It is perhaps ironic that Steve Jobs, cofounder of Apple Inc., died last week at the same time anti-capitalist signs and chants were televised from the leftist protests called “Occupy Wall Street.” The demonstrators demanded jobs and railed against corporations, testimony to their own ignorance of where their jobs and the products they use come from.
To paraphrase some demonstrators’ sentiments, can’t we all just share our country’s bounty instead of some getting rich while others remain stuck in poverty?
Of course that implies we should be a collective society even though individualism is the founding principle of America. Those who truly believe in collectivism should visit Cuba or study the history of Jamestown four hundred years ago. Besides, the country’s bounty is not static, it multiplies in a growing economy.
One interviewed demonstrator spokeswoman insisted corporations should not be receiving so much money unless they use it to create jobs instead of enriching themselves, suggesting there must be a nanny in the sky passing out money, never mind the misunderstanding of how jobs are made.
I suppose the root problem is we have done a miserable job teaching to recent generations the virtue of capitalism and how it works, and if uneducated you have to overcome the tug of your heart and use your head to come to the right conclusion.
Steve Jobs was the demonstrators’ fellow liberal, but as a capitalist he was a titan, leaving huge footprints. I remember very well when he and his partner, Steve Wozniak, started what would become the personal computer revolution, creating in their garage the first product that would fulfill their dreams of making tons of money and in the process they changed the world. You and I were the beneficiaries of the tidal wave of products that followed and spread worldwide.
In more recent years Jobs and Apple have given us the iPod, iPad, touch phones and many other products. While Jobs and his partner became wealthy beyond your wildest dream, I wonder how many thousands of people had a job, or a career, not only at Apple, but in the tens of thousands of other companies that jumped into the ocean of opportunity created by these two men.
By their continued vision, these entrepreneurs created not just a successful product, they created an industry that kicked in the afterburner of human productivity.
What an epitaph – Steve Jobs made the world a better place!
And he did it all in the pursuit of more-more-more money. Call it greed if you like, but that is our capitalist system, harnessing the self-interest of each individual to motivate imagination, innovation and hard work.
New businesses are started when someone has a dream, the desire to take a risk and try to make a product or deliver a service, something that works so well it becomes profitable. Most new business ventures fail, but if it succeeds and blossoms, that new business owner will have to hire people to help get the job done as he hopes to make tons of money.
That, of course, is how jobs are created in America, no matter what the politicians say.
In many cases the entrepreneur needs funding (capital), so venture capitalists bring investors to the table to buy a piece of the business, to become shareholders in a corporation, each one hoping to make an obscenely handsome profit. Everyone who owns a 401k, IRA or pension is likely one of these investors.
If the business succeeds and grows very large, eventually it will need highly skilled executives to guide and execute the business strategy, to select, manage and motivate employees.
The problem is the pool of the best among these executives is small, and the ones desired are already employed elsewhere. So recruiters specializing in executive search find the right people and entice them with piles of money in salary and bonuses that would make Jed Clampett blush, and golden parachute packages that guarantee them many millions even if they are fired. These executives are the ones the public loves to despise, having no understanding of why they are paid so much.
There is much risk in a new business. Along the capitalist highway are littered bone-piles of failed and dead ideas. We know what motivates entrepreneurs to take the risk trying to make their visions come true – the pursuit of wealth – and investors buy shares of corporations for the same reason, weighing the risk of loss against the profit potential.
Visions, dreams, taking a risk of terrible loss in hopes of making lots of money, that is the American economic engine, a competitive process that has turned on the lights of the world, raised transportation and communication and entertainment to an extraordinary level, made our lives more comfortable in a thousand ways. And all this has happened as a by-product of people pursuing their own self-interest.
We need regulation to set boundaries for corporate behavior, but there is a delicate balance to strike. Anything that discourages these entrepreneurs and investors from taking those risks should be of grave concern to us, because if they put their visions on hold, if they withhold their investable capital to keep it safe on the sideline, America’s economic engine will slow down, just as it has in recent years. What are those things that put the brakes on our capitalist system?
• More and more regulation that slows productivity and increases costs
• Higher taxes
• Uncertainty in Washington, D.C., about more taxes and regulation
• Class warfare that demonizes success
• Anti-business government rhetoric
• Government intervention into industry, like the shutdown of oil drilling in the Gulf of Mexico.
Sound familiar? At least the Obama Administration is consistent – they do ALL the wrong things! This is why President Obama preaching about job creation is a farce of the highest order.
His administration is the most anti-business of any in my lifetime, creating mountains of new regulation and relentlessly trying to raise taxes on the high-income people who invest and create jobs.
Is it any wonder investors are keeping their capital on the sideline? Is it any wonder entrepreneurs have put their dreams on hold until the fog of uncertainty lifts? And with each postponed and withheld business move, jobs that would have been created … are not.
All the stimulus spending in the world won’t break the jobs creation logjam. The dam will break only when this administration is gone, when the uncertainty is lifted in a more business-friendly environment.
It’s easy to demonize corporations, especially when our government is using our money to bail out banks, insurance companies, auto companies and state employee payrolls. It’s easy to demonize wealthy executives while we are paid so little by comparison. It’s easy to go too far with regulation and taxes that induce American companies to move jobs overseas.
It’s easy for President Obama to blame his predecessor, to blame Wall Street for causing our economic mess when in reality the cause was arguably decades-long liberal government policies requiring banks to lend to unqualified borrowers.
It’s easy for “Occupy Wall Street” demonstrators to forget that Wall Street is now Main Street where all of us are investors and should hope for entrepreneurs to succeed.
It’s easy for the President to point the finger of blame at high-income people demanding they pay more taxes even while Washington fails to eliminate duplicate, wasteful and unnecessary spending, even while his own administration has set new records in spending, even while politicians fail to tackle the unsustainable entitlement programs they have used to buy our votes.
The people marching in the streets demanding jobs might be enlightened if they give some thought to what President John F. Kennedy said about lowering taxes in order to promote business expansion, “A rising tide lifts all boats.”
It is that simple. Unleash entrepreneurs and investors, and the job creation machine goes to work.
This president working on jobs stimulus programs is the very definition of futility. There is only one thing President Obama can do to stimulate the creation of jobs.
Get the hell out of the way so we can celebrate success once again and stoke the fires of America’s business furnace.
[Terry Garlock of Peachtree City occasionally contributes a column to The Citizen. His email is terry@garlock1.com.]
