The Politics of Business

-by James Cook

There is no doubt that political discussions can be heated. On this industry ezine, they are necessary to stimulate debate about issues that directly and indirectly impact the MH Industry. As demonstrated by legislation of the past, one law can have a tremendous negative or positive impact that can be felt for generations (see Tax Act of 1986.) I think that we can all agree that 1) Not one of us agree 100% with any party or candidate and 2) Continued partisan bickering only ends in lack of progress for the entire country. I want to explain why I feel political discussion in business is essential.

Admittedly, I did not support President Obama in the first election (not that I was supportive of John McCain) because Obama had too little real world private-sector experience and too many left-of-center policies. But he won with the blessing of a Democrat majority in Congress.

Despite my ideological differences, I made sure my daughter watched this historic inauguration. I was proud of our nation; that it could rise from an era of gross racism and only 50 years later, elect its first black president.

I actually remember being hopeful that I was wrong and that Obama was the leader we needed. I hoped that his policies, enacted quickly with a majority in both the House and Senate, would have a positive effect on our economy and our country. I now feel that my hope was misplaced.

While politics can be boring, angering, or infuriating, the fact of the matter is that they do have an impact on how we conduct our business. We are already seeing some impact and projected impact from the Dodd-Frank Financial Reform Act, the SAFE Act, and the formation of the CFPB with its new Anti-Money Laundering program.

As Boe Davis said we, as an industry, should not be blaming government for our self-imposed ailments. I agree. When we blame anything for our circumstances we abdicate responsibility and our power to change those circumstances.

However, we also have a responsibility to do all we can to influence the regulations and policies that are coming out of Washington. Yes, we have dug our own grave but now the government is threatening to start backfilling the hole we are in. We do have the power to stop them and become our own best ally instead of our own worst enemy.

Many of you may live in MH friendly states. I live in Massachusetts: A microcosm of the policies that President Obama has and will continue to impose. There is a liberal Democrat majority on Beacon Hill. Governor Patrick is a close friend of President Obama. What I have seen under Gov. Patrick is what I believe is in store for all other MHCs and retailers if President Obama gets reelected. Here's an example:

– Lengthy, burdensome and paperwork-heavy process to have rules approved by government agencies with many things (like cleanliness standards and maximum lawn height ) deemed ‘unreasonable.’

– Laws that protect residents from retaliation from owners but not vice-versa. If we seek to evict a dead-beat tenant, they can turn around and sue us under a Massachusetts state law that requires the MHC to pay their legal fees. The claims can be for the most inane and frivolous items you can think of or imagine. Our judges heavily favor the resident/tenant in our courts so much so that we have seen great attorneys leave the real estate business out of frustration.

– A further restrictive financial environment. If you think chattel lending is lean in your part of the country, it's virtually non-existent here. We have only a handful of lenders licensed in this state. US Bank, 21st Mortgage, et. al. will not carry a license in MA due to the cost and regulations.

– Further financially unbearable regulations. Right now, our state association is fighting legislation that would require all septic and water systems to be inspected annually by a state-approved inspector (who will, no doubt, be in the 'repair' business as well). In addition this bill, to pay for the administration of it, will increase our licensing fees by a factor of 10 or more. If this bill passes, many communities may be forced into discontinuance.

Ideology aside, the fact is President Obama’s policies are anti-business regardless of what his administration may believe. His policies and rhetoric are why I came to the MH industry over 2 years ago. I was a project manager for a company that primarily made coal burning power plant equipment – much of it to comply with the Clean Air Act. This equipment is large, heavy, and cumbersome so 98% of it manufactured here in the USA.

The moment he was elected with his anti-coal rhetoric, our business hit the skids. No coal plant was willing to invest a capital improvement loan (especially when lending is already tight) on a fuel source that may be made obsolete due to government fiat. Our orders became emergency only – small batches with short lead times. All major expansions and improvements ceased.

As coal burning equipment fails, many power plants switched to burning oil and natural gas which are more expensive. This increased cost drives up electric rates and increases demand on these fuels. Increased demands drive up fuel costs. Now the consumer is facing higher electric bills, paying more at the pump and higher prices for all other goods they purchase that are directly or indirectly affected by increasing electric and fuel costs. Maybe supply-side economics don’t trickle-down 100%, but increased costs always do.

The Obama Administration has supported these increases. His energy secretary, Steven Chu, is on the record in favor of $9-10 a gallon gas because that would make it easier to transition into solar, wind and other green energy sources. Don't get me wrong, I'm for green energy, but I'm not willing to kill our economy in the process to get it.

If you are voting to reelect President Obama, I am okay with that. There are clear ideological differences and some people subscribe to a different belief system. However, I implore you to take a close look at your own ideology and your business. If you know business owners in Massachusetts or California, do your own survey and ask them if their state’s policies are hurting or helping their business.

We may disagree and that is fine. This is my opinion and I am entitled to it. However, politics are intertwined with every U.S. business whether we like it or not. Any industry publication that ignores politics, its policies, and legislative issues does so at its own risk. Political op-ed pieces are essential. If you disagree with me or any other author, you are welcome to write an opposing viewpoint. However, if you do not think political opinions belong on this site, I will gladly defend your right not to click on them.##

James Cook
MHC Property Manager
Member Massachusetts Manufactured Housing Association