Free Enterprise

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A roof over your head. Seems like such a basic concept, but ironically, what is the term for the biggest group of expenses of any business (the expenses that constantly get cut in order to maintain profitability)? Overhead — employee salaries and benefits, office or commercial space, utilities, taxes, insurance to maintain that office or commercial space. So, as businesses struggle to make payments, and often have to layoff staff, so do the many individual employees affected by such cuts. And with all the holes in the safety net of government assistance, more and more people are losing homes and without employment unable to find affordable housing. Vicious cycle, as they say.

Homeless is a term that says it all. You have hit rock bottom economically and you have the cold hard pavement as a pillow each night. A few weeks ago, our blog talked about the politics of cancer and how some forms were politically incorrect and less sympathetic (notably, lung cancer thanks to tobacco stigma). The same rules apply to the homeless and make them easy to dismiss — when you have a group that includes the mentally ill (many off meds or untreated), the drug addicted (alcohol, prescription, and/or illegal drugs), and the criminal (serving your time does not guarantee you a roof over your head upon release), many are going to be quick to write off the problem of homelessness as unsolvable or throwing good money after bad. But the group also includes people who can’t find work in a tough economy, entire families, veterans from Iraq, Afghanistan, and other wars, and the poor who work but don’t earn enough to pay for housing.

Real life is seldom ever neat and tidy, however. I was reminded of this when hearing the latest presidential campaign tussles over 47% of Americans not paying federal income tax and some other percentage receiving government assistance. Regardless of which candidate you support, those numbers should disturb you. A lot. For me, they underscore that too many Americans are on the handout side of some kind of weighted scale and not enough are on the working and earning enough to pay federal taxes side.

One Step Away is a new newspaper sold by the homeless in Philadelphia to help the homeless.

One Step Away is a new newspaper sold by the homeless in Philadelphia to help the homeless.

That is why I was heartened by a casual event when I was down to the Pennsylvania Convention Center last week. I was approached by a street vendor selling a newspaper called “One Step Away.” It is a new publication designed for a noble purpose— to incentivize the homeless to earn money and get themselves on a path toward a roof over their heads.  Each homeless vendor pays 25 cents a copy but sells the paper for $1. That means every paper purchased puts 75 cents in their pocket. Most salespersons I know would kill for a 75% commission; however, we’re not talking about an easy-to-sell product in the digital age. In fact, I just saw a story about how newspaper revenues had dropped to 1950s levels. So, “One Step Away” is properly structured on a basic free enterprise level and the homeless vendors have a great carrot to help themselves. They have skin in the game, unlike a significant portion of those 47% who aren’t paying federal income taxes but receiving benefits.

“One Step Away” gets its name from the truism that too many of us are only a missed paycheck or a lost job or a medical crisis on the plus side of the homelessness ledger. That is a sobering thought.

If you would like to help the “One Step Away” mission, I encourage you to visit OSAPHILLY.ORG to donate, support, advertise. This video will introduce you to some of the many homeless vendors you will be helping get back on their feet.

Philadelphia once captured national attention about the problem of homelessness when an 11-year-old boy named Trevor Ferrell from one of America’s richest suburbs, Gladwyne, challenged his parents, his church, and a whole lot of other fellow citizens to help out. I am glad to see that TrevorsCampaign.org is still carrying on his mission. It was a little bittersweet to read this account and learn that the adult Trevor elected not to leverage his fame into a career and is now dealing somewhat anonymously with adult challenges like the rest of us — meeting financial obligations and trying to make a good life for his own family. We all have skin in this game.

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Last week, my family went on a New England road trip and I brought along my laptop and iPhone to stay connected with the office and clients. It is the norm for many businesspersons these days (and not much different from typical weekends). The downside of technology is that you are always connected. Fortunately for me last week was quiet and the digital side was a huge help in managing projects in progress.

I mention all this because my family’s trip was a wonderful educational trip mostly along the coast of New England. It underscored for me how much life, especially working life, in America has changed over our relatively short history. It was humbling on many levels.

The Morgan docked in Mystic, CT is under major restoration but still tourable.

The Morgan docked in Mystic, CT is under major restoration but still tourable.

In Mystic, we had a chance to tour the Morgan, the only remaining wooden whaling boat left and currently under major restoration. On a hot AC-less day, its cramped quarters underscored that a long time at sea was a very long time. Especially at a time deodorant wasn’t invented yet.

The Breakers, the Vanderbilt mansion in Newport, RI, is a glimpse back to the Gilded Age.

The Breakers, the Vanderbilt mansion in Newport, RI, is a glimpse back to the Gilded Age.

With class warfare in full political mode, a visit to Newport, RI and the summer homes of the Vanderbilts and others underscored that at times the gulf between the haves and have-nots was much greater. The American middle-class didn’t exist yet. It is a testament to capitalism and free-enterprise that a middle ground evolved and thrived in the last century. Even if it feels like we are at another tipping point.

The whaling museum in New Bedford, MA tells the amazing story of whales and the men who hunted them.

The whaling museum in New Bedford, MA tells the amazing story of whales and the men who hunted them.

The whaling museum in New Bedford, MA is a treasure chest of knowledge and exhibits about what was New England’s principal livelihood for many years. I learned why every whale hunted was such a vital collection of valuable resources, principally oil used as a fuel for lights, which extended American’s day on average by an extra hour after sunset. However, the hard work and danger to successfully hunt, kill, and bring back a whale was beyond daunting. It must have taken a certain kind of bravado or crazy to sign on for this duty. Ironically, it was the discovery of oil in the ground in Titusville, PA that signaled the beginning of the end for whale-hunting as an industry in New England.

Up close and personal with a humpback whale from the deck of the Seven Seas tour boat.

Up close and personal with a humpback whale from the deck of the Seven Seas tour boat.

Happily, the whaling industry is thriving in a new way now — tourism. Whale sightseeing boats out of Gloucester are doing an amazing job of introducing landlubbers like me to these amazing creatures. On the Seven Seas, we saw a dozen humpbacks during an afternoon voyage off Cape Ann. And as these awesome natural wonders put on a show on the surface of the Atlantic, they are unaware they are helping to support all the shops, restaurants, and motels in the area that depend on summer vacationers. There were close to 150 on our ship, times twice daily, times many other similar tour boats. Talk about an unlikely ecosystem.

A Lowell textile mill reimagined dollhouse size.

A Lowell textile mill reimagined dollhouse size.

On the way home, we headed inland to Lowell, MA for a different take on the New England economy of yesteryear. The once thriving textile mills there are now a working museum run by the National Park Service. They have done a terrific job of presenting the relevant-today story of cheap labor in service of manufactured goods. The Lowell mills were populated by a steady stream of ever-cheaper-to-compete labor pools. Ironically, most were women. First, farm girls from New England. Then, immigrants were brought in, from one nationality or country at a time, always in search of remaining competitive. Lowell went from being one of America’s brightest stories during the Industrial Revolution to finding itself fighting for its economic life, first against other cities in New England, then in the southern US, and finally, in countries around the world. The work in the mill was hard, loud, monotonous, long, and often dangerous. In those early days, there was no OSHA and there were no unions, although both would come later.

The Lowell lesson is an instructive one — if America wants to compete in today’s global markets, we face tremendous challenges in terms of costs, regulations, worker/union expectations, technology, and governmental cooperation with the private sector. With Lowell’s mills closed in the early 90s, the city is now retooling in another direction — tourism. I encourage you to avail yourself of this instructive link to our past (and hopefully, future).

The late great Ron Rotelli (center) helping to manage a Time and Parking Controls seminar at the National Constitution Center.

The late great Ron Rotelli (center) helping to manage a Time and Parking Controls seminar at the National Constitution Center.

My vacation ended on a very sad note with an email from Kevin Elsesser, GM of Time and Parking Controls — his longtime associate Ron Rotelli passed away in his sleep during a family vacation. Ron was a man of many talents, he made friends instantly with everyone he met, and he balanced work with a love of family and a long list of personal interests, especially music. He was one of the least likely people to have his life cut short in such abrupt fashion, which just underscores the age-old Carpe Diem message for the rest of us. That he will be sorely missed by so many was brought home by the endless line of friends, family, and co-workers inside and outside the Donoghue Funeral Home Thursday evening.

 

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Image: Liz Nofsinger/FreeDigitalPhotos.net

Image: Liz Nofsinger/FreeDigitalPhotos.net

I admit it. I am a capitalist. If any of you sixties holdouts want to add the pig noun, be my guest. Not sure why this unfortunate, all-purpose, dehumanizing slur got applied to police officers and businesspersons alike, but ironically it often came out of the mouths of radicals preaching peace, love, and understanding in their next breath.
As we mark July 4th, 2010, the US economy is stagnant and unemployment is rampant. There are predictions of a slip into another recession. The political urge to do “corrective” things in the coming months will be great. Unfortunately, we have had plenty of corrections and big programs and new edicts by central planners in DC over the past year and they have only made things worse.
Here’s a modest suggestion: get back to incentivizing American business with carrots instead of whacking it with large sticks (and possibly soon, new taxes and more regulations). In particular, get back to incentivizing small business, where most innovation and jobs growth occurs. Then, get the hell out of the way and let the free market work its magic. Supply. Demand. Profits. And sometimes losses.
Too Big to Fail is a popular phrase and justification for bailing out failing companies. It could be applied equally to government. However, a more apt expression might be Too Big to Function. Whenever bureaucracies result from corpulent corporations and ill-defined, ever-expanding government entities, you wind up with something that looks, acts, and smells like Jabba the Hutt.

Too Big to Function: Jabba the Hutt

Too Big to Function: Jabba the Hutt

Big doesn’t have to mean bad. Last time I checked, Apple was large and successful. But they are supplying products that are in demand. Value is a critical part of the equation for success in business.
The single best thing our government can do right now is to stop treating business like public enemy number one. Or like colonists to be taxed and taxed again. Freedom is a beautiful thing. When businesspeople are freed from excessive government compliance, when investment capital is freed up, and when markets are free, then a lot more companies are free to hire and put people back to work. It’s a pretty simple idea and not that revolutionary.

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