The Hangover - A Chicago Story of drinking the Economy and Politics Cocktail

A few weeks ago I was in Chicago on business and had a very interesting conversation with a British company that recently established its US headquarters there. Through its Public Relation’s firm, Chicago’s Trinity United Church Of Christ, the former Church of the Obama’s that was a source of much scandal during last year’s US Presidential elections, approached the company. As a business process outsourcing company, the British firm is a welcomed entity to Chicago given its investment will create jobs and positively impact the local economy. The Reverend Otis Moss III, current head of Trinity United, met with the President of the company and proposed a very interesting partnership.

Reverend Moss proposed to introduce this company to Illinois Senator Roland Burris – also at the center of scandal himself over the Governor Rod Blagojevich impeachment last year – for the purpose of pursuing some local and national government contracts. The parties met, the opportunities were identified, and they are legitimate opportunities that are in the interest of both State and service provider.

The condition for the introductions from Reverend Moss was this: if you are successful in securing business process outsourcing contracts with local and national government entities, then you hold a recruitment fair at my Church and recruit people from my neighborhood. The President of the company plans to honor this commitment and will recruit as much talent as is available from Trinity United’s neighborhood.

Now there is nothing illegal or even slightly off that I can see about what has transpired here between the British company, Trinity and Senator Burris. If anything, you can applaud the company and Trinity for being innovative, while you can say Senator Burris was simply doing what he is supposed to do, introduce ways to improve local government. But something doesn’t sit right with me and it won’t go away several weeks after my visit to Chicago.

One thing I have learnt as an Executive who works with companies all over the world is to trust my intuition, and when something refuses to go away you have to hold on to it until it becomes clear. And it hit the other day when I was reading the recent "upbeat" news is that the level of unemployment has leveled off at about 10% after its earlier climb this year. That is what we are celebrating? It fell from 10.2% to 10%, and that has people singing rebound? I don’t get it.

But then what are you going to do in today’s climate? No one is inspiring confidence when it comes to the economy, not even the economists. The ‘experts’ advising the administration are staying away from the hard facts and figures that do not support what we are seeing and hearing from the capital today. And the unemployment figures are the sharpest of these facts and figures, indicating that the $787 billion stimulus package in the American Recovery and Reinvestment Act and its protectionist "Buy American" provisions remain a perpetual irritant to international trade and investment. The warped Cash for Clunkers program created a short bubble via a massive public giveaway (and incidentally doing nothing to help the environment), and is more akin to prescribing an aspirin for brain cancer. All of these initiatives fail to inspire confidence so what is a community leader like Reverend Moss to do?

And as if the White House is borrowing a page from the book of the Chicago community leader, a job summit was held on December 3^rd aimed at solving the unemployment problem that is hurting America and Americans today. Now I don’t personally have a view on the jobs summit and I purposely refuse to jump in a political debate over this President and his performance, but as a business executive I do know that the economy works on the same sound principles for the past 1,000 years, and its not a job summit followed by more government spending that is going to create them. And its not the President saying to Business: we need more jobs. No, subsidies for these programs sop up wealth and thus kill sensible job opportunities elsewhere.

And that is why you have a Reverend approaching a foreign entity to leverage his political connections, hoping that would create jobs somewhere down the road for his flock. 15.4 million unemployed, one Reverend. It won’t work.

You can only improve labor markets by freeing them up. Scrap the talk about ad hoc subsidies, and seriously consider deregulation. Roll back the three recent minimum-wage increases that have blunted job creation for low-skilled workers in a stagnant labor market. Veto any effort by Congress to pass the Employer Free Choice Act, whose uncertain threat of compulsory unionization has prompted many businesses to shelve any plans for expansion. And put a halt on legislation for carbon caps and taxes until the science gets sorted out. Don't let the EPA make a hasty endangerment finding on carbon dioxide. Deregulation costs nothing to administer, increases jobs and adds to the tax base. 

What has bothered me about the Chicago story is that it just highlights our current approach to fixing the economy doesn’t work. That’s what bothers me about that story. So what do you think about the Reverend, the British company and the Senator? I’d love to get your thoughts.