Why do we distrust the business community?

[Jmil]

Gary Brown article
http://www.electgarybrown.com/michch..._jul082009.pdf

Why are the motives of the business community always questioned? Is it possible that they do hold the best interest of Detroit at the center of their decisions?

[cloud_wall]

It's possible a business could base its decisions on the well-being of Detroit. It's more likely businesses have their own best interests in mind when they make decisions. The two aren't always mutually exclusive, but sometimes they are.

I'd point to the Synagro deal and Kwame's current employment with Peter Karmanos as examples of why people are skeptical of business involvement in Detroit politics. Mr. Ilitch's record of parking-lot creation also gives people pause. Businesses everywhere want what's best for them, but there seems to be an alarming level of unaccountability here.

Detroit needs successful businesses. But business can't be able to do whatever they want because of their relationships with politicians. Mr. Brown seems to have a pretty good understanding of the need to balance those two concerns.

[313WX]

Does Bernie Madoff & NASDAQ come to mind?

http://www.ft.com/cms/s/b7a8d610-caa...0077b07658.htm

[daddeeo]

If businesses were so kind hearted, there would be no need for unions etc. They are amoral entities.
They think first of themselves and last for communities they are in unless their feet are held to the fire.
Look what Chrysler did with Highland Park?

[kraig]

It all comes down to the character and integrity of the people that are involved. You have just as many dirty dealings with non-profits as you do with big business.

If someone is of the mindset to operate dirty, it pretty much isn't going to matter where they're working, they're going to be dirty. The only difference is going to be the amounts that they're being dirty for. In some cases it's billions of dollars. In other cases it's potato chips and soda pop.

[defendbrooklyn]

"Look what Chrysler did with Highland Park?"
GM ---- Flint

[313WX]

"Look what Chrysler did with Highland Park?"
GM ---- Flint

Ford ---- Highland Park.

[ThaFuzz]

Triangle Shirtwaist Fire
Flint Strike of 1936-7
Crystal Lee Sutton [[inspiration for the film Norma Rae)
ENRON
Dow Chemical Dioxin Leaks

Those were just the ones that came to me off the top of my head. What about what the medical insurance companies are doing right now on Capitol Hill? Or how the Energy Bill passed under Bush 2 was written by petroleum and coal lobbyists?

Larger businesses are mistrusted because they evolve to a point where the purpose of their existence is to generate a lot of money for a select few, and often at the price of the well being of employees, customers, nearby residents and the general sense of justice.

[Det_ard]

Look at what they did when they left, sure. Ignore what they did for those communities while they were there, no.

[Downtown diva]

this sentiment goes along with everything else I have read on this board.

WHile some companies have dishonored themselves by doing the wrong thing, the vast majority of businesses are good for the community. They employ people, they insure people, etc.

You people act as if everyone and every company should be completely altruistic....you all live in a fairy land. Grow up....for your own good.

[gnome]

313wx, you do know that Chrysler had its HQ and a factory in Highland Park until the late 1980's early '90's. It was located on Oakland Ave, south of the Davison.Chrysler paid $5 million to HP plus they donated the land back to the city. The site is now called Oakland Park, I believe Dave Bing has recently expanded there and Coke moved its regional bottling plant/HQ to that location.

http://www.modeldmedia.com/features/hpguide.aspx


On the thread topic, I believe the discussion is hinged on big vs small business. Detroit has a history of massive industries employing thousands of people, hence much zoning and permitting is geared towards such large operations. In a conversation with the GoodGirlsGoToParis lady, she underwent 7 or 8 different inspections to open her 10 sq ft crepe stand. My point is that Detroit isn't geared for the small business person and as a result folks have a difficult time starting their businesses. I think that is what Gary Brown was trying to point out.

Many folks - that Richard Florida punk in particular - points to small business as being the fulcrum for changing a post industrial economy.

[crawford]

Umm, Highland Park was a dump decades before Chrysler left. It's been bad since at least 1970, and lost its middle class even earlier.

Chrysler didn't consider leaving until workers started getting raped and murdered. In addition to almost routine robberies, there was a very high-profile rape and another higher-profile murder of Chrysler employees in the 1980's.

That pretty much sealed the deal.

[kraig]

Gnome, I think that 313 was adding that Ford had been in Highland Park, as well as, Chrysler.

"My point is that Detroit isn't geared for the small business person and as a result folks have a difficult time starting their businesses."

That is an excellent point that can't be stated enough. Small and independent businesses are what give cities character. Good examples are the Mexicantown, Corktown and Greektown areas.

[Maple Leaf Rag]

Look at Pete Karmanos for one. He cajoles [[read campaign donations) the Mayor into millions upon millions of tax benefits for his Compuware site, then he hires this convicted felon as some perverse sort of quid pro quo gesture.

[Fury13]

"Greed is good." -- Gordon Gekko

[gnome]

313WV, thank you for editing your post.

[Omaha]

Jmil, I generally post on the other side of DY, but am risking coming over here because I want to share “how a Colbert Conservative and Social Darwinist� thinks the world works. WE are very aware that democracy went to hell after extending the vote beyond white property-owning males.

“The people who own this country ought to govern it.� John Jay, first Chief Justice of the U.S. Supreme Court

Thank goodness, the rich and well-born then found a way to stretch one person/one vote into one/dollar one vote. Since that has happened, generally speaking, the rich and well-born have been pretty happy…note both Huffington and Fine quotes below.

As Gary Brown rightfully stated money is the “mother’s milk� of politics. At EVERY level of elected office, whom it comes from and why it was given are always questions that need looking into. And it is those with the money to spare over and above living expenses that tend to give individually to campaigns and to PACs.

“There can be no clearer indication of how undemocratic the way we finance campaigns is than the fact that only one-quarter of 1% donate $200 or more, and only one-tenth of 1% gives $1,000 or more.� Political commentator Arianna Huffington

And don’t forget that campaign donations are given year around to those already in office as well.

“If a baseball player slides into home plate and, right before the umpire rules if he is safe or out, the player says to the umpire ‘Here is $1,000.’ What would we call that? We would call that a bribe. If a lawyer was arguing a case before a judge and said, ‘Your honor before you decide on the guilt or innocence of my client, here is $1,000.’ What would we call that? We would call that a bribe. But if an industry lobbyist walks into the office of a key legislator and hands her or him a check for $1,000, we call that a campaign contribution. We should call it a bribe.� Janice Fine, Dollars and Sense magazine, July / August 2000

Hey, one dollar/one vote is just one of the reasons that people are suspicious of business Jmil. My next post will look at the other reasons. But whatever the reason, it works for this Colbert Conservative and Social Darwinist.

[Omaha]

Jmil, suspicion of business interests in politics go back to our Founding Fathers. They didn’t like the interplay between business and politics in England. The Parliament and the companies it served [[East India, Virginia, Plymouth etc.) made $ for England at the expense of the Colonies. We had a revolution to end the legally-binding contract that the Colonial subjects had with Mother England.

“For what purpose were they suffered to go to that country [the American colonies], unless the profit of their labour should return to their masters here?� The Marquis of Carmarthen commenting before Parliament in 1774 on the purpose of establishing colonies in America

In today’s economy, not everyone can be an owner or self-employed. Over 90% of the workforce are employees who sell their intelligence, experience and strength to an employer in return for a wage. Employers need employees; and employees need employers. It’s also essential to remember that every business has to get more $ from selling a good or service than it costs to get it to market … or it goes out of business and can employ NO ONE. Talk about your co-dependency!

Now, on to gnome’s comment about the distinction between big and small businesses.

There’s a critical difference between large publicly-traded companies and smaller privately held businesses. BTW, not every small business is a mom-and-pop operation. There are large privately-held operations. To confuse the matter further, any business that employs fewer than 500 folks is considered small business by federal standards.

The large publicly-traded companies, while few in number [[as a percentage of all businesses), account for nearly 75% of our GDP. And as that liberal rebel James Carville would say, “Those dogs can hunt.� Their decisions can seriously influence politics at every level. Notice what a fine public transportation system Detroit has historically had connecting the inner city with the manufacturing jobs in the suburbs after the BIG THREE’S move from "Detroit proper" locations.

The distinction between these two distinct types of business is important: a small privately-held business needs to make a profit to say alive, but its owners don’t NEED to spend every waking hour thinking about how to maximize profits. Publicly traded companies and their leader do.

Why does anyone buy a share of stock? To make money on the investment. All things being equal, the company that returns more than its equally-situated competitor will keep its investors and attract new ones. Profits for the “big boys� [[sorry sisters) are reported every 90 days. Short-term profit-maximizing strategies are the ones that are most likely to be rewarded by investors and pursued by senior decision makers.

So the senior decision makers of every publicly-traded company focus 24/7 on maximizing the return for its investors. These CEOs and their fellow travelers don’t engage in this greed-driven behavior because they are bad people who lack integrity …but because that is how the system works.

“Let me say as a caveat that I have spent most of my life worrying about the next quarter’s earnings.� Norman Augustine, President, Chairman, and CEO Lockheed Martin Corporation, 1997

The key to keeping profits high…is to keep ALL costs low. There are lots of variables that play a part in the cost of bringing a finished product or finished service to market like research/development and taxes. In my mind the three most important are the costs associated with [[1) labor, [[2) raw materials, and [[3) plant and equipment.

And ever since we were an agrarian nation [[at our founding) controlling the cost of labor has been a key strategy in maximizing profit. So in the move to industrialization, owners knew to keep labor costs as low as possible.

“There is no way of keeping profits up but by keeping wages down�. David Ricardo [[1772-1823), English banker and political economist in On Protection to Agriculture 1820

Chattel slavery is a product of greed; slaves were cheaper than indentured servants or paid labor. Those who opposed slavery were called all kinds of names including socialists and communists [[within a year of the first edition of the Communist Manifesto).

“The parties in this conflict are not merely Abolitionists and slaveholders – they are atheists, socialists, communists, red republicans, Jacobins on one side, and the friends of order and regulated freedom on the other. In one word, the world is the battleground -- Christianity and atheism [are] the combatants; and the progress of humanity is at stake.� Dr. James H. Thornwell, a religious and educational leader of South Carolina describing the forces that want to destroy loyal Southern slave holders, 1850

Importing immigrants to undercut the individual bargaining power of those already here to earn what liberals would call a decent living was another strategy for keeping wages low and profits high. Divide and conquer has always been a successful formula for keeping wages low.

“We can’t get enough white labor to build this railroad, and build it we must, so we’re forced to hire them [Chinese labor]. If you [white laborers] can’t get along with them, we have only one alternative. We’ll let you go and hire nobody but them.� Charles Crocker, company superintendent for the Central Pacific Railroad explaining to white workers why he was forced to hire Chinese immigrants [[at a 30 percent savings in labor costs) to build the Western end of the transcontinental railroad. 1865

Paying children less than adults and women less than men for identical work were another profit-maximizing ideas.

“Join the union, girls, and together say Equal Pay for Equal Work.� Susan B. Anthony, The Revolution [[woman suffrage newspaper) March 18, 1869

“The low wages at which women will work form the chief reason for employing them at all...A woman's cheapness is, so to speak, her greatest economic asset. She can be used to keep down the cost of production where she is regularly employed. Where she has not been previously employed she can be introduced as a strike breaker to take the place of men seeking higher wages, or the threat of introducing her may be used to avert a strike. But the moment she organizes a union and seeks by organization to secure better wages she diminishes or destroys what is to the employer her chief value.� US Bureau of Labor, Report on Conditions of Women and Child Wage-Earners in the United States, vol. 10, 1911

Too often the key motivation of a businesses owners is not to provide a needed good or service but to maximize profits for stockholders.

“The railroads are not run for the benefit of the dear public. That cry is all nonsense. They are built for men who invest their money and expect to get a fair percentage on the same.� William Henry Vanderbilt, self-described richest man on earth, owner of many railroads and son of Cornelius Vanderbilt, 1882

“Few trends could so thoroughly undermine the very foundations of our free society as the acceptance by corporate officials of a social responsibility other than to make as much money for their stockholders as possible.� Future Nobel Prize winning Economist Milton Friedman in his 1962 book Capitalism and Freedom

The kinds of jobs that remain in the city are only those that can’t go elsewhere. Manufacturing, and not just traditional blue collar manufacturing, can go wherever the costs of production are lowest. The same applies to some service work whether its “customer-service,� the reading of medical images, or some kinds of engineering where Ph.D. engineers can be found cheaper than in the U.S.

“Ideally employers should put every plant they own on a barge so that it could move around the world to take advantage of lower wages.� Jack Welch, former CEO, General Electric Corporation
“If the world operates as one big market, every employee will compete with every person anywhere in the world who is capable of doing the same job. There are lots of them and many of them are hungry.� Andrew Grove, president of Intel Corp., in his book "High Output Management" 1995

That said, sometimes privately held employers can display the same profit-maximizing avarice that their larger brethren do. But they don’t have to.

Nevertheless businesses large and small want customers who can afford what they have to sell. I didn’t say easily afford. My impression is that goods and services easily accessible to some of the poorer sections of metropolitan areas cost more than those same goods and services available in the suburbs. Businesses also want to locate where there is a pro-business political climate. …low wages, low taxes, and good city services.

So, Jmil those are some of the reasons that some people distrust the business community. It is not an exhaustive list, and it goes to how the economy works [[has worked, will work, etc.). It has nothing to do with whether individual business people are folks with or without integrity, are black or white, male or female, etc. It’s how the system works, and as a Colbert Conservative and advocate for the rich and well-born, I LIKE IT THAT WAY...and I don't have to rely on the quote of a fictional character.

“The point is that you can't be too greedy.� Donald Trump, Trump: The Art of the Deal [[written with Tony Schwartz, 1987).

“Greed is all right; by the way . . . I think greed is healthy. You can be greedy and still feel good about yourself.� Ivan F. Boesky, U.S. financier. Commencement Address, 18 May 1986, School of Business Administration, University of California, Berkeley.

[irish_mafia]

Based on the good that comes from private business and the overwhelmingly impressive character of most of those involved in business....

vs. the "good" that comes from government bureaucracies , power whores and tyrants, I will put my faith in businesses, big and small, every time.

[Omaha]

Irish_mafia. I agree that there are great men of character involved in business today and in the past...greed-driven short term profit seeking men of character rule…no pun intended.

“So long, and to the extent that I can speak for the government of the United States, I will use the power of the government within my control to prevent the labor unions of this country from destroying the open [union free] shop.� Attorney General Harry Dougherty [[under President Harding) expressing the governments opinion of unionization, 1922

“The prosperity of the lower and middle classes depends upon the good fortune and light taxes of the rich.� Andrew Mellon, treasury secretary under Presidents Harding, Coolidge, and Hoover; referred to as the “Greatest Secretary of the Treasury since Hamilton,� and who at his appointment, was the third richest man in America

“This is an impressive crowd. The "haves" and the "have-mores". Some people call you the ‘elite’. I call you my base.� George W. Bush joking at a fundraiser during 2000 campaign

“Many are concerned that federal disaster assistance [FEMA] may have evolved into both an oversized entitlement program and a disincentive to effective state and local risk management. Expectations of when the federal government should be involved and the degree of involvement may have ballooned beyond what is an appropriate level.� Joseph Allbaugh, first director of FEMA under the George W. Bush administration

“Brownie, you’re doing a heckuva job.� George W. Bush to then FEMA director, Michael Brown after viewing the federal government’s response to Hurricane Katrina.

Good to know there's potentially another Colbert Conservative and Social Darwinist who is an astute student the history of the intimate relationship between business and government on this site. One/dollar; one/vote rules!

“They [[the Irish) are nothing but imported beggars, animals...a mongrel mass of ignorance and crime and superstition, as utterly unfit for society's duties as they are for the common courtesies and decencies of civilized life.� Jersey City Standard, 1859

[MrJones]

"Contempt for wealth is a trick of the rich to keep poor people without it."
Michael Corleone - deleted scenes GF Pt. II

[irish_mafia]

U.K. Prime Minister Margaret Thatcher: "The problem with socialism is that you eventually run out of other people’s money."

[DetroitDad]

I don't really know, but I know why I and many others distrust business owners in the city, we are routinely screwed over by them. Generally, it seems that there are a lot of scammers in the area who take advantage of the cheap rents in prominent buildings like the Penobscot Building, such an address gives them credibility. Another problem, and one which has affected me throughout my employable life is that while many small business owners and investors are often good people doing their best, they have a lot to learn. Unfortunately, their trial and error comes at the expense of the employees who come to work to see a sign posted on the door saying the business is closed, or they do hours of work and then never get a paycheck.

Likewise, many distributors and small business to business owners are strongly affected by the failures of small business. Still other businesses around the city in the past were supposedly money laundering fronts that apparently didn't actually care much about retaining customers, as that wasn't really the reason they existed. When you have a high number of schemers and small business turnover, you get a lot of people who become skeptical of businesses in general.

[Det_ard]

Then let's all work for social services organizations.

[Detroit500]

When I think of Detroit, I think that for it to survive, there will have to be a lot of joint efforts done by both the private and public sectors, if it is to survive. The private sector has the ability to provide jobs. create wealth, and create philanthropic endeavors that simply cannot be matched by direct public investment.

At the same time, the public sector has the ability to determine what types of jobs, what types of entities, individuals, and economic opportunity will enter the city, and ensure that policies are created that both make the area a place where businesses want to be, as well as protect the interests and concerns of the individual.

I don't think that these interests public and private have to necessarily compete with each other, instead they should augment and reinforce the ability for opportunity for all individuals.