Bush Meeting With “Regular” Folks “Leaked” On Blogsite
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By KellyMc - Last updated: Thursday, March 4, 2004 - Save & Share - 14 Comments

The headline is all about how a “blogger released information”:http://www.washingtonpost.com/wp-dyn/articles/A57355-2004Feb20.html about a private meeting with President Bush. The kicker for me is that Bush picked “Rex Hammock”:http://rex.weblogs.com/ to represent small business when he discussed how his tax cut helped small business. Rex is awfully supportive of Bush and bubbles over when he discusses how the tax break let him invest in hardware and software. Of course, in the mind of most of America Rex Hammock’s business, [“Hammock Publishing”:http://www.hammock.com/], doesn’t really count as a “small business” by a long shot. In 2002, according to Austin-local “business-intelligence” company [“Hoovers”:http://www.hoovers.com/global/corp/index.xhtml], “Hammock Publishing turned $10,000,000”:http://www.hoovers.com/hammock-publishing/–ID__120585–/free-co-factsheet.xhtml for it’s 30 employees.

Politicians love to dance around the details when they present something as truth, but calling Hammock Publishing a small business is a lie.

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14 Responses to “Bush Meeting With “Regular” Folks “Leaked” On Blogsite”

Comment from christian
Time March 4, 2004 at 7:00 pm

Technically, Hammock Publishing fits easily into the official Government definition of a small business.

The Small Business Act defines a "small business" as "one that is independently owned and operated and which is not dominant in its field of operation." The Small Business Administration has formulated a set of tables that link business type with limits on number of employees and annual receipts (with other information in footnotes).

Businesses denoted as "Periodical Publishers" (NAICS Code 511120) qualify as small businesses if they have less than 500 employees.

For employee health insurance purposes, I think a small business is generally defined as having less than 50 employees. That’s the number I hear most often, anyway.

If Hammock Publishing was talked about as a “Mom and Pop” company, that would probably be misleading. Calling them a “Small Business,” however, is no lie.

Comment from etrigan
Time March 4, 2004 at 10:10 pm

Saying something misleading is a lie. Poll 100 average American citizens and ask how much a “small business” makes. 99 of their answers won’t be over $1M.

> Technically

That’s my beef. Technically, Bush says a lot of things that aren’t lies, but when you’re in his position it is dishonest to know that what you are saying is not what your audience believes.

Comment from Jank
Time March 5, 2004 at 8:36 am

> it is dishonest to know that what you are saying is not what your audience believes.

This is hugely audience dependent. I’d always thought of small businesses as empires of under 500 or so employees, regardless of revenue. Organizations that were small enough that employees who had been around for a year or so had probably run into most of the other employees. Places where the president’s “Open Door” policy was actually accessible.

I’d never much thought about it in terms of revenue. $10 million in sales may or may not generate a lot of revenue. How ’bout the single mom who gets her Certified Financial Planner qualifications, takes a 1% comission, and turns a whopping $100K in revenue (Before expenses and taxes) on $10 million in sales? Is she a small business?

How ’bout the local builder who runs three ten-man crews that can each turn out a $200K house in a month? He’s pushing about $6 million in sales – is he no longer a small businessman?

Things like that are what I think about when I hear “small business” (as opposed to Mom and Pop, though I’d throw our CFP into the Mom and Pop category, and she’s making dough hand over fist). They are also the models that the President should be promoting as small businesses. I dig the coffeshop down the street as much as the next guy, but where would you rather work – Hammock or Ed’s CoffeeHouse? Just a guess, but I bet Hammock has much better benefits.

Comment from etrigan
Time March 5, 2004 at 10:42 am

jank- are you presenting yourself as a representative for the American public? I think much better of you than that.

Comment from Jank
Time March 5, 2004 at 2:19 pm

No, it’s just that “Bush Lied” grates on my nerves something fierce, especially when it’s not true.

The other reason that I’m in this fight is that it’s businesses like Hammock that represent the future of the American workplace. And if/when we spend tax money to support/encourage/grow “small business”, I’d rather that it go to high skill niche businesses like Hammock instead of low tech/low skill “mom and pops” like the local greasy spoon or craft store.

Granted, I’m none too familiar with Hammock, but “Business Intelligence” and niche publishing sound like markets in which the US will have and maintain a competitive advantage over the rest of the world for at least a little while in the future. It seems like there’s pretty broad concensus that some sort of jobs globalization is a) going to happen, and b) is going to be a good thing in the long run; companies like Hammock (not necessarily publishing) that see a high-value niche and can develop expertise in that niche (especially if they can then figure out how to market the business model) are going to drive the creation of good paying jobs in the future.

(BTW – last sentance in that paragraph terribly constructed. Sorry.)

The successful small business of today and tomorrow are going to be those that can take high value, high skilled, functions from large industry and focus on doing that one job well. Industry benefits, since they do not have to keep a publishing/IT?/widget polishing department in-house without having 50 weeks of work a year for them to do. And the small businesses benefit because they’ve got a market.

The other reason you might want to consider for being slightly more expansive with your definition of “small business” is that by slightly expanding it, you encourage businesses to grow to the point at which it becomes able for them to deliver substantial benefits without incurring a competitive disadvantage.

Let’s take a hypothetical business, Frank’s Taco Stand. Frank buys an old trailer, guts it and puts in a grill and a fridge, and sits on the corner selling tacos. High margin, low revenue – Frank’s doing all right. But what are his options for expanding? He may hire Tasha to staff the stand Fri, Sat, and Sun so he can take a weekend, but it’s unlikely that he’ll be able to provide her a 401K, insurance, etc. Letting Tasha take a vacation – out of the question unless Frank hires ANOTHER employee. So until Frank grows his business to the point where he needs to move into a permanant location, it’s stuck. Even when he moves into a structure, his revenue growth (and potential to pay employees and provide benefits) is limited.

Until he hits some sort of critical mass of employees (my guess is somewhere in the neighborhood of 20-30, possibly as high as 50) benefits are hard to do.

Comment from etrigan
Time March 5, 2004 at 2:58 pm

That’s all well and good, but somewhere I missed the POTUS’s press release where he explained to the American public that “small business” is interpreted the way you dream it, and not the way _they_ envision it (like Uncle Joe’s Garage or Aunt Beatrice’s Beauty Shop.) You have a nice vision of what the preferrable type of small business is, but the majority of Americans qualify to work somewhere between Hammock Publishing and Frank’s Taco Stand. If the POTUS is saying “look at this small businessman, Rex Hammock” and the American Public is thinking “Uncle Joe’s rebate check must have really rocked” then he’s selling a bad bill of goods. You can start painting it as a white lie or a lie of ignorance, but it’s still a lie.

(Which leads to the questions: Which is worse a President who doesn’t realize the way his message is being interpreted or a President who does? Is there a diff?)

Comment from Jank
Time March 5, 2004 at 3:29 pm

> not the way they envision it

So you’re speaking for the American People now? What, praytell, are the total annual sales numbers and number of employees of a “small business”? There’s documentation on what the Feds consider “small business” – how ’bout similar from the rest of the nation?

> Which is worse a President who doesn’t realize the way his message is being interpreted or a President who does? Is there a diff?

Diff – GWB vs WJC.

And I still don’t buy that it’s a lie. As opposed to Clinton, who DID flat out lie (but it was all right – he lied about sex) and was disbarred as a result.

Lastly – Rex Hammock’s rebate check would have been the same $300 or $600 you or I got (kids being the difference). And Hammock Publishing would only get tax relief based on what they claimed as profit, which I can guarantee isn’t the $10,000,000 they booked in sales.

Buy into the left’s lie if it makes you feel better, but face it – it’s guys like Rex Hammock that are driving the economy, and will increasingly do so as big bidness sends jobs overseas. If he says the tax cuts helped his bottom line, who’s better to know? You, or the guy keeping the books.

Lastly – I went and actually read the Wash Post story you found this in. Dude – the White House didn’t even issue a press release about this until after Rex had blogged it. So how is GWB suddenly responsible for Rex claiming (correctly) to be running a small business, or for claiming that the tax cuts helped Hammock?

Stuff like this, combined with the fact that the DNC is going to nominate a Massechussets Liberal, with one of the worst voting records on defense in the Congress and a history of attacking the troops in the field from the home front, is going to get you four more years of GWB in the White House.

Comment from etrigan
Time March 5, 2004 at 3:55 pm

> speaking for the American People now

I am trying to because they don’t know there is wool in front of their eyes — and I fall back on my previous assertion.

bq. Poll 100 average American citizens and ask how much a “small business” makes. 99 of their answers won’t be over $1M.

> guys like Rex Hammock that are driving the economy

I don’t see the support in that statement. He’s driving the economy for the higher-educated 30-person staff he hires but I’d bet most of those people are above my income/cost-of-living level. Again, what good is GDP growth if it only reflects benefits for the top X% (what, 10-15?) of the population?

> driving the economy

I’m tired of this little fib, too. “Look! The economy is great and I can prove it because GDP is up!” Except that GDP is up due to tens or hundreds of thousands of Indians and South Americans taking what were previously American jobs for 5-15% the pay. Job growth is flat or turtle-slow at best. Who cares if the big guns are able to pump out more widgets if it only puts more money in their own pockets. (Go ahead, explain “trickle down” to me again, but this time include the trickle to other countries.)

> the White House didn’t even issue a press release

Dig a little further. The “story” is about the blogger leak, but the press opportunity was originally GWB standing in front of Rex (and a few other “small businessfolks”) saying “my tax cut helps small business — really, it does!”

Hammock Publishing’s tax relief was enough to buy new hardware and software — or so Rex told the POTUS. So, his tax relief was at least a couple thousand. Joe’s Garage and Beatrice’s Beauty Salon didn’t get that kind of tax relief.

(Sorry, I used the word rebate where I should have said relief — my bad. Thanks for correcting me.)

Comment from christian
Time March 5, 2004 at 5:50 pm

> Hammock Publishing’s tax relief was enough to buy new hardware and software — or so Rex told the POTUS. So, his tax relief was at least a couple thousand. Joe’s Garage and Beatrice’s Beauty Salon didn’t get that kind of tax relief.

Joe’s Garage and Beatrice’s Beauty Salon, I would assume, don’t get that kind of tax relief because their revenues, and concidently costs, wouldn’t be as high. They don’t need as much money in absolute dollars to get a similar economic boost. Of course, that’s all theoretical.

Leaving aside the "Lies, Damn Lies and Statistics" on both sides, I guess I simply disagree that Bush is "misleading" people who don’t understand the official definition of a "Small Business." Following that logic, does that imply that anyone who describes John Kerry’s service in Vietnam and lists his Purple Hearts with his Silver and Bronze Star is misleading people as well?

I don’t that all that many people can explain the criteria for a Purple Heart. Some people, I’m not gonna make up a number, would be able to say that it is for being wounded in combat, but I doubt many of those people can describe the severity of the wound required. It’s not much.

Honestly, I don’t think that’s misleading, but then I didn’t think Bush was misleading in his “Small Business” description either.

Comment from etrigan
Time March 5, 2004 at 6:39 pm

Here’s my piss-poor example I came up with at dinner:

If a high school principal touts his education reforms at the PTA meeting by trotting out a student from the top 5 percentile, he is being disingenuous.

Comment from christian
Time March 5, 2004 at 9:22 pm

Point, but if his critics point out the bottom 5%, I’d call that disingenuous as well.

I have to admit I took a while to formulate this next part, so it’s not extemporaneous.

Anyway, a key point behind the arguments for tax cuts is that when business have more money to spend they will create jobs. Sort of like if the 95% kid would raise performance of the 5% kid, especially if the performance raise is higher than if the school administration alone was responsible. That’s theory, though, and these comments are a little small for convincing someone to change their beliefs on economic theory.

I also stopped being lazy and read (ok, skimmed) the transcript for the actual press conference so I can put a nail into the case that Bush was trying to pass off Rex as a "normal" small business. Bush notes that Rex is putting $100,000 into capital investments, which matches the new deduction limit for small businesses and is four times higher than the old limit. Probably a little high for Joe and Beatrice, but they are probably more worried about the death tax.

Ok, "dead tax" is a little dramatic. "Inheritance Tax" is the official term. On a personal note, my Mom is taking care of my late Grandfather’s business for my Grandmother, and I’m pretty sure they both calls it a death tax. In the interest of disclosure, though, they are Republicans anyway.

In the press conference Bush talks about moving to eliminate the Inheritance Tax and points to a farmer in PA. Guy Donaldson owns a farm in a partnership and he would like to leave it to his family. The Inheritance Tax disproportionately hurts Guy (and the fake Joe and Beatrice) because, well in Bush’s words:

"….the problem is, is that when you’re asset-heavy in your small business or on your farm, it’s really hard to leave it to your — the death tax makes it nearly impossible to leave to a family without having to mortgage the future so heavily, or to sell off."

And that, I would argue, 99 out of 100 people would understand. Even if Bush isn’t a elegant public speaker.

BTW: Looking at this, it looks like a paralleled Bush’s segue into the inheritance tax. I didn’t plan that, but I wanted to point it out so I don’t look like a thief.

Comment from etrigan
Time March 5, 2004 at 11:08 pm

Again, I have to question where Bush is pulling his examples from. 99+/100 people will never ever have to deal with the “death tax” since it doesn’t hit until $2M (, right?). If those 99+ people were told this fact, they might change their mind. Then again, maybe not since lottery odds are so astronomical but people buy lottery tickets in droves.

I’m still on the fence on inheritance tax, but there is one thing for sure: current tax cuts are going to destroy the government and Bush shows no signs of cutting spending. Presenting those tax cuts as if they benefit anything more than the top 5% (or less I would wager) is going to do harm to our country. There are a few extremists — I like to think of them as neoanarchists — who think destroying the government this way is a good thing. If/when the military folds as the funding erodes, I bet they start to regret floating this notion.

Comment from christian
Time March 7, 2004 at 12:53 pm

Right now the the tax is being phased out by raising the maximum deduction (or the minimum estate value that is taxed). I couldn’t find the IRS site that gives the rates, but according to this PBS site it’s:

2002/2003 – $1 million
2004/2005 – $1.5 million
2006/2008 – $2 million
2009 – $3.5 million

Regardless, if you start changing the questions in poll, you can prove what ever you want. Perhaps it should be Lies, Damned Lies, Statistics and Polls.

As for who the tax cuts benefit, the people who pay more taxes benefit more in absolute dollars. Using this table from the decidedly anti-tax cut McAuley Institute, I would argue "top 5%" is a little off.

I would also argue that the looming explosion in entitlements caused by the Baby Boomers will cost far more than the tax cuts. That’s a huge debate that probably won’t take place until the situation is very, very bad. People can disagree on just about everything having to do with the costs of tax cuts and entitlements, but just about everyone can agree that any elected official who even thinks loudly about decreasing the benefits (or even, reduce the growth rate) will probably be kicked out of office.

Comment from christian
Time March 7, 2004 at 5:15 pm

Oh, I should also point at that I agree with you in part on the spending cuts. Bush and the Republican-majority Congress have shown little restraint in spending our money. And anything said about future spending cuts are just words until they actually happen. Them and four bucks will get you a pint of Guinness.

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