Too many regulations: that’s the judgement of Fred Deluca, founder of the Subway restaurant chain. In an interview with CNBC, Deluca said he couldn’t start his business in today’s economic climate.
The Subway founder pointed to a number of government regulations that are degrading the business environment for entrepreneurs. Examples include the Affordable Care Act, an increase in the minimum wages and the end of the payroll tax holiday.
The Affordable Care Act, often referred to as “Obamacare,” is “the biggest concern of our franchisees,” Deluca said. “They don’t know what to expect. It’s causing a lot of concern, but that too will be passed on to the consumer.”
Deluca also said payroll taxes are a burden passed on to customers, and sales then decline. He said that if he were to try and start his business in today’s tangle of regulations and burdensome costs, “…Subway would not exist.”
With the most recent fiscal cliff approaching this Thursday (February 28), it is worth asking, “How did we get into this mess?” My answer: a little leaven works its way through a whole lump of dough…. Touchstone Magazine (March/April 2013) recently published my article, “The Yeast We Can Do,” in their “Views” section (subscription required). In it, I explore the metaphor of yeast in the Scriptures—how little things eventually work their way through our whole lives and can lead to big consequences. In some cases, I point out, this is a bad thing. For example, I write,
According to Evagrios the Solitary, one of the early Christian hermits of the Egyptian desert, our spiritual struggle can be summarized quite simply: it is because we have first failed to resist little temptations that we eventually fall to greater ones. Following John the Evangelist’s warnings against succumbing to “the lust of the flesh, the lust of the eyes, and the pride of life” (1 John 2:16), Evagrios identifies three “frontline demons” in particular: gluttony, avarice, and seeking the esteem of others.
Little by little, when we give in to small temptations, they eventually work their way through our whole lives, leaving us vulnerable to bigger, related areas of temptation.
In “The Moral Meanings of Markets,” in the latest issue of the Journal of Markets & Morality, Ryan Langrill and Virgil Henry Storr argue that markets ought to be understood and defended not simply as amoral, or merely moral, but as robustly moral spaces. In exploring the contention that markets reward virtues besides prudence, Langrill and Storr illustrate how market exchanges tend to promote civility and politeness. “It makes sense for profit-seeking businessmen to invest in goodwill and good customer service,” they write.
A recent piece in the Harvard Business Review, however, underscores the reverse phenomenon, the costs of rudeness. As Christine Porath and Christine Pearson write in “The Price of Incivility,” the virtues required for good business are not merely oriented towards customers. “Rudeness at work is rampant, and it’s on the rise,” they write: “Nearly everybody who experiences workplace incivility responds in a negative way, in some cases overtly retaliating. Employees are less creative when they feel disrespected, and many get fed up and leave. About half deliberately decrease their effort or lower the quality of their work.”
But Porath and Pearson also note that “incivility damages customer relationships. Our research shows that people are less likely to buy from a company with an employee they perceive as rude, whether the rudeness is directed at them or at other employees. Witnessing just a single unpleasant interaction leads customers to generalize about other employees, the organization, and even the brand.”
The costs of rudeness are illustrated even more clearly outside the context of “competitive market settings,” as Langrill and Storr relate. They note John Mueller’s observation that “since enterprises like these cannot ration by price, they are inclined to ration by rudeness.” And even outside the context of “non-price competition,” as we observe in our own experiences everyday, there are costs associated with rudeness. Customers can certainly use rudeness as a rationing mechanism.
How much would it be worth to you to be treated rudely the next time you stop in at a McDonald’s or buy something from the supermarket? How cheap would things have to be for you to shop at the jerk store? Just how good would the lobster bisque have to be for you to buy it from the Soup Nazi?
The Center for Faith and Work at LeTourneau University recently profiled Camcraft, a Christian-run manufacturing business whose owners, the Bertsche family, seek to steward their business according to God’s purposes. “By using Biblical principles to run a company,” says Bern Bertsche, “not only is that God’s way, but it’s a very effective way to run a business.”
Watch the video below:
Camcraft orients itself around a broader mission to (1) to glorify God, (2) be a great place to work, (3) be a trusted and valued partner for customers, and (4) grow profitability. In addition to manufacturing high-precision metal components, Camcraft conducts after-work Bible studies for employees. “We know a lot of people never see the inside of a church,” says Bertsche, “but they see this business five days a week.” (more…)
The progressive politicization of certain religious orders hurries apace, especially as we enter the season of shareholder activism, proxy ballot initiatives and “corporate social responsibility” lectures from religious groups and churches. This year may generate even more activity as a result of the left’s renewed efforts to undermine Citizens Unitedvs Federal Election Commission.
Because many religious organizations are also shareholders in public corporations, their investments grant them a proxy voice in corporate policies. Unfortunately, this voice too often is used to promote policies that are often indistinguishable from secular-left political causes and may have little connection to the tenets of their respective faiths.
One oft-stated goal of these activists is “transparency.” They claim to rectify the perception the Supreme Court ruled erroneously in Citizens United when it declared unconstitutional the placing of limits on corporate and union political spending. But these attempts to pass transparency rules and regulations extend far beyond mere campaign funding by requiring that all corporations publicly divulge the recipients of their charitable giving. (more…)
There’s an old proverb, “Necessity is the mother of invention.”
Life is often difficult, full of challenges, trials, and travails. But it is a testament to the human spirit, created in the image of God to mature and develop morally, spiritually, and intellectually, that in the face of such troubles human ingenuity often wins out. Brad Morgan, a dairy farmer turned fertilizer magnate featured in the documentary The Call of the Entrepreneur, put it this way: “You put your butt in the corner, you’ll be surprised what you can achieve.”
I was reminded of this insight in reading a story this week about a local company, National Nail Corp., whose recent experience embodies this reality. As Jim Harger writes, “When the bottom fell out of the home building industry in 2008, the National Nail Corp. was forced to regroup and diversify, says W. Scott Baker, president and CEO of the employee-owned company.”
One of the new products is called Camo, which “created a new way to nail down deck boards without having nails or screw heads poking through the surface to create slivers, pop up or discolor a deck surface.” As Baker puts it, “Camo was birthed when we found ourselves in a place where no one would have willingly gone.”
I’m not very handy, but Camo looks pretty cool to me.
When your butt is in a corner, you’ll be surprised what you can achieve.
This is an important lesson to remember, especially in the midst of economic turmoil and fiscal crisis. Yes, we live in an age of dizzying change, but with these changes also come new opportunities. God has given human beings the august responsibility to be moral agents, to work productively in service of others. Rather than bemoaning our fate when adversity comes, we ought to look forward in hope and creatively exercise those talents God has given us to find innovative new solutions to the myriad challenges facing the world today.
The term “fiscal cliff”, which is believed to have originated in Congressional testimony by Federal Reserve Chairman Ben Bernanke, refers to the substantial changes to tax and spending policies that are scheduled to automatically take effect in January 2013. The changes are intended to significantly reduce the federal budget deficit.
What are the tax and spending policies that will change?
Several major tax provisions are set to expire at year’s end: (more…)
Is spartan austerity driving us over the fiscal cliff?
The latest step in the budget dance between House Republicans and the White House has to do with where tax increases (or revenue increases in general, depending on what is called what) fit with a deal to avoid the so-called “fiscal cliff.” As Napp Nazworth reports, President Obama has apparently delivered an ultimatum: “there would be no agreement to avert the ‘fiscal cliff’ unless tax rates are increased on those making more than $250,000 per year.”
On one level it seems reasonable to talk about addressing a deficit from both directions: cutting spending and raising revenue. But as Ray Nothstine put it so well earlier this week, without some structural (and cultural) changes to the way Congress works, it would be insane to think that giving politicians more money is going to change how they spend it. One definition of insanity is doing the same thing over and over again and expecting a different result. Historically “politicians spend the money as fast as it comes in – and a little bit more.” Without some kind of balanced budget agreement, something with real teeth, why should we think things will be any different this time around? (I’ve talked about a more promising “both/and” budget solution before.) As Ray and I have concluded elsewhere, “In the case of the federal spending, the government has proved to be untrustworthy with very much. It’s time to see if the politicians in Washington can learn to be trustworthy with less.” (more…)
“This is one of the sleaziest industries in the world,” says business owner Ethan Rietema. “Customers are treated so poorly. Stores beat you up, trying to get as much money as they can, but they couldn’t care less if you get the right bed.”
Rietema and Steve Van Diest, both former campus ministers, are bringing rest—and integrity—back to a business largely devoid of it. Four years ago, a Christian entrepreneur invited the Colorado natives to begin deploying their relational abilities in strip malls rather than on college campuses. They now co-own three Urban Mattress stores in Denver and have franchised four more. And, they argue, their current work is just as important as their former ministry….
…”I don’t have to do mental gymnastics with the product I sell,” Van Diest says. “It’s not a frivolous item. It’s not an image-conscious product. People come here after being worn down by horrible sleep, replete with aches and pain. If we can provide them with a small glimpse of grace for a third of their lives, that’s kingdom work. That matters to God.”
Every entrepreneur begins by identifying a need. For Rietema and Van Diest, it was better customer service and consumer information. Urban Mattress has grown its business by directly countering a status-quo industry environment of price misinformation, offering “consistent and fair prices that promote transparency and honesty.” No faux “blowout sales,” no shady product labeling, no overly hasty, overly pushy customer interactions.
Washington Post columnist Robert Samuelson says everyone seems to understand that the private sector creates jobs. Everyone, that is, except the New York Times. Samuelson calls the Times’ decree of government job creation “simplistic” and that it has a “flat-earth quality”.
He explains that if the government adds jobs – expands government – it comes at taxpayer expense.
But if the people whose money is taken via taxation or borrowing had kept the money, they would have spent most or all of it on something — and that spending would have boosted employment.
Job creation in the private sector is mostly a spontaneous and circular process. People buy things they need and want. Or businesses and private investors take risks by investing in new products, technologies and factories. All this spending, driven by self-interest and the profit motive, supports more jobs. In a smoothly functioning market economy, the process feeds on itself. By contrast, public-sector employment grows only when government claims some private-sector income to pay its workers. Government is not creating jobs. It’s substituting public-sector workers for private-sector workers.
With knowledge of how the developing world struggles to create jobs, Juan José Daboub, former Managing Director of the World Bank, concurs: (more…)