Jed Speaks

Where you can hear from one smart guy named Jed.

What Mitt Romney Doesn’t Understand About Small Business Will Hurt Me

A real small business veteran explains why Governor Romney doesn’t get his world.

October 12, 2012

As I watched the first Presidential debate Wednesday evening I listened carefully every time Governor Romney stated views that he said represented small businesses like mine. I don’t think his statements about me were accurate, so here’s a my personal ‘fact check’.

He Said I Made Sacrifices and Took Risks. I have owned my company for 25 years and employ 20 people. I started the business in my apartment and worked hundreds of 18-hour days. The Governor would say I built it myself but in truth I had help from my family and my government. I went to good public schools and obtained two masters’ degrees via low interest student loans that were paid off quickly. Mitt would call me a ‘risk taker’ because I invested my time and my personal savings to start my company. But when I compare that to putting myself in harm’s way as a member of the armed services or leaving an abusive spouse with children in tow and no place to sleep, I don’t think it’s a big deal. I was never in danger of being hurt or homeless or hungry. I never had to sacrifice my own dreams by going to a menial job every day to feed and educate my children. Neither Mr. Romney nor I have ever experienced real sacrifice and risk.

He Said I Am Engine of Job Creation. Over time I have hired lots of people. I take pride in meeting my payroll; it may be my major contribution to this world. But every employee was hired because my company needed them. I earn more from what each employee contributes as part of our team than what I have to pay them. I have never hired someone in order to ‘create a job’. I am positive that as a financially savvy manager at Bain, Mr. Romney never did either. So let’s be clear that job creation is only a by-product of our pragmatic decisions.

He Said I Would Hire More People If My Taxes Were Lower. Each year, I decide how much money to re-invest in my company and how much to take out. Because I pay taxes on my profit, I always look for productive ways to invest in my company first. Spending pre-tax money makes sense. If my taxes were lower, I would take more money out and just put it in the bank. This is the opposite of what he says I would do. Hiring more people is always a function of whether or not the company has work for them to do. I need taxes to be lower on the middle class people with jobs so that they have more money to spend buying the products that drive my industry.

He Said That ‘Obama Care’ Hurts My Business. He is right that I am not enthusiastic about the health care reform law. He is wrong about the reason. As an employer, the current system forces me into being a health insurance provider. That is not my area of expertise, and it takes time away from running my business. Most importantly, large corporations can offer much better coverage at a lower cost and thus they have a big advantage over me in attracting the best employees. I would like to see a national health care system that takes the responsibility for health care out of the work place. Since most governments around the world invest in health care for their populations, it would make all American businesses more competitive in the global economy.

He Said He Understands My Problems Because He Worked In the Private Sector. It is true that we both have many years of experience in the private sector. However, Governor Romney worked exclusively with large companies. When those giant players decide to enter a field, they have much greater resources and can often use anti-competitive measures to drive out small businesses like mine. At the same, they demand and get monopoly rents for their essential services and products. Large corporations want to extract as much of a small company’s value as possible from every transaction. He knows this. It is what he told clients to do at McKinsey and how he ‘turned around’ companies at Bain.

Corporate oligopolies are a bigger threat to the existence of small businesses than government regulations. The large public corporations Governor Romney ‘understands’ are not the private sector of Main Street.

Jed Horovitz is the owner of a small business in Haddon Heights, NJ.

Categories: Jed Speaks | Tags: , , , , , , , , , | 1 Comment

Create a free website or blog at WordPress.com.