Waking up to NPR this morning, I heard an incredible interview on Morning Edition. Following a report on the Occupy Wall Street movement, an interview with venture capitalist Bill Frezza of the Competitive Enterprise Institute tackled the myths about job creation head on. The summary barely hints at the bluntness of his message: creating jobs is the last thing business wants to do. Getting the country back on its feet is not the responsibility of business. The primary focus of business is to make the highest quality products at the lowest possible cost. In other words, making a profit is not the chief thing - it's the only thing we should expect businesses to do.
Last week when the BBC ran an interview with stock trader Alessio Rastani, jaws dropped when he said straight out that he and his friends were rooting for economic collapse because they were prepared to make money from it. There was widespread speculation that Rastani had to be a hoax - speculation that has since been debunked.
Frezza's remarks are potentially even more shocking to those waiting for business to do its part to put people back to work. He points out that if you substitute Expense Creation for Job Creation into all the rhetoric about what business is being asked to do, you'll get a much more accurate picture of what's going on. Payroll is an expense, like rent or raw materials; business doesn't go out of its way to run up expenses. To Obama's contention that 14 months is too long to wait for jobs to come back, he says business has every incentive to wait 14 months after the election to see what happens before doing anything.
The Audio is now up, and a transcript. This interview lays out for all to see just what we're up against, the economic tunnel vision that has crippled our country. This is a must-hear for everyone, a REAL morning wake up call thanks to NPR. (No wonder the GOP is out to destroy them.) (more)
The first thing you should do, if you haven't already, is listen to the Bill Frezza interview. You will hear in no-nonsense terms what we realistically should - and should not - expect from business. Which should also change the debate about what we should - and should not - expect from government.
The second thing you should do is reward NPR for running this, when it's the kind of clear unvarnished speech you will seldom if ever find on the commercial media. Throw some love at your local public radio stations, and contact your congress critters to tell them no way in Hell should NPR, PBS or the Corporation for Public Broadcasting end up on the chopping block.
A few more things to consider. None of this discussion would be taking place in quite the same way if Occupy Wall Street hadn't happened. FOX NEWS would still be setting the talking points unchallenged. I suspect Lynn Neary went looking for something to 'Fair & Ballast' the Occupy Wall Street story, and bit off more than she expected.
Update 2: Here's a takeaway quote from the transcript:
NEARY: But is that good for the country? Is that good for business even?
FREZZA: You know, each business is run for the benefit of its owners, its shareholders, its customers, and its employees. It's not run for the benefit of the country. That's not why people run businesses.
Remember that when they tell you that you must be prepared to sacrifice your income, your healthcare, your retirement, that you must be prepared to make do with schools short of teachers, empty firehouses, crumbling roads... The business of America is business. It's not about you. They're the ones suffering, they're the whipping boys, they're the ones bearing the burden of regulations. And if you want to know why they really need that money if it's not to create jobs, take a look here and here.
Some Takeaway Points
For a historical perspective on what happens to societies that become fixated on some extreme vision to the exclusion of the bigger picture, I recommend Jared Diamond's Collapse: How Societies Choose to Fail or Succeed. For something to explain it to the Children - and people who find it all too confusing, I recommend The Lorax, one of the most subversive books Dr. Seuss ever put out. It's not just about the environment any more.
And if you're looking for hard facts and documentation why the world view of Bill Frezza is so self destructive, if you want something solid on which to base policy that works, you really need to read The Spirit Level - Why Equality is Better for Everyone.