Here’s a thought to start off your weekend.
People that can do—do. People that can’t do—only work to get in their way.
Thats’ the bottom line in this piece as Intel CEO Paul Otellini explains why Big Government isn’t the answer.
From CNET News by Declan McCullagh entitled: Intel CEO: U.S. faces looming tech decline
“Intel Chief Executive Officer Paul Otellini offered a depressing set of observations about the economy and the Obama administration Monday evening, coupled with a dark commentary on the future of the technology industry if nothing changes.
The U.S. legal environment has become so hostile to business, Otellini said, that there is likely to be “an inevitable erosion and shift of wealth, much like we’re seeing today in Europe—this is the bitter truth.”
Otellini singled out the political state of affairs in Democrat-dominated Washington, saying: “I think this group does not understand what it takes to create jobs. And I think they’re flummoxed by their experiment in Keynesian economics not working.”
Since an unusually sharp downturn accelerated in late 2008, the Obama administration and its allies in the U.S. Congress have enacted trillions in deficit spending they say will create an economic stimulus but have not extended the Bush tax cuts and have pushed to levy extensive new health care and carbon regulations on businesses.
“They’re in a ‘Do’ loop right now trying to figure out what the answer is,” Otellini said.
As a result, he said, “every business in America has a list of more variables than I’ve ever seen in my career.” If variables like capital gains taxes and the R&D tax credit are resolved correctly, jobs will stay here, but if politicians make decisions “the wrong way, people will not invest in the United States. They’ll invest elsewhere.”
Take factories. “I can tell you definitively that it costs $1 billion more per factory for me to build, equip, and operate a semiconductor manufacturing facility in the United States,” Otellini said.
The rub: Ninety percent of that additional cost of a $4 billion factory is not labor but the cost to comply with taxes and regulations that other nations don’t impose. (Cypress Semiconductor CEO T.J. Rodgers elaborated on this in an interview with CNET, saying the problem is not higher U.S. wages but antibusiness laws: “The killer factor in California for a manufacturer to create, say, a thousand blue-collar jobs is a hostile government that doesn’t want you there and demonstrates it in thousands of ways.”)
“If our tax rate approached that of the rest of the world, corporations would have an incentive to invest here,” Otellini said. But instead, it’s the second highest in the industrialized world, making the United States a less attractive place to invest—and create jobs—than places in Europe and Asia that are “clamoring” for Intel’s business.
Chris Marangi, associate portfolio manager at Gamco Investors in Rye, N.Y., said Tuesday: “Capital is agnostic. It doesn’t have a religion. It doesn’t have a philosophy. It goes where it finds the highest returns.” The problem, Marangi said, is that many other “countries have a more friendly regulatory regime than we do.”
You don’t have to have an MBA in business from Wharton to understand that one.
Great stuff.
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