Wednesday, November 09, 2011

IBD Blog Series on Small Business And Regulation‏

Each day this workweek Capital Hill will feature a small business owner who struggles with government regulations. The companies were provided to us via the National Federation of Independent Business which, in recent weeks, has been blanketing Congress for reform as part of its Small Businesses for Sensible Regulations program.

The first business in this series is Cooper Enterprises, which manufactures wood and laminated components like office furniture and flooring. Located in Shelby, Ohio, it is owned by Monty Friebel. The business has been in his family since 1965. It currently employs 61 people.

Friebel’s biggest regulatory difficulty is dealing with the sawdust produced at his business. The Occupational Safety and Health Administration deems this to be “combustible dust.” Friebel spends over six figures making sure his business meets OSHA’s standards on combustible dust. The problem is that it’s not very clear what those standards are.

“There are no specific guidelines on dealing with combustible dust,” said Friebel. “OSHA addresses it under its ‘General Duty’ clause.” The General Duty clause merely states that “Each employer shall furnish to each of his employees employment and a place of employment which are free from recognized hazards that are causing or are likely to cause death or serious physical harm to his employees.”

That provides no guidelines as to how much combustible dust is unsafe or what procedures must be used for handling it.

“We have very highly sophisticated dust collection systems in place for all of our equipment and we have good housekeeping practices to keep the place clean and organized,” said Friebel. “But it is impossible for me to cut or mill anything without generating some level of uncaptured dust. So I’m automatically in violation of the OSHA General Duty clause. I can’t be in business and not be in violation of the clause.”

While Friebel has never been fined for combustible dust, other people he knows in the business have. But that hardly means that Friebel pays no cost. “I’ve had to add an additional person to the safety team and I’ve had to spend more money with my outside safety consultant trying to mitigate this concern.” He estimates that costs him between $120,000 and $150,000 annually.

It’s not even clear how much of a safety hazard combustible dust is. Friebel doesn’t think sawdust is all that combustible. He says it requires a fuel source, air and an ignition source. In the over twenty years he’s been involved in with Cooper Enterprises, he’s had no explosions due to combustible dust and only two small fires in the dust collection system that were easily extinguished.

In short, Friebel is spending a sizable amount of money on an unclear regulation to deal with a substance that is of minimal danger, money that is not being spent on a new employee, or increasing sales, or developing a new product.

“These costs are at the point right now I question why I still have a business, and you have to question why other businesses have left the U.S. and gone elsewhere,” he said.



Latino Small Business Owners Tell Their Stories of Lawsuit Abuse

Ramiro Arvizu and Jaime del Campo are the owners of La Casita Mexicana, a small restaurant in Bell, California that has become increasingly popular for its authentic Mexican dishes. Yet one day, Jaime and Ramiro were shocked to receive notice that they had been sued, along with dozens of neighboring businesses, by a plaintiff who has filed more than 500 lawsuits – including many against small Latino-owned businesses.

Roberto Guerrero found himself with a similar problem. The owner of Cumaica Coffee in San Francisco was also sued by a serial plaintiff. Several neighboring businesses were sued by the same plaintiff, and at least two were forced to close.

Unfortunately, these stories of lawsuit abuse are all too typical for small business owners, an increasing number of whom are Latino Americans. In fact, U.S. Census figures show that Latino Americans are creating small businesses at a rate three times higher than the rate for the non-Latino population.

To reach out to this growing community, ILR has created a new Spanish language version of its Faces of Lawsuit Abuse website ( and launched two new videos, in English and Spanish versions, that tell the stories of Jaime and Ramiro as well as Roberto.



Taxpayers Beware: More irresponsible housing expenditure coming

Behind closed doors on Capitol Hill, a massive lobbying effort is underway. On a seemingly small issue with scant public attention, powerful special interests are looking to cash in their chits and strike a deal – a deal that will come at the expense of taxpayers.

This week, House and Senate conferees will negotiate a minibus appropriations measure. Many Americans will focus on the inflated levels in spending and wonder how any self-described conservative could vote for a spending increase. The media will focus on the threat of a government shutdown and hope it will spike their rating. However, those powerful interests will focus like a laser on securing an increase in the conforming loan limit.

Wait! Don’t stop reading. Conforming loan limits sound boring, but that is by design because boring doesn’t invite scrutiny. In reality, this stealthy, special interest lobbying effort has major ramifications for America’s housing market and it could be the most significant legislative action this Congress.

An increase in the conforming loan limit would increase taxpayers’ exposure to additional bailouts by allowing the Fannie Mae and Freddie Mac (the GSEs) to purchase and the Federal Housing Administration (FHA) to insure home loans up to $729,750. As of October 1, the stimulus-era increase ended and the limit dropped to $625,000. Before the financial crisis, it was $417,000.

In practical terms, it would mean taxpayers would now be on the hook for guaranteeing home loans for as much as $729,750. If you’re looking to buy a home in that price range, you’re probably a fan of this idea because it would amount to an “upfront subsidy” of more than $123,000 since the down payment is not risk-based, according to the folks at Economics21. However, as we saw last week when taxpayers shelled out another $6 billion to keep Freddie Mac solvent, there is a serious risk to the taxpayer.

That is why Republican presidential candidates have mentioned Fannie and Freddie repeatedly. Even a former Freddie lobbyist is lobbying against the increase. There is widespread recognition the current housing system is broken, and it cannot be fixed without serious reforms to Fannie and Freddie. To their credit, House Republicans laid out a strong position in their Pledge to America last fall:

“Since taking over Fannie and Freddie, the mortgage companies that triggered the financial meltdown by giving too many high risk loans to people who couldn’t afford them, taxpayers were billed more than $145 billion to save the two companies. We will reform Fannie and Freddie by ending their government takeover, shrinking their portfolios, and establishing minimum capital standards.”

Now, an array of special interest housing groups, including the National Association of Home Builders and National Association of Realtors, are lobbying those same House Republicans to turn back on their Pledge to America. And make no mistake, “Big Housing” carries a lot of sway inside the Washington Establishment.



Prepare for the coming Entitlement Nightmare

At a recent National Speakers Association convention, futurist Ken Dychtwald shared a startling fact, "Two-thirds of the people who have ever lived past 65 throughout history are alive today." That's not surprising when he reports that that for 99% of human history life expectancy was 18 years of age. By 1900, it was only 47.

But by 2030, over 20% of America's population could be over 65, and they'll expect the government to honor its promise to take care of their retirement and healthcare needs for the rest of their lives. They'll have more political clout to demand it than they have now. If not dealt with soon, funding their entitlements may very well bring America to its knees.

When German Chancellor Otto von Bismarck first set 65 as the age for receiving state pensions in 1889, life expectancy was 45 years of age. Using that difference from our current life expectancy of 78, today we'd start benefits at 98.

That won't fly in this age of entitlement, but politicians on both sides of the aisle better start facing reality. We need bold leaders willing to make dramatic changes to our outdated and underfunded Social Security and Medicare system so that future generations to avoid a financial collapse.

Unfortunately, expecting bold leaders to emerge from our promise more, spend more, owe more political culture seems Pollyanna at best. As Will Rogers said, "We could certainly slow the aging process down if it had to work its way through Congress." Waiting for bankruptcy and chaos on the streets is not leadership. But besides voting for politicians who will tackle the entitlement addiction, what can citizens do to age responsibly?

Start by facing the challenge. Seeing families cope with the financial and health challenges of aging is sobering. Even with planning and resources, Social Security, Medicare, long-term care insurance and offspring who can afford to help, the financial and time strain on caregivers can tax all involved. Just remember, it's not the number of years, but the quality of the life lived that determines whether a long life is a blessing or a curse.

You can't control everything that happens to you as you age, but you can take responsibility for improving your odds of aging well. Some advice is obvious. Pay off debts early. Save more. Spend less. Think simple. Downsize. Get rid of stuff you don't need. And of course, spend time with grandkids. Love on them as they love on you. But if you want them to keep loving you, do what you can to make it less likely you will ever become a burden.

Use it or lose it. Phyllis Diller loves to say, "Maybe it's true that life begins at 50... but everything else starts to wear out, fall out, or spread out." It's no wonder seniors are "spreading out" when the average senior watches 48 hours of TV every week. Aging well requires developing exercise and eating habits that will give you a body ready for action. What's the best exercise? The one you'll do consistently. Trade watching more TV movies for more movement.

Keep working as long as you love it. Instead of sliding into retirement, invest in reenergizing and reinventing yourself. You become an old dog when you stop doing new tricks. Invest 5-10% of your time in developing a Plan B--a career or side business you can continue beyond your retirement. Many companies are creating part-time, project-limited career options for seniors with the right skills and experience. Other seniors have started service businesses out of their homes. As a professional speaker, I treasure the words of George Burns, "I can't die; I'm booked."

With aging, more and more of your friends and loved ones pass away. One woman shared her Senility Prayer: "Grant me the senility to forget the people I never liked anyway, the good fortune to run into the ones I do, and the eyesight to tell the difference.”One of the best ways to find and nurture new caring relationships is to participate in a faith community of your choice. Not only will you nurture your faith and connection to God; you'll find people of all ages who care about you. You will find strength both in helping and in being helped.

Finally, take aging seriously, and yourself lightly. Art Gliner had a great perspective: "We're only young once, but with humor, we can be immature forever." When you stop laughing, you become "old" faster! Read funny books. Watch comedies. Spend time with people who love to laugh. Laughter is a tonic for the soul that can bring momentary joy into the darkest of your days. Rest assured that aging will give you reasons to laugh or to cry. Choose more laughter, and start by laughing a bit more at yourself.




"Occupier" scum attack 78-year-old woman: "We posted video last night in which degenerates from Occupy D.C. stormed the Washington Convention Center where Americans For Prosperity was holding a dinner. In the course of their riot, the Occupiers attacked a 78-year-old woman who had been attending the dinner, and pushed her down a flight of stairs. Her name is Dolores Broderson, age 78. She rode on a bus for 11 hours from Detroit to get there. She went to the emergency room with a bloody nose and bruises on her hand and leg.”

Vietnam war vets seize back hijacked ship: "Taiwan hailed on Monday the bravery of five Vietnamese war vets who launched a surprise assault on six armed pirates and successfully took back their vessel after it had been hijacked off East Africa. The former Vietnam war fighters had been recruited by Taiwan to be part of a 28-man crew on the Chin Yi Wen .... The crew, who had been out of contact with the ship since Friday according to the foreign ministry, forced the six armed Somali pirates to jump overboard" [I like that last bit]

Obama’s contraceptive mandate will snare religious organizations: "A proposed Health and Human Services (HHS) mandate emanating from President Barack Obama’s Patient Protection and Affordable Health Care Act will require all private health insurance plans to cover contraceptive and sterilization prescriptions as 'preventative services' for women. Contraception and sterilization are currently causes of religious tension in many states, and this mandate has become a serious issue for religious institutions."

Government bureaucrats can’t prevent data breaches: "Sony’s popular PlayStation Network suffered a massive data breach earlier this year, exposing 100 million users’ credit card numbers, home addresses and more. Numerous other firms, including Morgan Stanley and marketing firm Epsilon, also have suffered major breaches in recent months. With this epidemic of data breaches making headline after headline, it was only a matter of time before Congress got involved. But more government intervention will only make things worse."

US economic recovery remains anemic, at best: "As the chart shows, real GDP has recovered its losses during the recent contraction and is now running at about the same rate as it was at its pre-recession peak in late 2007. So, the rate at which the U.S. economy produces total output has gained nothing during the past four years, and its present rate of growth, even if it continues, is too slow to bring back into employment many of the would-be workers now without work, including a disturbing number who have been without employment for years."

The varying states of US freedom: "The thought of learning another language in itself gives most Americans hives. Further still, most Americans like where they live and love their country, warts and all, and would never think of leaving. However, for anyone who has a constraint to internationalizing, a compromise solution to securing greater personal freedom without fleeing the homeland does exist: choose your state of residence wisely."


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The Big Lie of the late 20th century was that Nazism was Rightist. It was in fact typical of the Leftism of its day. It was only to the Right of Stalin's Communism. The very word "Nazi" is a German abbreviation for "National Socialist" (Nationalsozialist) and the full name of Hitler's political party (translated) was "The National Socialist German Workers' Party" (In German: Nationalsozialistische Deutsche Arbeiterpartei)


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