By John Mattingly
In this election year, it seems worth doubling down on the “back” part.
I remember a time, not so far back, when politicians resembled statesmen. Today – even if one sets aside the petty barbs of campaign advertising and debates – the process has become dominated by polls, super PACS, focus groups, and an endless procession of mediocre minds.
I’d like to be specific about a few things in this regard, knowing readers will have their own examples, which I would enjoy hearing about.
At the top of my Chuck-it List is this claim by interviewed business folks, TV talking heads, and the candidates themselves: that U.S. businesses are not hiring, are not purchasing major equipment, and are rejecting expansion opportunities because they are somehow frozen in place by the “uncertainty about taxes and regulations.”
I disagree with this logic because (a) there has rarely been a time when there was “certainty” about taxes and regulations; and (b) the determining limit on any facet of a business expansion is demand. For anyone to suggest that a business has some level of demand out there, but has decided not to meet it due to fear of taxes and regulation, is like deciding not to clean your ears with your elbow.
In farming, when I, or any of my cohorts, see increased demand for a commodity (reflected in future prices) we invariably seek more ground, more labor and equipment, to meet that demand. Taxes are seldom a (wise) determining consideration. If demand exists, a business will expand to meet that demand and pay the additional taxes. “You seldom go broke paying taxes.”
As far as looming regulations, there may or may not be a symmetrical impact on all businesses in a sector if a new regulation is enforced, but seldom are regulations retroactive. If a business anticipates a future regulation that will have a negative impact, the time to expand and take advantage of the current demand (assuming the demand exists) is right away, not later.
I have long suspected that people in the U.S., including business people, actually love rules and regulations, even though they whine horribly about them. It’s the old story: regulate the other business or sector, not mine, which sometimes leads to everyone being over-regulated. I think American football provides a good example of our cultural bias toward excessive rule-making. The game has become so riddled with rules that herds of rowdy fans now willingly sit for ten minutes in rapt curiosity while an official patiently interrogates a slow motion replay of a 300 pound lineman’s foot. Soccer fans have frequently made this observation: “Americans love rules.”
Second, in the cosmology of candidacy these days, Small Business is the societal equivalent of Joan of Arc. Candidates advocate policies as if small businesses are shrewd, agile, and the major creators of jobs. But wait, I thought billionaires were the only ones who could put JOB CREATOR on their name tag? There clearly is some disconnect here, particularly from the Republican side.
There is, of course, some necessary discussion of what is actually “small.” In farming, people generally judge size by how many acres a farmer is operating, even though a ten-acre organic strawberry operation with 120 employees and sales of $15 million a year might be seen as smaller than a 50,000 acre Nevada ranch with two hired hands and annual sales of $40,000.
In my experience, there have been more abuses of farmland by small farmers than by large and medium- sized farmers, simply because there is an economy of scale that contributes to good management. The basic point being, there’s nothing inherently virtuous about being small.
As I understand it, a business with gross sales of $5 million or less meets the definition of a small business, but wherever one puts the line, the statistics indicate that actually, more job growth comes from medium to large businesses (sales in the billions of dollars) expanding to meet demand than from small businesses starting up. Sad truth: most small businesses fail. So we really need to shuck this notion of the glorious small business. After all, (almost) everyone shops at Walmart or Costco, even if we do it in the dark of night. And I know this: in the farming sector, people will seldom pay more for wheat, sausage, corn, onions, soybeans, hay, apples, prunes or any other commodity just because it was produced by a “small farmer.”
Third, I cringe at the incessant pandering by politicians to the “Middle Class,” particularly when millionaires talk about their days in the poor house, striving for the ultimate rags-to-riches swan song, such as: “From the humble days when we used an ironing board for a kitchen table to the days when we had a private island.”
I understand that most of us suspect we are either middle class or somewhere in the vicinity, so the appeal is broad and obvious. I also understand that what some economists define as “the U.S. middle class” grew from post World War II until the end of the Reagan era, and there is general agreement that this was a great thing. This may be because baby boomers like myself dominated the population during that period, and we generally have it better than our parents. We have newer cars, bigger homes, stouter portfolios, and maybe even a boat, or a riding lawn mower, or a home theater system, or some other conspicuous evidence of progress.
But with the dot-com revolution of the 1990s, we in the U.S. have embarked on vastly different variables in the economy, driven by the computer, social networks, and the cloud, which have diminished some of the significance of “class.” For all the wailing at Wall Street, the average person today on Main Street can trade with the same algorithms, and enter the same orders, used by huge hedge funds.
The functional hierarchies that gave class meaning have faded with the democratization of information in the developed world, and to some extent in the developing world. This is not to say that all is fair and rosy, nor is it to deny that the U.S. is evolving toward an oligarchy: but let’s face it, when we look at the generations growing up with mobile apps and texting, virtual realities and sims, you have to admit that something new is happening. I don’t know what it is, exactly, because I’m now a fuddy-duddy baby-boomer who can’t text without creating a message that looks like a foreign language. But I suspect the post baby boomer generations are in the process of creating the next Big Surprise.
Fourth, what is the American Dream? There was a time when I thought it was food on the table, a roof over your head, a car less than ten years old, and good kids who got an advanced education of some stripe and came around once in awhile with grandkids. Now it seems like the Dream has conflated to dining out ten times a week, living in a 5,000-square- foot trophy home, and sending your kids to the Ivy League in a Bentley. Okay, that was unfair.
I stand, however, with the point that the Dream needs some clarification. The version that every generation should follow in the footsteps of the Post World War II Greatest Generation and hand over a “better world” to their children is a theory that leads, if you think about it, to a generation that doesn’t have to do anything to have everything. How about doing as my father did, and as I did with my son: “I’ll take care of you through high school. After that, you’re on your own.”
Finally, I can’t stand this question: “Are you better off now than four years ago?” When you consider that a lot of people in the world are still burning dung to cook gruel, or subsistence farming on the edge, or grubbing out a life in unending warfare, or in danger of having their hands cut off for stealing, it puts this inane question into perspective. Its mere asking betrays the inability of our leaders to think beyond the nose of their next election.
When was the last time someone asked: “Are we better off now than the folks who settled in Colorado 120 years ago?” – a time when families could expect half their children to die from disease, food supplies were more critical than money supplies, and most people worked on the farm; where anyone who talked about “creating jobs” would be considered a lunatic.
Okay, that too was unfair. But seriously, how far can expectations rise? I suggest that when the clocks retreat this fall, we fall back on some reasonable settings in politics and dreaming. g
John Mattingly cultivates prose, among other things, and was most recently seen near Creede.