Thursday, February 13, 2014

Small businesses can now cut every expense but labor.

Every day, I become more and more convinced that we are being governed by idiots, and that Barack Obama is their king. 

As anyone who has ever run a 5-employee coffee bar knows that businesses have an income and businesses have expenses. 

Expenses are coffee, cups, cleaning supplies, cash register tape, stir sticks, flavor for shots, milk, chocolate and, yes, employee labor. 

Income is income.  It could be dollars, or it could be javelins, Coca-Colas, gasoline, eggs, butter, ammunition or anything else you would swap for a double-espresso.   It's what people swap for your coffee, cups, cleaning supplies, cash register tape, stir sticks, flavor for shots, milk, chocolate and, yes, employee labor.

Let's pretend that you have a chain of coffee bars, and you have 100 employees.  If so, you're going to be hit with Obamacare costs.  But if you have 99 employees, you can avoid that expense for another year. 

Any sane human will find a way to avoid that expense.  All sane humans will avoid that expense, if at all possible. 

If the costs of cups goes up, they will try to find a cheaper cup.  Ditto for coffee or cash register tape.

So if expenses go up to the point where costs have to be cut (whether it is in cups, labor or chocolate), how will Obama's Mouth-Breathers protect their reputations? 

They will make it illegal to reduce the number of employees.  I swear to God, they're going to make you swear to them that you didn't cut payroll to avoid paying the Obamacare shakedown tax. 

 Consider what administration officials announcing the new exemption for medium-sized employers had to say about firms that might fire workers to get under the threshold and avoid hugely expensive new requirements of the law. Obama officials made clear in a press briefing that firms would not be allowed to lay off workers to get into the preferred class of those businesses with 50 to 99 employees. How will the feds know what employers were thinking when hiring and firing? Simple. Firms will be required to certify to the IRS – under penalty of perjury – that ObamaCare was not a motivating factor in their staffing decisions. To avoid ObamaCare costs you must swear that you are not trying to avoid ObamaCare costs. You can duck the law, but only if you promise not to say so.

If you've ever run anything and tried to make a profit by doing so, you know that this is lunacy.  Labor is the same as cups, coffee, or chocolate. 
If you aren't making money, you have to cut where you can.  Anywhere you can. 

Godalmighty, I'm ready for the Rodham Administration to take over. 

Tuesday, February 11, 2014

I, Valentine

From Wikipedia (because I'm feeling lazy and don't want to condense their words into my own) here is a summary of Leonard Read's immortal Free Market essay "I, Pencil", an essay which proves that no small group or individual can organize the production of something as simple as a pencil, much less control the U.S. healthcare system.  Nobody can make a pencil.  Pencils are too complicated.  But anyone with 15 cents can get a pencil  Go here to download a copy or an MP3. 

"I, Pencil" is written in the first person from the point of view of a pencil. The pencil details the complexity of its own creation, listing its components (cedar, lacquer, graphite, ferrule, factice, pumice, wax, glue) and the numerous people involved, down to the sweeper in the factory and the lighthouse keeper guiding the shipment into port.
No Master Mind
There is a fact still more astounding: The absence of a master mind, of anyone dictating or forcibly directing these countless actions which bring me into being. No trace of such a person can be found. Instead, we find the Invisible Hand at work.
... Since only God can make a tree, I insist that only God could make me. Man can no more direct these millions of know-hows to bring me into being than he can put molecules together to create a tree.
... The lesson I have to teach is this: Leave all creative energies uninhibited. Merely organize society to act in harmony with this lesson. Let society's legal apparatus remove all obstacles the best it can. Permit these creative know-hows freely to flow. Have faith that free men and women will respond to the Invisible Hand. This faith will be confirmed.
—"I, Pencil", 2008 edition
I instantly thought of that when one of my freight carriers sent me this Infographic showing the growth, movement, preservation and storage of the roses that you (better) buy for Valentine's Day. 

Nobody plans it, everybody plans it. 
Nobody did it, everybody did it. 
There is no "Rose Czar". 
The Invisible Hand makes it happen.  No one involved in the process cares that much about your Valentine's Day gift.  They care for themselves, and therefore, they care for you.   
Once again, from "I, Pencil".....

Leave all creative energies uninhibited. Merely organize society to act in harmony with this lesson. Let society's legal apparatus remove all obstacles the best it can. Permit these creative know-hows freely to flow. Have faith that free men and women will respond to the Invisible Hand. This faith will be confirmed.

And you'll never run out of roses

Monday, February 10, 2014

The New York Times Should Raise Its Price By 50% Between Now And 2016

How do you get people to purchase more of something?  According to the New York Holy Times, you raise the price. 

How do you make yourself more attractive to employers?  Keep raising your requested wage until someone says "I'll hire you". 

How do you increase employment?  According to the New York Holy Times, you put an added burden on people who purchase labor. 

Good God in heaven.....

Go here.  They've come out with another editorial demanding that the minimum wage be increased by some random amount yet to be determined. 

HOW HIGH SHOULD IT BE? There’s no perfect way to set the minimum wage, but the most important benchmarks — purchasing power, wage growth and productivity growth — demonstrate that the current $7.25 an hour is far too low. They also show that the proposed increase to $10.10 by 2016 is too modest.

You're damn right, there's no perfect way.  There is no way. 

I want to be paid as much as possible for my labor.  Employers want to pay as little as possible.  That varies from person to person, industry to industry, and enterprise to enterprise.  And the last humans on earth that I would want to determine that rate?  The New York Holy Times Editorial Board, Barack Obama, and the U.S. Congress.  The "perfect" rate will be determined by political considerations, not economic ones. 

I'm not going to rant about the racist origins of minimum wage legislation.  (Google the Davis-Bacon Acts.) 

I'm not going to rant about the obvious fact that if your skills aren't worth $10.10 per hour, it'll be illegal for you to work. 

I'm just going to ask the New York Times to raise it's price by 50% between now and 2016.  It will help sales.  600 economists have said so. 

One last thing.....

One of the favorite talking points that these guys like to trot out goes like this....   "If wages had kept pace with productivity, workers would be earning 43.07% more per hour."

Here's their chart.

That's probably an accurate chart. 

The other chart, the one they don't show, reveals that the iPhone in the typical minimum wageworker's pocket, would have cost 3.1 MILLION dollars in 1991

Is there anyone who thinks that the world would be better if cell phone prices were in line with worker productivity? 

200 years ago, something like 98% of us had to work on farms.  Food was a massive percentage of everyone's budget.  Do you with that your food costs reflect the increase in worker productivity, just out of fairness? 

God, they make me crazy. 


Sunday, February 9, 2014

From my garage archaeology project - a stash of 8-track tapes

From the Whited Sepulchre Garage Archaeology Project. A vintage 8-track of the Kansas classic "Point Of No Return".

I put away about 75 of these tapes on an upper shelf more than two decades ago, and dug them out last night.  Good times, good times. 

As I explained on Facebook to a 30-year-old-youngling, back when the earth was young, and the lava was still cooling, we didn't have cell phones that stored music.
We didn't have MP3's or Pandora, or even the now-primitive relic that you know as a CD. This was before we even had cassettes.
These were called 8-track tapes. 
It was a long spool of tape that had 4 separate L and R channels. You couldn't speed up or reverse. You could only switch around from track 1 to track 4. 
 As the tapes aged, you could often hear two songs playing at the same time, which you remedied by folding up a piece of paper to tilt the cassette upward in the player. 
 Most of them were eventually "eaten" by the tape player. They were the only recorded music that could be played in an automobile for a long, long, long, long time. 
 Late 1960s through the early 80's.

Here's Kansas doing "Paradox", one of my favorites from this album.  (I was a moderately bad violinist as a kid, and Robbie Steinhardt's rock violin artistry absolutely fascinated me.)  You can safely ignore the first 50 seconds.  It doesn't start crankin' until then.