Thursday, April 29, 2010

Who's the Real conservative?

Small business owners are supposed to be conservative. Against government interference, and all that. Against taxes that support social welfare programs. Against regulations.

I don't know that necessarily follows. Certainly, I want efficiency and effective governance; but that doesn't mean I'm against all social programs -- I just want them efficient and effective, you know? I believe that regulations are often necessary, and haven't found most of them to be onerous, just sometimes inconvenient....

But I don't believe the government should interfere with the creation of new business, or in spending too much effort to help people move here.

When it come to my own business, I really would rather be left alone. Let me do my thing, and you go ahead and do your thing. I don't want your hindrance OR your help.

Here's where I part from most of my brethren. I think the level of business we have is the level of business we deserve.

I'm truly laissez faire when it comes to business.

The comic book group is convinced we don't have enough comic stores; the games stores are convinced we don't have enough game stores; and so on. Whereas, I tend to believe they overestimate the demand, and underestimate the resourcefulness of the business community. That is -- I firmly believe -- if there is sufficient demand, someone will open a store to meet that demand. The problem usually is the opposite; someone opens when there isn't sufficient demand and fails.

The marketplace takes care of itself.

I'm talking small business here. Big business has turned into a giant, carnivorous, ravening beast who is eating it's young and needs to be reined in.

Let's put it this way -- I've behaved myself, acting as a responsible and honest seller of goods. These guys? These f%#%cking guys? Yeah, they need to be regulated because they've proven to be anything but responsible and honest.

But back to local interests.

The local business groups are asking the city government to help out. There's a good article over at the Source by Bruce in the Wandering Eye column. These being the same groups who will scream bloody murder if they are asked to help in return....(with, shudder, scream....taxes....).

I say artificial measures aren't helpful, they may be downright harmful. Back in the day, both the local city and county governments have stepped in with loans to help local businesses -- and to my knowledge, almost all of them ended badly.

If a business doesn't have enough reason to move here or open here, or enough resources to do it on their own, then I think it's dangerous to entice them or prop them up.

Who's the true conservative here?

I remember the amounts the county loaned to a couple of local businesses -- both of which failed-- was an amount that as many smaller loans probably would have helped dozens of local existing businesses get a firmer hold, hire new employees, and expand -- or at the least survive.

But having once stared down a stack of Small Business loan papers, I doubt even then I would have taken them up on it. Let me run my business. Don't go helping weak sisters who only turn around and siphon away dollars that might be better used by existing businesses.

There is just an inherent contradiction here; the article in today's paper about a local business owner running for city council has a couple of interesting quotes.

First: "Bend can be a difficult climate for small business, Ramsay said, particularly for newcomers who moved here from larger cities. Nice cars and a handful of sophisitcated resaurants give newcomers an impression of a much wealtheir town, he said, and many new businesses started by newcomers failed."

"....I think it's just a misunderstanding people have of our economic base here in Bend, which is a very conservative economic base. People hold their money very close to their wallets."

Well said. And as anyone who reads this blog on a regular basis knows, is pretty much what I've been saying for years.

But then he goes and outlines a program of 'pro-growth' which seems to be encouraging the very thing he just said is a problem. At least, that's the way I read it.

I'll repeat: If a business doesn't have enough reason to move here or open here, or enough resources to do it on their own, then I think it's dangerous to entice them or prop them up.

I have no doubt that the city and county will continue to throw money down the rathold of growth, instead of letting natural growth take place. And I'll just keep running my letting business without any outside help, thank you very much.

Apparently, I'm a liberal with true conservative values...

4 comments:

Anonymous said...

"If a business doesn't have enough reason to move here or open here...I think it's dangerous to entice them..."

So what's your opinion of Prineville's embrace of Facebook?

At least, the govt. enticements did seem to work in this case.

Duncan McGeary said...

Imagine, if you will, a world where no government, federal, state, or local offered incentives.

Where the business decided where to locate based in it's --GASP! -- own merits.

This would seem to me the most efficient market, which would result in the most profit, which would result in the local government gaining taxes.

I realize that municipalities are forced to play the game, because if they don't others will.

Still, philosophically, I think my position is more libertarian than most libertarians.

H. Bruce Miller said...

Three-quarters of the 138 businesspersons who took part in the Chamber survey complained that income taxes are too high, and I'm sure most of them would complain that property taxes also are too high, but they want the gummint to do more to help business. Where the hell do they think the money to do that would come from?

"Conservative" businesspersons definitely have a serious disconnect going on.

"I realize that municipalities are forced to play the game, because if they don't others will."

Bingo. Companies looking to locate in Bend play the local hayseeds like a Stradivarius. All they have to do is promise a bunch of jobs and say that if they don't get a good deal here they'll go elsewhere.

As you say, it's unrealistic to expect the city to stop playing the game. But at least it could insist on clawbacks in these deals so that if (when?) they go south the city can recoup some of its money.

Anonymous said...

Duncan, I think you're swimming against the tide, at least if I can believe the following article:

http://www.project-syndicate.org/commentary/rodrik42/English


This is about "industrial policy" at the national level, but has the same theme. A quote:


The standard rap against industrial policy is that governments cannot pick winners. Of course they can’t, but that is largely irrelevant. What determines success in industrial policy is not the ability to pick winners, but the capacity to let the losers go – a much less demanding requirement. Uncertainty ensures that even optimal policies will lead to mistakes. The trick is for governments to recognize those mistakes and withdraw support before they become too costly.

Thomas Watson, the founder of IBM, once said, “If you want to succeed, raise your error rate.” A government that makes no mistakes when promoting industry is one that makes the bigger mistake of not trying hard enough.

*

Please read the whole article though.