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The Entrepreneurial Agenda by Robb Mandelbaum
September 22, 2008
Campaign For The White House 2008
Obama Blows Off Small Business -- Again
Posted at 5:10 PM
Douglas Holtz-Eakin found himself in something of an awkward position last Friday afternoon, as he sat before an audience of some of the nations most successful growing entrepreneurs. Holtz-Eakin is John McCain's top economic adviser, and he was invited to the Inc. 500 conference in Washington, DC, to debate economic policy with his counterpart from the Obama campaign, Jason Furman. Moderator Carl Schramm had just asked Holtz-Eakin to sort out his candidate's position on tax policy.
But there was a catch. Obama's man, it turned out, wasn't there. Wall Street was imploding and the Bush Administration was shopping a bold plan to bail out debt-holding banks, so at the last minute the Democratic senator had called a meeting of his chief economic advisers in Florida. Instead of addressing the Inc. 500, Furman was meeting with Obama, Robert Rubin, Lawrence Summers, Paul Volcker, and others. So Schramm asked Holtz-Eakin for some "straight talk" -- on behalf of both sides. "You probably have debated the folks from Senator Obama's campaign enough to actually tell us if you can, in kind of a worthy way, what their thinking is," Schramm explained.
McCain's deputy dutifully obliged. Sitting, appropriately, to Schramm's right, Holtz-Eakin described the McCain plan, which would retain all of the Bush tax cuts, as "our attempt to keep the system as flat as possible, to keep it as competitive and pro-growth as possible." Then he got up and took the empty chair at Schramm's left. "That's eight more years of George Bush you're hearing," he began. "And we've tried, and that's failed." He described Obama's tax cuts for those making less than $250,000, including the credits and incentives for the working poor. "We're going to jump-start this economy by growing it from the bottom up," he said. "We're going to put money in the hands of people who deserve it, not those rich people."
It was funny and mostly gracious, and worked to McCain's advantage not just for the impression of magnanimity it conveyed, but because it also allowed Holtz-Eakin to gently place the Obama agenda in an unfavorable frame. Returning to his original seat, Holtz-Eakin gave himself the last word. The Obama plan "is just a flat transfer program, and it is worse than that in my view," he said, because it simultaneously undermines incentives at the top and the bottom. "You have to fight the intellectual case that it is better to have a job, the foundation of a future, the ability to run an enterprise, growth in the economy than have a short-run gain." A less partial observer might have pointed out that a job alone is not enough to guarantee improved living standards. As we've noted in this space before (here and here), the U.S. economy grew 15 percent between 2000 and 2006, but household income actually fell slightly.
Furman's absence clearly hurt his boss -- at least among the several hundred people who'd gathered at the Gaylord Resort. At dinner that night at the National Portrait Gallery, the Inc. entrepreneurs tried to make sense of the absence, said Amy Nichols, president and CEO of Dogtopia, which franchises canine daycare centers. "Does it mean they don't care about small business owners? Or does it mean they didn't actually want to deal with us?" she said. "People were offended almost. Especially being in DC. There's really no excuse not to have somebody available."
Worse, this is not the first time the Obama campaign has ignored the small business constituency, and in D.C.: When the National Federation of Independent Business held its own summit back in June, John McCain came to address the group, but Barack Obama declined the invitation.
It wasn't at all clear, by the way, that this crowd was wholly predisposed toward McCain. At a general session earlier in the day, speaker Seth Godin announced his belief that the election would be an Obama landslide. He never mentioned the Democrat by name, but he said, "I think that people of this country are sitting up and saying, wait a minute -- how did we talk ourselves into what we talked ourselves into? And how can we get back to the point where we can stand up straight and say to someone ten years from now or 20 years from now, 'I did something I'm really proud of that day'? The audience erupted in applause. "There's a lot of us that I think feel like Seth Godin feels," said Nichols. "I'm kind of on the edge, because the business owner in me says I need to make money, and I don't want to get taxed, but I also feel the other side, that the country's in trouble."
As for the rest of Holtz-Eakin's spiel, he didn't say much that hasn't been said before. You will certainly find a more detailed summary of the aspects of the candidates' platforms most relevant to small business at Inc.com's election pages. There was, however, one interesting tidbit, right at the very beginning. Schramm noted that while the candidates frequently nod to small business, they very rarely speak of entrepreneurs. Schramm wanted to draw a distinction between the two on behalf of the audience. "People are forever confusing what entrepreneurs do with what small business people do," he said. "Small business people are critical, but the growth and the job creation that's consistent and, I think, in the long term will be important in getting out of a recession -- or any slowdown -- comes at the hands of the folks these people represent."
"To be frank about the language of the campaign, 'entrepreneur' is too many syllables to fit into the sound bites," replied Holtz-Eakin. "And that's the reality in which we live."
UPDATE -- THURS., SEPTEMBER 25, 9:00AM: Turns out Barack Obama is not the only one to dis a critical constituency. Last night John McCain called off an interview with David Letterman, denying face-time to millions in the mid-40s-arrested-development crowd.
But what if McCain skips the debate tomorrow night, ostensibly to "[take] action to address this crisis"--essentially Furman's excuse to miss the Inc. conference, but writ much, much larger? If the Obama campaign was blowing off small business, as many in the audience seemed to think, isn't McCain himself blowing off the entire country?
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By their absence, I have to reluctantly conclude that Obama has lumped entrepreneurs into to that evil, non-patriotic group of individuals that have the audacity to earn more than $250,000 annually.
Both candidates (as well as past administrations) continue to miss the importance of this sector to the economy. At a time that we are spending unprecedented resources to rescue sectors that have wrought financial havoc, we continue to ignore the one group that has been responsible for all positive job growth in this country over the last decade. What is wrong with that picture!?
Robb --
Good stuff here. I was one of those audience members a bit offended by the "slight." Perhaps it's because I was also there in June at the NFIB conference when McCain spoke, but Obama couldn't be bothered to. I also asked one of the four questions from the crowd this past week to Tom Peters and Seth Godin -- the one about how we change our culture to understand entrepreneurs better, so people start to understand the link between our pursuit of profits and the innovations that make life
better -- rather put a "target" on our backs and try to inact policies that strangle the profit motive. Peters didn't get it -- he went on about how glorious life is for Tom Peters in Vermont -- no kidding! At least Godin made an attempt to answer it. I also slid you my business card during one of the breakouts -- let's chat sometime. Take care.
Chris
Christopher G. Hurn,
President/CEO/Cofounder
Mercantile Commercial Capital, LLC®
Altamonte Springs, FL 32714
Fulfilling Dreams with Smarter Financing®
"The Leading Owner-Occupied, Commercial Property Lender in Florida, the Southeast, and soon, the Nation."
Member of the 2007 Inc. Magazine "Inc. 500" list of 500 fastest-growing private companies in America -- #245.
As an Obama supporter and advocate for small businesses I must say that I have to disagree with this article. I think everyone is aware that there will be a shift to focus on more small business enterprises and encouragement of entrepreneurs in this time of economic turmoil in this country. The big boys at the big companies have shown us that bigger just does more damage and a truly capitalist society should have more than just a handful of companies holding the countries' destiny in our hands.
I want to encourage everyone to see the bigger picture here. At the end of the day tax cuts across all levels means more money for the bulk of americans to spend. McCain's cuts will put more money in the pockets of high net worth individuals and we know what they do with their money they save it they dont spend it and that helps no one least of all Small businesses.
So I think everyone should independently take a look at what each candidate brings to the table and weigh the pros and cons of their presidency against what is good for you and good for your business and make logical decisions not emotional decisions based on whether or not a candidate attends your conference.
Respectfully submitted,
Christina Spann
So, to abstract your point here: Sen. Obama is a bad guy because he elected, in a time of crisis, to consult Furman, his advisor, rather than have Furman attend your self-congratulating, dinner event. By extension you would prefer a ship's navigator attend the ceremonial captain's dinner when an ice field has been spotted dead ahead. A few of us believe the good of the nation supersedes your delicate ego.
With regards, Paul Grewe
I was quoted in this article, and would like to point-out that while Furman could not attend the educational seminar - not the awards dinner - we were less than ten miles from Capital Hill. I would like to think that someone from the Democratic party could have taken the time to visit with the more than 1200 small business owners in attendance. We want to make the best decision for our country, just as you do, but what was supposed to be a "debate" of sorts turned into an hour long advertisement for McCain. I am a supporter of Obama and was disappointed I was not able to hear his or his party's response.
No, no, no, Christina. There should always be a focus on small business owners, not just in a time of economic crisis. That's the thing about Obama, though, he needs the social programs people think they need because the "economy is doing so bad and we're all heading for a financial meltdown." We're not. Last month in Monetary Intelligence (awesome financial mag produced by none other than what? a small business)The "mainstream" (and that's vital) American economy is fine. Businesses are still growing. I read an article yesterday about a scrapbooking company that was just booming in Washington State. Scrapbooking.
Anyway, here's the point. Obama needs the economy to look bad. The entire campaign he has been saying the economy is bad. He has to because he can't praise anything American while Bush is in office. Smart, but wretched strategy. Here's the thing: the economy grew 3% last quarter! While Wall St. was stumbling! The real American economy is supported by the sweat and hard work of small business owners. They're the ones producing GDP and they're the ones paying more taxes to keep America safe and able to sustain capitalism and free market trading rather than slipping into the socialist ideology of Chicago's finest.
possibly the most forced article i have every read. looks like inc.com does not have a spot in my bookmarks anymore.
I was also present, and while not offended, I felt like it was low priority (hence no one else made available) for the Obama campaign because the Inc. 5000 winners are not their target market. I have never voted Republican in a Presidential campaign, but I will vote for McCain this year. Obama represents the same things that got Bush elected: style without substance, and no history of greatness. This country elected Bush over Gore and Kerry becuase he was more likable but considerably less experienced. I am afraid this country will once again choose someone they would rather hang out with than someone with proven character. Perhaps Obama will someday demonstrate he has greatness in him, or he might serve another 8 years in the Senate and prove he is nothing but fluff. I dont want to take that chance, not when the alternative is a true American hero who has taken on both parties his entire political career. His latest panderings to the Republican base were necessary to get him the nomination, but I dont believe for a second that he is not playing the game only long enough to get elected and show the country why he has been a maverick his entire political career. I believe only he can bring true change to Washington and end the political corruption and culture of lobbying away America's interests to the highest bidder.
That's interesting that Obama is getting slammed for 'attending to the national crisis'. It looks like he was well ahead of the curve compared to John McCain who now wants to 'suspend' his campaign so he can catch up. So what do you want? Someone who's proactive or somebody behind the curve.
So let me get this straight, an Obama adviser could not attend a magazine's fluff conference, because of an impending economic crisis, and your trying to label Obama as anti-entrepreneurial?
Get real..
Small biz owners in Chicago remember Obama's community organizing included helping neighborhood based businesses. Can't get any more basic than that. When was the last time John McCain stopped his local convenience store for a slurpee and chewed the fat with a biz owner? Keep you political dogma to yourself, please.
With Obama's huge campaign budget (bigger than anyone in history I believe), I would think he'd have plenty of advisors on staff ready and willing to meet. But I suppose he's targeting the "average person" not the "small business person". Of course there are 23 million or so small businsess in the U.S. I've read many similar accounts of the Obama campaign not showing up for meetings like this. So it's no surprise.
John McCain has not only taken the time to speak to small business owners directy but he has made a lifetime commitment of giving back to the community with charitable acts and donations - compared to, well nearly nothing given back on the Obama side. Look up philathropy of the candidates to see for yourself. I guess Obama lives by the "do as I say and not as I do" mantra.
As a long term small business owner I strongly support McCain/Palin and feel that if he is not elected, my business will have to change dramatically to accommodate all the new taxes and government requirements that will certainly follow. Maybe I'll just choose to sell it and not participate in the "shared wealth" strategy.
Personally, I guess I just have not seen all the "suffering" of lower income Americans. I have family who have been in the "lower income" (well under $40K) their entire lives and even they are not having trouble in recent times. Hmmm.
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