advocate any government spending of this type, but if politicians require taxpayer funding of start-ups, all specific investment decisions should be made by private venture capitalists with proven track records who would be required to share in the investment, risks, and rewards of their decisions. Government at most might prescribe targeted technologies. Interestingly, Josh Lerner, another Harvard business professor, argues that even government programs to stimulate bank lending are not relevant to start-ups, because entrepreneurial ventures cannot afford the financial burden of paying interest on loans.
Take easy unionization off the entrepreneurial table. As risk takers, entrepreneurs must have the ability to make fast decisions about what their companies do and how they do it. Unions inherently slow down and often inhibit fast action. This is exacerbated by proposals such as “card check” that allow sudden unionization without confidential balloting and that allow government arbitrators to set working conditions as well as work rules that drive entrepreneurs to seek more business-friendly host countries and take potential jobs with them. The Obama Administration’s policies requiring unionized or “prevailing wage” government contractors add costs and reduce business incentives for struggling entrepreneurs. Closing off large government contracts to entrepreneurs would have had dire consequences in most of the wars the U.S. has fought.
Regrettably, until unions recognize that workers’ interests, as with the nation’s interests, lie with greater innovation and entrepreneurship, they represent a formidable barrier to those goals.
Let any company fail, whether large, small, or entrepreneurial. At its best, the free enterprise system is impartially rational in allocating investment, rewarding smart innovation, and promoting economic growth and job creation. Unfortunately, when political calculations intrude, outcomes are usually disastrous. The most recent major examples are the financial bailouts of GM and Chrysler, which not only wasted billions in taxpayer funds but were primarily motivated by an unprecedented gift to the pro-administration unions which suddenly were lifted ahead of the line of private creditors.
Billions of dollars in debt, Ford is further burdened by competing against Chrysler and GM, especially since the government wiped out their massive debts. This means Ford mustpay several hundred million dollars in annual interest on its debt, while GM and Chrysler have little reason to invest.
Despite this, Ford stands as one of the most innovative and transformational companies of our era. It has shifted from a car company to a technology company. With a Ford F-150, a small business owner working construction can use an onboard computer, track tools, maintain supplies, and build efficiently.
Ford is one company that has not only innovated; it has also captured America’s sense of fairness. Many Americans, disgusted at the car bailouts but wanting to buy an American company car, have turned to Ford and are thrilled by what they see.
For this reason, we have eagerly invited Ford CEO Alan Mulally to give the keynote address at International CES three times. Before Ford, Mulally headed Boeing, and many scoffed when a non-car executive was chosen to lead Ford. A board’s selection of a CEO is its most important task, and the Ford Board proved innovative by thinking outside the Detroit box. Mulally is not only an affable and articulate leader, but his vision for Ford, his refusal to seek a bailout, and his shift of Ford to a technology company have proved to be a winning strategy. By the summer 2010, Ford revenues were up 30 percent from the same period a year ago. 25
Another less-noticed consequence of the GM and Chrysler bailout was the unprecedented executive branch intervention into the process of bankruptcy and creditor rights. It may seem inconsequential, but those who lent Chrysler and General
Take easy unionization off the entrepreneurial table. As risk takers, entrepreneurs must have the ability to make fast decisions about what their companies do and how they do it. Unions inherently slow down and often inhibit fast action. This is exacerbated by proposals such as “card check” that allow sudden unionization without confidential balloting and that allow government arbitrators to set working conditions as well as work rules that drive entrepreneurs to seek more business-friendly host countries and take potential jobs with them. The Obama Administration’s policies requiring unionized or “prevailing wage” government contractors add costs and reduce business incentives for struggling entrepreneurs. Closing off large government contracts to entrepreneurs would have had dire consequences in most of the wars the U.S. has fought.
Regrettably, until unions recognize that workers’ interests, as with the nation’s interests, lie with greater innovation and entrepreneurship, they represent a formidable barrier to those goals.
Let any company fail, whether large, small, or entrepreneurial. At its best, the free enterprise system is impartially rational in allocating investment, rewarding smart innovation, and promoting economic growth and job creation. Unfortunately, when political calculations intrude, outcomes are usually disastrous. The most recent major examples are the financial bailouts of GM and Chrysler, which not only wasted billions in taxpayer funds but were primarily motivated by an unprecedented gift to the pro-administration unions which suddenly were lifted ahead of the line of private creditors.
Billions of dollars in debt, Ford is further burdened by competing against Chrysler and GM, especially since the government wiped out their massive debts. This means Ford mustpay several hundred million dollars in annual interest on its debt, while GM and Chrysler have little reason to invest.
Despite this, Ford stands as one of the most innovative and transformational companies of our era. It has shifted from a car company to a technology company. With a Ford F-150, a small business owner working construction can use an onboard computer, track tools, maintain supplies, and build efficiently.
Ford is one company that has not only innovated; it has also captured America’s sense of fairness. Many Americans, disgusted at the car bailouts but wanting to buy an American company car, have turned to Ford and are thrilled by what they see.
For this reason, we have eagerly invited Ford CEO Alan Mulally to give the keynote address at International CES three times. Before Ford, Mulally headed Boeing, and many scoffed when a non-car executive was chosen to lead Ford. A board’s selection of a CEO is its most important task, and the Ford Board proved innovative by thinking outside the Detroit box. Mulally is not only an affable and articulate leader, but his vision for Ford, his refusal to seek a bailout, and his shift of Ford to a technology company have proved to be a winning strategy. By the summer 2010, Ford revenues were up 30 percent from the same period a year ago. 25
Another less-noticed consequence of the GM and Chrysler bailout was the unprecedented executive branch intervention into the process of bankruptcy and creditor rights. It may seem inconsequential, but those who lent Chrysler and General
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