September 23rd, 2011
By Frank Li, Ph.D.
I believe I have most accurately identified the root cause of many American ills and provided the best solution. The foundation of my solution is to run a country like a business, or it will go bankrupt, like what the West is experiencing now. So “why” is too silly to be discussed here. This article will focus on “how”.
I am a technologist by training, armed with a Ph.D. degree in Electrical Engineering. However, soon after I started working in the real world (vs. academia), the ambitious me realized that I was on the wrong track: Why are most of the top guys in business sales people, not technologists like me? I learned and have been running my own business for 6+ years.
To me, there are four basic principles in business:
(1) Making money:
Business is about making money. A company, no matter how big it is, can be simply divided into two parts: a profit center and a cost center. The former brings in money, while the latter spends it. So the management focus is almost always on the former, sales especially. When times get tough, without adequate money coming in, you must cut deep into the latter.
(2) Sales are not everything.
Sales are the only thing. Business is driven by sales, with the arrival of a purchase order triggering everything. Still wondering why it’s almost always the sales people that make it to the top? Wonder not!
(3) No democracy.
I learned this early in my career from my boss: “you guys discuss, but I will make the decision because I always have n+1 votes,” where n equals the number of his direct reports.
(4) No unions.
The world is becoming increasingly more competitive. The damage a union can do is more obvious in an internationally competitive business than a non-international one. I worked for both NEC USA and Fujitsu USA, and learned one open secret in these Japanese companies: no unions allowed in America. Look around: there is no union in any of the Japanese companies in America! In fact, there is no union in any of the Asian companies in America! So unions in American companies, among many harmful things, are making American companies less competitive than their Asian counterparts. Plain and simple!
Running a country like a business
Now, let’s apply the four basic business principles to running our country like a business:
(1) Making money:
The revenue of a country comes [chiefly] from taxes, and there is only one [chief] profit center in any country: business, the source of all taxes, corporate as well as personal. So a country must do everything possible to promote and support business. Everything else belongs to the cost center, which should thus be subject to big cuts when times get tough. In a simple business sense, America’s #1 problem today is not jobs per se. Rather, it’s the debts and deficits that are leading the country toward bankruptcy. Therefore, America must be restructured, as in business, getting its fiscal house in order first before anything else, such as hiring (= jobs).
Oh, by the way, if you think America’s #1 problem today is jobs, you either have a problem of your own (e.g. un-employed or underemployed) or have been brainwashed by the politicians (and the media)! The politicians worry about jobs for the sake of their own jobs, only to destroy America by emptying her treasury systematically, however individually unintentional maybe. Let’s be absolutely clear: There is no quick and easy solution to the jobs problem in America, other than the changes and time. Meanwhile, the more the government tries to do along the same old line of out-of-control spending, the worse off we are, because it drives us down the road toward bankruptcy, faster! We should leave the economy alone to recover on its own.
(2) Sales are not everything.
Sales are the only thing. Sales, in terms of a country in this global economy, simply mean selling to other countries. Unfortunately, we have trade deficits with more than 90 countries. No country or company can keep going like this! So rather than fighting with those 90+ countries one by one for fairness or currency, or both, why can’t we be honest with ourselves once by simply admitting that we have a big problem? What then is our big problem? Our cost structure is too high! Unconvinced? Just read this: in 2011, there are nearly twice as many people working for the government (22.5 million) than in all of the manufacturing (11.5 million). This is almost exact reversal of the situation in 1960, when there were 15 million workers in manufacturing and 8.8 million collecting a paycheck from the government … More Americans work for the government than work in construction, farming, fishing, manufacturing, mining, and utilities combined. We have moved decisively from a nation of makers to a nation of takers.
Still unconvinced? Read this: The national security state is out of control. What, then, is the most obvious solution in business terms? Restructuring! Cutting the costs (e.g. two-tier wages) and cutting more jobs if necessary, especially in the public sector! Oh, by the way, do you believe in the “infrastructure bank” President Obama recently proposed in his “misleading” jobs bill? I do not and here is why: Everything we do must directly contribute to the “sales”, or it’s just yet another cost, making a bad problem worse! In other words, our sales are down largely because of our high cost structure. Is it time to borrow more money to keep some employees busy by having them shine the windows in the factory? You will never do that in business! Note that some infrastructure projects are necessary. Do them for the sake of business (i.e. shareholders), not for jobs!
(3) No democracy.
Democracy, as we know it today, is a luxury we can no longer afford. However, running a country may not be a pure business per se. For this reason, let’s give democracy another chance by reforming our political system now!
(4) No unions.
Union, in its extreme form, is a de facto communist thing (i.e. the Soviet Union or China under Mao), with everything belonging to “the people”. This everything will quickly be reduced to nothing when “the people” are in charge, as history has repeatedly shown, from the ancient Rome to the modern Greece. Yes, everything of nothing is still nothing! Public-sector unions? Union against whom? The United States of America? They should not have been allowed in the first place (blame JFK!). They must be abolished immediately and banned forever!
Still in doubt if America will lose its #1 position to China by 2030? It will happen unless America changes soon! What’s the secret behind China’s success? Running a country like a business! In fact, the CPC (Communist Party of China) has recently been characterized as “the world’s largest chamber of commerce” - I agree! In short, today’s Chinese government is of the business, by the business, and for the business, while America remains a country of the people, by the people, and for the people, which apparently includes a new class warfare against the rich. It will be a disaster! The Chinese know, as they have been there, done that!
About the Author
Frank Li is the Founder & President of W.E.I. (West-East International), a Chicago-based import & export company. Frank received his B.E. from Zhejiang University (China) in 1982, M.E. from the University of Tokyo in 1985, and Ph.D. from Vanderbilt University in 1988, all in Electrical Engineering. He worked for several companies until 2004, when he founded his own company W.E.I. Today, W.E.I. is a leader in the weighing industry not only in products & services, but also in thought and action. Dr. Li writes extensively and uniquely on politics, for which he has been called "a modern-day Thomas Jefferson" (see page 31).