion or so in today’s dollars). Today it is a $4 trillion dollar behemoth. In this last year, despite funding Obama, the alligator has turned on them to an unprecedented degree with Obama policies that have included destroying bond holders rights in GM and appointing czars that determine their pay – not to mention adverse multinational taxation policies, unaffordable health care mandates, union empowering rules and much, much more. In other words, business has not received a good return on its investment in Obama either.
Knowing all of that, and knowing that a Republican Congress is a distinct possibility, the question must be asked, as the 2010 election approaches: Will American Business stop feeding the alligator that is our government?
All the way back in 1978, in his book A Time For Truth, Bill Simon’s father, former Secretary of the Treasury William E. Simon, warned us that “most of our politicians [were] careening toward more and more central planning and our society ruled by a small band of moral and economic depots.” He decried the fact that American businessman of the time had been:
“more concerned with short-range respectability than with long range survival. Most appear morally afraid of antagonizing the egalitarian gurus of our society. They do indeed seek to protect their enterprises, but with little understanding of the philosophy that justifies their actions. Consequently, they do so secretively, and often guiltily, in the form of lobbying, financing politicians and, not infrequently, bribing them. Even more disturbing, they also seek to protect their enterprises by endorsing the very values of their worst enemies and financing their causes. If American business consciously wished to devise a formula for self-destruction, it could do no better than this.”
He exhorted business leaders to start a “countermovement” to not only preach but practice free enterprise. Simon Sr., and his son, both understood what Thomas Jefferson warned us of long ago: that “Government can do something for the people only in proportion as it can do something to the people.” The Obama Administration certainly should be the final lesson for American business on that important historical lesson. 2010 should be the seminal year they decide to learn that lesson once and for all before it is too late for us all.
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