| Think about the Congressional leadership retroactive | | | | becomes an eraser and takes away the advantage. |
| punitive law for 90% federal taxation of bonuses | | | | However, the liabilities and corporate guarantees that |
| earned under binding legal contracts. Add state and | | | | funded those now less valuable assets do not go |
| local taxes and in numerous states, you would be | | | | away. Often the liability actually accelerates under |
| taxed for MORE than 100% of that bonus. Whatever | | | | debt covenants inserted to protect against business |
| you thought about the fairness of that law, who will | | | | becoming riskier. |
| not agree that it is a modern example of the | | | | This economic and financing fact has been around for |
| government changing contract law and business with | | | | centuries. Many of you have heard of the beautiful |
| the stroke of a pen? Where in your business might | | | | porcelain from Delft Netherlands. Guides there explain |
| the Congressional stroke of a pen create a great | | | | how economic changes reduced the cities industrial |
| opportunity or be a death knoll? | | | | base from 20 porcelain manufacturers to two. |
| If you initially have difficulty thinking of an example | | | | Whatever version of this story, your prospective |
| for your company, are you thinking about some | | | | banker or investor has heard, they are concerned |
| version of going green or renewable energy as an | | | | about the business long term viability once short |
| area subject to fickle changing Congressional favor | | | | term government regulations or incentives change. |
| while you decide whether going greener might | | | | And historically Congressional leadership has vacillated |
| change your company for the good or the bad? In | | | | between encouraging green on a short term basis |
| this turbulent economy, renewable energy is looking | | | | and periodically losing interest in that encouragement |
| like a favorite for a wide range of industries. Forums | | | | and then taking away or dramatically reducing the |
| are discussing what businesses will win in the new | | | | incentives. |
| environment still unfolding. | | | | The first step to surviving this degree of business |
| Making part of this cleaner energy world discussion | | | | risk, the government has added to you operations in |
| even more difficult for business leaders to plan for | | | | either renewable energy or whatever other area you |
| will be the long standing concern from financiers that | | | | have identified from this process is to recognize the |
| what politicians can create with the stroke of a pen, | | | | government can destroy the incentive as quickly as it |
| they can take away with a different stroke of the | | | | created the incentive, with a stroke of the pen. Then |
| same pen. Making this fact even more painful is that | | | | your strategic planning, risk management, contingency |
| your business will probably be required to make long | | | | planning, or enterprise risk management program can |
| term commitments in plant, product or contracts to | | | | consider this risk in addition to the other issues you |
| take advantage of the opportunity the governmental | | | | are planning for. After all the money you gain or save |
| pen created. Those same long term assets drop | | | | probably is significant, and it is YOUR money after all. |
| dramatically in value when the government pen | | | | |