There has been a lot of talk (most of it entirely predictable) about what lessons we should all learn from the election. I'm ambivalent about the wisdom of any of it. I don't think any of the people who are declaring that they now have a mandate actually have one. It doesn't seem to me that the people that voted for Obama did so because of his economic policies, and if they did, then we have an even bigger problem than I thought.
Anyway, I have some advice for business leaders on how to handle 4 more years of the Obama administration's war on commerce. You wonder how your investors are going to react to the (no doubt) politically unpopular but necessary decisions you make? I can answer that question for you right now.
The big question is, will we learn that leftism doesn't work after 4 more years of it, or does Obama's surprising victory in the face of his abysmal economic record represent a sea change for America. There are lots of reasons to believe both - I'll try to give you some perspective on how you should manage differently depending on how you see it.
In the end the war on commerce comes down to just a few items:
This is the big kahuna of the federal choke hold on America's businesses. In my opinion there is no reason to believe that Obamacare will ever go away. There is only one thing Republican politicians hate more than big government and that's smaller government. For all their posturing all they've ever done was slow the pace of growth. So at this point you have to believe that Obamacare (and the single payer system that it's designed to eventually mutate into) is here to stay.
With that said, Obamacare is the policy that will do the most to bring on the next recession that we're all expecting in 2013. And regrettably, you already know the answer to what you have to do. Wherever possible, convert full time employees to part time, and outsource all your non core competency services to sub-contractors. Things like your internal IT services, many office and administrative services, and any other 'cost center' your business carries should involve sub-contracting your staff.
That subcontractor, if possible should have fewer than 50 employees. I know what you're thinking. You're imagining all the management inefficiency this will introduce. Well there will be accounting firms and business consultants who will have shrink wrapped plans to sell you in order to lower the administrative cost of that change, but the actual decision making inefficiency is going to have to go with the territory. In the end it's the cost of having your business decisions being made by the deputy assistant director for compliance enforcement in the department of centralized enforcement compliance, several thousand miles away. And whatever the inefficiency, it's better than the alternative.
Obviously this will be a politically unpopular process, and there are large numbers of your customers (not to mention employees) who voted for Obama and therefore believe that reality should be subordinated to politics. They'll call you greedy and nasty and demand that your business be boycotted. You shouldn't be intimidated by that, but don't go out of your way to make a political point either. Take your cues from political environment under the soviet system - praise the wonderful people's revolution, but quietly do what you have to do.
When speaking to your investors and employees, emphasize how the focus of your business practice will be preserve all the internal full time staffing you can, even while you plan to eliminate all the internal full time staffing you can. It's a lie your investors are smart enough to expect and will not be disappointed by it - while your posturing might be enough to fool some of the dimmest (and therefore most vocal) Obama supporters. It's tragic that there will be such a huge premium on lying, but this is what happens when everything is subordinated to politics.
Unlike Obamacare, I don't believe the leftist view of Energy (and environmental policy) will remain a permanent law of the land. The effect of energy costs on the public is direct and simple - therefore they understand it. The environmental movement has faded dramatically anyway, and any new activity by the EPA looks and sounds like to the general public like bureaucratic abuse. Don't implement any marginal new projects of course - it's not worth generating the new EPA interest. But it might be more worthwhile to buy existing facilities that are being bankrupted by Obamacare. A lot will depend on the individual dynamics and your ability to placate the EPA.
With all that said, the cost of energy will be much higher under the second Obama administration, in spite of the economic slowdown that will come with it. Between monetary expansion and further supply intervention by the EPA and weakness overseas, your expectations should include a minimum of a 25% premium for energy. If this increased cost prevents hiring, so be it. The key to a time like this is survival and your investors will forgive lack of gain in exchange for perseverance.
The key to leftist economic policy is to promote 'good' (politically popular) business and punish bad (economically efficient but politically unpopular) business. And the key to implementing that policy is the special case (picking the winners and losers) tax and regulatory policy. For all the talk about reducing exemptions, the 'targeted tax cut' has long been a favorite of the left and right. It's only when the executive changes parties that those targeted tax cuts are magically transformed into 'spending in the tax code', but they all start out as the same thing.
So for all their posturing, when the Obama administration says "fairness" what they really mean is punishing the people they don't like with new taxes, new fees, and new regulatory burdens, and rewarding the people they do like with low interest loans, tax rebates and expedited regulation. But this is nothing new. For a century you could either run a company or run to Washington. And if you're unfashionable today you will be fashionable tomorrow.
So I think it's a mistake to assume that any changes the Obama administration implements will be permanent. Rather, you should base your expectation on the probability of America learning the needed lessons about leftism from 8 years of Obama, that it failed to learn from just 4 years. Don't count on the Republican party to help. At this point any future Republican victory (without a major change in it's platform) are exceedingly unlikely.
So that's it. We (your investors) know what you're going through. Most of us know what you have to do, and we know that you have to lie to us about your intentions when you do it. We're have the same boot on our necks as you do, and we will forgive what you do to endure. Just because 'the people' were foolish enough to give us 4 more years of Obama, doesn't mean we all like it. And like you, many of us will only do what we must.