American entrepreneurs really are a whole different breed. They don’t expect anyone to give them a break or a pat on the butt. They get their satisfaction from scoring, not praise. They take pride in doing something better than mankind ever did it before, not just their competitors. They pay their taxes to the local, state and federal governments without resentment, and then they pay for useless but mandatory insurance of all different varieties, interest on borrowed capital necessary to grow and merchant charges for credit card sales that scoop off a clean 2 – 4 percent right from the point of sale. For the credit card companies this is like a private tax that they get first, at the time of the sale, before anyone else gets a chance to cannibalize the entrepreneur’s “gross sales”.
Question: How many congressional Representatives and Senators can you buy with 2% of America’s retail gross sales? Answer: Just about all of them. Credit card companies ARE the BANKS. If you think banks make money lending money you are falling for the image of them THEY want you to have. Banks lend money, sure they do but it's the credit card income that keeps them floating in a sea of money coming in everyday – NOT the interest they earn off your line of credit or your mortgage. They can shut down those sources of income instantly and still make gigantic profits. It USED to be that banks made money serving your capital needs, but times have changed.
So when the banks caved in to the federal government and made real estate loans that went sour because they never should have been approved in the first place, they didn’t need to go begging to Congress for a handout, because they’d already bought the Congressional Representatives and Senators they needed to patch things up with special legislation for them and billions of dollars of quick money to solve the problem. That’s how the biggest bailout in the history of man happened, which became a stimulus package so gargantuan that it staggered everyone in the world who read about it, and numbed even those Americans who repeated the words, “785 Billion” as though it was just another big number. But the money’s gone now, with no apparent impact on the economy as seen by the American entrepreneur, the progenitor of global prosperity.
American entrepreneurs brush it off, but now with a great deal of resentment. What will their strategy be for 2010 and beyond assuming the federal government aims to feed off them and piles on the fees and taxes and increased costs of staying in business? Will they organize politically? Will they re-organize their companies to be more efficient? Will they sharpen their focus on ROI? Or all of the above? I believe they’ll figure out how to make more money, pour themselves a scotch at 5 p.m. as usual and reinvent the world economy again.
THE AUTHOR OF THIS BLOG ARTICLE IS NOT A LAWYER AND HARVARD BUSINESS SERVICES, INC. IS NOT A LAW FIRM. THE ARTICLE ABOVE IS NOT INTENDED AS LEGAL ADVICE AND SHOULD NOT BE TAKEN AS LEGAL ADVICE. THIS SHORT ARTICLE IS STRICTLY TO MENTION SOME ASPECTS OF DELAWARE’S CORPORATION LAWS AND/OR LAWS RELATING TO OTHER FORMS OF ENTITIES WHICH YOU MAY NOT BE FAMILIAR WITH. WE RECOMMEND THAT YOU CONSULT WITH A LAWYER BEFORE FORMULATING A STRATEGY WHICH WILL BE SUITABLE FOR YOUR SPECIFIC CASE.