Home Depot founder to Obummer: just get out of our way

Why do I suppose that our president never read Atlas Shrugged?

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.


20 Comments

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20 responses to “Home Depot founder to Obummer: just get out of our way

  1. Excellent article and so true.

    Home Depot stock has been bery bery good to the entire EOS family. But we shop at Lowes. 🙂

  2. CF asks, “Why do I suppose that our president never read Atlas Shrugged?”

    I can’t guess why you suppose anything, sir. It would be presumptuous of me. But I’ll guess why Obama never read A.S.: He can’t stand to read bad novels.

  3. Georgie in Greenwich

    LLS,

    I suppose the premise that these three entrepreneur “casino gamblers” (as you call people who risk it all to start something new) created untold wealth for employees and shareholders alike is too hard for you to grasp.

    Obama who has been a government employee basically his entire career (professor, community organizer, Senator, etc) has simply no idea what it takes a small business or even a large Fortune 500 to stay competitive.

    The Chinese, Indians, Koreans, Germans et al must laugh at us….and licking their chops with the opportunity!

  4. Anthony Fountain

    The perception is ever-increasing Obama can’t stand to read good novels, either–or even indifferent.

  5. chimney

    I’ve got to respond to that comment- to offset LLS’s learned opinion, Atlas Shrugged is the best novel I’ve ever read. That’s the first time I have heard that kind of statement about Ayn Rand.

  6. Old Coot

    Why do I suppose that Obama’s reading list is limited to authors such as Bill Ayers, Saul Alinsky and Jeremiah Wright? Easy…those are some of his heroes.

  7. Anonymous

    Generally agree w/Langone’s criticism of the commie-in-chief who has never had a real job in his life, like most clowns in DC

    Amusing to see outcome of The First Commie waging war against job-creating industries (and their evil “fat cat” owners and investors) throughout private sector, in the midst of a jobs depression and deleveraging cycle no less

    However, Home Depot is a major beneficiary of the 30-year taxpayer-subsidized debt/consumer bubble, as is most of anything in housing, retailing, tourism, entertainment, healthcare, etc: all avid consumers of corporate welfare (via overly cheap and excessive consumer debt thanks to government manipulation of cost of capital) w/uncertain net economic value on any risk-adjusted multi-decade basis to US taxpayers and investors

    • I don’t agree, Anon. At least in my experience Home Depot did well because an entire generation (that would be mine) bought old houses and fixed them up ourselves. That was in the 80’s, when almost every young couple I know had stretched their budgets to buy old wrecks, and we were all busy, weekends and evenings, improving them. That all changed in the 90s and especially in the 2000s, but Home Depot took off because of the DYI movement. Or at least, that’s how I experienced it.

  8. anonymous2

    Langone’s pitch is fine until the end when he goes off the rails to suggest the government confiscate Social Security benefits owed to what he calls “high net-worth” people.

    That would be all well and good were Social Security and Medicare welfare programs like Medicaid and Food Stamps, but they are not. We have all been forced to pay specifically enumerated taxes to these schemes in exchange for a government promise to pay up when the time comes. Would Washington confiscate annuity payments from MetLife?

    Now, if the government wants to break the Social Security promise to millions of millionaires that’s fine, but I’m willing to bet by the time that goes into effect there won’t be any high net-worth people left in this messed up country. The cash will be invested safely abroad out of the reach of the DC crooks. How will Langone finance more Home Depots?

    In the meantime, Mr. Langone is revealed as a socialist. It’s Lowes from now on…

  9. anony

    It’s amusing to see Langone complain about how Obama is screwing things up. Probably the most important decision Langone and the HD board made was to hire Nardelli, who proceeded to run the company into the ground (he then also got to run Chrysler into Ch 11 too) and, even after that, he was awarded a $210 million severance package. I think when Langone owns up to his own incompetence, he can throw stones elsewhere. As for Obama bashing, just remember how badly the Republicans screwed up the country under 8 years of Bush. Bunch of incompetent, hypocritical idiots (think Palin, nucular, WMDs, water boarding, massive deficits, Cox at SEC…you get the idea) that party.

  10. Peg

    One night in high school, I stayed up all night long and read Atlas Shrugged from beginning to end. Electrifying! (I will admit, however, that my favorite Rand novel is We The Living – one that is rarely mentioned.)

    And – I agree with you about Home Depot, Chris. For those who can’t afford to have a pricey remodeler redo, Home Depot is there. Fix the shower, install a garage door, overhaul the kitchen – HD can help the handy for a less than substantial price tag.

    • Peg, I found the book just before dinnertime in my first year at college. Read it during that meal and, like you, stayed up all night and finished it over breakfast. Amazing read, especially for a liberal kid just beginning to have doubts about what he’d been taught.

    • Peg, I found the book just before dinnertime in my first year at college. Read it during that meal and, like you, stayed up all night and finished it over breakfast. Amazing read, especially for a liberal kid just beginning to have doubts about what he’d been taught.

  11. Such one-sided and intemperate rubbish! What time do you folks start imbibing on a Saturday–noon? Sheesh.

    (I know you don’t indulge, CF. So what’s your excuse?)

  12. Peg

    Although I thought of myself as a liberal during high school and college – complete with the “Impeach Nixon” t-shirt that I still have shoved in a closet – in reality, I don’t think that my underlying beliefs have changed all that much through the decades. Back then, I believed in personal freedom – and responsibility – in government staying as much out of our lives as was possible, and of all of us needing to do our best for society to work – and to give a bit when some of us stumbled a little (or even a lot).

    I think I was what is referred to as a “classical liberal” – and not sure that I’m really not today. Somehow, the liberalism that I embraced morphed into something really rancid and ugly along the way….

  13. francisco

    No one has any need to read Atlas Shrugged anymore. All one has to do is open a newspaper. We are living it.

  14. Peg

    Ugh, francisco. Very well said. Wish you were wrong – but alas; you are right on the money.

  15. Hu Nhu?

    Obama can barely read a teleprompter without a gaffe. Any novel, good or bad, would be too much for him to process.

  16. Fred2

    “We The Living ”

    The most depressing freaking book I ever finished.