Magazine | March 25, 2013, Issue

An Entrepreneurial Life

Richard Spencer (Roman Genn)
Pictures from struggling, wonderful California

Fresno, Calif. — As some people have a talent for sprinting or dancing, Richard Spencer has a talent for entrepreneurship. Like most talents, this one manifested itself early. And, like many an entrepreneur, Spencer had the chance of a little capital.

Before he graduated from high school, in 1962, his great-aunt May asked him, “What are you going to do this summer?” He said, “Deliver furniture, same as last summer.” She said, “How would you like to do something more interesting?” The two of them went down to the Hall of Records. They leafed through some books and found a home about to be foreclosed on. May bought the home for $5,200. She also gave her great-nephew $800 for supplies. The plan was, he would fix up the house, and then they would sell it, splitting the profits.

At the end of the summer, he had another idea: How about renting it? They did. In the meantime, the young man had noticed a vacant lot, zoned for four units. As the owner of a house with a renter, he could borrow $4,000, to buy the lot. He did. To make a long story short, he has not stopped working and growing since. He presides over several enterprises, employing something like 400 people.

His city, Fresno, needs the employment. This is one of the most depressed areas in the country, dubbed “the Appalachia of the West.” Unemployment is now 14 percent, although recently it was 17 percent. In some of the small surrounding towns, unemployment is as high as 35 or 40 percent. “We are the agricultural center of the world,” says Dennis Woods, a leading banker in Fresno, “yet people are starving.”

It is indeed a strange and frustrating paradox. Fresno has long been famous for raisins, and it also has tomatoes, onions, peppers, cotton, oranges, pistachios — you name it. Almost anything can grow here. Armenians were once the prominent minority in the area (as immortalized by William Saroyan, Fresno’s literary light). The descendants of these immigrants are still here, but the prominent minorities are Mexicans, Punjabis, and Hmong.

As for Richard Spencer, he is nothing special, or so he says. But the type he represents is undoubtedly special: the person who comes up with an idea, comes up with another idea, takes risks, finds his way around obstacles, employs others, and prospers. “He’s always thinking,” says Mike Conway, a friend of Spencer’s, and a fellow entrepreneur. “He takes an intellectual approach. I’m more seat of the pants” — and Conway has done well by those pants, for himself and others.

Spencer is at the head of Spencer Enterprises, which builds houses and apartments. He also heads Harris Construction, which builds schools, hospitals, and the like. Then there is a parts business, and a company called CMEC. The latter builds aerial work platforms: boom lifts, scissor lifts. Spencer also has an almond ranch and a winery (the Cru Wine Company). He has had lean times and fat. He keeps going through the lean times, knowing that investors, employees, and others count on him. Business life is constant adjustment.

I think of something Bill Buckley often said, quoting Whittaker Chambers: “To live is to maneuver.”

Spencer is not a complainer, but he is nevertheless willing to tell me about the follies of government. Take the matter of engines. You have to buy new engines now, because older ones are deemed too polluting. The new engines are very expensive, too. Just last week, Harris Construction lent a water truck to the almond ranch. The people at the ranch wanted to water their dirt roads, in order to keep the dust down. The EPA demands this. But this same EPA demanded that the water truck be taken off the road, because its engine is too old. Harris will now have to scrap the truck.

#page#That’s a relatively small matter, among many. Here’s another: Spencer is building 160 apartments in Fresno. He has to pay the EPA a fee of $220,000. Why? Because people will live in the apartments, and people take trips — to and from work, or to the movies, or even out of town. They live; therefore, they pollute. And Spencer must pay. Naturally, he will build the fee into the tenants’ rent. And what will the EPA do with his $220,000? He has a good guess.

Over the years, he has noticed something about government: Often, its offices will charge fees, impose penalties, and so on simply to keep themselves in business. They justify their existence this way. They can say, “See? We pay for ourselves” — by generating money from the regulated, or overregulated.

Incidentally, this is a big part of what turned Thomas Sowell, the famed economist and writer. He became a libertarian-conservative when he was a young man working in the Labor Department. He saw that the bureaucrats around him were more concerned with perpetuating their jobs and keeping or expanding their powers than with the public interest.

Spencer, in his various enterprises, has a lot of EB-5 investors. “EB-5” refers to a provision of immigration law, a provision that allows foreigners to make a substantial investment in certain U.S. businesses in exchange for a green card. But there is a problem, says Spencer: The rules shift under your feet. And you can’t talk to anyone in government about it. You deal with “nameless, faceless websites.” You are at the mercy of anonymous regulators who can hold up an application or otherwise gum up the works — and you have little recourse.

To add insult to injury, says Spencer, the immigration service now employs “entrepreneurs in residence.” “By definition, a government employee is not an entrepreneur,” he says. But do they know what they’re doing? Are they of use? “I don’t know,” he says, “because we haven’t been able to meet with one or talk to one, despite our best efforts.”

Like other businessmen, Spencer now faces Obamacare — and so do his employees. At first, they were relieved to hear, from President Obama and others, that they would not have to give up their existing health care, if they were satisfied. But that has proven untrue. Spencer’s CFO at CMEC has devoted many hours to figuring out the new world of Obamacare — hours he could be spending on more productive work. This much is certain: Spencer will pay more for his employees’ health care, and so will they. Whether the health care will be better is doubtful.

In the almond business, Spencer is small-time, he says, but he takes me to see someone big-time: Tony Campos, a veritable almond king. He wasn’t born a king, or prince, however. He came to America in 1952 from the Basque country, with nothing. He took a bus from New York to Wyoming, where he would work as a shepherd. Eventually, he and his brothers tended sheep in California. Then they moved into farming, finally hitting on almonds. The Campos brothers did hard, tedious manual labor. Now Tony — the sole remaining brother — has a sprawling, gleaming operation, with equipment that seems out of Willy Wonka’s chocolate factory.

Business has never been better, he says. That’s because of a global market: He sells to 62 countries. Still, he could be doing a lot more. His company spends endless money and endless hours on regulations — particularly those relating to food safety and labor. Campos acknowledges the need for regulation, but says that much of it is absurd. Just a giant waste. Money that could be going to expand business goes instead down a rathole. When he speaks of this, his face registers both disgust and amazement. Why would a country want to do this?

#page#Here is a regulation that may be coming soon, a regulation in the pipeline: Say a kit fox wanders into your orchard and defecates near a tree. You have to quarantine off a sizable area and destroy the trees within it. You can’t keep Mr. Fox out in the first place — because he’s an endangered species. The government can tie you up in knots, in myriad ways.

Back to Dennis Woods, the banker — and more than a banker, a business impresario. He has started about 40 businesses, of various types. He is a banker who hates bankers, he says: They are risk-averse, practiced at saying no. And you can’t build anything with no. Woods likes to say yes, helping entrepreneurs get started. He lends them money and guides them through regulations, to the extent one can. The biggest barrier to entrepreneurs today, he says, is not taxes — though we could argue about tax policy. The biggest barrier is access to capital (a lack thereof). That and the morass of regulation.

It bothers Richard Spencer that men such as Tony Campos have to bow before regulators, and be yanked around by them: people who have no relevant experience, no relevant knowledge, and no accountability. Businessmen rise and fall, but a regulator is seldom fired.

But Spencer does not want you to feel sorry for Campos, or Dennis Woods — or Spencer. They’re all doing great. They’re big boys, well established, and they can hold their own with government, at all levels. Nor do you have to worry about their children, says Spencer. (He and Karen, his wife of 46 years, have six children.) They have resources. They also have resourcefulness. They have seen entrepreneurship in action, and they’ll figure out a way.

Spencer worries about those without resources, or with few resources: “the entrepreneur who never was,” as he puts it. The guy who could never get going, because the barriers were too high. “That is the sinister and obnoxious effect of overregulation,” he says — stopping people before they can get started, choking dreams in their cradle. If he were starting out today, he says, he could not accomplish what he has. The environment is too forbidding.

On top of everything else, businessmen have to put up with being demonized — with being the villain in countless movies and countless politician’s speeches. Spencer especially objects to the insinuation, or outright assertion, that people like him came by their money dishonestly. He belongs to “the rich,” I suppose, or “the 1 percent.” But he has also worked his tail off, paid millions in taxes, given millions to charity, provided goods and services that people need or want, and employed thousands.

He doesn’t mind paying taxes, by the way. “Happy to do it.” He does think that a welfare state may not help the people it intends to help.

Despite the unpleasantness of recent years, Spencer is optimistic. His California is in bad shape, as everyone knows. But it is still a golden state. “There’s still magic here,” says Spencer. And magic across America. “People from all over the world want to come here, and invest here, and have their children educated here. We’re tarnished, but we’re not through.”

Spencer may be nothing special, as he says — “Please don’t make a big deal out of me” — but, again, the type he represents is special. If we who are not entrepreneurs dump on the entrepreneur, and overtax him and overregulate him, we are only harming ourselves.

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