Free Market Enterprise: Not Quite So Free

Business, Front Page

    

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     The trouble with politics isn’t so much that people don’t agree on basic principles about good and bad, right and wrong, but rather that they cannot agree on how to achieve any such principle. We all believe, for instance, that freedom is necessary in order for a good life to be lived. We do not agree, however, on an absolute formula for a way to achieve freedom. In fact, many of us do not even agree on the exact meaning of freedom. In reality, being free consists of two parts which can simply be referred to as “freedom from” and “freedom to.” For example, in order to protect your freedom from bodily injury, the state must take away my freedom to punch your nose with my fist. Thus, true freedom also means giving up certain freedoms. Balancing the free will of the masses is the reason government is necessary.

      In America, traditional beliefs about freedom and happiness are derived from a limited government that endorses a free market approach to enterprise. The fate of American Capitalism rests on the ability to choose one’s own business, purchase private property, operate with a profit motive, and succeed or fail based on competition and consumer values. In a nutshell, these concepts seem both reasonable and fair, but the concepts themselves do not indicate how free a market should be. After all, there must be some form of regulation. How much control should government take over an otherwise free market?

     Remember the example about my fist and your nose? Well let’s apply that to American enterprise. In order to protect your freedom to compete in the free market and/or purchase goods at a fair price, I must be willing to give up my freedom to use my business and profit motives to lie, cheat, and steal from you. This is where government regulation becomes relevant to free enterprise and is the point at which the slope has become particularly slippery for our political leaders. It is also the point at which the water of debate among Americans becomes particularly murky. Often, those who fear big business push for big government, and those who fear big government pull for big business. As with most issues, the instincts on both sides are as right as they are wrong. In truth, it is the coupling of big business with big government that has tainted the reputation of free market capitalism.

     Throughout human history, politicians and corporate entities have proved incapable of swimming out of the cesspool created by greed and control. Those who dare to challenge this statement need only look at the existence of black markets. A black market only exists because people either want something they cannot have for a fair price, or they want something they cannot have at all. And who paves the way in making products available, setting prices, and determining whether or not we are allowed to have a particular product? Big businesses (greed) and big government (control). Black markets, however, are a mere sample portion of the problematic substrate that trails behind the ongoing marriage between politicians and corporations.

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     Greed and control also drive most of the politics surrounding “unicorn” solutions for inequality (unicorns = companies valued at more than $1 billion). It turns out that politicians not only cater to their largest campaign financiers, but also to the electorate whose votes can be auctioned off to the highest bidder. Take poverty as an example: Clearly, there is nothing equal about the many Americans who live without basic necessities of life, but is asking a greedy government that thrives on control really our best hope for a solution? If you are the kind of person who would feel confident asking a tiger to lead you out of the jungle, then you might answer with a resounding yes. But for the rest of us, it seems clear that we have been looking to the wrong people for help.

     In reality, free market capitalism in America isn’t so free. After the government and the big corporations have divvied up their slices of the pie, very little is left for the rest of us. Unfortunately, this scenario is one that is very difficult to reverse, but as long as we are on the subject, let us consider a hypothetical: Say that the government removed itself entirely from all market affairs. No longer do restrictions or legal minutia prevent people from forging ahead with their business ideas, and no laws exist to prevent people from taking advantage of one another. Naturally, some will be smarter, some will work harder, and some will be more successful. And when the best business minds begin to lap everyone else in the rat race, they will find themselves very rich. Some of these people will use their money to contribute to the betterment of society, and some won’t. Some will be overrun by greed, and they will work with others who share their sentiments.  Together, they will create a system that they can manipulate and control in order to grow their profits. Average people, many unaware of what is happening to them, will be at the mercy of these select few. Soon, those who are being put through the ringer will wise up and recognize the problem. They will be the ones who push for new laws, new regulations, some form of governance over the slavery of their free market. And if they are successful, meetings will occur, laws will be written, and government will intervene. Before long, this minority of wealthy crooks will have limits set on their practices.

     For a period of time, people will have a restored faith in the system and in the government they have chosen to referee their market. But it won’t be long before greed flares up again as wealth will this time be used to test the will of government leaders. Soon enough, politicians by the jet-loads will be flocking into the warm confines of the deepest pockets in the country. And once again, the backbone of the nation, its average citizens, will suffer the disadvantages being dealt down by the powers that be. Trust in the market, its biggest marketeers, as well as the politicians who were put in place to prevent such cooked practices, will flounder. Only now, people don’t know where to turn for help.

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     The truth is a free market can only be free insomuch as that it allows people to freely choose their businesses, purchase property, and compete on a level playing field for profits from consumer dollars.  A level playing field and consumer dollars means that there are equal limitations, laws, and market freedom for all businesses and entrepreneurs and that money is earned solely as a result of legitimate trade as opposed to backroom political agendas.  Apart from these very basic measures, not much else can be expected from a good government. Good businesses should ultimately succeed or fail at the mercy of their consumers and clientele.

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Craft Training Center: Building the Future

Business, Corpus Christi, Education, Front Page, Opinion/Editorial

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     “My child is not cut out for a four-year university.”  This is the battle cry of parents whose children love to be outside, enjoy working with their hands, and can’t bear the thought of sitting in a classroom every day.  That’s where schools like the Craft Training Center of the Coastal Bend comes in.  The students who successfully complete the programs offered at the CTC leave high school ready to go to work at jobs that pay well, offer great benefits, and provide much needed skills in their community, across the country, and around the world.  On April 1, 2016, The Craft Training Center of the Coastal Bend (CTCCB) hosted the 2016 SkillsUSA State Championships in Welding, Masonry, Plumbing, and Electrical. Exhibits plus a Mobile Crane and Welding simulator were on site for educators, students, and local industry.  With the smell of barbecue in the air, students from around the state competed for prizes and scholarships while parents, community members, and industry specialists looked on.  What a treat it was to watch these young people work hard to do a job well!

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     Dr. Michael J. Sandroussi (Ed.D, University of Texas Pan American, MS, Corpus Christi State University, BS, Texas A & I University. NCCER Certifications: Primary Administrator, Master Trainer, SME Core) serves as the president of the center.  He, along with a highly specialized administrative staff and instructors who have Journeyman level experience and are NCCER (The National Center for Construction Education and Research) Certified, turn out scores of highly skilled craftsmen every year.  However, this won’t be enough to meet the needs of the next five years.  Sandroussi expects a deficit of 35,000 skilled craftsmen in South Texas by 2020.  He is not alone in his thinking.  According to the Associated General Contractors of America, the shortage is already being felt in every state in the nation and affects both residential and commercial project completion times.

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    “The industry is hiring people at quite a strong clip, but at the same time, contractors are saying they can’t find the folks with the skills they want,” said Ken Simonson, chief economist at Associated General Contractors of America. “They’re having to pull in people from other industries or people that haven’t done it before, which isn’t always something you can make do with.”
 
     According to the Manufacturing Institute’s analysis of the US Department of Labor statistics, “Over the next decade, nearly three and a half million manufacturing jobs likely need to be filled and the skills gap is expected to result in 2 million of those jobs going unfilled.There are two major contributing factors to the widening gap – baby boomer retirements and economic expansion. An estimated 2.7 million jobs are likely to be needed as a result of retirements of the existing workforce, while 700,000 jobs are likely to be created due to natural business growth.  In addition to retirements and economic expansion, other factors contribute to the shortage of skilled workforce, including loss of embedded knowledge due to movement of experienced workers, a negative image of the manufacturing industry among younger generations, lack of STEM (science, technology, engineering and mathematics) skills among workers, and a gradual decline of technical education programs in public high schools.”
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For students who don’t mind working hard, staying drug free, making a good wage, and learning a skill for life that can lead to financial independence, then this shortage could be seen as a great opportunity.  A four-year degree is not for everyone.  Not every high school graduate should be pushed down the traditional college path when other great options exist.  Training centers like the CTCCB offer an affordable, fast track to being a contributing member of society.  Becoming a skilled craftsman or an artisan is something of which to be proud and something that can open doors.  Many craftsman go into business for themselves, while others use their skills to earn money for a traditional college education.  For me, being married to a master bricklayer and stonemason, who has knowledge in all the construction trades, has saved us thousands of dollars over the years because he can do the work himself, something not many people can do.  Plus, it makes me swell with pride when we drive past a building or a house or a fence, and he humbly says, “I built that.”  Craftsmen leave their marks for all to admire.

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Robert Ramos Offers Federal Contracting Tips

Business, Corpus Christi, Front Page

     Every fiscal year, the federal government contracts for over $35 billion in goods and services in Texas (www.usaspending.gov).  This article is intended to help firms get a share of those dollars. The first step is to determine if this market is right for you. It is oftentimes hard for retailers to participate. As a general rule, furniture is bought in bulk from the manufacturer/distributor. So, ABC Furniture store cannot expect repeated business from this customer; whereas, a service contractor can.

     Next, check the requirements at U.S. Small Business Administration.   It is vital to start with a self-assessment. The best tool for this a Capability Statement. This statement helps determine and communicate the firm’s expertise, management, and desired markets.  It is a one-page snapshot of your company’s unique features.  There is no one form for this, so look for one that suits your business and your style.

     There are a number of useful databases to assist you in procuring federal contracts:

Why go after federal work when the subject can be dominated by red tape? Simple, there are no bad debts. If you do the work, you get paid.

Robert Ramos

Robert C. Ramos is a graduate of Del Mar College and Texas A&M Kingsville.  He retired from the Small Business Administration in 1994 and owned and operated The Gabriel Group, Inc., a DOD contracting company, until October 2014.  Mr. Ramos has over 35 years experience in federal procurement as a Contracting Officer with SBA and owner of The Gabriel Group Inc.

 

Related article:  Small Business Start-up Tips

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Small Business Startup Tips

Business, Corpus Christi, Front Page

     The purpose of this piece is to provide a basic road map for obtaining small business startup financing particularly from a bank. However, some points might prove useful to an existing business.

    There are three basic business organizations: sole proprietorship, partnerships, and corporations. The simplest being the sole proprietorship. The type of organization chosen depends on the circumstances and makes for the easiest loan application.

What is needed:
• Personal and business (if not a startup) credit histories,
• One year cash flow projections showing how the loan payments are to be made,
• A financial statement as to the loan amount and how it is to be used,
• A simplified business plan,
• A proforma balance sheet and a proforma income statement, and
• Organizational documentation.

     As a rule of thumb, after the loan is made, the owner(s) should have at least a one-third interest in the business. In cases where ownership financing is involved, the “old” owner’s retained interests can be counted depending on the lender’s policies.  If needed, most banks have a “partnership” relationship with the Small Business Administration. Under the SBA’s 7A Loan Guarantee Program, qualifying loans are guaranteed to the bank up to 80% of the outstanding principal and interest.  For more details, visit www.sba.gov.

     There are many types of worthy banks. Unless there is a compelling reason otherwise, the best bank to approach is a Community Bank. These banks are locally owned, and loan decisions are made locally.

Closing thoughts:
• Never approach the banker “cold turkey.”  Be prepared to respond to his questions even during the first meeting.
• Be prepared to respond to any potential problems.
• Once he says yes, close the subject. Just accept the yes.

Robert Ramos

Robert C. Ramos is a graduate of Del Mar College and Texas A&M Kingsville.  He retired from the Small Business Administration in 1994 and owned and operated The Gabriel Group, Inc., a DOD contracting company, until October 2014. 

Related article:  Federal Contracting Tips

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