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We need to fix the problem, and credit ainít it!

Yesterdayís report that Sea Tow recorded a 19 percent increase in marine assistance calls during the July 4 holiday gets a big bravo! Oh, not because boaters had any problems out there, but because they were out there at all.

Itís good news when lots of people are using their boats. Because thereís no question the more people use their boats, the better the chance their desire for that new boat may be re-ignited. And, while weíve spent a lot of time these last couple of years lamenting the impact the ďcredit crunchĒ has had on our dealerships and customers, the truth is whatís really needed to get our industry going again is boaters getting fired up to move up.

ďThereís no problem a good sale wonít cureĒ is an old expression. Itís still true. So, when we talk about ďeconomic stimulus plansĒ these days, we should clearly be targeting consumer spending. But, thatís not happening. Washington continues to miss it and, therein, rests a critical part of our problem. Both Congress and the Obama administration have been great at lip service about helping small businesses and providing SBA loan money. Puleeze . . . as if that were a magic answer.

What did we get from the last $730 billion stimulus? For about $79 billion, we got a couple of broken down car makers (with lots of UAW employees) and some freakiní bridges and roads somewhere! Meanwhile, those who allegedly represent us failed to recognize itís the nationís small businesses that provide more than 60 percent of private sector jobs. People with jobs make money. People with money buy boats. So, they think making $30 billion available for SBA loans will miraculously turn all our small businesses around . . . why, theyíll borrow this money and begin hiring employees again! Itís time these politicians got back from Oz to Kansas to become reality-based again, if they ever were.

The fact is small businesses, like boat dealerships, will expand and hire people only when sales, not loans, justify the need. Thatís pretty business-school-basic, isnít it? So how does Washington conclude that a lack of loans is the reason thereís no hiring going on? The truth is SBA loans can, at best, be a short-term fix to keep things going until sales increase. Thatís fine — boating supports that. But, we also recognize itís not the key to solving the economic problems. Clearly, public policy needs to provide real stimulus by including provisions that substantially reduce taxes for consumers. In fact, consumers will face a big tax increase looming ahead next year if certain tax reductions are left by Congress to expire.

†Moreover, consumer tax reductions should be coupled with proposals like the temporary elimination of payroll taxes for small businesses and major tax credits for hiring. Until that happens, consumers will continue to hold back their spending, sales will not increase and small businesses will not hire again. Itís time Washington moved ahead, and with urgency.

Comments

5 comments on “We need to fix the problem, and credit ainít it!

  1. Ben Sherwood

    Norm:

    You are spot on again. The administration has so badly handled this economic crisis while creating a debt load our great grandchildren will probably have to pay. The last words any of us want to hear are, “I’m from the government and I am here to help you.”

  2. Don Thurston

    There you go Norm, they finally got you mad! (actually, I knew you were mad from the start, when Barney Frank wanted to put all the balme on the banks) It has now started to wear through your veneer. You are now transitioning from cheerleader and positive talker to problem solver.
    I’ve been feeling the anger for well over a year now because nobody who could be heard in Government knew how to (or wanted to) get anything economically positive to happen. The SBA thing was a pure act from the wizard ! No peeking behind the curtain! Sort of like the old country doctor bleeding the patient to get the poison out until lack of blood finished the poor weak patient off. “Well, he was too sick for us to save” came the excuse. It was never the fault of the ignorant President, err, sorry, I meant physician, who squandered the final reserves the patient could have used to survive.
    We have been successful in turning the tide at our marina. We stuck to our guns and promoted blowout pricing on millions of dollars of inventory. We looked long and hard at trades, and passed on the rotten fruit. We cherry picked the trades just like we were being plucked on the new stuff, but we got it done , and we are here. We are using our own capital to purchase limited new inventory. We are capitalizing on our strengths in service and being flexible on all our rates and slip rentals. It’s better to have 2/3rds the cash flow and full slips than nothing !
    Be politically active. There is a groundswell of political “P” “O’d” ness. We are being talked down to. We are being ignored. We are being lied to. Yet we have some surprisingly gutsy group of politicians who want to see America back to where we were when we actually built things here.
    Jeep has a wonderful and emotional TV commercial running right now featuring the new “American” jeep that is actually built by and for Americans. I almost forgot that they were owned by Italians (Fiat).
    What a great message they presented no matter who owns them !
    I am / we are by now fully vested in what we all (businessmen & women) are going through. I like winning, and I feel I’m on a winning team. We must then quickly and efficiently get rid of the losers and never let them grab the reigns again ! We are driving this economy. We are running this country, our country !

  3. Chip Hart

    This is an age old problem with an age old solution Norm. Make it illegal for lawyers to run for public office. Every time a lawyer wins a public office, they got there telling us one thing and then they do something completely different. I concede every business needs a good one but only for protecting us.
    Now if all of our elected representatives were just like you, we would have no worries. By the way, a corporate income tax reduction might go a long way too.

  4. Doug Reimel

    Hello Norm, it is absolutely amazing what one cup of tea can do for someone. The recomendation is to stay away from the KOOLAID, it is full of artifical ingrediants that are just as empty and unfullfilling as our leadership. I was recently told that if you barrow 1million dollars from the bank the bank is in control. But if you barrow 100 million you are in control of the bank and can dictate terms. Such as who they loan money to so you can pay the bank. Well I for one am not willing to spend my way into prosperity. Our leaders believe they know what is best for us. They do not want to hear what we have to say.

  5. Kevin McLaughlin

    This this is an age old problem, and we are not providing a solution, we’re just crying. Nobody wants big government. A large number of people do not want to recognize what the reduced funding of governmental agencies and the promotion of industry self-regulation did to everyone in America over the last 20 years. Yes, those who went on self-centered great expansion and profit programs, without regard to the impact of everyone else, did very well. They made a lot of money, even if they are out of business today. In the stock market we talk about fear and greed. Well, we know what greed can do when it is out of control – good for the winner, bad for everyone else. We, big and small business alike made a bunch of money, and simple Joe the worker lost a job.

    For the small government advocates who seem to say, don’t provide a stimulus to anybody but me, just give me and my business some help, either fish or cut bait. I doubt very many business owners spent money on capital goods, inventory, or labor just because there was a tax brake available. It is more likely owners spent money because they had data that told them they could lower costs and increase sales. Well, the government cannot directly impact your sales. Yes, if more people, like engineers, road workers, and bridge builders, have money, some of them might buy our boats. However, if our boats are overpriced, prone to expensive failures, and consume huge amounts of gas per hour, we have only ourselves to blame for decreased sales.

    I suggest it is time to stop looking to blame one political party or the other. It is time to start building even more quality and excellence into our industry and products. It is time we stop saying stimulate me (boating industry), but don’t stimulate my neighbor (any other industry) (with money or tax cuts) and starting doing what smart business people went into business for – fill a consumer need with a quality product priced at a fair and competitive price.

    By now most marine businesses have cut all the fat they can cut. Going forward, everyone needs sales. What are you doing yourself to increase sales in your business? Are you providing better/the best customer service you can? Are you buying products that are high quality and priced fairly? Are you talking with your customers and finding out what is motivating them to either buy or not buy? Are you finding innovative ways to go to your customers or bring them into your store? Have you cleaned the customer bathroom lately; have you repainted your showroom; have you refilled your sales brochure rack with current materials? Are you doing the all small things in your business that make a big difference to your customers? Are you focused on being known as the best in your community? Are you focused on being known as the quality provider in your community? If not, you have a lot of work you can do, and you do not need any government help.

    By the way, if you make decisions based on tax benefits, ask your accountant about the payroll tax benefit derived from hiring an unemployed person. If it means anything, then ask which ugly government agent provided the benefit.

    Sorry people, as you can tell, I think we can do a lot for ourselves and we do not need to complain or groan about it. We need to help ourselves increase our own sales. I also think, a lot of the people we laid off over the last couple of years, do need a helping hand. If I cannot help them today, I’m not upset (not real happy, but not upset) if the government can.

    Tom Peter’s wrote “In Search of Excellence” a long time ago. Focus on what you can do for your company in your community, and stop looking to Washington, DC for anything (good or bad). Your a businessman, run your business.

    Kevin J. McLaughlin

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