Manufacturing a President

A little more than two weeks to go before the 2012 American election.  It seems like business is stuck in the mud–slinging.

I’m going to make the contrarian case that this is precisely the time for people to take action, because almost everybody is so scared about the outcome of the election.

If the President is re-elected, many people I talk to think it will be a bad thing for small business and manufacturing. But if you listened to his arguments, Obama is gung ho for small business and manufacturing, and the remarkable thing is that this segment of the economy has generally prospered since he took office. The “Jobs Act” of 2010 has been helpful by extending very favorable tax incentives for investment. These goodies end December 31, 2012.

Small business definitely fears Obamacare and it has been a significant deterrent to hiring because the regulations are still cloudy, but our business is seeing reductions in rates for next year for the first time in memory, which my agent tells me is a reaction by hospitals and insurance companies to compete for clients heading in to life under Obamacare.

I know the Obama haters will be furious about these remarks, but my point is that from an economic standpoint, our community has generally done well during Obama’s tenure and the GM/Chrysler bailout. Would we have done better with McCain? I don’t know, nor do you.

If Governor Romney wins, which I now believe is quite possible, I think a Republican administration with a leader like Romney will also be favorable for business. Regulation, particularly EPA meddling will subside. Obamacare, though unlikely to be repealed, will be restructured to consider the burdens on small business. And the mood will improve without the annoying confrontational posturing of Obama.

Either man will face the “fiscal cliff” immediately. I think there is a 90% chance of some kind of deal, even if it is the deferral of a compromise for a year. The Simpson-Bowles proposal is the framework for an ultimate resolution of the gridlock and I can feel the country moving toward a consensus that the debt crisis and entitlements must be addressed now. Neither party wants to be blamed for pushing the country into another recession after we have barely moved out of one.

My belief is that neither Obama or Romney will be a savior, but the country will survive under either man, because fortunately the President does not run the economy–though he is blamed for it. What I see now is a business environment paralyzed by fear of the unknown election outcome and the “fiscal cliff” stalemate. Whoever wins, the unknown issues will likely be clearer in six months. But by then the accelerated write-offs will probably have expired.

In case you care, I have tentatively decided to vote for Mitt Romney, almost as an act of faith, because his tax proposal does not add up unless the mortgage interest deduction is eliminated which strikes me as highly unlikely.

But our country has survived four years of Obama and we will pull through if we have four more. Maybe he will move more toward the center since Bill Clinton has become his key political adviser.

If my assessment is correct, and with the stock market up almost 7000 points from its low in 2009 tends to confirm it, the country will be ok.

In the next two months we will have the opportunity to acknowledge our fear of the future yet make decisions that will help us cope with what will come our way.  The pessimism and indecisiveness is palpable at this moment. The opportunists will take advantage of the moment.

Question: If Romney wins the election will you be more likely to invest in more equipment?

Share this post

62 thoughts on “Manufacturing a President

  1. AvatarBill

    ms

    Turns out “my guy” is whoever is looking to make self responsibility and less government intervention into my business, personal and work, a priority. Therefore, in this election, it is Romney. I could care less if he was black, white, Asian, Hispanic or from Jupiter, you see I don’t care. I care about the issues I care about, race is NOT one of them.
    My “Heroes”? (I spelled it right for you) You think because I call you out on a subject you can assume I will vote for someone because some talking head is my “hero”. Sorry, I get my information the same way I get my income, I earn it.
    YOU brought the race card into this discussion. YOU were the first person to even insinuate anything to do with race. YOU should take responsibility for YOUR words and take it like a man and quit blaming others for YOUR mistakes. I take responsibility for mine, try it some day, you might like it.

     
  2. Avatarms

    Kelly, what’s the hangup you have with coal? It seems the market has decided and all the fracking in North Dakota and Ohio has resulted in natural gas being a better fuel for now. Things might change in the future, but probably not till most of the natural gas has been pumped first, and then we’ll probably be on to the tar sands. I just don’t see it as some big govt. conspiracy against coal companies.

    I don’t have any friends in Florida that didn’t get what they deserved. Fact is, they got greedy and got caught. My problem is all the other people that tried to play by the rules got taken down with the greedy people, and they have no redress.

    Now can you blame people if they have to walk because the 20% they put down on the house is gone and they still owe 20%. I don’t, I blame the politicians (both parties) and speculators that allowed the bubble to happen. A little regulation of the banking industry would have helped.

    Fact is, I wouldn’t vote for Obama if there was a better candidate. But there is not. For me, Romney is that rich dude that was born with the silver spoon. Romney’s comments clearly show that he doesn’t care about anybody but himself and others similarly situated. As infamously put in the 47% remark, romney has disdain for almost half the population of this great country. What a poor remark from someone that wants to be president.

    I’m glad you’re doing well. I hope you treat your employees well and that you put the gifts God has given you to good work. Maybe you are that type of employer, if so, good for you.

    Me? You probably think I’m some deadbeat guy sitting around collecting welfare and food stamps. I’m not, but my family and I have volunteered to help those people. What we’ve learned is that most of the homeless and disenfranchised out there are basically good people down on their luck. Most don’t want to take handouts, but have to to survive. I suggest you go volunteer to serve the homeless, you will get more from them than what you give.

    BTW, I’m a co-owner of a small business (S-corp), so I know all about paying taxes. Last year I paid an effective fed rate of 28% (76K). I just think Romney and his buddies show pay a rate more commensurate with what he makes and be more transparent in his dealings. But we both know that if he was transparent, he would have no chance of getting elected.

     
  3. Avatarms

    So Bill, how has government and/or Obama interfered in your business? In my business, everybody’s gotten tax cuts the last four years. Did you miss out on that?

    Just curious, I’m trying to figure out why people vote they way they do. Were your parents republicans? Mine were democrats, kind of hard to imagine, huh?

     
  4. AvatarKelly

    ms

    I have no hangup with coal. It’s just another energy source. I have plenty of hang-ups with today’s “green energy” though.
    There is an attitude that the current wind and solar projects can transform America into a more energy independent country overnight, or even in the space of a few years. Uninformed people take what the government and mainstream media put out and never look into the scale of the operation. I’m in manufacturing and I’d enjoy a lower energy bill and I’ve been concerned with the environment since joining Johnny Horizon way back in the day.
    Agreed that we should do something and move in a sustainable direction. NOT agreed that the government, anyone in the government should dictate the technology used or the companies building it.
    And certainly not agreed that the UN “Agenda 21” should ever see the light of day as law.

    We are all riding around on the same planet, regardless of country or anything else. Over the last 200 or 400 years we’ve witnessed a number of different societies rise and fall. Each of these societies made their contributions while active and many survive in some form today. The USA is unique in one major sense, it has spread more prosperity to more of the world and protected more from harm than any other system in history.
    The problem is too many forgot what is was about the US which made it so great, individual responsibility and initiative. While it’s true there’s been some pain along the way and many have suffered, more have been saved. If our country isn’t strong both militarily and economically it won’t matter what morals and values we wish to hold. We’d be speaking German or Russian now.
    Now for my point and why Obama is so bad.

    He seeks to pit one American against the other. He vilifies me and my kind to win the current popularity contest. He isn’t held to the same standard as Romney (just look at how the morons on the view treated his wife so differently) and he’s held out to be something special when he’s nothing of the kind.
    He promised full quarterly reporting of TARP and stopped reporting.
    He said we’d see what’s in his health care law for a week before voting and it was taken down after a few hours.
    There’s 2 billion dollars going into a “special demonstration project” related to the health care law specifically to delay the true cost to seniors until after the election. While this isn’t the first demo it’s the largest by far.
    Many states already have “special exemptions” to the law.
    His admin is helping push through rules in the UN which would dictate the laws of member countries, even where they violate the Constitution.

    And the absolute worst? He promised the Russians he’d be able to act after the next election.

    He’s never created anything but he has become VERY good at taking from those who create.
    Whatever headstart Romney has had he’s at least made something of himself.

     
  5. AvatarBill

    “So Bill, how has government and/or Obama interfered in your business?”
    I own a CNC machine shop. Let me count the ways;

    1. The “cost of doing business” or “cost of good sold” as it specifically says in a P/L somehow does NOT include the capital equipment costs of buying machinery, but it does include the cost of paying somebody a wage to stand in front of the machine that never calls in sick. Sure you get do depreciate the equipment, but the payment that is required to purchase the machine (the least expensive CNC we have in our shop is $270,000 a copy) has to be paid out of profit. As a S-corp owner you know that every penny of the machine payment has to come from somewhere and that somewhere is now taxed at the top tax rate, since we have 7 of them that adds up to about $420,000 of profit before we even turn on the machines EVERY year. Sure we need to take some of the blame for this because we refuse to let technology pass us by, therefore we update our machines every time there is a significant step up in technology. But right of the gate we, an American manufacturer is at a deficit relative to the rest of the world. But because of the left side of the aisle demonizing business owners in the 5% it would be impossible to pass thru congress the idea of letting capital equipment purchases be fully deductible instead of just the interest on the loan itself. On the other hand, if we fail to make enough profit to make the payment on these machines, the bank can take the machine off our floor, even if the reason we can’t make the payment is because of the “profit”, we make by making the payment, is being taxed at a $420,000 income level tax rate.

    2. I live in California. Over the top regulation of machining industries ring a bell with you? How about this, we generate waste oil in our day to day operations. As responsible, environment loving people, we make sure as much waste oil as possible ends up in the recycling barrel to be hauled away to a recycling facility. BUT, if the truck that hauls the oil away (and that by the way is their primary business) happens to get in an accident on their way back to their facility and some of the oil they are hauling happens to spill, guess who the state is going to sue? The company that is in the business of hauling the oil? Not a chance. The big loser in this case would be me and my company. Why? Because somehow, even though when the garbage can get set at the side of the road for pick-up it is no longer my property, the oil from my business is mine until it makes it back their yard. That means we get the shaft if SOMEONE else makes a mistake!

    What you don’t seem to understand is government is just like Vegas. They give you something that sounds like a good deal, but really if you look into it, it’s just them making a better way to take your money. The only difference is we have a choice not to go to Vegas.

    Also, government doesn’t work in giant steps. It works very slowly and if you don’t notice the direction a law is headed you are going to get the short end of the stick. That is the reason the NRA is so adamant about ANY gun control law. First they take away automatic weapons, then they take away assault rifles, then they limit the size of the clip you can have, next they will tell you the caliber of the gun is too big, then they will tell you can only have 1 gun per person with a carry permit, then just like that, criminals are the only people with guns. How do you like THAT society?

    The exact same thing is happening to manufacturing in the US. We are so busy trying to make other countries like us, we are sacrificing the ONLY thing that makes our country rich. Manufacturing IS freedom. THE reason we became THE world power was because our country mobilized into the greatest manufacturing country in the world during World War Two. It has been a steady decline ever since Congress saw the huge cash cow that is manufacturing and wanted their cut. That’s all fine and dandy when we were the biggest guys on the block, what about now? Not so much.

    “Were your parents republicans? Mine were democrats, kind of hard to imagine, huh?”

    Yes my parents were and still are Republicans. Believe it or not I voted for Clinton the first term. I was young and ill informed. I don’t consider myself a Republican as much as a fiscal conservative with some liberal social leanings, but then again I live in California, I’m probably considered a Commie in the central US…

    A famous quote by Winston Churchill goes something like this, “If you’re young and not liberal, you don’t have a heart, if you’re older and not a conservative, you don’t have a brain.”

     
  6. Avatarms

    Kelly,

    I guess we’ll just have to agree to disagree.

    I don’t see Obama pitting one American against another, unless you call rolling back the Bush tax cuts for the wealthy to what they were in the in the Clinton era class warfare. Seems to me we had a surplus back then and the country was doing much better.

    But I did catch Romney’s 47% remark where he called almost half the population a bunch of moochers. I’ve also seen where he said he’s not concerned about the poor because they have a “safety net” and the rich because “they are doing okay”.

    So where’s Romney stand on any issue? He’s been on both sides of every issue and also on the fence. He tells the tea party one thing to get through the primaries and once through, he’s back to flip flopping and being a moderate.

    I watched the debate last night. Did Mitt differ from the president’s view on any foreign policy issues? For 3 weeks, Mitt and others hammered Obama on Libya. We get to the debate and what happens? Nothing.

    It’s got to be a big letdown for you guys for the way Romney performed in last night’s debate, pussycat Mitt. But that’s Romney, he will say or do anything to get your vote, but how do you guys know what you’re going to get if he’s elected? It will be moderate Mitt from Massachusetts that we are all stuck with.

    You know, I didn’t like W’s policies, but I respect him because he stood up for what he believed in, even if it was misguided.

    Bill, a couple of comments for you –

    I am glad you are manufacturing in the U.S. and hope your business does well. But I haven’t seen any proposals from either Obama or Romney that would allow you to write off your equipment any faster than current law. Both Obama and Romney speak in generalities and not specifics.

    As far as guns go, nobody on the left is advocating taking away your guns. Enforcing current laws yes, taking guns away, no. That’s just a scare tactic that people buy into.

    On manufacturing, you might want to ask Romney why he was a pioneer of moving companies to China and / or loading them up with debt and dismantling them for a profit. Actions speak louder than words and Romney’s actions certainly show he has disdain for ordinary working class people.

    Romney takes pleasure in being able to “fire people”. He’s not my kind of guy.

     
  7. AvatarKelly

    I LOVE firing people. I HATE laying them off. There’s a big difference between the two.

    When I fire someone it’s because they’re not doing the job I’m paying them to do. By not doing their job, or doing it improperly they are taking from all of the other employees who ARE doing it properly. I’ve been told my turnover is well below industry norms. In 8 years I’ve had to fire 4 people in total. I always do everything I can to avoid firing an employee but when it becomes obvious they’re not interested I wake up that morning happy that I’ll be removing a problem.

    When I lay someone off, something I’ve done 3 times in 24 years and never (so far) in my company it feels like the absolute worst day in my life. I can’t stop envisioning them going home and telling their families they’ve lost their job through no fault of their own and usually, when one company is laying off so are most in the same field so their prospects of finding another job are greatly diminished. In the past I’ve spent time contacting my competition and trying to place those laid off and sometimes find success there.
    Well before laying people off I have gone weeks without pay for myself in order to pay them. I’ve NEVER cut benefits like health insurance to anyone. Ever. I feel I’ve failed utterly in my job of managing a business when I have to lay off and have only ever done it for the survival of the company.

    I think you have a certain picture of me as someone just out for a buck (not that there’s anything wrong with that) who doesn’t care about anyone not my financial peer. If so, you couldn’t be more wrong.
    I pay 100% of the med-dental-vision for every employee here and match 401k the max allowed by law (though I experience a personal penalty due to the tax law) and their health benefits are EXACTLY the same as mine and my business partner. Same benefits, same co-pay and I start full benefits in their first 30 days. I also pay well above prevailing wages, have never started any position at less than 12/hr and give raises in 1-2$ increments based on performance and knowledge only.
    I’m flexible with work hours and voluntarily pay full salary for 15 weeks maternity leave. I enjoy teaching my people and take time away from my personal life with my family to train people on weekends because I believe it’s for the greater good.

    Though I conduct my business in this way and treat all with respect I’m still targeted as one of the rich. I drive a really nice sports car and have seen some looking at me with disdain for it. I am one piece of the pie at my car dealership who makes the higher than average wage my service technicians receive possible since if I and those other customers are not willing to lay down our money there would be no market for mechanics with their skill.

    People sometimes tell me I’m “lucky” to drive that car and “it must be nice” but they don’t see is what I’ve had to sacrifice to get here. I live 10 minutes from work and have gone weeks without even laying eyes on my children because my head was buried in a program or machine. I’ll never get this time back and live with the pain of loss daily but, as I said before, it’s a choice I made.

    There are many others like me in this country. For sure not enough, but many. You and your people single us out as if we’re less than yourselves and rob us because your mob in government will do your taking for you. You insult self respect and self responsibility while you push your collectivist agenda and “progressive” ideas shouting all the while that it’s only “fair” you do so. You disrespect those who’ve built this country and are yourselves diminished in doing so.

    Yeah, I agree we disagree.

     
  8. Avatarms

    Kelly,

    You don’t have to justify anything to me. You sound like a decent guy and that you treat your employees well.

    Like you, my partner and I pay good wages to our 6 employees ($14 – $35/hr) and also pay benefits (full med, dental), xmas bonus ($2500/ emp) and profit sharing (about $12500/emp). Needless to say, we don’t have any employee turnover.

    Nobody is condemning you. In fact, more power to you.

    The only thing I don’t understand is why would you vote for Romney? The way you look after your employees makes you sound more like an Obama guy.

    The thing is, Obama is out there looking out for people like your employees. Obama is trying to make sure single moms can take care of their family. That seniors can get the health care that they need. That students don’t have to pay an arm and two legs to go to college.

    Obama is ready to compromise to get the deficit under control. But everybody has to have a little skin in the game. We need to cut the programs that are wasting money, we need to raise a little revenue and we probably need some government spending on roads and bridges to put people to work and increase the tax base. Republicans took a no tax pledge and will only agree to cuts. That makes them not serious about cutting the deficit.

    When I do well, I don’t mind paying a little more if I know it is going to be put to good use and either pay down the debt or put people to work.

    As I mentioned in a previous post, most people are not trying to rip you or the government off. Many people end up relying on government programs through no fault of their own and they are ashamed to be in that position. That’s just how this economy is. But they shouldn’t be villified.

    For sure, there are villains on both ends of the spectrum. There are people that take advantage of government programs, but there are also corporations that don’t give a hoot about their employees (hmmm Bain perhaps, maybe Darden Restaurants, Apple Computer, etc.). Wherever money is used, there will be greed.

    Don’t think that just because somebody disagrees with you, that they hate you or want to somehow take your money. We are all in this together.

    You own a car dealership? Foreign or domestic? If I was a betting guy, I’d bet foreign, othwise you’d be pro-Obama for the way he saved the auto industry and the cash for clunkers program got car sales going again. That was a pretty good program wasn’t it? Saved a lot of dealerships, got car sales and manufacturing going and got a bunch of big old gas hogs off the highway. Or do you view it as just another wasteful government program?

    That’s probably enough for now, got to get back to work.

    Good luck to you, btw, what kind of car do you drive?

     
  9. AvatarKelly

    I drive a 2011 Audi R8 V10.
    I don’t own the dealership. My point was people like me who buy things support others indirectly through the money we spend by maintaining the necessity of their jobs.

    And my point regarding obama and the language on the “progressive” side is they want more of my money. As I posted earlier, I have personally paid more in taxes than any handful of “middle class” taxpayers and more than hundreds or thousands of those below the “middle”. I paid for the roads. I pay more for them every year through my car registration. I pay more for them every year through my income taxes. Your guy said I didn’t build my business because others built the roads and whatever else.
    My point is they were paid to build whatever (or teach, in case that comes up) by me and people like me through my consistently higher taxes both as a percentage of my income and as real dollars.

    If you don’t think they’re after me you should listen closer.
    I really liked Herman Cain’s 9-9-9 plan and would have voted for him because He’s had a real job and had to make payroll but He didn’t make the primary cut so it’s Romney.
    And I’m not saying he’s perfect, just that he’s speaking the truth so many seem to want to avoid.

    For whatever the reason (and there are many) 47% of this country pays nothing in federal income tax.
    For obvious reasons 10% of tax payers pay for 70% of the government and because once the government has something it never gives it back they want those at the top to pay ever more to support those draining the efforts of the productive.

     
  10. Avatarms

    Wow, I heard of the A4, A6, etc, but not an R8. I had to look it up. Those things are over 100k. Kind of embarrassed to say it, but we have a 2008 Altima, 2002 Maxima, 97 Econoline van and 97 Mercury Sable with a bad transmission. The things you have to do with 2 kids in college.

    Guess I didn’t read your paragraph about the car dealership close enough. So what kind of business do you own?

     
  11. AvatarKelly

    I have a screwmachine shop and a milling company. I learned my trade on manual mills, lathes, surface, id/od grinders and mechanical shapers. Then I learned cnc hand poking disk drive bases when mastercam was new at V2.0!
    I love what I do and always have, even though it’s been tough it has been satisfying because it’s been tough.
    I have 4 kids with the oldest reaching 18 next year.

    The car is still mostly the bank’s but 4 more years and it’s mine. Cost new was 198k.
    I got it so I’d feel something tangible to calm me after working 18 hours and to keep me hungry for business when I find complacence creeping in.

    I also had a 2001 F350 7.3 4×4 6 on the floor I almost lost to the bank when I had 2 payments left in my second year of business, along with my home.

    All’s well that ends well!

     
  12. AvatarRobin

    I was born in America to Canadian parents. I have worked my ass off for 36 of the last 52 years – and always paid my way. I just happen to care about the little guy who can’t get medical care. I don’t want to pay for food and housing for able bodied people. I was married for 20 years, and left a bad situation and had no fianancial support. I have worked two and three jobs to make ends meet. I have gone back to school. I have a great job now. But if I had a child who was sick and I had to pay the total bill out of my pocket, alone. We’d have to jump off a bridge. That’s why I admire President Obama. And I have to laugh at the ignorance and anger of some who can’t listen to another’s opinion without shouting profanities at them. To those, I say..Keep on letting your church and your neighbors make your political decisions for you – because you certainly can’t read.

     

Comments are closed.