Stalling Our Economy One Company at a Time

Guest Column by Glen Meakem

This past weekend, I examined the possible political motivations behind the Obama administration’s recent attack on Gibson Guitars. Over the past week, Americans have learned that the wood seized from the Gibson manufacturing plant in Nashville last month is exactly the same in every way as the wood used by every other guitar manufacturer in the country. George Gruhn, an expert on vintage American guitars and related instruments stated, “the wood that Gibson is using is from the same country and cut to the same specs as wood used by every other guitar maker. If it isn’t legal, than all of those makers in the USA are in deep trouble.” No other guitar manufacturers have been raided to date, and Gibson has not yet been charged with a crime. The fact that Gibson is a non-union company, based in a right-to-work state, and run by a Republican CEO, when most other manufacturers are unionized with CEOs who say they are Democrats, has numerous industry insiders wondering if the decision to seize assets was a political one.

Perhaps this attack on an American manufacturer and on American manufacturing jobs is a politically motivated move by the Obama Administration. Perhaps it is just the action of a brain dead bureaucratic machine randomly enforcing an Indian law that even the Indian government says has not been violated. Who knows? No matter, this incomprehensible action by the U.S. government to seize one million dollars of semi-finished goods from an American manufacturer, while also publicly castigating a well known American company and an iconic American brand is creating new levels of fear and uncertainty in what is already an incredibly difficult economy. American Companies that import rare wood to manufacture furniture as well as musical instruments are openly concerned that they may also have their assets seized, and brands tarnished. The Obama Administration’s attacks on businesses are weakening our economy one private business at a time. Just ask Boeing about the costs and risks it is incurring from the Obama Administration’s shut down of its new $2 billion aircraft plant in South Carolina.

This weekend I also commented on President Obama’s “jobs” speech, which recycled the failed tax, borrow, and spend policies of the “progressive” left yet again. This time, President Obama said the “rich” can afford to pay more in taxes because Warren Buffet (a man who is worth $50 Billion) wants his tax rates increased. But quoting Warren Buffet to make the argument for higher taxes was a weak move on the part of the President. Unfortunately for the U.S. government, Buffet is currently arguing with the government to avoid paying $1 billion in back taxes. He also employs 120 people off-shore in Bermuda whose primary job is to reduce the amount he pays in U.S. personal and corporate taxes, and is giving tens of billions of dollars away over time to the Gates Foundation. All of these gifts are, of course, pre-tax and help Buffet to avoid taxes. We should judge Mr. Buffet on his actions, and not on his words. Can you say “$50 billion hypocrite?” If Mr. Buffet really feels like he isn’t paying “his fare share” of taxes, then he could both close down all of his tax avoidance schemes and pay more to the Federal Government. After all, Warren Buffet and Bill Gates who earn billions per year on their massive fortunes cannot be compared to much more typical Americans who earn over $200 thousand per year. Buffet is a complete hypocrite and it is shocking that our President quoted Buffet’s cynical, empty words in front of a special joint session of Congress as justification for raising tax rates on all Americans who earn more than $200,000 a year. The average American does not earn $200,000 per year, but millions of very hard working executives, entrepreneurs and small business owners (who put their money at risk to employ tens of millions more Americans) do. These job creators already pay between one third and one half of their earnings to the government, depending upon where they live and work. Aren’t these tax rates high enough? I guess not if, like Obama, you do not believe in achievement based on hard work and merit, but rather believe in redistributing wealth. Karl Marx had a phrase for this — “from each according to his ability, to each according to his need.” I guess our current President agrees.

President Obama demanded that Congress pass his $450 Billion “jobs” bill “right now” eighteen times during his 25 minute speech so that, among other things, construction workers could immediately begin repairing bridges and school buildings. This demand raises the obvious question: what happened to the money that was supposed to be for infrastructure projects in Obama’s first $830 Billion stimulus? If the new bridge and school repair work – funded on high from the federal government — is so obvious and so easily accomplished before next year’s Presidential election, then why wasn’t this work already done over the past two years? What makes President Obama think “shovel ready” projects are any more “shovel ready” in 2012 than they were in 2009, 2010 and 2011? The fact is the stimulus money that could be spent quickly in 2009, 2010 and 2011 was spent and it did not improve our economy or long-term jobless situation. In fact, the failure of Obama’s massive stimulus programs to revive our economy is further proof (on top of many other empirical examples from the past century) that Keynesian stimulus destroys more economic activity and value than it creates. Obama’s insistence that Congress add another $450 Billion to our deficit in 2012 in order to “jump-start” our “stalled economy” is a tremendous admission that the kind of Keynesian government spending he has forced on America for the past 2 ½ years is a failure. (By the way, President Obama claimed his bill is “paid for” and then went on to say that Congress will have to find the money to pay for it.)

Even if the President and his speech writers did not just dream up the urgent need to repair schools, spending money to “modernize” public school buildings does not guarantee a better education for our kids. My wife and I spend many thousands of after-tax dollars each year to send our elementary school age kids to a private Montessori school. This private Montessori school is located in old classrooms tacked onto the side of an old ice rink. This old ice rink is situated under a major road bridge. The school has no gym, no music room, no art room, no computer room, and no cafeteria. The kids have their recess on a nearby community owned playground. The suburban public school district in which we live has two beautiful new elementary schools with every modern convenience. So why do my wife and I spend thousands of dollars a year to send our kids to the old, decrepit, make-shift school building under the bridge? Because the school has a GREAT LEADER, GREAT TEACHERS and GREAT CURRICULUM. And, of course, it has no union. The quality of education is not determined by the quality of the building, but by the quality of the teachers, the support of the parents, and the work ethic and commitment of the students.

Please remember that I will host “An Evening with Glen Meakem” this coming Tuesday (September 13th) at the Hilton Garden Inn in Southpointe, Pennsylvania. I will be discussing America’s strategic strengths and weaknesses as well as long-term threats to our nation, including our rapidly rising debt, and the out-of-control government spending that is fueling it. Please consider attending this educational and uplifting event. To find complete information and register, go to glenmeakem.com, or call (412) 749-9045. The cost for this event is only $45 per person.

I hope to see you there.

Sincerely,

Glen