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Morning Commentary

War on Capitalism (Forcing social and economic change on business)

By Charles Payne, CEO & Principal Analyst
12/5/2012 6:21 AM

As each day goes by in the fiscal cliff debate, President Obama becomes stronger among the masses that view this as a fight between very rich guys against little guys barely making ends meet. Beyond the publicly fighting over tax policy, there is a battle waging in an area that businesses cherish most of all - the bottom line. It's all about greed and the notion of how much money is enough.

There is a growing consensus that profits should max out at some point and anything beyond that point is greed - the kind that hurts Americans.

I don't buy the argument, but I'm not walking through life with blinders, headphones, and getting my news from Comedy Central. More than elections are going to be lost if there isn't some way to educate the masses in ways that pierce limited attention spans and avenues of influence. The lure of socialism and disdain for even moderate success makes for a lethal broth equal to economic Kool-Aid.

There has to be a counter argument but that spokesperson hasn't materialized. It just can't be the Donald, or Romney, or anyone else that had a foot-up on the rest at birth, regardless of how impressive their personal journeys have been. The same thing on the political front, there has to be someone that can connect the dots on how strong American businesses with a laser-like focus on the bottom line propelled the nation to the top and have kept us there.

Of course, employee prosperity is critical and doing business in a way that mitigates impact to the environment matters. But these things are a given for long term success. What company wants to retrain workers over and over or ruin the world they serve? It's not a rhetorical question and the answer is a handful, but those companies become flashpoints and the source of movies hinting that all businesses operate in similar vein.

While that search for articulate spokespeople goes on, the business world has to figure out how to handle the onslaught of higher taxes and regulations and less support from the public and current customers. The problem will go beyond neat advertising campaigns and placating photos on websites and annual reports. Customers aren't saying they don't want goods and services, only that they want them with limited profit margins.

So, despite the fact that Uncle Ben has been promoted company CEO, it wouldn't stop a public relations campaign looking to portray the company as greedy, mean-spirited, or out of touch with emerging values, especially among younger people. Or if there had to be adjustments to account for higher taxes and more regulations. Where does this leave most businesses, especially those that are publicly traded?

Quiet Desperation

The mass of men lead lives of quiet desperation. What is called resignation is confirmed desperation. From the desperate city you go into the desperate country, and have to console yourself with the bravery of minks and muskrats. A stereotyped but unconscious despair is concealed even under what are called the games and amusements of mankind. There is no play in them, for this comes after work. But it is a characteristic of wisdom not to do desperate things.
Henry David Thoreau

I suspect most businesses will just try to weather the public relations and regulation storm in bunker-mode. Head in the sand and make-nice until something changes. They can make disingenuous commercials like BP touting solar energy or they can keep management quiet. But think about losing that liberty. More important than making profits, is the right to voice an opinion, yet there will probably be gag orders on CEOs speaking out on everything from God to higher prices.

Ironically this approach to business means less hiring and higher prices for consumers. It feels like the proverbial rock and hard place.

Indeed, some companies know they have to relay business moves to shareholders and in the process will be flagged for excessive greed and insensitively. Case in point is yesterday's statement from Clarence Otis, CEO of Darden Restaurant (DRI) parent company of Red Lobster and Olive Garden:

"In light of these upcoming changes, we are being cautious about our sales and earnings forecast for the full year " Otis continued. "Our outlook for the year also reflects the potential impact, though difficult to measure, of recent negative media coverage that focused on Darden within the full-service segment and how we might accommodate healthcare reform."

In short, the Company knows the media is going to crucify it for having to make more employees part time rather than full because of higher healthcare costs. Clarence Otis is an Obama backer and Red Lobster has a giant following among black consumers, which means there could be attempts to sway them away from the chain through negative media propaganda. Of course, no company is immune these days.

Other companies have tried to get out in front of things like soaring healthcare costs but it's backfired in the world of public relations. Darden Restaurants is just the latest to say it has to make tough economic decisions to combat higher costs foisted upon the company by Washington's taxes and regulations. Of course, few have admitted making such adjustments could be used to drive away business.

It's a full frontal assault on any negative reaction to Obama policies. The media moving from helping to seal reelection, to joining with White House to punish companies that get out of line of voice criticism:

After the election several companies commented on adjustments needed to deal with the harsh impact of the new healthcare law. Several were skewered in the media as heartless and greedy and the focus of campaigns to drive away business. Three in particular saw an immediate decrease in brand approval according to You Gov.

* Papa Johns: PZZA
* Denny's: DENN


Since their initial reactions to the election outcome, the CEOs of all these companies have spoken out about being taken out of context or simply have gone on the apology tour.

Night of Long Screwdrivers

While the world was watching RG3 do his thing, John Boehner was also running roughshod... over his own party. Actually, he was exacting a form of revenge and fending off the impetuous Tea Party in the middle of the night. It was stunning and perhaps the biggest concession made to date in the fiscal cliff debate. The Tea Party presented a challenge to all entrenched power in both parties. While there is no doubt the GOP is down five easy seats because of the unpolished members of the Tea Party, there is a very important role for them and candidates they sent to Washington.

The vote to boot Tom Price last month from Republican Party Study Committee should have been a clue. But its official, the Tea Party has been screwed.


The news probably means a deal is closer than expressed in the general media to kick the fiscal can down the road but with serious concessions to President Obama.


Comments
Charles, you would be a good spokesperson..maybe getting directly involved in politics would be difficult for you...but you would have my support and my guess is that you could get the support of many others. You should think about

Rick Geiger on 12/5/2012 9:43:20 AM
Charles, in addition to you, what about Herman Cain? He has already been run through the gauntlet now, and has nothing to fear - a cancer survivor never does. ANd J.C. Watts, another wonderful communicator.

Boomerbabe on 12/5/2012 12:46:24 PM
Charles, Obama's and the press has won by separating classes by income, race, ethnicity. Add in each groups lobby centers growing exponentially?? what CAN be done to slow growing masses when they are being fed. Possible answer-Someone with Reagan-like charisma must make have "MLK" presence to for sound economic change to reverse the irresponsible wild spend thrift, back scratch liberal agenda.

RAL3 on 12/5/2012 12:58:43 PM
Charles, I watch you every day and admire you! (Varney too.) Thank God you are on air. I am, like many others are scared. Obama is leading this country to ruin. Can you talk more about what we are to do with our IRA and 401K.? It is stunning what is happening to our freedoms. Losing them day by day. I think I speak for millions of people. I am retired housewife with grandchildren. A loyal follower.

M Karchut on 12/5/2012 1:31:05 PM
Charles, the name of the spokesman you are looking for is "Publius" (Alexander Hamilton, James Madison and John Jay - the authors of the Federalist Papers). If we could redirect our efforts to reinstating the Constitutional Republic with a federal government of limited and enumerated powers envisioned by our framers, most of our problems would simply disappear. We could hardly go wrong by embracing that which has already made us the greatest nation on earth. We should, at least, give it a try.

George on 12/5/2012 1:57:56 PM
Mr. Payne, like other posters have written YOU would be a shining example of such a person.

Reading your daily commentary and watching you on a myriad of financial, political-themed programming through the years your honesty, tenacity is worn on your sleeve.

I believe another spokesperson and someone I really wish would throw his hat in the political ring again is former OK-Congressman JC Watts.

Watts has become a successful businessman post-politics. He was a VERY well liked and reelected Congressman. As well as Conservative, author, successful college and pro athlete, called out the CBC, a religious man..

I was wanting a DeMint/ Watts ticket in '08, '12 respectively!



markit8dude on 12/5/2012 6:47:56 PM
Charles I must add that BO and his enablers have divided this country along race, income, citizenship and sex. Things are so out of wack that Biden can get up in front of a room full of AF Amer and says the GOP wants to "put Yall in chains" and gets away with it. BO you did not build that as "somebody" else did gets pushed aside. As a country we are in real trouble

JustRightofCenter on 12/6/2012 12:20:05 AM
 

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