So it’s been a little while since I’ve blogged about something political, but it’s kind of hard to overlook what occurred one week ago today in Massachusetts. And no, I’m not going to get politically dogmatic here in today’s post . . . those of you who’ve been reading what I write for a while know that I’m a capitalist above all else and vote for whomever best represents the free enterprise system. I firmly believe that business (not government) is the best tool available for economic, social, and political progress. Philosophically, I’m Libertarian, but because I’m a pragmatist, it’s a bit hard to vote that way – – throwing away my vote. All that being said, if you’re thin-skinned, I suggest you stop reading right here . . . just don’t say I didn’t warn you.
Today, I want to point out some lessons from Massachusetts’ recent election for America’s great entrepreneurs and small business owners . . . people like You, who we at Mercantile are most concerned about.
As I’ve been saying for months here on this platform, “the folks in Washington are ignoring small business owners at their peril.” It is an indisputable fact that the Recovery Act (the ARRA – passed in late February of 2009) committed less than 1% of its total funds to America’s small businesses, while at the same time committing hundreds of billions of dollars to Wall Street and other large businesses (AIG, GM, BofA, etc.). The Beltway Bandits have been bailing out Big Business, expanding Government, giving rights to Terrorists, and hoping Main Street continues in its apathetic slumber. Well . . . finally, the pendulum has swung too far to one side and awoken our People. And lately, the forces of anti-business have started losing to the forces of anti-Government.
[By the way, I’ve taken a few shots over the months and years for calling them “Beltway Bandits,” so let me explain once and for all WHY I’ve named them that: too many living and working in the Beltway of our nation’s capitol have been stealing our future and our children’s future for far too long . . . with little consideration for the consequences of their actions . . . just as long as they get reelected or bumped up in pay grade. We have gotten the government we deserve, as one of our Founders foretold . . . a Government mostly devoid of honorable people serving to better our overall national interests, our way of life, and the creed that America stands for. When will noble people of common sense and goodness crowd-out career politicians? When will our Republic function more as one again, rather than as factions fighting for every scrap of pork? When will we lock-away the Bandits and reaffirm our special place in the world?]
At our best, we as a People have always been politically bi-polar – vacillating between them, never trusting one party too much over the other. My mother, who has lived in downstate Illinois her entire life, very wisely tends to split her vote in every election. When I ask her why, Midwestern common sense explains, “That way neither of them gets too much of what they want. Working together, they can check one another.” She intuitively understands that every time we hand the Country’s keychain over to only one of our two political parties, they hit the highway like drunken teenagers in a sports car. It isn’t a pretty sight; it gets ugly and messy.
I would argue that what we’ve been witnessing in Virginia, New Jersey, and now in Massachusetts is a revolt of the common citizenry saying, “Enough! Enough of the demogagoing. Enough of the too-fast-too-furious lurching to one extreme. Enough of bastardizing healthcare reform. Enough of silver-tongued rhetoric accomplishing little.” We are a moderate People. We are NOT a radical People. Some voted for “change” last year, but didn’t quite expect literally radical change or at least threats of it. And it is those threats of more hurdles to come – large tax increases, more regulations, more uncertainty – that is primarily keeping the lid on economic recovery. Show some visibility and economic understanding, Mr. President, and businesses will start hiring and investing again. Continue to muddy the waters, and we won’t dip our toes in at all.
Most reasonable people can understand that our healthcare system needs to be reformed, but reforms must come from both sides of the aisle, not just one. Most knowledgeable people can understand that our justice system has served the test of time and is to be cherished, not tainted by anointing our enemy combatants with the same rights as our American citizens (I’m speaking of the soon-to-be civilian trial of Khalid Sheikh Mohammed only blocks away from Ground Zero). Most of our wise citizenry can understand that when you take more of something, you shrink it; yet when you let people keep more of something, it grows . . . this is the way taxation works and study after study (not to mention the cold, hard facts) bears this out.
The lessons of Massachusetts for business owners are numerous, but below are three key ones to keep in mind in 2010 for your business:
- Have a positive message and stay on it. Differentiating yourself from the “incumbents” in business or in politics works. Plain and simple. Attorney General Coakley in Massachusetts and others of her party seemed to be negatively bashing the previous Bush Administration STILL, even though those days are long gone. She would have been better served explaining how her party will bring positive, impactful change to the citizens of Massachusetts (in only a few areas – too much “diarrhea of the mouth” about every public policy initiative confuses even the most sophisticated). She didn’t. She mostly reacted to whatever Scott Brown was saying and strayed from what should have been a short set of issues. It had the effect of her seemingly lashing out against him, time and time again and covering way too much ground while she did so, which ultimately watered-down her campaign. The analogies to the Big (In-Trouble) Banks trying to be “all-things-to-all-people” are obvious. At Mercantile, we have stuck to our knitting over the years (providing the smartest owner-user commercial property loans available) and are still standing today, even when many others aren’t . . . many others that originally thought our business model strategy was crazy.
- Focus on what’s most important, rather than getting caught up in dogmatic principles. In this case, it was (and is) the economy, not healthcare, that was (and is) the most important issue for the citizenry of Massachusetts . . . and frankly, for the rest of the country, too. Just as it was in the Clinton Administration, it holds true now: “it’s the economy, stupid.” Ms. Coakley strayed too far afield – covering cap-and-trade (which most citizens either don’t understand or don’t care much about), tax increases (which everyone inherently knows will be shared by All, no matter how often the Bandits say otherwise), and a healthcare bill so fraught with exceptions and special-interest carve-outs (like Big Labor’s $60 billion giveaway – arguably the most blatantly unfair provision in ANY bill in years and certain to be challenged on constitutional grounds) that it ultimately won’t reform what all that political capital was spent to do. The business example of this is when business owners stay with what they’ve “always done . . . because that’s how we’ve always done it.” Many of these folks don’t or can’t adapt to changing times – what may have been yesterday’s Big issue, isn’t necessarily today’s. And just because you’ve always done it that way historically, doesn’t mean there isn’t a better way today. In business and in politics, it’s the Results that count above all else. The ends must justify the means, otherwise what’s the point? In the case of Mercantile, we’ve always focused on wealth-creation for our small business owner borrowers, yet few other lenders ever tend to mention this primary motive for commercial property ownership. We don’t let dogma cloud our focus on the results we want for ourselves or for our constituency.
- Populism, or what I’ll call “really relating to your customers” (constituents), really matters. We are currently witnessing the battle of anti-business populism versus anti-government populism . . . and so far, the electorate has been more leery of the latter and rightfully so. Being so against the profit-motive is inherently contradictory to what has made America great. We act like petulant children when we rail against business and the innovations all around us that have made our lives so tremendously comfortable. President Johnson may have had his “War on Poverty,” but President Obama seems poised to have a “War on Prosperity” if he keeps marching forward. In Massachusetts, we saw another example of this with our President’s fixation on Scott Brown’s pickup truck. To me, he unfortunately epitomized the leftwing Democrats’ elitism, arrogance, and distance from the laymen they claim to represent. Outside of Peoria where I’m from, (25 minutes to President Lincoln’s law offices in Metamora, 10 minutes to Pekin where Senator Dirksen was from, and 5 minutes to former Minority Leader Bob Michel’s offices), we used to call them “limousine liberals.” The modern-day equivalent I often say is “Lear Jet liberals.” In business, as in politics, it’s tough to stay a winner when you don’t occasionally get in the trenches. People buy from people they like and who are like them, but if you have disdain for your customers, you’re dead in the water. I guess this is why Gallup just released data yesterday explaining that President Obama is the most polarizing President ever – you can read more here . . . I can’t make this stuff up! Hopefully, our President will soon see that his policies can either garnish applause from his liberal base OR they can help create jobs. It is apparent to me that he cannot accomplish both objectives. It’s time that he steer his ship toward the center, or perhaps November 2010 will bring a rather helpful Clinton/Gingrich leadership split in Washington that once served our nation very well. He’s virtually ignored small business so far, and has suffered for it. Will he now ignore basic economics and suffer even more?