Monday, September 9, 2019

It's Time To Bring Back Free Enterprise

Business Roundtable’s emphasis on “stakeholders” helps emphasize the socialist movement and bury capitalism.   

by: Matt Walsh | Editor & CEO Jacksonville Record and Observer 

On the morning the Business Roundtable published its full-page ad in The Wall Street Journal proclaiming its CEO members’ allegiance to “stakeholders” above shareholders, the following text message pinged my phone:

“It made me puke. I’ve made it a personal policy to sell stocks in companies that put social ahead of shareholders. I have several sell orders in now.”

The message came from a Gulf Coast entrepreneur who in 10 years built a company that went from $0 to $1.4 billion in revenue and who, during his career, led organizations that created almost 5,000 jobs, 200 employee millionaires and more than $10 billion in shareholder value.

He is proud to say he is a capitalist and an ardent proponent of capitalism.

You can’t say that about the 181 big-corporation CEOs (out of 188) of the Business Roundtable who signed the organization’s new statement of the Purpose of a Corporation. They say in the second sentence of their new manifesto they believe “the free-market system is the best means of generating good jobs, a strong and sustainable economy, innovation, a healthy environment and economic opportunity for all.”

But rare is the day, if ever, you hear any of these 188 CEOs proclaim themselves a “capitalist” or say they believe “capitalism” is the best economic system in the history of the world (which it is). “Capitalist” and “capitalism” have become dirty words, not to be uttered publicly.

As you no doubt read and heard, the Roundtable CEOs modified the 50-year-old purpose of their corporations from being first and foremost committed to creating value for shareholders (their owners and bosses) to a commitment to “all of our stakeholders.”

A telling sign: In their new commitment to stakeholders, “generating long-term value for shareholders” was last among their five stakeholders. Ahead of shareholders were customers, employees, suppliers and “the communities in which we work.”

Milton Friedman, Ayn Rand and Adam Smith all flipped in their graves. Friedman especially. He was the inspiration of the Roundtable’s commitment to shareholders above all in the wake of his 1970 article, “The Social Responsibility of Business Is to Increase Profits.” To do otherwise, such as “promoting desirable ‘social’ ends,” Friedman said, would be “preaching pure and unadulterated socialism.”

Of course, at the same time, every business owner, entrepreneur and CEO knows that to increase profits and shareholder value the business must excel at fulfilling the wants and needs of everyone involved — customers, employees and the community in which the business operates.

As Smith and Rand explained, the entrepreneurial baker doesn’t make cakes out of a commitment to “stakeholders” or the goodness of his heart.

He bakes them because he sees a need he can fill in the market and because of a selfish interest to feed and house himself. In the free, fair and peaceful exchange of his cakes for cash, he creates value for his customer, his employee and himself. At the same time, he is contributing to the betterment of his community. Everyone benefits.

That is capitalism, free enterprise.

Unfortunately, in the Roundtable’s new pronouncement, the CEOs are putting a greater emphasis on social responsibility. And by doing so, they are playing into the movement toward socialism and further burying capitalism and its virtues below the depths of mainstream American society.

We dare you: Try finding a 20-something Gen Zer or millennial who learned in high school Adam Smith’s explanation of the free hand.

From grade school through college, America’s public school systems have done almost nothing to teach two generations the virtues of capitalism versus the destructiveness of socialism and a Leviathan central government.

This cannot go unchallenged. The results will be disastrous. They’re showing up already.

If we are to preserve American capitalism and what the Founders designed, the curricula in American schools must infuse unbiased lessons on the outcomes of the “isms” — capitalism, socialism, communism, fascism, as well as a much deeper grounding in the nation’s founding principles.

Business owners and CEOs are deathly afraid to speak to their employees about the virtues of capitalism.

But there’s nothing wrong with letting new employees know in their orientations and employee manuals that you and your company embrace capitalism — and that you aren’t afraid to use the word and explain how it works.

We are reminded at a time like this of the forceful argument for a capitalistic, free society in “Wealth and Poverty,” the 2012 book by the great thinker, George Gilder.

“Liberals seem to want wealth without the rich,” Gilder wrote. “Yet most real wealth originates in individual minds in unpredictable and uncontrollable ways. A successful economy depends on the proliferation of the rich, on creating a large class of risk-taking men and women who are willing to shun the easy channels of a comfortable life in order to create new enterprise, win huge profits and invest them again.

“It will be said that their earnings are ‘unearned’ and ‘undeserved.’ But, in fact, most successful entrepreneurs contribute far more to society than they ever recover, and most of them win no riches at all. They are the heroes of economic life, and those who begrudge them their rewards demonstrate a failure to understand their role and their promise.”

What is their role and promise? To create value … which inures to the benefit of their shareholders, employees and society.

Capitalists unite.

Thursday, July 11, 2019

Rental Rates Are Creeping Up Slowly

Research firm Reis Inc. reported that both the national average asking rent (at $21.39 per sq. ft.) and effective rent (at $18.73 per sq. ft.), which excludes landlord concessions, increased 1.7 percent in the second quarter 2019 compared with one year earlier. Reis reported that rents at regional malls were up 0.2 percent.
The sector is seeing a “continued picture of slow, creeping rent growth in terms of both asking and effective rents that are pretty much growing in step around the mid-1 percent range year-over-year,” says Matthew Schreck, senior quantitative strategist at Ten-X Commercial, an online real estate marketplace. That’s slow compared to the last expansion in the early 2000s, when rents were growing in the mid-2 percent to as high as the upper-3 percent range, Schreck notes. But they’re still moving in the right direction.
 “Rents are growing across property types and across markets, and I think it has more to do with the fact that we’re in a longstanding, fairly robust economic expansion,” he says. “The unemployment rate is really low. Incomes are growing. People are spending their money and, in a sense, a rising tide lifts all boats.”
But the degree to which they’re lifted varies, Schreck adds. Some sectors and some markets have seen much stronger real estate recoveries in this cycle than others, and retail has been among the slowest to come back. He notes that the rate at which the rents are growing is a bit disappointing. “And it sort of begs the question of what would these [weaker] markets look like in the event of any kind of an economic downturn.”
Reis research reveals that rent growth in the second quarter was healthy in a number of metros, with eight boasting rent growth of 1 percent or more. Metros with the highest effective rent growth included Seattle; Nashville, Tenn.; Sacramento, Calif.; Oakland-East Bay, Calif.; and Louisville, Ky.
However, 19 metros posted an effective rent decline in the quarter, including Little Rock, Ark.; Kansas City; Omaha, Neb.; Lexington, Ken.; and St. Louis.

Tuesday, June 25, 2019

Mangerial Derailment


Researchers have studied managerial derailment — or the dark side of leadership - for many years. The key derailment characteristics of bad managers are well documented and fall into four broad behavioral categories: (1) “moving away behaviors,” which create distance from others through hyper-emotionality, diminished communication, and skepticism that erodes trust; (2) “moving against behaviors,” which overpower and manipulate people while aggrandizing the self; (3) “moving toward behaviors,” which include being ingratiating, overly conforming, and reluctant to take chances or stand up for one’s team; and (4) "no movement behaviors," not overtly misbehaving, nor being a ranting, narcissistic sociopath. Rather it is being a leader in title only having the role of leadership, but providing none. Absentee leadership rarely comes up in today’s leadership or business literature, but research shows that it is the most common form of incompetent leadership. . The popular media is full of examples of bad leaders in government, academia, and business with these characteristics.*

*Not my own work. I don't remember the author, but would gladly give he/she credit for good thoughts. 

Friday, June 21, 2019

Passenger Drones the Next Big Thing?


According to an article on Biznow.com, NASA is getting ready to test passemnger drones in Reno, Nevada, and Corpus Christi, Texas.  

In Florida, two buildings in Miami will have capability for landing the drones, the Paramount Miami Worldcenter condominium where a rooftop pool has the ability to be converted into a landing pad and a reconstruction project on Grand Avenue in Coconut Grove that features landing pads on the rooftop of a five-story building.

Can George Jetson be far behind?