Hi again, all. You may remember me from the 2008 cycle, or maybe not! I hope to add some insights and convince a few people if I can that we need Mitt Romney as President in 2012.
Who I am.
First a bit of background about me, then why it’s relevant: I’m from San Diego. I’m married with three sons of high school / junior high age. I happen to live in a neighborhood near a few members of Mitt’s family, so from time to time have had some personal interactions with them and, on a few occasions, with Mitt. I’m a practicing corporate lawyer for a large local firm. I help companies do deals. Usually it’s helping them take investment from venture capitalists, “angel” investors or other private equity investors (like Mitt used to be). I spend about half my time representing these growing companies or their investors, and the other half helping sell these companies once they’re successful. Most of my clients have some sort of technology focus, whether it’s internet-related, mobile phone related, medical devices or other life sciences. I’m a believer in innovation and its role in the economy.
So why is any of that relevant to Mitt Romney and the 2012 campaign?
My seat on the sidelines representing companies receiving investment and representing their investors has taught me a few things:
1. The cost of government regulation is real. I see many start up and growing businesses deciding to move out of my state and the United States altogether due to higher costs of doing business driven directly by regulation. Many of my clients have employees outside the United States. These business people don’t hate America and are not evil. Most aren’t even part of the “1%.” These companies and their investors often make their decisions based on a sense of loyalty to those that entrusted them with investment dollars and a sense of obligation to protect that money. Too often due to high taxes or over-regulation their best path to success takes them away from my home state and the United States, taking jobs with them.
2. Corporations are, in fact (made up of) people. Everyone who has a 401-K knows this. Employees also receive their wages from businesses and lose jobs if companies don’t do well. While corporations may seem faceless, taxing them means taxing real people (which was Mitt’s point when he said corporations are [made up of] people). Those are dollars workers won’t see because they can’t be reinvested, and that will reduce dividends to shareholders. That’s Mitt’s point: businesses aren’t evil, they’re good. They’re you, and they’re me. They create wealth, they don’t take it. While some regulation is appropriate, we need to promote business. Mitt knows this. Apparently the left doesn’t, or is more willing to use a soundbite for political gain than to engage in a real discussion about how to create jobs. We need to stimulate, and not vilify, businesses. As Mitt says, the Obama administration doesn’t seem to love business very much.
3. It seems every time there’s an economic problem, the government’s solution is more regulation. But often it’s redundant with existing regulation, adding only more cost for little marginal benefit. Take Dodd Frank. It attempts to fix the causes of the recent economic meltdown. And with such a large bill, there are some redeeming qualities. But there were already laws covering many of the same topics before. Weren’t banks and ratings agencies regulated before? Wasn’t it already fraud, and therefore illegal, to trick consumers into signing loans on false pretenses (ignoring for the moment it’s the consumer’s job to read the contract)? It’s often not a question of needing more regulation, it’s a question of enforcing existing law. Same story with Sarbanes-Oxley. Does that law make companies’ financial statements more accurate or trustworthy? Marginally. But wasn’t it already part of the law that public companies’ auditors give opinions about the accuracy of financial statements? Weren’t Enron’s actions already criminal under existing law? Yes, they were. So is it worth the billions our economy spent and will spend to comply with Sarbanes-Oxley? Is it worth the cost to our system to encourage companies to publicly list their securities outside the United States to avoid redundant regulation? China does not have the same level of regulation: is it a surprise they attract business? Is it worth the billions, if not trillions, lost as companies decide not to go public, given the costs, and instead sell themselves to larger companies more suited to bear those costs? I’m not saying there should be no regulation, but our first reaction shouldn’t be to pass more regulation restricting all business when we see a problem.
And one bonus point: President Obama does want your money.
I listen to the current President’s speeches about the rich “paying their fair share,” and they sound good on the surface. Who can argue “fairness?” But then you start thinking, “who defines ‘fair?’” Under the President’s system, it’s the government. And who defines “rich?” Again the government. In the words of Scooby-Doo, “Ruh-roh!” So to cut the deficit, the proposal from our President is that he and the Congress will look at what you make, decide how much they get to take, and use that money to first pay the costs of the government (whose goal is not efficiency), then set priorities they think are appropriate and allocate your money to causes they think are worthy. The right’s proposal is, instead, to recognize that the government is not entitled to that money, so rather than immediately raising taxes, to look hard at what those spending priorities are and cut first. I honestly don’t know if we can cut all we need to out of the federal budget without raising taxes. The left says no, the right says yes. But I do know that I want someone committed to do his best to look first at expenditures before raising taxes under the theory taking my money is “fair.”
So, then, after all this, why Mitt?
My principal economic reasons to support Mitt are his intimate knowledge of what I describe above. One of Mitt’s solutions to lowering the regulatory burden on new businesses is to work toward the repeal of Dodd Frank and Sarbanes-Oxley. Fix regulatory over-reach, and you can go a long way to lowering costs of business, and increasing a company’s likelihood it will undertake a new project, thus hiring new workers. MItt understands these concepts from years in the private sector, and in particular as an investor and a business operator. I don’t believe that President Obama fully appreciates these concepts. His tendency is to try to protect the poor and downtrodden through government action. Unfortunately, as the Obama economy has proven, that’s often just the wrong approach. Taxing to pay an inefficient government to redistribute wealth is not going to lead to prosperity for anyone: it punishes those most likely to start a business and makes it harder to operate a business, thus dragging the whole system down. Like Mitt has said, it’s not that President Obama is a bad guy, it’s just that what he knows is wrong. The best way to help the poor and downtrodden is to stimulate the economy to create jobs.
Mitt also knows the true costs of running deficits. At their current size, they threaten our national security. They threaten our economy. They threaten our children’s future. They must be reduced, or the troubles we see in Europe resulting from failure to self-regulate will reach our shores. No one knows this better than Mitt. And I trust him to cut first, and look at taxes as a last option to curb the deficit, while maintaining national defense as a priority. As Mitt says, freedom’s best friend is a strong America.
Our problems are not simple. They’re not even simple to define. Look at how the press loves to jump on candidates simply for even mis-stating the problem or their position. We need a disciplined politician who’s an economic surgeon skilled with the scalpel. Is President Obama the man for this job? Clearly no. He’s still in economics medical school. Any other GOP contender? No. Perry’s job creation is an illusion. Bachman and Santorum have no operating room experience. Newt is way too mercurial, and we’ll be hearing more and more about his many flaws in the next few weeks. I used to think he’d be a good VP choice, but after even his most recent unnecessary and inflammatory comments, I’m not so sure he’s fit for that office. He’s more likely to kill the patient and blame the nurses. He also couldn’t successfully run the House, or even his own campaign, so I don’t want to trust him with the reins of the entire executive branch. He’s not the guy. Mitt has the experience. He worked across the aisle in Massachusetts. His family is outstanding, and if the apple doesn’t fall from the tree, he’s an impressive man. In all aspects, he’s the man for the job. He knows this patient’s anatomy.
Sorry to get long-winded, but I get excited. I’ll post more on these topics later. But it’s good to be back.