When Fred Smith speaks, politicians should listen
Saturday, October 25, 2008 at 03:43PM ** Work Alert**
Few businessman have accomplished more than Fred Smith, the founder and CEO of FedEx (note: FedEx is a Ketchum public relations client).
He has built one of the most succesful companies in history -- one that employs 290,000 people around the globe, and boasts the largest civil aircraft fleet in the world. It's been cited time and again as one of America's most admired companies, and has helped drive global productivity simply by making the tracking and delivery of packages more efficient.
So it's worth a listen when Fred Smith opines about our ailing economy, and how to fix it. In an interview with Stephen Moore, an editorial board writer for the Wall Street Journal, Smith gives the best explanation for the financial meltdown that I've seen yet. The money paragraph:
"Rather than in our business where you have to have a dollar of equity for, 10 cents or 15 cents of debt, it's exactly the opposite in the financial sector where you have one dollar of equity for 10, 25, 50 times risk. Things became so flipped upside down [that] the assets at these banks became the liabilities and the liabilities became the assets. These people were making these fantastic returns -- at places like Fannie Mae and Freddie Mac -- but in reality they weren't adding a lot of value. I have said time and again that there is a fundamental tendency in good times in the financial sector to over-leverage. Our national policies actively encouraged all this debt."
And his fix for our struggling economy: reducing the cost of equity for businesses. He notes that our current corporate tax rate of 38 percent (which is higher than even Germany which has a 25 percent corporate tax) hurts U.S. competitiveness and stifles growth. "Look, our capital budget as we went into this year was about $3 billion," he tells Moore. "We went out to Boeing in July for our board meeting to see the new triple seven, [the Boeing 777] which we have bought. If we had a lower corporate tax rate with the ability to expense capital expenditures, guess what? We'd buy more triple sevens. We absolutely have to cut the corporate tax."
As an outspoken McCain supporter, there's little chance that a President Barack Obama would seek Smith's counsel ... then again, perhaps Obama will live up to his promise of reaching across party lines for the best people and solutions. He'd be wise to start with Fred Smith.
Reader Comments (4)
One of Obama's strengths in addition to pummeling McCain overall has been his ability to surround himself with people that know more than him about issues, i.e. defense, economy and more. He makes no bones about it. He doesn't claim to be the single most important mind in the country and that is a exceptionally endearing quality. His brilliance is in knowing who the best are, and them adding to his team. He has run an amazing campaign and this plays no small part.
To me, in terms of this leadership test (or lack thereof) that gets thrown his way by McCain camp and others need only look at the campaign he and his internal and external team have masterfully run to get a sense if what a leader he has been. If his campaign were a publically traded company, they would have already move to become part of the Dow 30. My guess is that from a political science standpoint, the case study on how the Obama campaign was run will be mandatory reading for students and current/future politicians alike.
To me anyways, If Mr. Smith can help him, and was of the mind that he can advise a democratic president, no doubt Obama would look to his advice as well...this is what makes him great.
Thank you for your sharing!
cheap nike shoes
Discount Louis Vuitton Handbags
<h1>replica designer bags</h1> Affordable bags
<h1>replica designer handbags</h1> Come ah
<h1>air max 2012</h1> Favorites
<h1>nike shox turbo</h1> Discounts and more
<h1>men puma shoes</h1> Online Sales
<h1>air max 90</h1> Wholesale sales
<h1>wholesale puma shoes</h1> Wholesale sales
<h1>puma shoes sale</h1> Look comfortable
<h1>timberland mens boots</h1> Buy comfortable
<h1>gucci women shoes</h1> You are wrong?
<h1>louis vuitton outlet</h1> There must you like
new era hats
new era hats