Guest Column: Gary Trauner
Searching for ‘Common-Sense’ Capitalism
By Gary Trauner, 5-23-07
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As a businessman and financial manager, a recent story about Northwest Airlines’ emergence from bankruptcy got me thinking about the plight of everyday working Wyomingites and the balance, or lack thereof, in our economy.
This story brings to mind United Airlines and so many others before it: a poorly run company enters bankruptcy, breaks its written commitments to its employees, puts the burden of these retirement commitments on our government, and reorganizes. And when its time to emerge from bankruptcy, we find, as in the case of Northwest, the very people who ran the company into the ground stand to receive stock worth nearly $300 million, while the employees who built the company and conceded to reduced pay and benefits in an effort to save the company stand to get back roughly 20% of what they gave up. As the USA Today states, “management will see pay that was cut during the bankruptcy restored, will keep raises they received in the interim, plus get bonuses and stock in Northwest…Northwest pilots, meanwhile, have seen pay rates cut 24% on average. And, …[f]light attendants and ground workers also took pay and benefits cuts.”
Many “conservatives” call for increased personal responsibility, including toughening our nation’s bankruptcy laws. However, these same folks don’t seem to have a problem when a large corporation declares bankruptcy, unloads the pensions it promised to its workers (in writing) on the federal government, continues to pay its executives obscene amounts of money and is allowed to continue in business. This is hypocrisy of the worst kind.
While speaking to a local group of successful businessmen recently, I was asked, “If our GDP is growing, household income is up and unemployment is down, what is wrong with our economy?” My reply was all about balance. In most recoveries, individuals see the lion’s share of gains through higher wages and income. In this “expansion,” the tables have been turned – corporate profitability and executive pay are the big winners, with individual wages stagnant, and even falling in some cases. In fact, the only reason household incomes are up is because people are either working longer hours, taking on multiple jobs or their spouse went to work as well. So, regular people don’t earn any more while the price of energy, education and healthcare soar through the roof. My question back to this businessman was, “What good is a growing economy if the vast majority of people, most of them hard-working, continually lose ground?” Interestingly, the room was silent – I received no answer.
Abraham Lincoln spoke of a government “…of the people, by the people and for the people”. Which brings me to the role of government in helping us to achieve economic balance, or as I call it, “common sense” capitalism.
Seems to me that the economic focus of government should be:
- To provide a level playing field for all businesses
- To ensure that business plays by the rules; and most importantly,
- To ensure that government truly honors the constitutional right of each citizen to “life, liberty and the pursuit of happiness” by making sure our economic system works for all people, not just those at the top.
In a speech back in 1932, Franklin Delano Roosevelt stated, to paraphrase, that while powerful groups often claim to oppose a strong government role in the nation’s economic life, they almost always seek government’s protection for their own interests. He argued that government’s task was to intervene “not to hamper individualism, but to protect it” by helping the less powerful confront abuses of the system by the powerful. In the words of FDR, “The test of our progress is not whether we add more to the abundance of those who have much, it is whether we provide enough for those who have little.”
I also subscribe to a maxim set forth by another former President, Ronald Reagan, who said “trust but verify.” We need reasonable yet meaningful regulation and oversight of our markets, institutions and businesses in order to promote our economic system yet ensure compliance. The most dangerous threat to our economic way of life is a loss of confidence and trust in our system by consumers and investors.
We can start by extending responsibility and accountability to business and their managers. By balancing employee gains with corporate and executive gains. By promoting policies that encourage economic growth while benefiting everyone; healthcare coverage for everyone, fiscally sound retirement plans and protecting consumer rights would be a good start. Let’s pursue “common-sense” capitalism.
Gary Trauner is a family man, businessman and entrepreneur who moved to Wyoming 18 years ago and lives in Wilson with his wife Terry and their two young boys. He ran for Wyoming’s lone seat in Congress in 2006, narrowly losing to a 6-term incumbent.
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Comments
Why is this site so left wing? Why are conservatives and Republicans so hated here? Why do liberals get a free pass on hatred and demeaning language? Why do liberals never have to say they are sorry? (I have a million examples if you want them)
I grew up 1 block from one of the toughest housing projects in Los Angeles.... right next to the Los Angeles Harbor. I had seen everything that anyone would want to have seen by age 10. I was a busboy in a resturant when I was 12... Started hauling trash from constructions sites when I was 18 in a 1963 Ford F-600 Flatbed Truck that I bought for $700 bucks. When I was 18 I registered as a Republican and voted for Ronald Reagan. I saw first hand what liberal policies do to the human soul. How they break up families. Most "liberals" I know are guilt ridden, rich white people who have never done a hard days work in their lives.
I am now 46 and have been in business for myself for 28 years. I have employeed hundreds of people. For the last 25 years I have paid 100% of the health care benefits for every employee I have. Their lives and families are at the top of my concerns everyday. If I am not successful, they are not successful. If they are not successful I am not successful... Its pretty simple. Oh yeah.. I forgot to tell you... I am a pretty damn "Conservative" Republican.
It's sad that your intellect can only boil it down "Conservatives" who watch large companies go BK and then dump their woes on the Feds... You say that as if those big companies are devoid of Liberals. Let's talk about Teresa Heinz, George Soros and Warren Buffet for awhile. Don't try to tell me they have never made a buck off the poor working man.
To conclude, your socialist brand of "Common Sense Capitalism" has so many holes in it it looks like swiss cheese. 90% of Americans work for companies with less than 50 employees. Your logic does not apply to most of this country. Contrary to your beliefs, this country is powered by ABC Plumbing and Heating not Northwest Airlines.
Your last statement is ridiculous... "By promoting policies that encourage economic growth while benefiting everyone; healthcare coverage for everyone, fiscally sound retirement plans and protecting consumer rights would be a good start." Huh? Those may be nice ideas in some Ivy League business school... but in the real world who pays for all the stuff you say you want...?? The risk taking business owner?
Your bio states that you are a business man and entrepreneur.... Tell me... Do you pay for health care coverage for Everyone? Not just make it available, do you pay for it? Do you provide Fiscally sound retirement plans for everyone? I have built and sold three businesses and am working on #4. Have you ever sold a business.... and if you did, did EVERY employee benefit? Did they all get to draw the water from the well?? Or was it just you?
Great article, right (as in correctly) on target, and I particularly liked your remembering FDR, whose own brand of what you certainly could call common-sense capitalism pulled America back from twelve destructive years of twisted "conservatism" that included the lazy incompetence of Coolidge, the perversions and corruption of Harding and Albert Fall and others, and the pompous fiddling of Hoover while America smoldered its way downward into the Depression. The lessons of history are clear and they run perfectly counter to what the GOP wants us to swallow today.
By the way, you should always have a good clear picture of your critics; so, I allow me to offer one of the latest postings of Tracy Lotz, this time on climate change...
"Global Warming is becoming a laughing stock and when Al Gore announces his bid for President, in Antarctica, with a legion of Penguins in the back ground it will be clear to all of us that An Inconvienent Truth was just slick campaign propoganda for the man who invented the internet."
It speaks for itself. He has no credibility...
Bravo! Spoken like a true liberal! You cannot address what I wrote so you attack! Beautiful! That speaks for itself!
I would not be surprised to find out you are a college professor... You remember the addage... Those who can, DO... those who can't get Phd's and Teach College. Believe me Mike there is no resemblance in today's Democratic Party and FDR's... If you really want to talk about someone who busted up big business you need to look no further than FDR's cousin... one of my heros Republican Teddy Roosevelt.... If you could have just looked back a few years you would have found him... TR the Trust Buster!
It is sad that the only thing you guys can do is pit everyone against each other....
Mike... as for knowing anything about me you may want to check this out....
http://blog.sunvalleyonline.com/index.php/tsl/201/
One last thing.. Confucius say... Man who ashamed to use last name is the man with no credibility! LOL...
In general, what Gary is saying makes sense. Government should apply a more consistent, even-handed approach to business/economic regulation. The present system creates a lot of uncertainty--there are loopholes to exploit, counterproductive subsidies, conflicting rules.
Thanks for the thoughtful response. I'm not missing anything... I read Gary loud and clear. He says the Feds have the answers... I say hold on a minute...
Let me take another stab at this... Why would we want to let the FEDS be in control of anymore than they already control? They control too much already. Aside from our military...Name one bureaucracy they run well. The closest is the US Post Office...and that gets a "C". Private industry via UPS and FEDEX do a much better job.... after that is all downhill. The Border, Immigration, FEMA, IRS, Social Security, Medicare... There is not one of these bureaucracies that is run efficiently. Whether it is a Democrat or a Republican in office neither party can do much to change those bureaucracies.
Currently I spend 10's of thousands of dollars annually for health insurance for my employees. That said we have tremendous choice, flexibility and the best medical care in the world. People from all over the world come here for medical care.
As far as providing a level playing field we need to deal with China first... as long as that field is not level we cannot level our own.
With all due respect (and I do mean that) you are not reading me loud and clear.
But first, let's get some personal stuff out of the way. I am roughly your age and my wife and I have worked our entire lives to provide for our family. Yes, I am a real world "risk taking-business owner". I have started and run several companies, like you (some successful, some not). Yes, I provide and pay for health coverage for everyone AND their families whenever possible (you are right, from a small business, sometimes it is not possible due to the burden private employers bear). Yes, I have sold companies and, more often than not, valued employees down to the lowest level have participated in the success of the business.
Second, you rely on labels instead of truly dealing with the specific issues, and because of that you jump to conclusions that are not true (I'm not advocating "socialism", I never even hinted that big companies are not run by what you call "liberals" - that is not even relevant to my post - and I never said or even believe that the "Feds have the answers". Frankly, I don't like labels, especially in a political sense. Like everything else in politics, they make it easy to throw stones instead of dealing with complex issues.
Third, again, I NEVER said the "Feds have the answers". Just the opposite in this post, as it is the government that supports lack of accountability. My point was really about accountability and responsibility. As Mike points out, all I want is some consistency. The fact is that the elected leaders who speak out the most about personal responsibility are the same ones who don't apply that concept to large companies. As a businessman, would you allow a management team or group that ran part of your business into the ground to reorganize, essentially give themselves a raise and a bigger stake in the company (with the support of the government) while voiding written obligations to hard-working people like yourself? Written obligations that these hard-working people may have relied on when they chose their job over perhaps another offer that did not include that type of commitment? I hope not. I think we can both agree that would be bad business.
Look, government should be as small as possible. But the simple truth is government has always existed and always will. It is necessary. If you don't try to run it well and don't believe in its mission, it will fail. I'm sure you as a business owner can see that. Unchecked bureaucracy stinks. But government also provides stability, if done right. And to get the facts straight, whether you agree with the concept or not, Medicare and Social Security are run very efficiently (of course, though, they do have their problems); in fact Medicare is run many times more efficiently than our private insurance-based healthcare system.
As for the best medical care in the world, we pay nearly twice as much per capita as any other country, have lower life-expectancy and infant mortality than most western countries and still have nearly 50 million people, nearly 17% of our population, with no coverage at all that THE REST OF US PAY FOR as a HUGE HIDDEN TAX in our insurance premiums. We actually already have a national healthcare system (because we all pay for the costs, whether we admit it or not) - we just don't manage it well. You are right in one sense, we may have the best system in the world if you are incredibly wealthy or are lucky enough to have an employer like you who pays for full coverage. (I'd love to discuss healthcare with you another time.)
Tracy, obviously we don't agree on some points, but I think you'd be surprised that we are less far apart than you think - it's just that these issues are difficult with no easy answer, and the more we let labels cloud our thoughts the less likely we are to work together to solve tough problems.
Gary
By the way, as a "conservative" Republican do you believe in bigger government, huge deficits, the federal government usurping the role of the states and intrusion into our private lives? Because that's what you've gotten with the people who have run our government under the Republican brand in the recent past. Bring on Teddy Roosevelt!
Universal health care has several problems, not the least of which is elimination of competition to be the best among health care providers. Why spend the extra time, effort, and money to be constantly improving if you are locked into being exactly the same as everyone else?
Medical training is expensive and time consuming, why do it if there is no incentive to improve your life or use your talents?
Incentive is the backbone of what makes our country great, and it is the thing that libs are intent on removing. That is the breakdown of the Great Society, easy to get on welfare programs have taken away incentive to improve one's lot in life.
Pork is just the everyday name for politician, no matter what party! FDR started us down this road and the road gets greasier by the year. Believe me more democrat give aways is not the answer, and there are more of them than there are republican give aways which are far too many. Unfortunately that is how politicians get elected promising more and more goodies, but never mentioning the cost.
Gary, I think it is becoming more and more obvious that you are hoping to make another run for an elected office in Wyoming, personally I'd like to see you make a difference in the gap between haves and have nots in your own town. Granted that is tough, but so is being a responsible official on a national level, even more so.
By the way, I think we are further apart than you realize.
"Many “conservatives” call for increased personal responsibility, including toughening our nation’s bankruptcy laws. However, these same folks don’t seem to have a problem when a large corporation declares bankruptcy, unloads the pensions it promised to its workers (in writing) on the federal government, continues to pay its executives obscene amounts of money and is allowed to continue in business."
Seems to me that you constructed a strawman you called "conservatives" and then knocked it down. True conservatives do not ask for government bailout and a bonus. Those are the charletons. As you know many liberals also fall into that same category but for other reasons. Such strawmen do not advance an argument or debate.
Being a capitalist and a conservative are not the same thing. Look to Armond Hammer, Bill Gates, Hillary Clinton (cattle futures) and the Oracle of Omaha for examples.
Frankly, I agree with you. It was not my intent to use a strawman. What I was trying to point out was that self-professed, self-labeled "conservative" politicians take the stance I mentioned - all you need to do is look at the specific debate over the bankruptcy bill. My point is exactly what you state - this is hypocritical behavior, no matter the label.
I appreciate the rebuke, because strawmen generally do not advance any argument.
Gary
Thanks for the thoughtful and intelligent response. Lets be Men here... and lets be honest. You tried to hang the Northwest Bankruptcy on "conservatives". If you want to talk about label's you need to start with yourself. Gary, I threw a few labels and jumped to some conclusions in my post above to make a point. The point was to see what your reaction would be and it was what I expected. You did not like it.
Yes we could talk about healthcare but let me point this out to you. You said "(We) still have nearly 50 million people, nearly 17% of our population, with no coverage at all that THE REST OF US PAY FOR as a HUGE HIDDEN TAX in our insurance premiums." Gary, what you are saying is that even though 50 million do not have health care they still get services. No one is going without service. I had an MRI done last year. It cost $4500 (It should cost $100) On the release form in Big Letters it said "If you cannot pay for this service CHECK HERE. Even if you cannot pay for this service you will not be denied service". Bottomline I cringe to think of the FEDS in charge of health care. HillaryCare is not what I want.
You also said "Medicare and Social Security are run very efficiently ". Really? They are both going bankrupt.
To close, I am sure you are a good guy and I appreciate the fact that you seem to put your family first. That scores a lot of points. If you really want to go to Congress try to pull people together. Oh and one last thing. You are corresponding with a guy who is pretty pissed off at his party right now. You are 100% correct about the Big Government label. My question to you is besides wiping out the Bush Tax cuts what would democrats do to slow that down (or cut spending). Remember with Defense, SSI, Medi-care etc there is very little discrecionary spending that Congress or any President can make. Cut the spending and you are going to cut services. What services are you going to cut? Raise taxes and you will tank the economy and make guys like me (and you) dig in and take fewer risks (IE spend money).
It is not as difficult as dealing with Iraq, Iran, and all of the rest of those countries, in fact I suspect we are eventually going to have Russia reverted to communism again and have to deal with that. Not dealing with terorism for so many years (both Repub and Dem administrations) is exactly whey 9/11 happened and it is why the war is dragging on, no one really knows how to conduct the kind of war that is going on, and no one wants to make the hard decisions to do what is necessary. It is easy for some to say just walk away, it is too unpopular, but the fall out from such a thing is beyond comprehension. We were attacked because terrorists thought we were vulnerable and lacked the will to retaliate. In addition the left was screaming and wailing about how dumb President Bush was, so they felt he would never strike back.
Social Security and Medicare are Ponzi schemes that are going to go bust sooner or later, no one wants to take responsibility for doing whatever needs to be done because it might cost some votes.
Again, I say potential candidates need to be able to solve problems on local levels before big ones are tackled on a national level.
There is too much concern for power and not enough on actually accomplishing good things.