CEO - ACG - July 2017

Special Advertising Supplement

A global community for middle-market M&A dealmakers and business leaders focused on driving growth.

ACG Columbus is the local affiliate of the Association for Corporate Growth, whose 14,500 members share education and networking activities for middle-market merger specialists, private equity firms, bankers, lawyers, accountants, corporate development officers and their professional advisers.

ACG Columbus offers special opportunities throughout the year, including monthly meetings and networking events, webinars, regional and national conferences and programs specifically designed for women and younger members via two new affiliates: Women in Transactions and Young ACG Columbus.

Stories by Mike Mahoney • Photos by Dan TriTTSchuh

In partnership with Association for Corporate Growth®

l

Association for Corporation Growth®

87

John Tamny speaks to the Association for Corporate Growth Columbus chapter’s annual dinner.

ACG AnnuAl Dinner SpeAker John TAmny

BiGGeST poTenTiAl Trump peril P

point here or there.

Tamny’s credentials are commanding: He is the political economy editor for Forbes, a senior fellow in economics at the Reason Foundation, senior economic adviser to Toreador Research and Trading and editor of RealClearMarkets.com. His compelling keynote at the May 23 ACG Columbus dinner was “Donald Trump’s Economy: The Very Real Promise and Potential Peril.”

Tamny sees more promise than peril, long-term, in the Trump presidency and what the new administration means for national economic growth. Tax cuts and less regulation will fulfill the promise, he says, but the potential peril lies in any Trump initiative that threatens free international trade.

“The feedback was very positive, and members said they appreciated Tamny’s perspective,” says Bill R. Remias, president of the local ACG chapter and senior vice president and commercial region manager

olitical economy commentator John Tamny found a sympathetic audience in the Association for Corporate Growth, and he praised its values and mission as he addressed the annual dinner of its Columbus chapter.

“Investment banking is one of the most important professions on earth. It’s one thing to come up with a business idea.

It’s quite another to find the financing for it. It’s one of the most difficult jobs in the world,” Tamny says, taking his cue from investment banker Andy Hays of Copper Run, who introduced him.

ACG Columbus, comprised of bankers, lawyers, accountants, private-equity investors and business owners, generally seeks to build a networking and professional education platform for individuals with a role in helping middle-market corporations expand.

Most members of ACG’s Columbus chapter received Tamny’s message with favor, although a few took exception to a

Association for Corporation Growth®

l

of Huntington Bancshares Inc. “They really appreciated the historical perspective, going back to the 1920s and 1930s, and then relating the background with Nixon and some of the other administrations.”

ACG Columbus annual dinner chair Don Hughes of Squire Patton Boggs agrees, saying Tamny’s remarks were the kind of thought-provoking commentary ACG Columbus tries to blend in with its other presentations and programs on current issues and practices in finance and corporate funding transactions. “Some of the positions he took were a little aggressive. But more people agreed with him than disagreed,” Hughes says.

Tamny hopes Congress and business leaders will check Trump’s tendencies toward economic nationalism and protectionist trade policies. “What Donald Trump doesn’t know about trade could fill many books,” he says.

Tamny provided copious context in both old and recent economic controversies. He condemned President Richard Nixon’s abandonment of the gold standard for American currency in 1971. He says most government interventions by Presidents Herbert Hoover and Franklin D. Roosevelt alike during the Great Depression were futile. He questions whether the Federal Reserve Bank provides any real beneficial function in the economy.

And he opposes today’s Dodd-Frank financial regulations.

“Banks are the most regulated part of the economy,” he says. “But the regulators

Special Advertising Supplement

didn’t have a clue” about abuses that led to the 2007-08 mortgage-backed securities crash.

Tamny compares this mismatch of regulators and regulated financial institutions to the lopsided 2014 victory of Michigan over Appalachian State, 52-14, although he acknowledged—to the audience’s applause and laughter—Michigan’s 2007 loss to the same opponent also made him wonder about relative skill sets.

To understand thoroughly his outlook for the Trump presidency, Tamny says one must understand how each president can be measured on how well they reduce or eliminate four barriers to economic growth: • Taxation, which Tamny views as a penalty on work, investment and success.

• Regulation, which does not work because it pits the smartest industrial leaders against inept bureaucrats who never anticipate trouble spots.

• Unstable money values, which have created uncertainty ever since Nixon severed the dollar from the gold standard.

• Tariffs on trade, which act as an inhibitor to exports and domestic innovation.

To sharpen and simplify the focus on these barriers, Tamny emphasizes the value of individual contributions to the marketplace of commerce and ideas, much in the tradition of Ayn Rand, Friedrich Hayek and one of his personal heroes, Henry Hazlitt, an economic writer for The New York Times, Newsweek and the National Review.

Hazlitt said what is harmful for an individual is equally harmful for a collection of individuals—that is, an economy like ours—and Tamny believes that simplifies economic issues.

“Whatever one’s ideology, what you cannot deny is that on an individual level, no individual is better off if more and more of his dollars earned are being taxed on annual basis,” Tamny says. “No individual is able to create more wealth if in more of his working hours he’s spending time on complying with regulations. No individual

“No individual is able to create more wealth if in more of his working hours he’s spending time on complying with regulations.”

tion and the massive impact of the Great Depression of 1929 with extensive government spending. The US economy would have bounced back more quickly after the 2007-08 recession without stimulus packages and bailouts, he says.

“Painful as recessions are, as soul-crushing as they are, as dispiriting as they are, they are essential and they are beautiful,” Tamny says.

“Recessions signal an economy that is about to boom, simply because they signal an economy cleansing itself of all the misuses of labor, all the bad habits developed, all the lousy investments and all the lousy companies holding the economy down.

When governments fight recessions, they are fighting an economy that’s fixing itself on the way to a momentous boom.”

The Great Depression also offers the biggest object lesson in avoiding protectionist trade policies, Tamny says. In 1930, Hoover signed the Smoot-Hawley Tariff Act, taxing more than 20,000 foreign products imported to the US, ignoring the objections of industry leaders and experts and making perhaps his biggest mistake.

“If you want to crash an economy, one of the quickest ways to do it is to put up barriers and taxes to foreign goods directed toward it,” Tamny says. “If foreigners can’t sell to us, they can’t buy from us. So with the stroke of a pen, President Hoover instantly shrank US sales around the world.”

Fast-forward to today, he contends, and free trade is the path toward successful specialization and growth, and President Trump should not restrict it.

“Think of the companies right here in Columbus: the Limited, Big Lots, Abercrombie & Fitch. If not for their interconnected nature over the global economy, if not for their embrace of the global division of labor, they could not compete in foreign markets,” Tamny says.

Free trade represents the most talented people on earth fighting to give you a bargain, Tamny says. Moreover, trade allows individuals to do the work “that most animates our individual talents, the work that we do best. Rich countries tend to be free-trading countries because they’re most likely to be doing the work commensurate with their individual skills.”

Finally, Tamny asks: “Why do you get up for work in the morning? You work so you can trade for what you don’t have.”

– John TaMny is able to store and save more wealth if the US Treasury is constantly devaluing the dollar. And no individual is able to attain that wealth if talented people around the world are barred from serving that individual’s needs solely because they are from another part of the world.”

In the 2016 election, Trump wanted to cut taxes but renegotiate what he termed “unfair” trade deals, a potential threat to free trade, Tamny says. Trump’s opponent, Hillary Clinton, wanted higher taxes on the wealthiest individuals, and she only recently had modified her long-held support for multilateral free trade agreements such as NAFTA. But Tamny contends neither candidate posed destruction for the US, as their opponents claimed. “Both sides severely insulted the United States. If a constitutionally limited president could bring down the United States, it’s not worth saving in the first place,” he says.

“If you talk about just one person ruining it, I think we do a disservice to the country.”

Instead, he contends, the level of personal distrust of the two candidates reflected the country’s anxiousness about a too-powerful presidency and growing power of the federal government over the economy. That has been developing since the 1920s and 1930s, according to Tamny, when both parties abandoned constitutional limits on federal authority.

Thus, Tamny favors eliminating estate taxes because family wealth provides essential risk capital in an economy that sees many failures. Thomas Edison would have struggled for capital without J.P. Morgan, ESPN would not have survived without Getty family support and many Silicon Valley startups benefited from venture capital funds that included Rockefeller and Vanderbilt money, he notes.

Tamny doesn’t believe in federal fiscal and monetary interventions during recessions, citing a rapid recovery after the 1921 recession with little government intervenl

Association for Corporation Growth®

Special Advertising Supplement

ACG exploreS AVenueS for GroWTh AnD neTWorkinG for DeAlmAkerS

F

want to expand or grow through merger and acquisitions or through organic growth, joint ventures or partnerships.”

“So now when one of my clients wants to do a transaction, I typically will know the attorney on the other side, I’ll know the CPAs that are involved in doing the due diligence. As a result of having that mutual respect with people, the transactions go a lot smoother.”

Events and programs of ACG Columbus seek to: • Share best business practices.

• Build worthwhile relationships that will generate quality growth opportunities.

or many business owners, corporate development managers and merger dealmakers, the Columbus Chapter of the Association for Corporate Growth has become a favorite source of education and contacts.

ACG has adopted a mission of growth, self-improvement and contributions to the community very much in line with the Columbus Partnership, Columbus 2020 and JobsOhio—to foster the startup, growth and investment of local companies, says Don Hughes, a Squire Patton Boggs attorney and ACG board member.

“We’re blessed with an incredibly collaborative and collegial professional environment,” Hughes says. “Even competitors get along here. When you have this kind of social network on top of the professional network, it helps foster a positive business environment.”

Founded in 1954, the Association for Corporate Growth nationwide has 14,500 members. ACG Columbus is one of 54 chapters, and it was recognized as Chapter of the Year in 2011.

ACG Columbus was founded in 2005.

It currently has 150 members; about 40 percent are dealmakers, and 60 percent are service providers.

In 2016, ACG Columbus had 19 events with about 1,800 attendees, reports President Bill R. Remias, a senior vice president at Huntington Bancshares.

“We bring together people with programming and networking opportunities, people that have experience and skills related to helping businesses grow,” Remias says. “We have that service-provider portion of membership that are really the experts and have done a lot of transactions.

We also have a certain number of members from corporations in central Ohio that

Association for Corporation Growth®

hoW To GeT inVolVeD

• Membership in ACG Columbus is open to corporate, equity or service professionals in a wide range of financial, legal, accounting, banking, advisory and business management occupations, as well as governmentand community leaders, educators and full-time students.

• Individual corporate membership is $300, or $375 for professional service providers. Young ACG members pay $220 annually.

• Membership privileges include the chance to attend the Great Lakes Capital Connection, to be held this year in Grand Rapids, Mich., Sept. 6-7. Sponsored by ACG affiliates in Columbus, Cleveland, Cincinnati, Indianapolis, Detroit and Pittsburgh, the GLCC matches companies and private equity firms to facilitate deals.

More information is available at acg.org/columbus or by calling the ACG Columbus chapter at 614-652-9928. l

• Increase

exposure to investment opportunities.

• Promote Columbus-area companies through organic growth and transactions such as mergers and acquisitions, joint ventures and distribution agreements.

Past speakers and panelists have included Elaine Roberts, CEO of the Columbus Regional Airport Authority; David Meuse, a senior adviser at Stonehenge Partners; Mark Russell of Worthington Industries; Mark Kvamme of Drive Capital and formerly of JobsOhio; Jeff Myers of Bigger Tuna, a product development company; and C. Robert Kidder, former chairman of Chrysler Group.

The organization is continually reaching out to new members and recently formed two new affiliates: • Women in Transactions connects women in the Columbus deal-making community. The group sponsors social networking events and educational programs.

• Young ACG Columbus provides programming for emerging leaders, innovators and entrepreneurs who are 35 years old or younger, connecting them with the support and strategic network of ACG Columbus.

Renee A. Milyiori, a wealth adviser at the LeClair & Milyiori Group of UBS Financial Services Inc., helped spearhead Women in Transactions with Laura Hult, an attorney at Calfee, Halter & Griswold, to get more women involved.

Just a year old, Women in Transactions already has had three events and helped increase the attendance of women at other ACG Columbus events, Milyiori says.

Young ACG has held social events and plans a YACG Charity Volleyball Tournament at Flannagan’s Dublin on Aug. 23.

Mike Mahoney is a freelance writer.