The People Speak
“How can Washington Help American Business?” That’s a loaded question. There are many Americans who believe Washington needs to do more to spur the economy and create new jobs. There are probably just as many Americans who believe policymakers should get out of the way and let business take care of itself. In fact, the federal government is deeply involved in business, regulating everything from tax rates to visas, and this is unlikely to change in the near future. Since much of the resistance to government involvement in business stems from the observation that many of those doing the meddling are politicians, Businessweek.com decided to ask non-politicians for suggestions. The people with whom we spoke come from all parts of the country. Some are in small business, others are academics. We spoke to billionaires and former cabinet secretaries, dairy farmers and chief executive officers of startups. We're impressed by how many good ideas they propose.
Read on to see them for yourself.
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Mark Bozik What he does: Firefighter and paramedic, North Aurora Fire Protection District
Where: North Aurora, Ill.
“As both a firefighter and a rescue-equipment manufacturer, I continually see training being cut for our first responders and state-of-the-art equipment not able to be purchased, even though the value of both the training and equipment is undisputed. Funding at both the local and national level needs to, at a minimum, be maintained to ensure proper staffing levels, provide proper training, and provide the equipment needed to keep our citizens safe. With all of the uncertainty in the world today, the one thing our citizens should not have to worry about is when they call 911 if the first responders are going to show up and that they can deal with the emergency.”
Beata Caranci What she does: Economist, TD Bank Group
“A weak demand [sales] environment is the biggest influence dampening new hiring by [small and medium enterprises] in this cycle. So directly addressing this through a single, targeted government initiative is not realistic. However, the American psyche is fragile and businesses are struggling to predict and incorporate major policy initiatives from Washington—from health care to financial regulatory reform. Reducing uncertainty on these and other matters, like further government debt-reduction initiatives, would leave SMEs (and all businesses in general) better equipped to plan for the future.”
Elaine Chao What she does: The 24th U. S. Secretary of Labor (2001- 2009); distinguished fellow at the Heritage Foundation
“The current, chronically high unemployment rate could be even higher if millions of discouraged workers had not effectively dropped out of the workforce and ceased being counted in this statistic. ... Washington could stimulate job growth by becoming the champion, rather than the nemesis, of America’s private sector. This would include efforts to open foreign markets to American exports. The President should begin to deliver on his stated support for free trade by signing the Korea, Colombia, and Panama trade agreements that are ready for ratification. Congress and the President also should not dither in extending the tax reforms slated to expire after the 2012 election.”
Carly Fiorina What she does: Vice-chair, National Republican Senatorial Committee
Where: Washington and Los Altos Hills, Calif.
“If Washington is to help American business—large and small—sustain growth and create jobs, it must restore confidence by tackling three fundamental, longer-term elements for a stronger underlying economy. It must first reform the tax code; second, restrain government excess, in terms of both spending and regulation; and third, restore our entrepreneurial culture by removing the barriers that keep our small businesses from forming and thriving.”
Chris Fralic What he does:
Managing Partner, First Round CapitalWhere:
“Patent reform is a huge issue. Patents are a huge drag on innovation. It’s costing so much money that could be spent on hiring people. Look at recent Google (GOOG
), Motorola (MMI
), and Apple (AAPL
), Nortel (NTL
) news that relates entirely to patents. In those two examples, it’s about $18 billion spent on patents that won’t create a single job.”
Matt Golden What he does: Policy chair, Efficiency First
Where: San Francisco
“In many public-private partnerships, the government asks companies to make long-term investments against short-term public policy. ... Companies want the government to give ground rules and not change them. The single most-important thing in private capital is managing risk, and the political uncertainty is a deal-killer for investment.”
Paul Grover What he does: Real estate agent, Robert Paul Properties
Where: Osterville, Mass.
“While uncertain investment returns are helping to stimulate a flight to high-quality real estate, I believe Washington's strongest contribution to business would be to instill some confidence in its citizens that both sides are working together for the good of the country. To suggest that the next election will resolve matters is an empty concept. The lack of responsible leadership from our elected officials is as much to blame for the current problems in American business as is anything else.”
What he does: Chief executive officer, TechShop
Where: Thousand Oaks, Calif.
“If Washington were to view infrastructure for innovators, inventors, and entrepreneurs like they think of infrastructure for commerce, I believe important insights would come to the forefront quickly. Like providing access to the actual tools needed to make something.”
Brenda Hastings What she does: Owner, Hastings Dairy
Where: Burton, Ohio
“Federal and state government must limit programs and spending. Business owners and individuals should not look to government, asking ‘what are you going to do for me?’… The government shouldn’t provide bailouts or subsidies to any business sector. This creates a false economy that can’t be sustained long term. An example of this is the ethanol industry. Federal subsidies have dramatically increased the price of corn and diverted corn from human and livestock food to fuel. ... The only role of government should be to provide public safety. Government regulations, mandates such as federal health care, and taxes take money away from businesses that could be used to grow the business and hire more employees.”
Douglas Holtz-Eakin What he does: President, American Action Forum
Where: Arlington, Va.
“The most important thing would be to simply break all ties in favor of a better business environment. You have to place a higher priority on the business-and-growth environment or you’re not going to succeed. Business has been last in terms of priorities. Roll back regulation and reform entitlements so we don’t drive off a fiscal cliff.”
Dina Kaplan What she does: Co-founder, Blip.tv
Where: New York
“Washington could make our lives easier as business people and make our companies more competitive if it did two things. First, the government should end the cap on the high-skill H-1B visa so we can bring more engineers from around the world into American startups and other high tech companies. Second, we have to control the cost of health-care premiums, which limit American companies' ability to hire to the extent we otherwise could. When we talk about health care, access should not be the only concern. Costs must be controlled as well.”
LeaRae Keyes What she does: Nurse case manager and executive director of Nurse Entrepreneur Network
“Nursing is a very strenuous occupation that demands a great deal. Rotating shifts are not good for anyone’s health, so why are health-care workers and nurses forced to work rotating shifts and forced overtime? This is especially challenging to older nurses. Why aren’t more health-care employers required to offer straight shifts to nurses? Legislation should be enacted—or some type of stimulus—to make nursing less strenuous and stressful. … I think Washington needs to figure out a way to decrease the cost of health care. If health care were more affordable, more older people would retire, leaving jobs open for younger workers. This in turn would result in decreased unemployment.”
Aaron Levine What he does: Co-founder and chief executive officer, Box
Where: Palo Alto, Calif.
“We hear them fight a lot and not make a lot of progress. It would be a good first step if Washington would tell us anything. The government should exist to provide a better social foundation for our economy and should not overly stimulate businesses or the marketplace. At this point, the government does a disservice by not sending a clear message because that is where a lot of the volatility comes from.”
Jane Lukens What she does: Farm owner
Where: Aneta, N.D.
“If left unchecked, the Environmental Protection Agency will regulate the American farm into the history books. Well-intentioned laws are being over-zealously enforced. Washington can help our business by using a common sense approach to regulating food and energy production. I do not believe the American people want to pay the price that over-regulation will cost them. If we want safe, reliable, and affordable food and energy in America, do not let misguided regulation impede the business of agriculture.”
Bernie Marcus What he does: Co-founder of Home Depot; founding member, Job Creators Alliance
“Washington is a big part of why our economy is struggling to recover. There's too much uncertainty about what kind of new rules, mandates, or taxes might be around the corner for business. Instead, the federal government should encourage individuals to take risks and invest by committing to lower, more stable tax rates and putting a freeze on any new regulations. The uncertainty of the government’s actions is most certainly causing the job picture to look bleak.”
Will McDermott What he does: Partner and art director, Kern + Lead
Where: New York
“I think that Washington should focus on simplifying the tax structure. By ridding the tax code of loopholes and complication, they'll be creating both greater income equality and future predictability. Finally, this additional income could be used as investment to create new opportunities for growth and deal with the deficit.”
Conan O’Brien What he does: Comedian and talk show host
Where: Los Angeles
“The stock market dropped 600 points [on Aug. 8] because Standard & Poor’s downgraded our credit rating from AAA to AA. On the bright side, Pat Sajak has offered to sell us another “A” for $2 trillion.” (From Conan on TBS) Photographer : Jason Merritt/Getty Images
Daniel Pearlstein What he does: Law student, Benjamin N. Cardozo School of Law, Yeshiva University
Where: New York
“Washington should create tax incentives for businesses to reinvest their earnings in themselves, rather than pay out their earnings as profits to owners and managers. In the mid-20th century, income and corporate taxes were structured in such a way that businesses preferred to reinvest in their research and development operations, their worker training, and their physical plants, rather than strip their assets to pay more and more money to a very small pool of people at the top. If income and corporate taxes rose, businesses would keep their money in economically productive operations, rather than parceling it out to people who can afford to save it. There is plenty of money in American business to act as a stimulus; taxes are a way of getting that money moving in the right direction.”
James Saccacio What he does: Chief executive officer, RealtyTrac
Where: Irvine, Calif.
“Here are five things Washington can do to help American business. First, redirect the individuals’ unemployment benefits to employers who will match that money to hire that unemployed worker instead of paying that unemployed person to collect unemployment checks. Second, give businesses a temporary cut in the employer tax portion of the payroll tax and require that the reduction be spent on new workers. Third, repatriate U.S. dollars that are sitting offshore back into America by offering a reduced tax rate, conditionally tied to reinvesting those funds into U.S. factories, operations, and workers. Fourth, promote and market Small Business Administration (SBA) lending nationwide, making it easier to get a federal loan by incentivizing financial institutions to do community marketing outreach to expose the programs. Fifth, allow people to utilize retirement proceeds (401K or IRA accounts) to buy real estate and be able to withdraw those funds—both tax and penalty free—provided you invest in a new piece of real estate or use those funds for a loan modification on existing debt.”
Tom Secor What he does: President, Durable
Where: Norwalk, Ohio
“Eliminate the federal income tax and replace it with the Fair Tax. One of the biggest problems in America today is the income gap between the upper management and hourly workers. It is not that upper management makes too much money; it is because the hourly workers don't make enough. We need manufacturing jobs in the U.S. to provide the family sustaining wages that made our country great. Changing to the Fair Tax will lower the cost of an item manufactured in the U.S. by an estimated 22 percent. Immediately, manufacturing in the U.S. becomes competitive—not only here but throughout the world—as under the Fair Tax, there is no tax on exports. Manufacturing jobs allow a financially strong middle class, which will drive our economy.”
Jeff Sheinbein What he does: Chief executive officer and co-founder, Social Imprints
Where: San Francisco
Washington can bring back the Jobs Now Wage Subsidy program. This was a program from a couple of years ago that provided work opportunities to low-income San Franciscans while offering employers a full-year wage reimbursement for new hires. Social Imprints hired two people from this program after it ended in 2010.
Lawrence Summers What he does: Charles W. Eliot University Professor at Harvard University's Kennedy School of Government; president emeritus, Harvard University: 71st U. S. Secretary of the Treasury (1999- 2001)
Where: Cambridge, Mass.
The government can best help American businesses by raising the demand for its product. This goes to the tools of fiscal and monetary policy. It also means working to promote exports in every way possible. Business needs customers right now, much more than incentives.
Maggie Wilderotter What she does: Chairman and chief executive officer, Frontier Communications
Where: San Francisco
“Broadband connectivity throughout America can be the thread that unites us and helps pull our nation up again. Last year the Federal Communications Commission focused on broadband in rural America and gave many a needed wake-up call about the have/have not state of broadband communications in our country. Less regulation and more investment in rural broadband would address our nation’s digital divide and be a catalyst for growth. The issue needs and deserves attention, investment, and advocacy on behalf of the `disconnected' in America.”
Mark Zandi What he does: Chief economist, Moody's Analytics
Where: West Chester, Pa.
“Washington must follow through on the debt-ceiling deal and put the nation firmly on a path toward fiscal sustainability. Policymakers need to do this quickly and in a reasonably graceful way; another round of political vitriol will be too much for the collective psyche to bear. Fiscal sustainability requires government spending cuts and tax revenue increases. Ideally, this will include corporate tax reform that significantly broadens the corporate tax base, raising enough revenue to help with deficit reduction and also lowering corporate tax rates. American businesses are well-poised to compete in global markets. A sound fiscal situation and saner tax code are the key missing ingredients.”
Frank Zimring What he does: Professor of law, University of California-Berkeley
Where: Kensington, Calif.
“The famous slogan of the 1950s was, ‘what's good for [ticker symbol="GM"]General Motors[/ticker] is good for the country,’ but the current age of global competition has turned this on its head. Right now, ‘what's good for the country is good for General Motors and for the rest of American business.’ The critical need is to maintain the power of educational and scientific institutions and build toward a long term. A permanent sense of short-term emergency is the natural enemy of rational policy.”