I’m curious: as a consumer, have you been scaling back on your spending?  If you run a business, are you making pricing changes to entice customers?

Barack Obama meets with a flock of nervous bankers at the White House tomorrow to reassure them he understands their interests. Good luck. There has always been tension between the Democratic Party and the private sector. That tension is over. With its vote in the House of Representatives to punish corporate bonus payments, the national Democratic Party has disconnected itself entirely from the private sector.

…The current version of the party has largely broken free of any understanding whatsoever of the private sector — how it works or what it needs to function.

…Imagine any of this generation’s Democratic establishment taking a job at Procter & Gamble in Cincinnati as a middle-manager responsible for a division of employees and its annual profit and loss. It is wholly inconceivable. Or helping an owner of an auto-parts company manage through a real crisis. They wouldn’t have a clue.

More: Democrats Bid Business Adieu

“My basic theory was this: “Charities” raise funds and redistribute them. By nature, value is destroyed in the process. You hope a well run charity might take your $1 donation and turn it into 80 cents of giving. A for-profit company, however, creates value. An investor expects their $1 to generate income over and over again. What if you created a for-profit business, then used the resources created for ministry?”

An interesting question.  World Vision, a ministry I admire for their theological commitment and compassionate humanitarian services, began funding microbusinesses in 1993 and now helps entrepreneurs in 40 countries around the world.  Money given to the microenterprise program is distributed to small business owners as loans.  Loan receipients are given training and business coaching to help ensure the success of their businesses.  As the businesses grow, the loan repayments are pooled and used to fund further business development in the region.

For me, the main thing missing from this model is the return for the original investors.  Kiva does this and I wish World Vision did as well.  Contributions to World Vision’s efforts are helpful at tax time–and certainly helpful for the receipients of the loans–but there’s less incentive for investors since they receive no return on their investments: they are donors, not investors.

Back to the BAMN quote above–how much value in the original investment/donation to a charitable microenterprise effort gets eaten by administrative overhead?  Wouldn’t a more efficient, for-profit model be more beneficial?  Are there some organizations doing this already?

Some years ago when I worked at the libertarian Cato Institute, we used to label any new hire who had not yet read “Atlas Shrugged” a “virgin.” Being conversant in Ayn Rand’s classic novel about the economic carnage caused by big government run amok was practically a job requirement. If only “Atlas” were required reading for every member of Congress and political appointee in the Obama administration. I’m confident that we’d get out of the current financial mess a lot faster.

Many of us who know Rand’s work have noticed that with each passing week, and with each successive bailout plan and economic-stimulus scheme out of Washington, our current politicians are committing the very acts of economic lunacy that “Atlas Shrugged” parodied in 1957, when this 1,000-page novel was first published and became an instant hit.

Rand, who had come to America from Soviet Russia with striking insights into totalitarianism and the destructiveness of socialism, was already a celebrity. The left, naturally, hated her. But as recently as 1991, a survey by the Library of Congress and the Book of the Month Club found that readers rated “Atlas” as the second-most influential book in their lives, behind only the Bible.

For the uninitiated, the moral of the story is simply this: Politicians invariably respond to crises — that in most cases they themselves created — by spawning new government programs, laws and regulations. These, in turn, generate more havoc and poverty, which inspires the politicians to create more programs . . . and the downward spiral repeats itself until the productive sectors of the economy collapse under the collective weight of taxes and other burdens imposed in the name of fairness, equality and do-goodism…

The current economic strategy [from Washington] is right out of “Atlas Shrugged”: The more incompetent you are in business, the more handouts the politicians will bestow on you. That’s the justification for the $2 trillion of subsidies doled out already to keep afloat distressed insurance companies, banks, Wall Street investment houses, and auto companies — while standing next in line for their share of the booty are real-estate developers, the steel industry, chemical companies, airlines, ethanol producers, construction firms and even catfish farmers. With each successive bailout to “calm the markets,” another trillion of national wealth is subsequently lost. Yet, as “Atlas” grimly foretold, we now treat the incompetent who wreck their companies as victims, while those resourceful business owners who manage to make a profit are portrayed as recipients of illegitimate “windfalls.”

Get the rest.

How about a system that encouraged investment and saving?  Is it possible that the system has played a part in the current recession and credit crisis?  Probably.  At this point we don’t need stimulus spending; we need lower taxes.

May your 2009 be blessed with greater wisdom, deeper relationships, rich insight, and lower taxes.

(Incidentally, don’t blame me when your taxes are increased over the next president’s administration: I voted Libertarian this year.)

Congress has been suitably tough in its advice to Detroit, calling for “a complete restructuring” of our failing auto makers. But how about restructuring Washington? The federal government is a giant Rube Goldberg machine that not only wastes hundreds of billions of dollars each year but also burdens local governments and the private sector with legal requirements that no longer serve the public good. Congress should take its own advice and retool Washington.

Remember the internship?  Seth Godin is now offering a few bright and creative people the opportunity to work with him for a few months.  Tuition is free.  This would be a business education unlike any other you could get–at any price.  It starts January 19, 2009, and you’ll need to apply by December 14.  Here are the details.

I watched this video with a few students last week and we were impressed with his easy presence and lack of pretense, not to mention that he now lives off only 10% of his income and gives away the remaining 90%.  He has used both his new-found affluence and influence to try to do some remarkable things–like work toward solutions for poverty and the global AIDS problem.  As this profile in the Wall Street Journal indicates, Rick Warren is not a fan of government solutions: ”There is only one way to get people out of poverty and it’s not charity. It’s jobs.”  Take a few minutes to enjoy this talk.

This ninth biennial fiscal report card examines the tax and spending decisions made by the governors since 2003. It uses statistical data to grade the governors on their taxing and spending records – governors who have cut taxes and spending the most receive the highest grades, while those who have increased taxes and spending the most receive the lowest grades.

In my home state of Illinois, Gov. Rod Blagojevich received an “F,” with the second lowest score of on the list.  The report summarizes the governor’s efforts thusly:

Rod Blagojevich of Illinois has been singleminded in his drive for tax increases on businesses. In 2007, he pushed for a huge $7 billion tax hike in the form of a new business gross receipts tax and increased payroll taxes. That hike was the largest proposed or enacted increase of any governor in this report, measured in total dollars or as a percentage of current taxes. He has proposed schemes to wallop businesses nearly every year since 2003, including plans to raise taxes on refineries, gaming businesses, and software companies.  Blagojevich seems unaware that Illinois is competing against other states and nations for business investment in the global economy.

I hope you fared better than those of us in Illinois.  Unless you live in Maryland (which received the lowest overall grade), apparently you did.  Find your governor’s grade.