Leonard and I spent a couple of hours at the Air Force Museum on Saturday, concentrating our visit on exhibits associated with the aerospace industry from 1900 to 1920. We discussed how the Wright brothers depended upon the work of Octave Chanute, and how Glenn Curtiss worked with Alexander Graham Bell (yes, that “Bell”) to build the first large-scale airplane company.
Len was perplexed that the Wrights could invent the airplane, yet very quickly lose their business advantage. I mentioned that much of American business success has been created by invention and the notion of reward from hard work. The company that is innovative and has access to investment capital to bring ideas to reality is typically the business that succeeds…
Ironically, later that day I came across a great interview in the Wall Street Journal with Fred Smith, founder and CEO of FedEx. After reading this timely article, I realized that Mr. Smith reinforced many of the same beliefs that I shared with Len. A few excerpts from the Smith interview:
He attributes the financial crisis to “the intersection of four long-term developments.” Reckless mortgage lending policies; high energy prices; mark-to-market accounting rules; and national policies that favor what he calls “the financial sector over the industrial sector.”…
So how do we fix this problem and retool our industrial sector in a pro-competitive fashion? “We’ve got to reduce the taxes on equity. Let companies expense their capital purchases.”…
We’re now at a point where a very large part of the population pays no federal income tax at all. When you have a majority of the population that realizes that you can transfer money from the productive to themselves, that’s one of the great questions for the future of civilization, as far as I’m concerned.”…
“That’s where all wealth comes from . . . It’s not from the government. It’s from invention and entrepreneurship and innovation. And our policies promote a legal and regulatory system which impedes our ability to grow entrepreneurship. Lastly, if we want to make [America’s workers] wealthier we have to quit demonizing quote, big corporations.”
We must support the 3i — invention, innovation, and investment.