I was on FOX Business News yesterday morning (December 3rd) for the third time this year . . . this time, along with Dave Ramsey (nationally-known author, radio host and TV personality). The White House’s “jobs summit” was the topic of our conversation yesterday, and I came prepared with a list of things our elected representatives need to do to boost job growth immediately. The only problem is that when you share the stage with Dave, he gets a little more camera time because he’s just a bit more well-known than I am 
. . . and it doesn’t hurt that he was physically there yesterday on the set AND already has his own show on the network. I didn’t get quite as much of an opportunity to share my perspective as I had hoped, but he and I seemed to be on the same page when it comes to stimulating job growth and getting our overall economy expanding again.
I’ve embedded the video below so you can see for yourself if you missed it yesterday morning.
We were only able to gloss over some of the “big picture” things regarding job creation, but I did get to explain a little-known fact: that the Obama Administration has the least amount of private-sector experience of any administration in over 108 years – - all the way back past 1900. Only about 10% of the current Cabinet has ANY significant work experience NOT paid for by your (and my) hard-earned dollars. Truly shocking . . . but that DOES help to explain a LOT, doesn’t it?
As citizens, we sure heard about the need for more “bipartisanship” and working to find the best solutions to all issues when President Obama was on the campaign trail as fall, but it appears he wasn’t all that serious about it after all – - maybe just another case of empty rhetoric? If our President really wants to find the best ways to boost job growth and fix our economy, he needs to get input from ALL sides – - get the best suggestions from anywhere, irrespective of political bent or voting record. If his Administration is sincere about this, then it means the owners of small and mid-sized businesses need to have as much say as the big companies (if not more) – - because these people . . . people like you and I . . . are the Job Creators who will lead us out of the Great Recession. We’ve received very little attention since the financial meltdown began – - they’ve been too busy saving the behemoths (so they don’t go extinct) rather than the small, nimble, job-creating companies. Makes me wonder if the horse-and-buggy whip manufacturer would have gotten bailed-out years ago, if those in charge now would have been in charge back then? The Administration continues to ignore America’s small business at their peril. Even the “jobs summit” had more “big business” folks there than “small businesses” – - won’t they EVER learn?
And let’s just get something out of the way here: more government spending isn’t the solution. It’s a bandage at best. Their short-term government spending gimmicks (like on more highway work or on government assistance to the States) is called “investing” by some, but it’s a complete misnomer. If it’s investing, then where is our return? They may be putting some money into creating work (not jobs, but work), but that money has to come from somewhere (typically from confiscatory taxes). Every single dollar they inject INTO the economy must first be taxed or borrowed OUT of the economy. Only TRUE wealth creation (the result of innovation, and often by association, job creation since entrepreneurs can’t do it alone) comes from private-sector efforts, NOT public sector expropriations.
Apparently some in Washington believe economic growth and job creation comes from society’s stakeholders – - business, labor and government – - simply holding-hands and working together (of course, they also think increasing taxation in a recession is appropriate, too – - more on that in a minute). What they’ve forgotten from their Econ 101 classes is that the Profit Motive is the magic elixir of capitalism. You cannot continue to demonize the fundamental tenet of capitalism (making a buck) and expect the business sector to be real excited about the future . . . whether to add needed jobs to meet increasing demand or to grow their businesses forward in other ways. Create an environment of certainty (unlike today’s demagogueing against business) and confidence will come back . . . both business AND consumer. They need to focus on wealth creation, not wealth redistribution . . . that’s dare I say it: un-American in the land of opportunity and home of the Brave. Continue to threaten tax and regulatory increases and watch the 2010 and 2012 elections demonstrate the populace’s position on those obstacles to growth and American economic dominance.
As for the “jobs summit,” there were six separate “side-discussions” about “green jobs,” small business growth, infrastructure projects, and so forth, but only two of these topics are the most meaningful and worth spending time on NOW: small business growth and American business competitiveness. Here’s what we NEED in these important areas ASAP:
Boosting Small Business Growth
- We need to enact a payroll tax holiday for all of 2010 (paid for with unspent TARP funds) to put money back into the pockets of Americans (employees and employers) to spend, save and invest. To create jobs, we must create more demand for products and services, as well as stimulating investment in innovative, new ventures.
- We need to permanently abolish capital gains on small business equity investments made since the financial crisis began and including ALL of 2010. Once that demonstrates how effective a targeted capital gains tax elimination is, we then need to cut ALL future capital gains taxes in half thereafter – and make it permanent. If China can have a zero capital gains tax, why shouldn’t we match them or only be slightly more than them? Capital will flock to where it is most welcome, always does.
- We need to correctly reform health care – this means including tort reform and interstate insurance competition . . . two helpful measures completely missing in the current 4,000+ pages of bills being jammed down the throats of American taxpayers.
- We need to halt ANY regulation that could negatively impact job creation – everything needs to be looked at through the prism of American job creation. If it destroys, destroy it. If it creates, enact it.
- We need to improve the SBA’s two primary loan programs by doing the following:
- Extend the 90% government guarantee for SBA 7(a) loans.
- Tweak the SBA 504 loan program to allow “true” refinancing to unlock business owners’ “embedded equity” in their commercial property and equipment. . . and trust them to do what’s best with this capital.
- Tweak SBA loans programs to require commercial property and equipment ONLY be financed with SBA 504 loans, thereby providing a better overall value to business owners and U.S. taxpayers, while freeing-up more availability for start-up and working capital monies from the SBA 7(a) loan program.
Business Competitiveness – Improving long-term American productivity so business owners can properly plan and put their ingenuity to work on the “right” things.
- We need to repeal or drastically modify SarbanesOxley – it has shown itself to be a major over-reaction to a few bad apples (Enron, Worldcom, etc.), but it is now clearly a major constraint to American capitalism. Compliance cost estimates for an IPO put the figure north of $1million – there’s a clear reason fewer IPO’s have been occurring and more American firms are going public overseas. For our future, this cannot continue.
- We need to cut the corporate tax rate to 12.5% permanently, matching Ireland’s — the Celtic Tiger. We can no longer afford to have the second highest corporate tax rate in the world. Our competitiveness is being impaired.
- We need to reduce marginal individual tax rates for at least five years or until unemployment falls below 5% again. This, plus my payroll tax holiday suggestion above, means more of Americans’ money in their pockets and NOT in the pockets of politicians in Washington. Washington does NOT know best – we need to stomp that idea out of our culture. The people in the trenches daily, away from Washington, should be trusted to do what’s right and what’s best. As a free people, we need NO paternalism from politicians . . . they’re supposed to work for us, not the other way around. This measure encourages increased productivity by American workers by incentivizing it, rather than penalizing it.
- We need to vigorously promote international free trade – we have trade pacts with South Korea, Panama and Columbia just collecting dust for absolutely no reason.
- We need to double tax credits for research and development (R&D) for the next five years – this will help stimulate the innovations (and job growth areas) of tomorrow’s economy.
Earlier, I addressed why short-term government projects (“gimmicks”) won’t help long-term to stimulate the American economy, but now I’ll also quickly explain why the much-discussed, new hire tax credits are wrong-headed as well. Tax credits for new hires are ineffective because businesses hire based on need, which is driven by demand (see my earlier comments above about this). Plus, a credit won’t cause a business to hire someone if they weren’t planning to hire them in the first place – - there’s not enough of an off-site in credits versus wages. These silly suggestions are just that: silly, and they seem to be coming from people who’ve never had to make a payroll.
While it is a well worn-out cliché these days: our competition really IS global, so we must become more competitive globally if we don’t want to see American dominance wane. The measures I’ve proposed above will assure that. In the late 1970′s, we had a sector of the economy that stimulated growth: the personal computer (PC). In the late 1990′s, we had the internet. We need some large industry segments to be the job drivers of tomorrow. While it might be “green jobs” that break our dependence on foreign oil, I know one thing for sure: it will definitely be the small businesses, in general, that account for new job formation in the future, if we just let it.
Reducing taxation and regulation leads to lower prices and more demand, which increases efficiencies in the marketplace and produces economic growth and lifestyle improvements . . . essentially wealth creation. We will have to grow our way out of this hole we’ve put ourselves into (unless we’re comfortable reverting back to the 1970′s – - I, for one, am not). Raising the retirement age for Social Security benefits for younger workers and freezing increases in federal program budgets for the next two years (at a minimum) will also reorder the economic climate of America. Our multi-trillion dollars in debt will shrink as a percentage of America’s assets if we allow our assets to grow effectively again and pare-down our liabilities (government spending, in particular). Washington must learn it cannot LOVE jobs, but HATE employers. My suggestions above will improve things dramatically . . . if they only see the light of day.
Tags: commercial property financing, Dave Ramsey, economic expansion, Fox Business News, Obama Administration, SBA 504 Expert, SBA 504 Loan, stimulating job growth, wealth creation
Charles Sands says:
To further assist small business growth, we also need to allow SBA guarantees on Industrial Development Bonds. This does 2 things: Gives the banks and other lenders the comfort of a partial SBA guarantee to increase their lending, and alaso gives the borrower the benefit of very low intrest rates. My company arranges IDBs for manufacturers throughout Florida and I can tell you first hand there are many expansion projects that are now stalled because of the lending environment that could benefit from this and many good jobs that would be created.
Carmen says:
You got it right, Chris! You and Dave Ramsey stood up and told the truth. You made so much sense and it is people like you that Washington and this administration should look to for advise. Thank you for representing us in the battle to get the FREE ECONOMY work without the interference of uncle Stalin. It appears the guy from “crime stoppers” lives on another planet. He could use a little more education rather than indoctrination.
Good job, Chris! True American, God bless you!
Fe Casem says:
I completely agree with Dave Ramsey,Chris Hurn and Greg Whisenant to ” LEAVE US ALONE AND LET US MAKE MONEY AND HIRE PEOPLE. I’m small business owner. I created this company as 2005 and hired people. But since this economic downturn and I laid off 2 admins, two loan processors and a RE coordinator. I’m still in business and surviving. But I’m afraid to hire people and even if the RE Sales increases because of Washigton increasing taxes and we are obligated to pay & share the medical insurance for the independent contractors. Now, the condo office I bought is on Short Sale. I bought it 2005 cash $360K and after 2 years, I refinance it and took $300K. Now I can not even refinance it because I’m behind 7 months and my credit is ruined.
We have 39 agents and we are closing transactions 2 to 5 a month. But Still not enough for my reduced operating expenses.
I still a hope for economic turns in Real Estate & Loans. We are consecrating on REO and Short Sale (Residential & Commercial properties, small businesses.
Fe R. Casem
Realtor/Owner
Diane Roehrig says:
Chris: You are right on target. By ignoring the small business community, the WH has done far more harm than good to the most important sector of the economy.
Diane
Dale Gibbons says:
Great interview Chris. You and Dave were right on track my friend.
Pete says:
That is obvious.
Philip David says:
Great to see you on TV and being part of our economic recovery process. I am sure the President and cabinet members learned a lot of the free enterprise system we have, not having much experience within the staff.
Thanks and congrats on the Fox TV segment.
Steve Maughan says:
Great interview. Your fellow guest, Greg was at best naive.
A couple of point:
I’d put corporation tax to ZERO since it is effectively double taxation on shareholders. This would result in the estimated twelve trillion of US Corporation’s offshore assets being repatriated back to the US. The capital injection into the economy would more than offset the loss of tax revenue (and dwarf the “stimulus”) – not to mention all of the HQ that would relocate back to the US.
Secondly, you make a good point about SarbanesOxley. When discussing it I normally point out that it was put in place to *protect* shareholder value, whereas compliance is now *destroying* shareholder value. I’d like to see an analysis of the total cost of compliance for US businesses since its introduction, and compare this to the loss for Enron shareholders. My hunch is that compliance cost will be several multiple higher than the loss.
Have a great weekend,
Billy Parsons says:
ITS THE FAIR TRADE ACT.
WHY CAN NO ONE SEE WHAT HAS HAPPENED ?
THE AMERICAN WORKER SHOULD GET THE SAME BREAK ON TAXES THAT HAVE BEEN GIVEN TO FOREIGN WORKERS (NO TARIFFS) THE MANUFACTURING HAS TO COME
BACK.
IF THAT DOESN’T HAPPEN IT MAKES NO DIFFERENCE WHO HAS WHAT SUMMIT WITH WHO IN WHAT COUNTRY WANT TO MAKE YOURSELF FAMOUS ?
GET THE FAIR TRADE ACT REPEALED.
THAT WILL START THE WHOLE WORLD ECONOMY BACK.
Timothy Yentsch says:
Just a note If you restrict M&E and L&B financing only to 594 you will lock many small lenders out of the SBA program because their lending limits create problems on large projects. (They cant book the loans and then sell them because the act of booking violates the limit. Also if any one of these loans goes bad the small bank’s balance sheet takes a big hit because the whole loan is “watch” or below. SBA used to have a section 502 guaranty program which combined 7-A features with the predecessor to 504. We do a lot of big ticket lending which couldn’t fit under 504 due to the exposure. The SBA 2nd market for 504 first mortgages would help but it appears a long way off. If the 2nd market sale is recourse it is no help
Elvis Turkovich says:
Congrats, I was at the office at that time and missed the opportunity to see the footage.
I really enjoy your informative views and thoughts on your blog and emails..Keep sending.
Gary Miller says:
Thanks for sending the e-mail and sharing the video. I think you’re selling yourself short (no pun intended)! IMO, you came across very well and more than held your own with Dave (although he did receive most of the attention). I think your comments were spot on and I agree with a lot of your comments concerning this Administration.
Quite frankly, I think we’re starting to see a bit of a turnaround despite their efforts! Keep up the good work! Also, if we have any clients who are looking to buy and need help with financing, we’ll be sure to send them your way. Hope all else is going well.
Take care and I’ll talk with you soon.
Dan Newberry says:
Keep up the good work Chris.
Elaine Barry says:
Thank you once again for hearing the American people and taking a stand for them!
J.M. Ross says:
There’s a lot to what you say, except that you gave George W. Bush and his minions a completely free pass on the 700 billion Paulson yanked out of our hides to get the ball rolling, and the billions spent on the off-budget wars Bush started and couldn’t finish.
I’m a true Independent and small business owner and I don’t like Obama any better than I liked Bush, but you can’t fairly paint this on him all by his lonesome. The conditions that allowed this to fester occurred on Clinton’s and Bush’s watches, starting with the policies of the Fed and NAFTA, about which Ross Perot was right.
Don’t get me wrong; that doesn’t give Obama a free pass either; he’s certainly no better than Bush; maybe he’s even worse, if that’s possible. So far, it sure looks that way.
But no matter who’s throwing the State dinner on a given day, Republican or Democrat, what’s happening is a slow-motion national bank robbery and BOTH sides are guilty of staging and perpetuating it.
That said,in my view NONE of what you are suggesting will work over time if we don’t somehow manage a term-limits amendment to the Constitution.
Members of Congress are all pirates on both sides of the aisle and if you think the Republicans aren’t crooks same as the Dems, then you have blinders on. The Republicans are in bed with big insurance, the Democrats are in bed with the tort lawyers and they’re both French kissing the military industrial complex.They’re ALL there for themselves and nobody else. Public servants my rear end.Pull any lever you want in that booth; either way, you end up electing a pirate.
Given that reality, the only long-term solution is to get them off the meal ticket after shorter stays in office and before they have time to pull this kind of B.S. over decades. And then you have to ban them from even telephoning Washington for five years after they leave office.
In my view, the ONLY systemic problems with Free Markets are crooked politicians and lobbyists feeding our money to themselves and greedy mega-corporate or legal interests, coupled with crippling, anti-business laws passed under the guise of “regulation for the good of the public.”
What we’re living through now is simply the result of those facts. If we don’t change Washington big time, we’re a third world country in the making and nothing you’re suggesting will prevent that. The fish rots from the head down.
Robert Gottlieb says:
I did see you on fox –very impressive–
As a mortgage broker—
why is it that we can not get an answer to the future of the FHA.
According to reports over 3 months ago the rules in regard to a broker having a mini eagle was going to change–in other words a broker could do an FHA loan without the mini-eagle. The federal Housing Administration is increasing its net worth requirements for approved LENDERS to $1 million and requiring banks to file audited financial statements for the first time ever.
Information in regard to the future of the Broker–with out the mini eagle–is so important.
Do you have any knowledge of this?????????????
James Borchers says:
I think we met at the NADCO national conference last year. I’m a closing attorney and unabashed promoter of SBA 504′s. Enjoy your blog and e-mails. Hope you can get your message through.
Boyd T Cochrane says:
Chris: Keep in mind the opposition’s long term, obvious plan. Our only way to change anything is at the ballot box. Even that is a major long shot in some places now and growing exponentially across the US due to massive playing field dislocation. My greatest fear is repeal of our constitution, bill of rights and electoral process.
Burton Jamison says:
It is refreshing to have some one in your position not be afraid to tell it like it is.
If the liberals that get your email are offended, it is their problem, and time to get their head out of the sand…
Keep up the good work, and have a good weekend.
John Pamer says:
Good job on Fox Chris . . .
All of us who have spent our lives working in the capitalist system know exactly and precisely what our economy needs – and it’s not a lot more of the “professional executives” with zero exposure to corporate losses making zillions of dollars. It also isn’t the banking community as it currently exists spending most of their time screwing around with derivatives and trading various instruments. Most certainly, and above all, the last thing we need is the Federal government adding yet another monster program and agency or department to get involved in another aspect of our lives.
It occurred to me the other day that the whole lot in DC not only are incompetent when it comes to business, but there is a vested interest in maintaining the status quo. The people running the government have an understanding that no matter which party is in power, there are some things that are not to be touched . . .like congressional pay, spending money, perks, travel allowances, and on and on. It’s also understood that going flat out to war with unions that are bloating government at all levels is a big no-no. Over 4.8 million people work for the Federal government in some capacity (including military) and that is one hell of a lot more than any other employer.
Just for laughs, you know two companies that have taken all kinds of heat in the past? One is Publix and the other is Wal Mart . . . now, here we are in deep doo-doo economically and guess who was HIRING during this down turn? Guess who continued to support local charities? Guess who continued to hire handicapped people? Guess who continued to promote employee ownership of the company?
Son of a gun . . . do you suppose some company has a better idea of how to succeed that some others? And do you suppose that a lot of companies out there could learn something from these companies?
Yeah, I guess that would be too simple.. not enough trillions needed to effect a solution . . . not enough drones employed doing little or nothing . . . and mind you all the money that has been thrown at the economy has been thrown at things that have absolutely no long term benefit, no growth potential, and no job creation outside of the specific task being funded . . . damn! Almost forgot.. running our deficit up into the stratosphere and devaluing the dollar . . . just minor little things . . . nothing to worry about . . . plenty of lifeboats for all the passengers . . . so says the captain of the USS Federal Titanic as we sail into one iceberg after the other at full speed . . .
Shareef says:
Chris, I believe in our president and the extremely hard work he and his administration are doing. Our country were truly on the threshold of complete bankruptcy and civil war. Had he not stepped in with the stimulus package all our major banks would have gone under. Had he not place stimulus in our economic systems our unemployment would be at 40%, and the people would have come after the government for what your bank executives, wall st, and rating company bretheren had done. Its amazing that people like you and Fox News are quick to point out what he hasn’t done, what he doesn’t have on his staff, what his stimulus hasn’t accomplished etc…..
My buddy is a construction manager he couldn’t find work for three years. Since the stimulus money he’s now working building schools and university.
What about the banks executives, wall st, and rating company who underwrote the residential and commercial toxic papers and literally bankrupted the entire world for fees and lining their own pockets. How they changed the bond ratings on the paper to give an AAA rating. They made this paper look as strong as treasury bonds. This was extremely manipulative and wrong What about the banks who taken the stimulus money, but still don’t make loans to the public.
Its amazing that you are a small bank, and our president is going to channel the stimulus funds to small to mid-size banks, so they can do what your brothers won’t do, write loans. Talking about biting the hand that feeds you. When you get the stimulus money are you going to line up your pockets like your brothers, or do what’s right?
You want to go on a crusade about bringing down our president whose only been in offices less than one year, and has done more than President Cheney had done in 12 years. This goes back to Bush Sr. Why don’t you go on a crusade to bring to justice the people who underwrote the toxic paper, and convict them through Rico laws. What they underwrote were criminal and with intent to solely line their pockets.
The media hung Bernie Maddoff for his ponzi scheme what about these executives, wall streeters and rating companies? What Bernie had done was wrong, but it can’t touch what these executives who underwrote the toxic papers. Put them on the same stage as Mr. Madoff. By the way Fox is not a real news station they are an absolute JOKE. They called the President a racist. Hello his mother was white. His grandparents were white, his sister is white and asian. Give me a freaking break. And yet you watch this station. When have they ever spoke positive about his accomplishment? I’m sorry but if president Bush is your gauge for a leader as President than I can see why you hate President Obama. President Obama is one of one. What that means is he’s the Micheal Jordan, Teddy Roosevelt, Shawn Carter, Dr MLK of Presidents, and he’s only been in office less than one year
We are businessmen that serve the public.
Although I don’t agree with nothing President Bush or Cheney had done in 8 years I will never throw them under the bus to the public. The people elected him and its our job to do the absolute best in our profession to bring promise to our country and the world. Its our job to help our President. That’s a real patriot.
Don’t sound like a birther or tea bagger. We are above these racist in tea bag clothing.
Scott Frizzell says:
You did great. I look forward to reaching a profitable SBA 7a partnership and emerging as an industry leader.
Marie Paulsen says:
Good luck. I will have the station on. Marie
Todd Long says:
Thanks for sending me the message and the link to the Fox appearance. You did a great job! So much of this just seems like common sense.
Unfortunately, government schools have dumbed down the public so much the last 50 years very few citizens even ponder to think that people create wealth and governments confiscate it and destroy wealth creation, incentive and opportunity when they become too big and begin to overtax, regulate etc. This notion that governments can build an economy from the ground up like Obama likes to say or that government is going to create good paying jobs long term is outrageous. Thanks for educating the masses and trying to keep our private sector alive until hopefully some common sense conservatives with solutions based on an understanding of economic truths can replace this current crop of self-serving socialists.
Lee says:
Great job, Chris!
Chris Hurn says:
Thanks for your comments, everyone, and thank you for the blessing, Carmen.
Steve, . I don’t disagree, but I’m a pragmatist and I just don’t think your approach will work with this Administration and Congress, as much as I’d like to see them try it. Regarding SarbanesOxley, you are correct again, Sir. There was recently a Wall Street Journal article that put the compliance costs alone at $60 billion by 2005 (only 3 years after it was enacted). To say it’s hurt American capitalism is quite the understatement.
We are in agreement, Mr. Ross, that Bush made plenty of mistakes, too. Manage a term-limits amendment to the Constitution? . . . Now you’re getting to the heart of the problem – career politicians more concerned with their public sector jobs than with doing what’s truly in the best interests of America.
Robert – - I’m not really sure. We only lend for commercial properties and have never done an FHA loan.
And, thank you, Burton, I’m an equal-opportunity “offender,” I suppose. I just want some common sense based on experience in Washington.
Mary Jo Larson says:
Hi, Chris. I hope this finds you well and enjoying the holiday season. Good job, by the way, on the Fox News interview last week!
Braudis Lee Pegram says:
I had hoped you would get more airtime Chris, but c’est la vie. Oddly enough, those that were guests as well as those commenting here, all have good points even though they may appear to be somewhat at opposite ends.
Diversity. A good thing in times of crisis? Economic crisis? We have underlying problems which appear to be purely economical on the surface, but are in fact very political.
There is a scheme here, a big picture which we are missing; from the devaluation of the dollar, to the spinning of news, to the proliferation of entertainment, to the tremendous cutbacks in our public schools and “no child left behind” policies, to the crippling of small business people, to the gluttony of gold and beyond. This is something that is building up to something else.
Unfortunately, the admirable effable efforts of people like you and others (keep up the good work!), may continue to fall on deaf ears if no actual action is taken short of affecting The Fair Trade Act and amending The Constitution.
I voted for Obama, but there’s a reason why he’s surrounded by the same “good ole boys” that surrounded Bush. We need to see this. Everyone. As a Veteran, I have come to realize that we need to not let our American diversity scatter the energy that will be required to resourcesfully maintain The American Dream.