Here’s some new thinking.

Peggy Noonan’s WSJ opinion piece in today’s paper hits on a good observation that the Republicans need to come up with some new talking points or new thinking.  Here is an example from her editorial:

If conservatives are going to appeal to the nonrich, perhaps we want to be talking about—I don’t know, let’s float an idea—breaking up the banks? Too big to fail is too big to live, didn’t we learn that in 2008? Why aren’t we debating this? How about doing away with the carried interest deduction? Would billionaire hedge-fund contributors not like that? Isn’t that just kind of . . . too bad?Those are two ideas that, while politically difficult, would have broad populist appeal and are conservative in essence.This is not the time to be describing the problem—we need “new thinking”—it’s the time to start coming up with the new thinking.

I think she is spot on with the first item.  Sure it’d require a  new regulation, but if you kept it simple (not a modern concept) and said you have to sell off part of your operations if you reach a certain size, or you can only have a certain percent of the banking market before you have to diversify, this would be a popular and smart policy.  Her second item, the carried interest deduction, shit I know what she is referring to, nor would 95% of the voters in this country.  I am not saying it’s not a good idea but it’s not going to a barn burner in terms of political gain.

Here is a thought that I think should be pushed hard, and I mean really hard by the Republicans/conservatives.  Push for laws that would encourage formation, (or lessen any constraints on them being formed) of ESOPs; especially targeting companies who are enmeshed in constant union vs. management battles (airlines, auto companies, shipping companies, steel, construction).  ESOP, or employee stock ownership plans make so much sense on so many levels I can’t believe it’s never talked about.

One it’s a better business model than most.  It allows for employees to buy and own stock in the company, taking part of their salary as options, stock, methods of ownership in the company.  It’s not a cure all, and it should not be a plan where all employee’s 401K or savings go into just company stock; but  properly designed you can bet you look at your fellow employee differently if they are not protected by a union contract that prevents them from being fired except for the most egregious circumstances.  You might not tolerate sloppy work or bad habits of colleague when you know your bonus or profit sharing and stock price may suffer.   Management would have to include more input from front line and production employees.  It also helps to have employees having a strong voice in policy and business decisions, and I can’t help but think it has to prevent stacking the board of directors with cronies, helping to stem the obscene payments and bonuses some companies have for upper management.

I good example is the recent Hostess Bakery demise .  Here you had unions dug in, and in essence allowing principle and stubbornness rule over saving thousand of jobs that are hard to replace in this economy.  But before we go all hard ass on the union, in a WSJ article from Dec 3rd, well lookie here, the board of directors gave all the executive geniuses bonuses knowing the Ding Dong was about to hit the fan.  My that was convenient wasn’t it?  Maybe I would have been a little reluctant to bend over if I was the union as well.  I mean this how broken the union/management divide can be to companies.

What a better message than pushing a business model that provides the chance for great reward for employees and companies that work hard and with purpose to grow and make long-term decisions.  If a company succeeds and does well, let all the people who made it do so share in the reward, not just a small group of investors and upper management.

Republicans could use this subject to emphasis making healthier companies and healthier economy;  having an economy with more responsive, responsible  companies that can react and adapt quicker to economic conditions, and best of all weaken the Dem- labor union political marriage, and take a positive tack on labor issues than the confrontational one we have now.

I think we need to do the same thing in a public sector unions as well, where there are incentives and policies to make it so all parts of a government entity work towards similar goals and making good financial decisions. But that subject is a lot trickier and I think above my pay grade.

So Repubs bring some solid and popular ideas to the table, and I hope you see ESOP model as one of the ways to think new and think smart.  Because right now you are the Stupid Party and that needs to change.

December 15, 2012. Party Chairman Commentary.

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