One of the speakers scheduled for the Republican National Convention is Cheryl Valenzuala. Now most people wouldn’t have heard of her, and if a storm-shortened convention knocks her from the roster due to time constraints, she will probably remain largely anonymous.
Her claim to fame and the reason she’s scheduled to speak at the even is that she’s the owner of a business that her husband Eli and she started in their garage. The company they founded was an upholstery company, and they started it in order to make some extra income in order to help pay for their child’s autism treatments. The business has grown into a company that now makes vests for baseball umpires, and anti-ballistic vests for the Israeli military. The Valenzualas currently employ about forty workers and the company makes about 4.5 million dollars in revenue every year.
The story of their achievement is a warm and fuzzy, heartfelt one. And it appears to go along with the Republican mantra attacking President Obama’s campaign statement that business owners didn’t build their businesses entirely on their own. Of course, what he meant by his statement is true. If for no other reason, the use of normal tax benefits and loopholes, the use of public roads to move goods and supplies, tax-funded education that supplies competent and skilled workers, etc., all add to the ability of business owners to succeed without them having to do all of those things alone.
But there’s often more than those general amenities and advantages available to, and used, by all. There is a myriad of government aid out there to help businesses succeed, and even though an entrepreneur may work long hours and take many risks to do what they do, almost all of them use these services of local, state, and federal government agencies. As seen in an article in National Small Business Week, the Valenzuala’s success was not made entirely on their own either:
For First State Manufacturing, Inc., the dream began in 1998 with a man, a woman, and a sewing machine in yes, you guessed it, a garage in Milford, Del. Today, that dream has become First State Manufacturing (FSM), a thriving business employing more than 40 technicians working in a new 66,000 square-foot facility funded by a $1.8 million U.S. Small Business Administration 504 loan.
Eli Valenzuela learned the upholstery trade from a correspondence course he took in the Army; he applied what he learned while working at Dover Air Force Base upholstering enormous C-5 Galaxy airlifters. With help from SCORE and the Delaware Small Business Development Center, Eli and his wife Cheryl composed a business plan, and opened FSM in their garage. With an initial $20,000 SBA-guaranteed loan they secured larger contracts and also became certified in SBA’s 8(a) Business Development Program.
In 2001 FSM was ready to grow again, with a $96,500 SBA-guaranteed loan to modernize and expand inventory. After the 9/11 tragedy and its economic fallout, FSM obtained a $65,800 SBA disaster loan to maintain their business and employees until revenues returned. FSM revenue doubled from 2007 to 2010, increasing from $2.2 million annual revenue to $4.5 million.
There are other cases where entrepreneurs tapped by the Romney campaign to repeat its “We Built It” message has relied on the government for help with their business.
Dennis Sollmann, the owner of Sollmann Electric Company, appeared in a Romney web ad criticizing the president for his “you didn’t build that” line. It turns out that Mr. Sollmann did millions of dollars worth of work for the government. Also, and probably most famously, Jack Gilchrist, the owner of Gilchrist Metal Fabricating, who starred in another Romney ad, received $800,000 in tax-exempt revenue bonds, as well as sub-contracts in 2008 from the U.S. Navy that helped his business to not only stay afloat, but to grow.
The Valenzuala’s business was built by using millions of dollars of government–public–loan money. What this does, of course, is to prove President Obama’s July comments to be totally correct, even when disingenuously taken out of context in order to manufacture faux controversy. Few, if any, entrepreneurs have built their businesses completely on their own in this country for decades, if ever.
If Cheryl Valenzuala wants to stand in front of the nation and claim that she succeeded entirely on her own, and that the rest of us didn’t contribute to that success in any way, then she has that right. But she will be lying if she does say those things. To tell the real story of how her success was financed and supported by public funds will prove the President’s point. So let’s be honest, Republicans, and take the President’s statement in the context in which it was meant. We all need each other, we all work together, and we have to stop letting politics and political lies diminish those facts. And we don’t need Cheryl Valenzuala or any other entrepreneur to lie about their achievements in order support erroneous campaign rhetoric.
Republicans would have you believe that President Obama’s stimulus package failed, even as economic consensus and actual fact prove the oft-repeated statement that “the stimulus didn’t work” is actually false. Nevertheless, Republicans and conservative commentators continue to recycle this myth.
A recent example comes from conservative columnist Charles Krauthammer, who blasted the stimulus as a failed policy in a column. Krauthammer’s evidence for that failure is that the American Recovery and Reinvestment Act, as the stimulus is properly known, didn’t generate a project as big as the Hoover Dam:
“First, the $831 billion stimulus that was going to “reinvest” in America and bring unemployment below 6 percent. We know about the unemployment. And the investment? Obama loves to cite great federal projects such as the Hoover Dam and the interstate highway system. Fine. Name one thing of any note created by Obama’s Niagara of borrowed money. A modernized electric grid? Ports dredged to receive the larger ships soon to traverse a widened Panama Canal? Nothing of the sort. Solyndra, anyone?”
Krauthammer is correct in his claim that Obama’s stimulus bill didn’t create a Hoover Dam. In actuality, it created the equivalent of a dozen Hoover Dams.
The maximum output of the Hoover Dam is about 2 gigawatts of electricity. The increase in U.S. wind-power output under the Obama administration so far has been 25 gigawatts — 12 times as much as produced by the dam. Under normal wind conditions, that’s enough to power over 6 million more homes with renewable, environmentally-friendly energy.
That explosion in wind-power didn’t happen by chance: as Michael Grunwald points out in a Time column, it was “the Obama stimulus bill that revived the wind industry and the rest of the clean-tech sector from a near-death experience.”
Under Obama, the United States has doubled its annual wind power output to 50 gigawatts, thanks in large part to the stimulus bill, enabling us to keep pace with China, the world’s wind power leader.
Krauthammer only asked for “one thing of note,” but Grunwald supplies us with more, just on the clean energy tip, which has only been a fraction of the overall stimulus effort: “The stimulus has financed the world’s largest wind farm, a half dozen of the world’s largest solar farms, the nation’s first refineries for advanced biofuels, a new battery industry for electric vehicles, unprecedented investments in cleaner coal and a smarter electric grid, and over 15,000 additional clean-energy projects.”
As far as the right’s repeated insistence that the stimulus didn’t work, that’s false too, as you can see by watching the short video explanation, below:
What’s Mitt Romney’s plan to turn the economy around? “Something dramatic” according to him, but he won’t say what that something is. He will only say what that something is not.
The Republican presidential candidate says he opposes another federal stimulus package and new government programs. He also says that if the Federal Reserve were to undertake another “massive” program of buying government bonds and mortgage-backed securities, with the goal of driving long-term interest rates even lower, it wouldn’t help the recovery.
“I can absolutely make the case that now is the time for something dramatic and it is not the time to grow government. It’s the time to create the incentives and the opportunities for entrepreneurs and businesses big and small to hire more people and that’s going to happen,” Romney said an interview aired Sunday on CNN’s State of the Union.
We’re going to create incentives and opportunities without more stimulus or a new government program? And the Federal Reserve isn’t allowed to help either?
Mitt must be referring to his Tax Cut Magic. If he simply peppers the federal budget with a few magic asterisks, success will pour down like a heavy rain. And if you believe that, I have a bridge I’ll sell you.
The last round of quantitative easing initiated by the Federal Reserve actually did lower commodity prices and boost consumption, by the way. But that is not a long-term solution, and no one thinks that it is. It’s up to congress to act on some long-term goals, such as tax reform that shifts a little more of the burden onto the wealthy and away from the middle and lower class. Public works programs could put a lot of people to work in a short time, improving our infrastructure, improving our schools, making our streets and cities safer, and helping us to develop a more skilled workforce at the same time. Banking and investment reform could help people keep a little more of the money they do earn, and help them to invest some of it more wisely, creating a broader, more diverse investor class for our future and sustainable growth. And a lot of other things like green energy jobs, educating more health care professionals to close the widening gap between medical needs and the supply of medical access and procedures.
But back to Mitt and his secret economic plan. We’re supposed to believe him about his taxes, though he won’t admit nor deny that he has paid less than the 13.9 percent he paid on 2010’s returns according to the incomplete paper work he has supplied thus far. He denies not paying taxes for a ten year period as claimed by Harry Reid, and we’re just supposed to believe him because he says so.
We’re supposed to believe that he retired from Bain Capital retroactively nearly three years after he first claimed to have left the company. If he continued to work for Bain during that period of time in question, then his fingers were in some pretty sticky deals with which he doesn’t want to be associated. So, in spite of what legal SEC filings and other documents show, we’re to just believe him when he says that what we see isn’t really what we’re seeing. Even though to have filed some of these documents erroneously or duplicitously would be felony offenses.
Mitt is reminding me of Tricky Dick Nixon whose “secret plan” to get us out of Vietnam was a central part of his 1968 campaign that propelled him into the White House. Never mind that Nixon widened the war, carpet bombed large parts of Southeast Asia, including Cambodia and Laos, as well as North and South Vietnam. Never mind that Nixon prosecuted that war for a longer duration of time than did LBJ. Never mind that he clearly had no secret plan other than getting himself elected president.
If we learned nothing else from Nixon, we should have learned that we cannot believe leaders who hide things from us and simply ask that we believe them and trust them. We’ll see in November if we learned that lesson or not by how much of Mitt Romney’s lies and obfuscation we are willing to ignore.
The newly named CEO of Duke Energy resigned this week after only one day on the job. But it isn’t so bad. At least not for him. According to the Wall Street Journal, he will retain his full severance package and relocation expenses for that one grueling day of sitting in a high-rise office.
Despite his short-lived tenure, Mr. Johnson will receive exit payments worth as much as $44.4 million, according to Duke Energy. That includes $7.4 million in severance, a nearly $1.4 million cash bonus, a special lump-sum payment worth up to $1.5 million and accelerated vesting of his stock awards, according to a Duke regulatory filing. Mr. Johnson gets the lump-sum payment as long as he cooperates with Duke and doesn’t disparage his former employer, the filing said.
Under his exit package, Mr. Johnson also will receive approximately $30,000 to reimburse him for relocation expenses.
So let’s do the math and see how lucky this guy was to be employed for one day.
Assuming that he worked for a full eight hours on Monday, that comes out to a nice $5.5 million an hour. That’s 765,000 times the national minimum wage. His relocation alone is over half the average annual salary for an American worker.
Johnson’s resignation was apparently a forced resignation, meaning he was fired, but I assume Duke Energy shareholders will not be very happy regardless. And funneling this kind of money to the top has nothing to do with anyone’s high utility bills, right?
Can someone explain to me why an unemployed, single mother is a welfare queen, and corporate flacks getting millions of dollars for one day on the job are entitled to what they get without any challenge?
I have reached that position in my life where I am peering intently over the wall at what is to come and looking over my shoulder at what has transpired. The other side of the wall is not a far view. Quite the contrary. The other side of the wall is my “golden years”, retirement, and passing on into the great ether that is outside of the bonds of time. Behind me is a long life which passed too quickly and a few observations learned along the way.
With the recent cataclysmic economic crises that have enveloped us, the time beyond today takes on a lot more uncertainty, just as it takes on more meaning than almost anything that has happened in my life up until now. It won’t keep me from this long planned retirement. Not that I feel financially above worrying about it, but with the realization that if it is going to be a bad time, economically, in which to retire, it will be an equally bad time in which to continue working.
I, and many of my baby boomer compatriots, have the advantage over most other people today if the economy does worsen into a prolonged recession, or even depression. I, like most baby boomers, grew up in the 1950s. We learned then, even if we’ve forgotten since, how to make do. How to get by with what you have and to work for what you need.
There were still pockets of people in those days who didn’t have electricity and weren’t Amish. Many people didn’t have telephones. Some who didn’t have indoor plumbing. As a child I learned that while all of those things were nice, they were also very recent developments in the march of civilization. I spent more than one night in a home without electric lights, and used an outhouse on more occasions than I care to remember.
I remember the advent of television and the demise of the radio as the primary entertainment source in most homes. That may be why I’ve never been a particular fan of television in general and most of today’s programming in specific.
I remember when most of our news came to us on the printed page, from local newspapers to “Time”, “Look”, “Life”, “Saturday Evening Post”, and a plethora of other publications. It was news that we could read and reread, over which we could ponder, discuss, and cogitate. There were no arched eyebrows or vocal inflections of a news reader to sway our opinion or our thoughts. There was no visible corporate philosophy than spun the news in a certain direction.
Those were also times when banks were regulated, and a time in which they were local, serving the needs of the local client base. A time when the money that was earned locally stayed local. A time before deregulation and merger mania drove the economic engine over the abyss.
In those days, I was taught in economics class, every dollar earned became seven dollars of value in the economy. That was because every dollar spent in that local economy then changed hands on an average of seven times. In other words, the dollar you spent at the local restaurant got spent at the local produce market, which in turn paid someone’s wage, which in turn paid onto a mortgage at the local bank, and a car payment from a local dealer, and so forth. In today’s economy that money leaves most local communities and ends up in Bentonville, Arkansas, headquarters to Wal-Mart, or on Wall Street, bundled into earnings instruments, or some such thing.
I lived in a little town of ten thousand people in Northeast Indiana until I was eleven. The downtown had two banks, two movie theaters, two nationally based grocery stores, two drug stores, a bakery, a meat shop, a produce market, two hardwares, and a mixture of other specialty shops. There were no subdivisions or suburbs. There were two small neighborhood grocers, an ice house, a few gas stations, three car dealers, and a few other businesses located in town outside of the downtown area.
The first “supermarket” in town was the A&P which closed its downtown two aisle store in 1959 to open the new concept in grocery marketing, a seven aisle monstrosity eight blocks from the downtown region. In short order, Krogers closed their downtown location to relocate to the opposite side of the town’s periphery with a store approximately the size of the A&P.
While in my experience until that time, if we wanted to buy meat, we went to the butcher shop, or if we needed bread, the bakery, we could now buy all of our groceries in either of these two super stores. The 1960s saw the demise of the bakery, the butchers, the produce store, and countless other specialty stores. It saw the burgeoning presence of large nationally based hardwares, general merchandise stores, and drugstores. The downtown died a slow and agonizing death as each of these new stores moved to the edges of town.
By that time my family and I had moved to a rural setting miles away, but we still returned to this town on a regular basis. We witnessed its metamorphosis, whether for the better or for the worse. Local restaurants and their unique fare gave way to the bland sameness of McDonalds and other chain restaurants. Local stores run by local people that sold you not only merchandise, but expertise, folksy wisdom, and that indefinable personal touch, gave way to the big national corporations who brought in management teams from outside of the area and sent the profits back to a corporate headquarters.
At this stage of my life, and viewing many of the current crises in the economy, energy, and other areas, I long for a sensible return to the concepts of community. I hope a time is near where our food is once again grown and marketed locally to a large degree, eliminating much of the costly transportation costs, while giving us fresher, more wholesome food. A time when local entrepreneurship will let our local money remain in our communities, and banks once more serve the local clientele, not a national or international hegemony enriching far-off owners and their needs and desires.
We may have reached the outer limits of concentrated wealth and power, and may stand on the threshold of a return to communitarian principles. One can only hope. For only within that framework may we be able to save ourselves and our progeny from an empty and vacant future.
According to Karl Marx, an economy based on speculation, and one from which only a few profit, cannot sustain itself. Marx predicted the eventual collapse of capitalism based on that postulation. He did not predict when or where this collapse would happen, only that it was an inevitability. We may now be witnessing that collapse before our eyes.
We now see that greed is not the engine that can run or maintain an economy. It is now obvious that Reagan’s vaunted “trickle down” theory of the economy has a lot more down to it than it does trickle.
I’m not an economist, nor am I a Marxist. I do know, however, that while a three-legged table may look nice, it is a precarious repositor upon which to place anything of value. And our economy since the Reagan era can well be likened to this three legged table.
You may think that you like limited regulation and unsustainable growth, but this position has suddenly become an untenable one due to the greed factor. Now that we have had that erroneous view of the economy yanked out from under us, we have a trillion or more dollar mess to sweep up. Actually, if some economists are correct, the mess may well be several trillion dollars before all is done and said.
It’s a mess, and most economists who aren’t card carrying Libertarians have been warning about such a calamity for three or more years. The banks didn’t fail because the free-markets were restrained. The lending industry didn’t collapse because taxes were too high. Nor did the market tank because the Democrats took control of Congress two years ago. We, the people, were promised prosperity in a time of war, financed by low taxes and borrowed dollars. And, or yeah, good times were just around the bend. We were told to shop instead of save and to borrow instead of invest. This is a failure of leadership and that leadership sits in the White House. And it controlled the Congress for twelve out of the last fourteen years.
I, myself, flirted with the Libertarian philosophy from the eighties until 2003. I began to see the flaws in Libertarian ideology when trade deal after trade deal took our jobs away, and when tariffs disappeared, harming the manufacturing industries and their workers. At the same time our borders were overrun by immigrants, understandably seeking a better life, all the while diminishing job opportunities and wage and benefit improvements for us and our children. Libertarians embraced much of this deregulation, freetrade, open borders and other positions which have not worked.
Then when those Indiana voters who were misled by Mitch Daniels, buying into his vision for the state, elected him as governor, the final nails were driven into the coffin of Libertarianism for me. He messed up our time zones for no reason other than that he could. He privatized our Toll Road for what amounts to thirty pieces of silver, and either privatized, or tried to privatize, our child care services, welfare, prisons, license branches, and other necessary and essential services.
Privatization sounds a lot better in theory than it appears to be in reality. Bush, Daniels, and their ilk have pushed me back to the progressive liberalism of my youth. They and their minions have proven that government is necessary, that oversight and regulation must be maintained for the good of the people and to keep robber barons and other purveyors of greed in check. Only through the workings of a government which protects those most innocent of our citizenry can we achieve and hold on to justice and fairness. We have tried their lassaize faire style of privatization, deregulation, and rampant greed and found it to be a failure. We need to get back on the path of good government and necessary oversight and fairness. Not the nanny state which keeps us safe from all risk and potential harm, but a government that functions for the best interest of the people as a whole, and not just for those few with power, wealth, and access.
The system has failed to deliver, but at the same time, we have failed ourselves. We haven’t asked the hard questions nor demanded to hear the hard answers. We have grown accustomed to our cell phones, plasma TVs, and mobile living rooms that we call SUVs. We expect to live our lives in comfort while month after month only making the minimum payment on our mortgages and credit cards, and we get angry when our gas bill cramps our spending habits. Government can’t, and shouldn’t fix this for us. We need to take charge of our own lives and we need to stop blaming anyone else for our own unrealistic expectations.
Maybe government can, and probably should, offer better tax incentives to encourage us to save and invest than it does for us to spend. But we need to do those things regardless, because they are ultimately good for us, our children, and our grandchildren, and for the economy as a whole. Rampant consumerism needs to be replaced by investment and responsibility, and good government can encourage us on that path.
Wall Streets robber barons who were allowed to run amok for the last eight or more years have now floundered on the rocky shore of greed, and I say not a dime for them in any bailout that ultimately comes out of Washington. Whatever money is injected into the economic failures of these greed meisters should be introduced at the ground level of these serial collapses. What I mean by this is, the money should be earmarked toward bailing out or guaranteeing the mortgages of single dwelling borrowers who find themselves caught up in this conundrum in which they are the victims, not the perpetrators.
It should not bail out the losses of those who mortgaged second, third, or more homes. It should not bail out the real estate speculators who were busy flipping houses for the sake of profit who finally ran out of wiggle room with the mortgage holders. And it should certainly not bail out those who wrote up and backed bad loans just so they could bundle more mortgages into financial instruments which they then sold to other speculators trying to get their share of the carcasses of hard working middle America. Nor should those purchasers of these bundled mortgages be rewarded for their despicable role in this financial fiasco.
The dollars that flow out of Washington, in whatever version of a bailout is finally arrived at, are our dollars. They will be injecting tax dollars, or more likely, borrowed dollars, the repayment of which we are all collectively responsible. Therefore we are all stakeholders in the bailout. We need to let our Senators and Representatives know that we want these dollars to purchase or insure the mortgages of people like us. Middle class wage earners who were lied to, misled, overleveraged, or whatever, by these shysters, and that the financiers whose greed superceded the national interest, and the best interest of their clients, should get not one dime.
We the people have the power to determine the final bailout deal with our vast numbers and the articulation of our voices in a way that we seldom do. National elections are 39 days away. The entirety of the House of Representatives, and one third of the Senate are standing for election. We need to let those who ostensibly represent us know that we are watching what they do and are conversant and cognizant about what they decide, and that we will vote accordingly. Then we need to actually direct our votes based on the stance taken by our current elected officials.
Those who vote to do nothing do not deserve our support. Those who vote to lower capital gains taxes do not deserve our support. Those who vote in favor of financial tycoons do not deserve our support. Those who vote for the same or more relaxed oversight and regulation do not deserve our support. Only those who vote to back the mortgages of our friends, neighbors, relatives, or ourselves deserve our vote. Determine the role of your representative or senator in these trying times and vote accordingly.