Hail and Farewell

This is an old Navy term that connotes the changing of command, and it’s about the nicest thing I could say regarding the departure of Barry and the Gangsters.

Farewell to Little Barry.  Thank God that we only have to deal with the pardon of Chelsea Manning in his last hours. It’s been eight years of annoyance. We in the small business community didn’t feel much wrath from him (I’m not sure he knows we’re out here), but it’s the absence of the psychological downer that the presents.

Hail to the Donald, the CEO of the government. So far, his cabinet picks look stellar, and the Senate Dems can’t block them….not enough votes. It’s also encouraging that he wants to cut non-defense spending 20%. Frankly, we’re of the opinion that even Defense spending can be cut, especially with the redoubtable Mattis in charge. We think the budget might actually sort of be in balance.

The media largely has missed the fact that Donald wants to level the trade playing field, and some of the tariffs are just the opening gambits in the world chess match.

Even with the tax cuts, growth should kick revenues upward enough to balance. We continue to be concerned with the change in government culture (accountability might be a foreign term), but it will take time.

We like the fact that Trump is making the rounds of the most important agencies….CIA, State and Defense, to give them all a pep talk. That’s leadership.

It’s also comforting that some of the appointees want to get rid of their cabinet posts….EPA, Education, Commerce. We wish them well.

So, here we go.

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So, What Are Your New Year’s Resolutions?

No, we don’t mean lose 10 pounds.

We mean, for you business owners and CEOs/Presidents out there, what are you going to resolve to do this year, and it doesn’t all have to do with more sales. Here are some ideas that we’ve put out to our clients:

  1. Improve your work/life/family balance. We do this one every year, and some year we might get it right. But we, as entrepreneurs, don’t really know what ‘right’ is; for us, it means saying ‘no’ to some opportunities that present themselves. Hug your wife/spouse/significant other and your kids more. Play with your dog or cat.
  2. Get better at personnel selection: we had a bunch of people taking our personnel selection course in the American School of Entrepreneurship in December; maybe they were getting ready to the new year (this year we’re putting in a tracker feature so we can tell more about what courses they took.)
  3. Develop a new product or service, add a new location or acquire one of your competitors. In our Solutions Forum practice, a lot of that went on in 2016. Develop your employees that look promising. Prune out the ones that are stagnant, or at least counsel them about their stagnation.
  4. Be a friend to someone struggling to get our of a senior position with a major corporation. Encourage them to start a business, coach them on what they really want to do when they grow up.
  5. Don’t get irritated at clients/customers who might otherwise be irritating. Just because they don’t see the way and the light, doesn’t make them bad people.
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What’re You Going to Do in 2017?

OK, forget the disasters of the Obama years, other than the fact that we suspect he’s going to be an annoying presence on the US and global stage for some years to come. Worse than Jimmy Carter.

But on to 2017; we have a new President, looks like a step in the right business direction. But, Trump isn’t afraid to whack corporate folks over the head when they need it.

  1. Pay attention to what Trump did to Carrier and Rexnord; he severely chastised corporate managements for being shortsighted and not thinking of alternatives. With the new money you’re going to get in the tax cut, think about putting some of it in labor-saving productivity improvements, so you can hire more US workers and pay fair wages.
  2. Entry level workers remain a problem, because they don’t know anything. Our clients all hire seasoned folks who aren’t on an entry level program. Talk to your local schools, at all levels, though, because they may have engineering or other students who are looking for job experience. For example, my college, Antioch, is looking to restart its business coop program, for three month internships. Right now, we need a slot for a media arts major. Ad agencies come to mind.
  3. We don’t entirely know what’s going to happen on health care for workers, although it’s a good idea to have a plan, to attract workers. If you are below 50 employees, having a health for your workers plan is optional, but if you’re over 50, you have to have one, until the Affordable Care Act is changed. We have suggested some mods to  ACA as a stopgap to a more comprehensive fix, but who knows? Probably sometime in 2017.
  4. Labor laws will get eased. The big problem is our universe has been the law that requires you to pay overtime up to $55k. This will probably get changed by the Department of Labor under Andy Puzder, but it might take awhile.
  5. If you got bushwhacked by the executive orders of Obama (#4 above is an example), help is on the way. Wake up your congressman/person. EPA and OHSA are notorious for ambushes here in Arizona, but we think the whole culture of these programs will change, but not overnight.
  6. Watch your work/llife/family balance. Entrepreneurs are notioriously bad at this. Delegate more, if you can afford it.

So, valued readers, that’s our opine about what’s going to happen early on in 2017, but I’m sure we’ll have more to say as the year goes along.

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Good News to the Video calling app lovers. Google has announced the release of its new video calling App named Duo. Duo is coming up to take a strong stand in the market overtaking the already established Apps like FaceTime, Skype, Facebook messenger, Viber and whatsapp etc.

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What to Expect of Trump

The unexpected.

The Donald is a good listener, even for a New Yorker, and he absorbs what you say and synthesizes what you say on a topic with what others say.

There’s the public Trump, which sounds authoritarian, but he IS A LEADER, and wants you to know it. And, being from New York, he’s direct about it. The stream of leaders going into Trump tower is impressive.

There’s the private Trump, who watches a lot of TV, even at 2 am. He’s not quite introspective, but close. I went to Wharton with him, and had a good friend from New Jersey, Eric Zausner, and the two of them were, and are, a lot alike. Zausner’s family owns a big food manufacturing and distribution business.

So, what might happen? Here are my thoughts:

  1. There will be an upturn in economic activity, just because Trump got elected. It’s all psychological.
  2. The business tax cut will happen quickly, and it will be 15%, or maybe 14, just to let the rest of the world know we mean business (pun intended).We suspect the law is being written as we speak. It has important psychological ramifications.
  3. The Affordable Care Act will be replaced, maybe with v. 2.0, which will be more affordable and there for those who need it. It will look like private insurance, and be underwritten by private carriers, but it will be underwritten, and you will get a subsidy if for income reasons you need it. Mandates are gone, in all forms. We suspect v 2.0 will have more options, to fit the intended audience better, which will be priced into the quoted costs. There will be some provisions for tort reform. Sessions and Carson will figure it out.
  4. God knows what is in the executive orders that has a business impact, but there will be a blanket repeal, and we suspect new legislation that is less dictatorial. For example, the overtime rules will be rewritten. Yes, you have to pay it over 40 hours, and here are the guidelines (not mandates).
  5. The downsizing of the EPA and Commerce will probably have some business impact; our friends at Ford and the other car companies probably are rejoicing.
  6. Wilbur Ross running Commerce will have a positive business impact; our guess is that if a company needs some help with trade levelling the trading playing ground, they will get it, and fast.
  7. Linda McMahon running the Small Business Association will be interesting. Maybe she can arm wrestle the banks to do more guaranteed lending to small business. Out of our 20 or so clients, only one has an SBA loan, and I’m sure others could use it.

 

  1. In fact, shrinking Barry seems to be the new rage. Trump is already making presidential decisions.
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What Carrier Really Means

OK, the Donald went to bat for the Carrier workers, and good for all. We can probably expect more of this as managements rebalance balance all of their stakeholder interests.

We had sent a tersely worded text to our buddies at Ford to get their heads out of their nether regions, which Bill Ford finally did, by negotiating a deal with Donald to move production around so he could get his small car plant in Mexico. Sounded like a win/win.

There were good reasons for Carrier management to cave, not all of them related to the issue at hand.

First, Carrier is a division of United Technologies, which has a lot of government contracts. We think that Sikorsky helicopter is one of the divisions, and they’ve got a contract, we believe, to replace the UH-53 family of helos, and apparently not a minute too soon. Mad Dog Mattis, as a retired Marine general, will probably handle this one personally as SecDef.

Second, and most important, corporate taxes are coming down from 35% stated rate to 14%, stated rate. There’s a lot more at stake with this that the wages of 1100 workers.

The tax cut is really the big enchilada, and Trump will deliver on it.  It’s a major rebalancing of labor, capital and shareholders.

Third, it’s not known, how much technology Carrier could put in the production of gas furnaces (the subject of the dispute) to offset the labor increases. That Indiana would give them a $7MM grant probably speaks to the tech improvements that could be made. But, one wonders why Carrier management didn’t make them without the grant.

So, you CEOs and owners, get your big boy pants on, and buckle up; its gonna be an interesting ride with the Donald at the controls. It’s the second coming of Teddy Roosevelt.

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The Trump Bump

Happy Thanksgiving to all readers, and with the right person in the White House, it WILL be a Happy Thanksgiving, now that we’ve all been spared from four years of Nurse Ratchet.

During our group meeting after the election, one of the members made the point that there’s going to be an increase in economic activity just because the Donald was elected and we’re going back to a pro-business attitude in this country. Even before tax cuts and other pro-business items on the Trump agenda are enacted.

Sure, he said, tax cuts are nice (and he’s at the top tax rate), but it’s more important to him to have a positive business climate in which to operate. He’ll start thinking about business investment again, moving forward, rather than what the Department of Labor might do to him on wages and overtime.

So, for all you business owners who are our loyal readers, we hope you feel the same.

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Trump Victory Shakes Businesses ?

Our friends at the Wall Street Journal have written another provocative headline centered on only three businesses: big multinationals, energy and healthcare. Missed the big picture, we think.

Dodd-Frank, the bane of the big banks, is going away.

The multinationals are worried about a retreat into protectionism. Mr. Trump’s stance on trade and tariffs with Mexico and China is probably only an opening salvo to level the trade playing field. Some of the CEOs better go back and read ‘The Art of the Deal”.

Energy will be a winner by liberalizing the drilling rules and the Keystone pipeline finally becomes a reality. Clean coal is expanded. Fracking is here to stay, greenies.

Healthcare could be a mixed bag, depending on what happens to Obamacare. We could see more competition on drugs and in hospitals, and maybe the dismantling of the VA back into hospitals dedicated to, but not for the exclusive use of, veterans. Or the VA system might go away, as redundant, with veteran’s care done by existing hospitals. We could argue this one either way. We suspect the latter, because getting rid of big bureaucracies will a watchword.

But, ok, for the rest of us, it’s pretty much good news. We printed off for our clients 8 pages of regulations that are probably going away, which is good news.  If you’d like a copy, let us know; we’ll have to fax it to you, since it isn’t a PDF.

Business taxes are going down, to 20%, which is good news.   We will be better able to compete around the world, with lowered tariffs for getting into China and Mexico. All that cash stashed abroad will be coming back at low tax rates (can we hope for 5%?). After all, it’s been taxed once, in the country of origin, so let’s not be punitive.

The reworking (read downsizing) of the EPA, with its onerous air and water rules, will be a plus. The general reduction in government spending, caused by tax cuts, will be welcome.

We presume liberal depreciation laws are here to stay. Maybe the IRS will be kinder and gentler. 941 taxes could go down.

We don’t like the higher starter wages with paid time off passed in Arizona, but there are lots of loopholes in it, so it’s not so bad. Our clients tell us they’re paying above starter wages for people, anyway.

So, let us know what’s on your wish list. We have a bit of influence with the Trumpers, and we’ll be pleased to use it on your behalf.

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Run the Country Like a Company, Donald

Enough of the politicians, already.

Donald is a breath of fresh air in a fetid swap of political correctness.

You’re going into a major turnaround, Donald. The company is loosing money, seriously in debt, sales aren’t growing, and the joint is in need of serious reform. Customers are angry about its products and service not working very well.

This country was started by a bunch of entrepreneurs, and let’s get that spirit back into the government.

Out go big expensive programs that don’t work, such as the Affordable Care Act. In come programs that, if the society says, through its representatives, are needed are going to be simpler and more effective. To hell with the last guy’s legacy and his executive orders. If Congress doesn’t go along, then the program isn’t a good idea.

State, Commerce, Homeland Security and the other cabinet departments need a shakeup. There seem to be a lot of butt covererers in these departments that aren’t doing anything else. Justice is a real satrap.

Reform starts with the Cabinet. You’ve got to have some really tough minded people leading the departments. Guys and gals, you’ve got to get into all the missions to find out if we need them, and if we do, rethink how they’re done. Start with Defense. Yes we need it, but are we lined up against the threats?

We already know that you want to renegotiate trade deals with Mexico and China, to level out the playing field, and that’s good. But don’t fall into the protectionist trap. We don’t know who you’ve got in mind as your Chief Trade Negotiator, but it better be someone tough. China and Mexico will come around, because they have more to lose if negotiations fall apart than we do.

Yeah, let’s make America great again. We’re all for it, and you.

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