Although I was glad that you answered a question of mine at the Sept. 20 town-hall meeting you hosted in Washington, D.C., Mr. President, I must say that the event seemed more like a lecture than a dialogue. For more than two years the country has listened to your sharp rhetoric about how American businesses are short-changing workers, fleecing customers, cheating borrowers, and generally “driving the economy into a ditch,” to borrow your oft-repeated phrase.
My question to you was why, during a time when investment and dynamism are so critical to our country, was it necessary to vilify the very people who deliver that growth? Instead of offering a straight answer, you informed me that I was part of a “reckless” group that had made “bad decisions” and now required your guidance, if only I’d stop “resisting” it.
I’m sure that kind of argument draws cheers from the partisan faithful. But to my ears it sounded patronizing. Of course, one of the chief conceits of centralized economic planning is that the planners know better than everybody else.
A little more than 30 years ago, Bernie Marcus, Arthur Blank, Pat Farrah and I got together and founded The Home Depot. Our dream was to create (memo to DNC activists: that’s build, not take or coerce) a new kind of home-improvement center catering to do-it-yourselfers. The concept was to have a wide assortment, a high level of service, and the lowest pricing possible.
We opened the front door in 1979, also a time of severe economic slowdown. Yet today, Home Depot is staffed by more than 325,000 dedicated, well-trained, and highly motivated people offering outstanding service and knowledge to millions of consumers.
If we tried to start Home Depot today, under the kind of onerous regulatory controls that you have advocated, it’s a stone cold certainty that our business would never get off the ground, much less thrive. Rules against providing stock options would have prevented us from incentivizing worthy employees in the start-up phase—never mind the incredibly high cost of regulatory compliance overall and mandatory health insurance. Still worse are the ever-rapacious trial lawyers.
Funny, but true story about those stock options the writer mentions: When I was still in law school – 1978? 1979? – I visited a friend and his lawyer/girlfriend out in the Hamptons. The girlfriend was complaining because she had spent huge amounts of time helping a company go public and just the day before, as things were being wrapped up, she’d been told “sorry, there’s no cash to pay you, but here: have a bunch of stock options.” Ooh, she was madder than a wet hen that weekend.
Of course, the company was Home Depot. Twenty years later, I asked my friend how Christine the lawyer had made out with her stock. Turns out, she sold half of it ten years on and took early, luxurious retirement.