Chapter 9. Starting Over: From Rags to Regulators.

What follows is a continuation of a series of articles comprising a book entitled “Passion, Power, and Panties–Confessions of a Businessman” wherein the author describes being raised as a Jehovah’s Witness, spending almost ten years at their headquarters in Brooklyn, NY and then entering the ”outside”  world at the age of 27.  For purposes of continuity, I encourage you to subscribe in the column to the right so as not to miss a post.  It is free and without obligation. 

During the last few weeks at Watchtower, I began preparations for entering the outside working world.  Since I loved to write, I sought a job as a writer.  It took no time at all to discover that writers with  phD’s were falling out of trees.  My first obstacle was how to explain how I had spent the last nine years of my life.  Life in a monastery?  A waiter, bookbinder, letter writer for Jehovah’s Witnesses??  How to explain why I left?  To have children?  On the outside, people didn’t have to quit their jobs and relocate in order to start a family.  What was I qualified to do?  How much did I have to earn to survive, to support a wife and possible child?  I had no idea about any of the above.  I had never bought a car, established credit, learned a trade, or gone to college.  I was twenty-seven years old.  During the few disastrous  job interviews before we left Brooklyn, I did learn the short answer to why I left my last “position”:  “Career redirection.”   My first lesson in spin control.  Substance and unnecessary detail were not nearly as important as a few words that created a brief image.  I also learned a quick lesson right out of law school:  Never answer a question that hasn’t been asked.  Also,  never ask a question to which you don’t already know the answer.

Suffused with early rejection and a sense of impending disaster, Barbara and I decided to move to Youngstown, Ohio where she grew up.  Her parents encouraged us to stay with them until we got on our feet.  Our timing was impeccable.  Unknown to us, Youngstown Sheet and Tube, a steel company that was a pillar of the economic community was about to announce its closing, the first in a string of dominoes due to fall in quick succession and ultimately to devastate the local economy.  Unbeknownst to us, the biggest business in the Youngstown area appeared to be organized crime, and the economy was so bad even they were leaving town.  With tens of thousands thrown out of work, we came to Youngstown like two immigrants just off the boat and looking for work.  And like first-generation immigrants, because of being sequestered for over nine years in near-monastic existence, we couldn’t speak the language of the new world in which we found ourselves.  I couldn’t even begin to comprehend their thought processes.  It was massive culture shock, and we were too ignorant and innocent to even feel sorry for ourselves.

I was turned down for a job by Truck Stops of America because I responded to an ad for someone to pump gas dressed in a three-piece suit.  I’m sure they thought I was overqualified for the job, or else crazy.  I was turned down for a management-trainee position with Arby’s, a fast food franchise that began in Youngstown, Ohio before being purchased by Pepsi.  I had no employment experience that they could understand.  I finally got a position with a company that sold burglar and fire alarms on straight commission.  I worked with them for about five weeks and quit for two reasons:  first, I had trouble getting paid commissions due, and secondly, I experienced great difficulty practicing their standard sales techniques as instructed.  We were told, for instance, to position ourselves on the sofa between the homeowner and his spouse, making sure that  each of our knees touched one of theirs.  Then we were taught when presenting the contract to drop our pen on the carpet, wait for them to politely pick it up, and suggest while they had it in their hand to go ahead and sign the agreement.  I thought it was all very hokey and distasteful.

Barbara got a job as a secretary making $600 per month.  I decided to go down the main street in town, Market St., business by business, and try to get a job as a janitor.  How hard could that be?  My first stop was at a car dealership and I met the general manager named Al Helms.  Al was one of the first, and best, things that happened to me after moving to Ohio.  Al said yes, he did need a janitor, but he didn’t want me on his payroll.  So would I please take a look around and give him a monthly price to do the work  I was to  provide all the equipment and materials.  I told Al I didn’t know how to do that, and he suggested I give it my best shot.  I walked around and told Al $400 per month.  He said that was too cheap and to go look again.  I came back a few minutes later with $600 per month.  He said that was better, that at $400 per month I would have quit after one month.  He asked me to put together a contract for him to sign, and I said I didn’t know how to do that either, so Al suggested something brief, such as  I would clean with my equipment and materials and he would pay.

Elated, I went down the street to another dealership about half as large, suggested half as much, and got that contract also.  I was now up to $900 per month!  This was real income!  Of course, I had no idea what equipment I needed, or materials, or how long any of this was going to take me to do.  But I would find a way to make it work.  I called around to janitorial supply houses, found a sales rep who prepared a list of what I needed and offered to teach me how to strip and wax floors after I bought his products.  The initial outlay was $2500.  It might as well have been a quarter of a million.  I had no money, no savings, no nest egg.  No nothing.  So obviously I would need a loan.  I had never borrowed money before, not even from a friend.  I had no credit history.  I was an unknown who had just moved in from out of state.  I was rejected by five banks; the sixth one loaned me the money.  I found a banker who believed in me.  You have to believe in yourself before you can expect someone else to believe in you.  I was scared, but I was also determined.  Over the years I have wondered if it is easier to be determined when your back is up against the wall.  Maybe it is because your choices seem so limited at the time, but  I also know that is when most people quit, or give up.  You have to keep going in order for good things to happen.

Starting Over 1978

Al Helms apparently felt sorry for me, and periodically he’d ask me how I was doing.  I had signed up for evening classes in Business Management at Younstown State University, and I was busy cleaning my two dealerships and going to class.  Al suggested I go to see Jerry Thorpe at the Automobile Dealers Association and maybe I could get Jerry to put a blurb about me in the newsletter that went out to all the dealerships in three counties.  So I went home and wrote an “infomercial” about my fledgling operation, and of course I understood that I had to make it sound as if I was a company, not a one-man operation.  I went to see Jerry, who I am sure gave me an interview only out of respect for Al.  I told Jerry that if he ever needed some filler for his newsletter, I had some newsy information about janitorial service for auto dealerships that might be useful to the membership, and I gave him my infomercial.  Well, he must have needed filler because he printed it in the next issue, and I ended up with thirteen car dealerships to clean, all over three counties.  I learned to clean very fast and drive even faster.   Except for Al Helms, my customers all thought I had an organization behind me.  So I would spend all night cleaning their buildings, go home and get a shower and put on a suit, and go back to visit them to ask them how “my people did”.  It used to really piss me off when once in a while one of my customers would accuse one of my employees of doing something I knew I had not done.  But I could not tell them it was me doing the cleaning because they wanted to do business with a company, not a cleaner.    So I would swallow my pride and tell them I would talk to my employees about the matter and get it corrected.  Driving down the road I would have a talk with myself.  Even so, it became quickly apparent that I needed to hire someone to help, and that’s when the fun really started.

I had come from a background of dedication, and this was the only paradigm I knew.  So I just assumed that when people responded to my ad in the newspaper and said they needed work, they meant it.  I had no idea how to interview applicants and what kind of questions would get them to talking about themselves and tell me what I needed to know about them.  I just told them what I had and what I was paying and the hours and asked if it suited them.  I saw them pretty much the way Al Helms saw me:  I wanted to trade with them, this amount of work for that amount of money.  I didn’t think I was doing them a favor and I didn’t think they were doing me a favor.  We were traders, no more or less.  I thought they meant what they said, otherwise why did they respond to my ad?  And if they accepted whatever we agreed to, they owed me the work and I owed them the money.  Simple, right?

My first brush with reality was with my first hire.  She was a young, slender pretty woman who seemed eager for the work.  I think I was also influenced by her attractive appearance, and when I stopped in to visit with her on the job site for the first time, I was surprised to find her dressed in a very sheer blouse and she was braless.  I liked it a lot, and so did the mechanics working in the back of the dealership.  About ten days later I stopped in at her dealership late one night, when she should still have been there, and I found the doors to the dealership showroom wide open, with neither my cleaner nor the keys anywhere to be found.  Anyone in the world could have driven off with any new car in that showroom!  Several hours later I found the keys in the grass outside one of the doors.  I could only blame myself; I had confused hormones with character and aptitude.  Over the years I also learned, over and over again, that sexual attraction is a weapon and it is used every day in the marketplace of life.  This is not bad, it just IS.  We are what we are.  Anyone who doesn’t understand this should watch the mating antics of the Bird of Paradise as filmed by the BBC.  It will make you laugh, but sometimes we have to laugh at ourselves too.  We are not all that different.  In time I learned to better understand the dynamics of human behavior without losing focus because of it.

Within several months I had begun to lose business because of the behavior of my employees.  Sometimes I was just shocked at things they would do while at work.  I was equally shocked at how they viewed me.  I had become an employer.  I wasn’t sure what that was supposed to mean, because I didn’t feel any different than before; I just had more car dealerships to clean than I could possible keep up with myself.  I didn’t see Al Helms or any of my other customers differently because I cleaned their places of business; we had just agreed on terms of how this would get done and for what price.  I respected them and their property, and I expected to be honest with them, and I expected to be treated the same way.  But not my employees.  I would walk into buildings and find parts of brand new vacuum cleaners mysteriously missing; they ripped the cords and tore the prongs off the plugs.  When I would talk to them, as delicately as I knew how, they would shrug their shoulders and walk off, or simply tell me they knew nothing about it.  The worst part of all was correcting something they did.  I had no idea how extraordinarily difficult it is for some people to clean a desk top without smearing it.  I would show them, then I would have them show me, and if they didn’t get it right, I would show them again.  I would come back four hours later and they had smeared every desk in sight.   Sometimes if you corrected their work, they just didn’t show up the next night.  They didn’t bother to call either.  But they sure didn’t forget you when it was payday. The smallest kind gesture was often accepted, not as a gift, but as an entitlement, and went without gratitude.  I remember a few years into my business, on a Thanksgiving Day I decided it would be a nice gesture to give out turkeys to my supervisors.  I was shocked that only one out of nine supervisors bothered to say thanks, and the next year most of them asked ahead of time if I would be getting them a turkey, since they wouldn’t buy one themselves if I was going to.

I  discovered that employees lied on their time cards.  I didn’t have time clocks in my client’s places of business, and we weren’t allowed to use theirs, so my employees were on the honor system.  I told them about how long it should take them to do the job, based on my own experience.  I quickly learned that it took them a lot longer to do the same job as it did me.  But I would tell them I wanted them there on the job at say, eight o-clock, and to be finished about 10 o-clock, for two hours of work.  I would come in at eleven and not only not find them there, none of the work had been done either.  Sometimes they had just quit, and sometimes they just decided to come in at midnight that particular day.  Most of them never took a starting and ending time seriously.  Sometimes I would come in at nine, and find half the work not done, the employee was gone, and they had marked themselves out at ten.  So I was paying for time not spent on the job, I had a dirty building, and an unhappy customer.  In an attempt to resolve this problem, when I would hire them I would tell them I would pay them for two hours to do a particular job, because it couldn’t possibly take any longer than that to do the work, not even on a bad day.  .  In this way, I couldn’t go over budget, because I never paid them more than the two hours.  That of course, did not stop them from working for forty-five minutes and getting paid the full two hours.   I still had quality problems. 

Several years later I got audited by the federal Department of Labor, Wage and Hour Division, and I learned that paying for a fixed amount of time was against the law, and they called it “stereotyping job hours”.  I asked them how I was supposed to control the abuse and this guy just shrugged his shoulders and said that wasn’t his problem, and he gave me a bill for $17,000 that he said I owed former employees for improperly calculating their time.  Apparently he had called a sampling of them and asked them how long it really took them to do the work, and of course, smelling money, deuces were wild.  I had no documentation to disprove their claims.  And so I came to learn one of my first great business truths that they don’t tell you in business school:  in the absence of proof to the contrary, an employer is guilty until proven innocent.   I was enraged by the injustice of it all, and got a lawyer who told me there was nothing I could do about it.  He did however plead my case with the government people, and they reduced my bill to $13,000.  Very gracious of them.  In the process, I learned that the solution in dealing with the governmnet is usually to be found in semantics, not reality.  As soon as we informed our cleaners that their shift began at 6 p.m. and their shift ended at 8 p.m., and that during this shift their duties included cleaning bank A and bank B, this whole problem with the regulators went away.  It was all in the choice of language!  The trick was to get the regulators to tell you what language, what specific wording, they were looking for.  I doubt that any of these regulators had been English majors in college, and most likely would never have understood Shakespeare’s ironic  Would a rose by any other name smell as sweet? implying that what a thing was had greater signficance than how it was labeled.  Not with the regulators!  I also learned that regulators are most interested in their own next performance review, and that they are often measured by how much money they bring in from employers, or how many infractions they can establish.  With tens of thousands of regulations, everyone, everywhere, is violating some aspect of the law or government regulation, knowingly or unknowingly.  Regulators’ jobs are measured by “bringing home the bacon”, i.e. finding some of those regulations you are violating, if for no other reason than to justify their own existence.  Fighting with a government regulator is usually a losing proposition, and you will only incur greater focus on your business, to your detriment.  As with so much else, I learned that when dealing with the government, it is rarely about right and wrong, or justice, or fairness; it is about conformity and obedience and following the rules, and going along in order to get along.  If you are going to fight, pick your fights carefully, unless you want to spend the rest of your life in an unwinnable tit-for-tat war of attrition.  Live your life in your own way, and stay below the radar.  That applies to anyone, not just businessmen and women.  Endless confrontation is a waste of time and of your life.  Take your lumps and move on.

Once we learned the rules, we went out of our way to follow them.  That wouldn’t prevent the authorities from attempting to shake us down once in a while.  Several years after the above episode with the Department of Labor, I got a phone call from their Cleveland office telling me they had a complaint about underpayment from a certain employee.  I said I would check our records and make sure no mistake had taken place.  We did so and got back to the authorities telling them that our records were accurate and we would be happy to send them a copy.  They replied no, the amount this lady wanted was quite small, and they wanted me just to cut a check and forward it to them, and they would pay the lady.  When I retorted that we hadn’t made a mistake or broken any laws, they said if I didn’t cooperate, they had the option of launching a full, random inspection of all my payroll records for the last three years, and such an audit would tie us up in knots for weeks or months, and wouldn’t it just be more cost effective to send the small check requested.   In other words, they wanted us to send this person unearned money just to make the regulators look good!  And we were being threatened with disruption of our business if we didn’t comply!  We stood our ground on that one, and they audited us–for one full day.  The regulator went through our payroll files for over six hours and couldn’t find a thing, and went home, discouraged.  He did not want to commit to even more time wasted with no return for his effort.  That was the last time we were bothered by these guys.

Another problem that drove me crazy was money being reported missing by my customers.  At first I would defend my employees vigorously, because I really thought they were innocent.  And sometimes they were.  Many times they were not.  I remember eventually I got a contract with a K-Mart store where my employees would be locked in all night, and the store manager would unlock in the morning and they would go home.  The store manager in this case called to tell me he thought my guys were stealing guns out of the K-Mart gun case.  So we set up  a sting operation, and he and I stayed up on the elevated  catwalk that goes all around the inside of the building, and from which we could see what was going on in the store through windows with one-way glass.  No one knew we were up there watching them.  And we did catch the thief:  it was the K-Mart Assistant Store Manager.  It was in this way that I learned all the thieves and miscreants were not exclusively on my payroll.  Many years later I hired a young man who, unknown to me, used to be a drug dealer (they generally don’t include this on their resume or application).  He was a good employee and eventually was promoted to supervisor.  Years after he had established a good reputation for himself within our operation, he felt safe enough to confide in me details about his past.  Two things I remember vividly were that he and his cronies never worried about law enforcement for a significant number of local officers got their personal stash of controlled substances from him.  Another item of interest was that he and his friends preferred to get jobs with guard service companies who serviced local retail stores.  Talk about hiring the fox to watch the henhouse!!!!  Sometimes you need to hire and use people who understand the problems from the inside.  That’s why criminals are often hired to catch criminals, and computer hackers are hired to catch hackers.

One of my earliest “lucky breaks” was to get a contract with a local bank that had about 20 branch offices in the immediate area of Youngstown.  I soon had about 30 people employed in these bank buildings, including the main office which was over 10 stories tall.  I was often out late at night checking on the work of my employees, and office buildings were deathly silent in the midde of the night when I would come through.  Being a reader, I never failed to notice what books lined the shelves of executives, and I was eternally curious to learn something new that would help advance my practical education.  In this particular case, I noticed a copy of “In Search of Excellence” prominently displayed on the credenza of the president and ceo of this bank.  I had already read the book, but I picked it up anyway and immediately noticed that it had never been opened before, for it made that ‘new book’ cracking noise when I opened it.  I had to smile thinking that this president had bought this book as an ornament, not to read.  Well, unfortunately, our company had apparently hired a thief and placed him in this facility, and this person was stealing blank checks from one of the tenants upstairs, filling them out and cashing them in local grocery stores.  The police were trying to figure out who it was, and of course I was taking a lot of heat from my client to catch the thief also.  As it turned out, the client caught the thief before I did.  A Vice President of the bank hid in the building after hours (with his own personal gun) and actually caught the thief redhanded.  The next day the  president and ceo of this bank decided that my entire company had to be fired, and gave us half a days notice to clean out all of our employees and equipment at all locations, and the same Vice President of the bank who caught the thief rode shotgun on our truck from location to location making sure we didn’t steal anything else on the way out!  Of course I had a contract, but the bank had all the money, not to mention the fact that they were being bought out by another one of my clients, another bank, and suing them would not particularly endear me to what was to become the parent company.  You can imagine then, my enjoyment of the irony when, nine months later this same president and ceo was indicted by the FBI for embezzling $7 million dollars from his bank.  A few days after this news broke, the parent company asked me to come back and resume cleaning those facilities.  I couldn’t help thinking that maybe this guy should have read the book on his credenza!  Years later when I occasionally did consulting for some companies, it was not uncommon to find that the biggest problem in the client organization was the person who hired me.

On  other occasions I got the bad news about theft long after my employees quit or were fired.  When we cleaned the floors in a K-Mart or grocery store, we used these large walk-behind machines that put soapy water down on the floor, scrubbed the floor, vacuumed up the water, and squeegeed the floor dry, all in one pass.  The machines were quite expensive, about $6,000 apiece.  They had two tanks inside them, one a solution tank, and the other a recovery tank.  When cleaning grocery stores I found out my employees stole wrapped steaks, kept them submerged inside the solution tanks of the autoscrubbers until they got outside the store, when they would remove them and take them home.  I could never understand what they thought was wrong with just paying for them.  One of the problems in the janitor business is that whenever something disappears, in the minds of the client, the shadow of suspicion falls first on the cleaning people.  This is often very unfair, but if your mother told you life is fair, she lied to you.  Every business everywhere has to spend serious money to minimize what is tactfully referred to as “inventory shrinkage.”  They’re not talking about what happens on laundry day.  Stealing is a part of life, and always has been. 

In Ohio, Unemployment Insurance is a government monopoly.  An employer paid in so many cents on the payroll dollar, and if someone lost their job through no fault of their own, such as a business downsizing, they could collect a percentage of their paycheck for about six months or so as a financial cushion until they found another job.  I did not realize that on the street this was viewed as an entitlement, something that was owed them without regard for any efforts they may or may not make to find another job.  If someone lost their job for “just cause” they could not collect unemployment, and it would not be charged against the company’s rating set by the government.  I was quite astonished to discover that many of these people would lie through their teeth about almost anything in order to collect their unemployment.  I would contest their stories, and time after time I would lose.  Once again I discovered that in the eyes of the law, or at the very least in the eyes of the government referee adjudicating the case, in the absence of documentation to the contrary, I as the employer was wrong.  I could not help but wonder why or how the referee hearing the case could not identify the obvious contradictions in their stories and not hear the sincerity and frustration in my own.  Little by little I got better at building documentation, only to discover I was still losing consistently because I had not used precisely the right terminology or phrase to describe my employees’ actions.  As we continued to lose these cases, our unemployment experience rate, the formula by which the government decides how much to assess a company in unemployment taxes, rose considerably.  This made us more expensive for our customers.

It was many years later, when we were much bigger and could afford an outside consulting firm who handled all this unemployment stuff  for us, that I learned from them what the magic phrases and catch words were which had to be used to win a case.  For example, let’s say  you have an employee who is quite unproductive and will have to be discharged as soon as you find an acceptable replacement.  While you are looking for this replacement, he causes a major complaint from your customer, and the next day says he’s quitting at the end of the month.  If, in your frustration, you tell him he can leave right away, he will collect unemployment.  His “Quit” became a “Constructive Discharge” the moment you shortened his resignation lead time.  As a “Quit” he would not have collected (but you might have lost your customer due to his negligence), but as a “Constructive Discharge” he was unemployed through no fault of his own.  The legal concept behind the term “Constructive Discharge” was that some employers would try to create a difficult working environment for an employee in an effort to force them to quit, knowing that when the employee did so, the burden of proof for the cause of the unemployment shifted to the employee.  And of course this is what employers with any sense did, for we all knew how difficult it was to prove to a referee’s satisfaction that a discharge was justifiable.  So many of these job applicants learned the system quite well, and worked just long enough to leave and collect unemployment benefits.  And the attitude of the referees was that these poor people had no job, and someone should take care of them.  Like the people who were working, for instance.  I also think the government referees were well educated and poorly paid themselves, and there was a certain amount of undisguised envy and distrust of employers.  They seemed to have a zero-sum, feudal mentality, that if we had money, we must be taking it from these poor people.  Philosophically the referees simply saw it as a transfer of wealth, and they wanted the employee to be able to collect.  Again, it wasn’t about right or wrong, or justice and fairness, but about entitlement and ‘social equality’.  Producers were punished for their virtues, and the indolent were rewarded for their vices.  This prevailing attitude in the culture in northeast Ohio had a lot to do with their inability to make a financial recovery over a period of 40 years.

Another, similarly intractable problem with similar causes was the matter of Workers’ Compensation.  In the state of Ohio, workers’ compensation is a state monopoly.  It is basically an insurance policy for workplace injuries, so that if an employee is injured on the job, the policy will pay for their time off work  and pay their medical expenses.  Because there was no legal competition, the Workers’ Compensation rates were usurious, back-breaking for business.  The system was rife with corruption, graft, and abuse.  Employees flagrantly abused the system, faked injuries in order to collect insurance money while sitting at home, and it was virtually impossible to prove to the authorities that they were committing fraud.  The public in general didn’t realize that the money the government used to pay for these claims came directly from employers, which of course raised the cost of operating a business.  Workers’ Compensation was by far the single largest, uncontrollable business expense, bar none.  I doubt there was an employer in Ohio that didn’t have their own horror stories about employees who claimed they couldn’t work because they had injured their back at work, but who belonged to bowling leagues, played summer softball, and had part-time jobs in construction, getting paid under the table.  And the injuries were always the same:  they claimed they had hurt their back.  “Back problems” were indefinable and indisputable.  No one could really prove you did, or didn’t,  have a back problem.

What made all this dishonesty possible, of course, was the existence of two cottage industries that benefitted by the abuse:  chiropractors and Workers’ Compensation attorneys.  The chiropractors would prescribe virtually endless treatments that rarely produced any significant progress (for then the treatments, and the income from them would cease).  The attorneys got paid on a percentage of the benefit amount you were awarded by the state, so it was very much to their advantage for your treatments, and their income stream, to continue.  I had a neighbor who had been collecting Workers’ Comp payments for many years, and he would tell me how his attorney would rehearse him for a Benefits Hearing, including advice not to shave for a week before the hearing, to wear shabby, rumpled clothing, and to otherwise look down and out.

When we knew a claim was fraudulent, we always reported it, and I can honestly say I don’t know of one single occasion where it was even investigated by the state.  When the state would send us information in the mail about safety in the workplace, and safety training programs, I used to actually get mad.  My problem was not a lack of safety awareness; my problems were fraud, greed, and government lassitude.  Everybody seemed satisfied with the status quo.  Labor unions could crow about how they were protecting the rights of employees, politicians could advertise about how they were the champions of the little guy against those rapacious employers, the chiropractors and attorneys were getting rich from the business, and the employers, well, they would simply pass the costs on to their customers, and the state Workers Compensation fund was awash in cash from high premiums.   So what’s the problem???  And all of this was passed off to the media and the public as altruism; the government authorities looking out for the best interests of the common man.  It never occurred to anyone, apparently, that the government had no money of its own, and merely transferred income from those who earned it to those who preferred not to.  And that the purveyors and facilitators of the system were getting rich from being the middlemen in the deal.

The problem was that Ohio businesses, burdened with this high cost, could not compete with other businesses outside of Ohio who operated under more enlightened and competitive systems.  So business was leaving the state, and new businesses didn’t want to invest in Ohio.  And when the State of Ohio tried to reform the Workers’ Compensation system, they were subjected to a powerful media blitz paid for by the cottage industries that fluorished under the status quo.  For our part, our little company literally staggered under the burden of making the premium payments, and for many years we were under a partial payment plan with the state. 

Eventually the balance of power shifted slightly (and temporarily) from the cottage industries who lobbied to preserve the system, over to employers, for in time people began to realize that if business left the state, there would be no funding for the system.  I always thought of the political process in matters of business and economics as resembling fleas on a dog.  The dog is Business and the fleas are the parasites that live off the dog, and the political process was a system of constantly determining the maximum number of fleas you can load on to the dog without killing it.  In Ohio, the Workers Compensation fleas were killing the dog.  In order to survive Business was leaving the state.  Suddenly, one year, I got a check in the mail from the Bureau of Workers’ Compensation, in the amount of $36,000.00 because the ‘Bureau’s investments had been unexpectedly successful.’  My ass.  When you punish your productive people for their productiveness, those with get-up-and-go get up and go.  The State of Ohio had to stop the flight of business and capital out of the state.

I have to say in passing, that the real victims of the WC system were actually the fraudulent claimants.  They usually got caught up in  a spiral of altering their life style to conform to the needs of the fraud they were committing.  They had to be convincing, and I think that for many of them the pretense eventually became reality.  Their back did hurt,  and when they dressed and acted in a manner required to maintain their benefits, their self-image began to conform to what they saw in the mirror. In my experience, they were almost always a very unhappy, depressed lot.  It took far more energy to maintain their benefits than it would have to exercise daily and find a job they could handle, for honest money.  Fraud corrupts the soul every bit as much in the little guy as it does in the fat cat attorney down the street who advises him.  Some of these chiropractors and attorneys made half a million dollars a year working the system. 

Many years ago I had a skinny fellow who worked for me for a few months named Rodney.  Rodney worked hard when he felt like it, and one day he helped me unload some stuff off the back of a van and into a shed in my driveway.  It took us about an hour.  A couple weeks later Rodney quit and I got a Workers Compensation claim in the mail.  Rodney stated he had hurt his back helping me unload the van.  I thought ‘that’s funny, he never said anything, and he seemed fine to me.  What injury??’  Well, Rodney got himself an attorney and got his claim.  He has been collecting Workers Compensation benefits for many years now.  Every year we get literally dozens of pieces of mail from the state Bureau of Workers Compensation with regard to Rodney, and it is an endless litany of hearings, medical evaluations, and negotiations.  It appears the state is trying to get rid of Rodney’s case, and of Rodney, and with great difficulty.  Rodney, all by himself, must keep two or three state employees busy full-time just circulating all this paperwork.  And Rodney, well this must be what he does full-time for a career these days, responding to all this stuff.  I cannot imagine how he can have much time for anything else.  As far as his back goes, I have no idea what’s wrong with his back, if anything.  But there is one thing I do know:  he didn’t hurt it at work with me that day.

What bugged me the most about the Workers Compensation boondoggle in Ohio was that with the exception of employers, everybody was presenting themselves to the public in  altruistic terms; what they were doing to help everybody else.  Everybody, the unions, the attorneys, the chiropractors, the politicians, and the state bureaucracy, were selling themselves as the guardians of public interest and the injured worker, while they were fleecing the system and lining their pockets.  And as always, we employers were the bad guy because we made no bones about the fact that we were there to make money.  For ourselves, and our investors.  For this reason, we were selfish and greedy, and the worker needed to be protected from us.  The lesson appeared to be that all anyone had to do to be believed was to merely proclaim his unselfish, altruistic intentions, and anyone who stated the opposite, that he was looking out for his own best interest, could not and should not be trusted.  Now you tell me, which one would you believe?  Like I said, whenever anyone tells you what he’s going to do for you,  grab your wallet and run like hell.

I was also becoming acquainted with the halo benefit of government:  All government gets a huge benefit of assumed legitimacy.  Maybe that’s why we have 80,000 pages of government regulation in the Federal Register.  For me, the administration of Workers’ Compensation insurance in Ohio during those years was an example of the Lockean Paradox:  The very instrument used to secure one’s rights becomes their greatest threat.  In the face of this vast smothering bureaucracy, does anyone really believe they are in control of their economic life because they vote every four years??

Because the government regulated so many aspects of the employment relationship, I learned over and over again that everything in business related to employees had to be documented.  It was necessary to adhere closely to a system of written progressive disciplinary procedures for employees; the catch for an employer was that from the moment you administered any kind of written warning to the employee, whatever little there might have been of a positive attitude in the employee instantly evaporated.  No matter what you said to the contrary, in their minds from that point on you were trying to get rid of them.  And of course that very often became a self-fulfilling prophecy. 

What a far cry all this was from my former utopian world of Watchtower and Bethel.  Was everything really this messy?  Where had all the heros gone?