Which Presidential Candidate is Right for Automotive Dealerships

The social media sites were hot last night during the presidential debate between Former Massachusetts Governor Mitt Romney and current President Barrack Obama. Since the election of former President Bill Clinton, our nation has been evenly divided over which man is the best person for the job of leading our nation amongst the world.

As a small business owner who helps companies, specifically automotive dealerships, build their business and "Win Customers for Life"; I have some very strong opinions about who I feel should become the next elected President of the United States of America. However, I will let the reader research and decide who I am for, and who I am against. (James Schaefer) This blog is meant to encourage voter participation and look at one philosophical point of view of each candidate and who is the best person for business.

I will try to take a simple common sense approach and put forth the facts as if I were hiring for an executive position within my own company. This essentially is what Americans will be doing in November when they go to the polls. However, just like in the real world; some people would not make good business owners or managers, and some people need to reevaluate whether they are making the right decisions when they vote. Now remember, I am writing this blog about one of the many issues that is very important to me and my company. I am not writing this issue concerning healthcare, defense, or government sponsored programs. Therefore, a truly informed voter should look at all of the issues individually and way them to how their interest would be affected by the outcome of this year's election.

The following point and position is described referencing Small Business and each candidate's position. Hopefully, by laying this out in this format the reader will be able to ask questions of their own and vote for the best candidate that will help them and their interest. This is why the United States is so great. We all have a voice in who will govern us for the next four years.

Small Business:

The fundamental question is what is a small business? My definition is a business that was started from an individual or a group of individuals that developed their company because there was a need for their services or products. It is a business that is not financed by government or publically traded on the stock market. A small business is a private company, and how much money the company makes is NOT a factor. The reason that I feel the amount of revenue a company makes should not be a factor whether the business is considered a Small Business or not is because the risk completely falls on the individual or group of individuals who have created the company. They could fail if the business fails, but if it succeed they should benefit as well. In addition, I believe that the higher the revenue the company receives, the more opportunities they are able to provide for future employees and other companies that provides goods or services to that company.

Now the government has a different definition of Small Business. The Small Business Association (SBA) defines a small business as one that is independently owned and operated. It is organized for profit, and is not dominant in its field. Depending on the industry size standard eligibility is based on the average number of employees for the preceding twelve months or on sales volume averaged over a three-year period.

Most Automotive Dealerships should fall under this definition of a Small Business. However, until recently most dealerships were not classified as a small business. The Recovery Act of 2009 reclassified 89% of automotive dealerships under the SBA; however, the gross revenue receipts were put at $8.5 million. My contention is that this is not fair to the Automotive Industry. There should not be a cap placed on any private business in terms of revenue received nor should a cap be placed on these automotive dealerships for profits gained.

The simple reasoning is that if an automotive dealership is successful; they employ sales people, service technicians, administrative personnel, accountants, parts specialist, and vendors (like my company). Their staff brings in more income which they will spend stimulating the economy. The vendors they employ are able to hire more employees and the cycle of economic growth will continue in a positive direction.

The candidates' positions:

President Obama believes that a Small Business is classified by how much revenue a company brings in. He believes that a company making $250,000 or more should be taxed at a higher rate according to CNNMoney.com. Under this premise, the government would be able to collect more taxes and thus be able to provide more programs for Americans.

Governor Romney believes that taxes are necessary, but tax breaks for Small Businesses would create more jobs. He has stated that the 3% of the highest grossing revenue companies are responsible for 80% of the jobs that Small Businesses provide. In short his method for creating more jobs is to give a break to these businesses and hope those companies will hire more people to help the business continue to experience growth.

I understand each candidates philosophical position on the issue and respect their and others opinion. The president believes that a company which makes more money should pay more taxes to help the country and its government backed programs. The governor believes that leaders of successful business will practice good ethics, and thus provide a piece of the pie for more individuals.

A new study by Ernst and Young projects that a tax rate hike will kill 710,000 small business jobs. Depending on who is elected will determine if this result comes to fruition.

I can tell you this. The larger my company becomes, the more people we will be able to hire. The more profit my company earns, the more benefits we will be able to provide individuals. The more benefits we are able to provide to employees, the better our retention of employees become. If we are taxed at a higher rate, our company will not be able to provide as many jobs otherwise. It is true, I will put more dollars into my account if my company continues to be successful. Contrary to the president's speach about small business "you didn't build that business" in July, I used my own money to start this company. My family and our employees depend on the success or failures of this company. I am sure many automotive dealerships will face the same concerns.

Hope to see you at the polls in November.

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Comment by Timothy Martell on October 5, 2012 at 3:18pm: no. not talking about you david... I read your linked in profile. Surprising that a former dealer principal would stand on the left, but then the 70's were a long time ago...

Comment by David Ruggles on October 5, 2012 at 3:16pm: Experts on the Left? McLean and Nocera you brand as "Left?" The President has done little in his life? Compared to who? Or are you talking about me?

Comment by David Ruggles on October 5, 2012 at 3:13pm: I have read the book. But it is certainly NOT the only research I have done on the subject. Mortenson's book is full of inaccuracies. The CRA had nothing to do with it. Read the Fed's reports, not something written with an objective other than fact.

Thanks for bringing up Dubya!

http://autosandeconomics.blogspot.com/2010/12/george-w-bush-2002-sp...

Comment by Doug Davis on October 5, 2012 at 3:06pm: RE: "David, talk about revisionist history. Are you really going to ignore the fact that it was Barney Frank and Chris Dodd's initiatives and policy's that forced fanny and freddy to guarantee subprime mortgages?

Get a copy of Reckless Endangerment (How Outsized Ambition, Greed, and Corruption Led to Economic Armageddon) by Gretchen Morgenson and Joshua Rosner. It explains how this started and who was responsible. Chief among them are Clinton, Dodd and Frank.

When the Bush administration warned congress of the impending mortgage crisis, he was called a racist because many of those mortgages were going to minorities.

Comment by David Ruggles on October 5, 2012 at 2:58pm: The Contract with America? I recall the country rejected the RW's "hostage taking" when they shut down the government. I recall Newt being ousted on ethics charges. I recall the Republican Health Care Reform Bill, which was the model for RomneyCare, which was the model for ObamaCare.

I also recall the Reagan recession being caused by Paul Volcker and the Fed, as a measure to defeat inflation. I also recall the recovery referred to as the Reagan Recovery, even though THAT was also the result of Volcker's policies.

I'm not big on revisionist history. The facts will do.

Comment by David Ruggles on October 5, 2012 at 2:48pm: RE: "News Flash, trickle down economics works."

When did it ever work? When did we last have a non socialist President? Economies are run based on demand and consumption, which drives everything. Even the wealthiest do better when there is a strong consuming middle class to sell to.

Check the employment statistics since Kennedy. You'll find that jobs added during Dem administrations are double what they are under Republicans. We experienced an increase of 23 million jobs during the Clinton administration. AND that happened under the Clinton era tax structure, higher than now. How do you explain that? If low taxes were the answer, we'd be awash in jobs. We are only taxing at the rate of 15% of GDP, a historical low.

Comment by David Ruggles on October 5, 2012 at 2:44pm: RE: "David, talk about revisionist history. Are you really going to ignore the fact that it was Barney Frank and Chris Dodd's initiatives and policy's that forced fanny and freddy to guarantee subprime mortgages?"

@ Tim - I know this theory is popular in the RW closed information loop. But it is just wrong. Fannie and Freddie didn't cause anything. The were victimized by the fact that they suddenly held trillions in mortgages where the collateral value didn't support the money they had lent. This was caused by the real estate bubble created by unregulated Wall Street. You see, it was Wall Street, NOT F&F who bought all of the sub prime mortgages to package into so called AAA mortgage backed securities. There is a major difference between a CRA mortgage and the kind of stuff Wall Street approved routinely. F&F were prohibited by law from buying the kind of stuff Wall Street bought. In fact, CRA mortgages from that era have performed at least equal to the market overall, not worse. I understand that credit default swaps are complicated enough that many of the predisposed fall back on "Liberals made banks make risky loans." *%% of all the mortgages made during the bubble period were made by NON CRA REGULATED lenders. That reads Wall Street. If you don't believe me, listen to conservative Jack Kemp.

http://www.youtube.com/watch?v=fWNQza4CMwI

If you really want the truth begin by watching the Oscar winning documentary, "Inside Job." Featured is Romney's current economic adviser Glen Hubbard. The there is the documentary, "The Warning," which is the story of the RW's successful effort to block the Commodities and Futures Trading Commission's effort to regulate credit default swaps. Some of the culprits are RWers Alan Greenspan, an Ayn Rand protege, Phil Gramm, Arthur Leavitt, SEC Chairman, and many others.

Then there is the book "All the Devils are Here," Nocera and McLean. Then there is "The Big Short, Inside the Doomesday Machine." Then there are the numerous independent and Federal Reserve studies on the matter culminating in the 500 page "Financial Crisis Report."

If you really want to know what happened, in proper proportion, the information is widely available. But you want get it from the RW propaganda machine.

Comment by Doug Davis on October 5, 2012 at 2:42pm: David, you keep bringing up Clinton. Don't you remember the 1994 elections and the Contract with America? Clinton was successful because he had a Republican congress ushered in by his first term liberal ideas. He learned and moved to the center. Obama will never do that.

If you want to compare, look at Carter. I was a GSM at a store during the Carter administration. I couldn't get any worse than that. He woke up in a new world every day, putting the business world into chaos. The only thing that was good about, the white version of Obama, he ushered in Reagan. Reagan added as many as a million jobs in a single month. I guess you prefer trickle down government?

Comment by Timothy Martell on October 5, 2012 at 2:26pm: David, talk about revisionist history. Are you really going to ignore the fact that it was Barney Frank and Chris Dodd's initiatives and policy's that forced fanny and freddy to guarantee subprime mortgages? You give Bush way too much credit. He was not that smart.

News Flash, trickle down economics works. Did you forget the greatest economies in the history of the world we experienced in the last 30 years? Everyone thinks their problem is different from the last. B S. Its cyclical because the "sheeple" love to forget.

We put a republican in office. Economy's rise. We do well, so we talk about bleeding heart initiatives - save the poor; save the whales; save the children; save the old people; ad nausium. So we put a dem in. He passes a bunch of legislation, we rack up debt, inflation sets in, consumers lose confidence, spending slows, unemployment rises, we find someone who can run a business... republican is elected... repeat cycle.

Come on. Nothing special is going on now except the numbers are bigger. Far too many reliant on government entitlements... Santorini is a nice place to vacation, I wouldn't want to work in Greece though... Will never understand why so many are hell bent on duplicating bad existing philosophies.

Comment by David Ruggles on October 5, 2012 at 2:10pm: RE: "Obama's plan is more of the same."

More of the same what? Romney's plan? More of the same. Unpaid for tax cuts, voodoo economics, and trickle down.

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