George McGovern

With former Senator and Presidential candidate George McGovern on life support tonight, I thought I’d share this op-ed he wrote in 1992.

A high school young Republican friend of mine told me earlier today:

“He goes to the diner by my apartment. I see him there every now and then. Was still sharp this summer.”

In all of the tweets I’ve seen from liberal fans of his, I haven’t seen many people talk about this op-ed he wrote, giving perspective to his years as a Senator and politician from an older man in the private sector.

It is a great read. McGovern’s prognosis isn’t promising. A dedicated public servant, America owes him gratitude.

A Politician’s Dream Is a Businessman’s Nightmare

(BY GEORGE MCGOVERN) JUNE 1, 1992 | Wall Street Journal

`Wisdom too often never comes, and so one ought not to reject it merely because it comes late.’ — Justice Felix Frankfurter.

It’s been 11 years since I left the U.S. Senate, after serving 24 years in high public office. After leaving a career in politics, I devoted much of my time to public lectures that took me into every state in the union and much of Europe, Asia, the Middle East and Latin America.

In 1988, I invested most of the earnings from this lecture circuit acquiring the leasehold on Connecticut’s Stratford Inn. Hotels, inns and restaurants have always held a special fascination for me. The Stratford Inn promised the realization of a longtime dream to own a combination hotel, restaurant and public conference facility–complete with an experienced manager and staff.

In retrospect, I wish I had known more about the hazards and difficulties of such a business, especially during a recession of the kind that hit New England just as I was acquiring the inn’s 43-year leasehold. I also wish that during the years I was in public office, I had had this firsthand experience about the difficulties business people face every day. That knowledge would have made me a better U.S. senator and a more understanding presidential contender.

Today we are much closer to a general acknowledgment that government must encourage business to expand and grow. Bill Clinton, Paul Tsongas, Bob Kerrey and others have, I believe, changed the debate of our party. We intuitively know that to create job opportunities we need entrepreneurs who will risk their capital against an expected payoff. Too often, however, public policy does not consider whether we are choking off those opportunities.

My own business perspective has been limited to that small hotel and restaurant in Stratford, Conn., with an especially difficult lease and a severe recession. But my business associates and I also lived with federal, state and local rules that were all passed with the objective of helping employees, protecting the environment, raising tax dollars for schools, protecting our customers from fire hazards, etc. While I never doubted the worthiness of any of these goals, the concept that most often eludes legislators is: `Can we make consumers pay the higher prices for the increased operating costs that accompany public regulation and government reporting requirements with reams of red tape.’ It is a simple concern that is nonetheless often ignored by legislators.

For example, the papers today are filled with stories about businesses dropping health coverage for employees. We provided a substantial package for our staff at the Stratford Inn. However, were we operating today, those costs would exceed $150,000 a year for health care on top of salaries and other benefits. There would have been no reasonably way for us to absorb or pass on these costs.

Some of the escalation in the cost of health care is attributed to patients suing doctors. While one cannot assess the merit of all these claims, I’ve also witnessed firsthand the explosion in blame-shifting and scapegoating for every negative experience in life.

Today, despite bankruptcy, we are still dealing with litigation from individuals who fell in or near our restaurant. Despite these injuries, not every misstep is the fault of someone else. Not every such incident should be viewed as a lawsuit instead of an unfortunate accident. And while the business owner may prevail in the end, the endless exposure to frivolous claims and high legal fees is frightening.

Our Connecticut hotel, along with many others, went bankrupt for a variety of reasons, the general economy in the Northeast being a significant cause. But that reason masks the variety of other challenges we faced that drive operating costs and financing charges beyond what a small business can handle.

It is clear that some businesses have products that can be priced at almost any level. The price of raw materials (e.g., steel and glass) and life-saving drugs and medical care are not easily substituted by consumers. It is only competition or antitrust that tempers price increases. Consumers may delay purchases, but they have little choice when faced with higher prices.

In services, however, consumers do have a choice when faced with higher prices. You may have to stay in a hotel while on vacation, but you can stay fewer days. You can eat in restaurants fewer times per month, or forgo a number of services from car washes to shoeshines. Every such decision eventually results in job losses for someone. And often these are the people without the skills to help themselves–the people I’ve spent a lifetime trying to help.

In short, `one-size-fits-all’ rules for business ignore the reality of the market place. And setting thresholds for regulatory guidelines at artificial levels–e.g., 50 employees or more, $500,000 in sales–takes no account of other realities, such as profit margins, labor intensive vs. capital intensive businesses, and local market economics.

The problem we face as legislators is: Where do we set the bar so that it is not too high to clear? I don’t have the answer. I do know that we need to start raising these questions more often.

Link: http://1.usa.gov/jO4SHw

George Stanley McGovern (born July 19, 1922) is a historian, former United States Representative, Senator, and Democratic presidential nominee. McGovern lost the 1972 presidential election in a landslide to Richard Nixon. As a decorated World War II combat veteran, McGovern was known for his opposition to the Vietnam War.

Facebook Comments

comments

2 Thoughts on “George McGovern

  1. Thanks for this, Jim. It does indeed provide perspective on McGovern’s policy preferences, but it in no way negates them. Nor does it suggest that regulations – all, most, or even some – are a bad idea. And I don’t mean to suggest that you’ve posted it on the basis of such an interpretation.

    Rather, all it says is that regulation is a complicated matter. If we are to interpret the op-ed more deeply, perhaps it says something about the level of government at which regulation needs to happen. But that claim would be based on the logical leap from “need more information” to “more information available to local governments.” A probabilistic statement at best.

  2. Justin on October 18, 2012 at 3:14 pm said:

    Thanks for posting this, Jim. Great op-ed, especially considering the government’s recent (going on about 20 years) tendency to over-regulate and over tax. This made me thing of an article I read earlier this morning about how the Cook County Board in IL proposed their new budget and it includes an $800 tax on every slot/video poker machines in the county, a $25 tax on every gun purchase, a nickel-per-bullet tax on ammunition, a 1.25% tax on merchandise worth more than $2,500 purchased outside the county and $1 tax on every pack of cigarettes. Interestingly, the board acknowledges many of these new taxes would fall directly onto the business. Does the County really think these businesses either won’t pass these costs onto the consumer and/or eventually leave the County to find a cheaper, better place to do business? It’s hard to see how these taxes, especially a 5 cent per bullet tax, strike the balance to which the Senator refers in his op-ed.

Post Navigation