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Friday, April 24, 2009

24. The Bubble-Headed Bleach Blonde

"We got the bubbled-headed bleach blonde
Who comes on at five
She can tell you 'bout the plane crash
with a gleam in her eye." - Don Henley, Dirty Laundry

The other day I caught a few minutes of CNN, you know “The most trusted name in news?” They were discussing another of Obama’s anti-business proposals and the costs associated with such a program. The anchor finished the segment by saying, “the concern is that corporations will pass these costs on to the consumer.”

I couldn’t suppress my very audible sigh. Is there a brain in anyone’s head in the media? How about academia? I’m beginning to seriously wonder.

So, in my effort to educate the left by writing this column, I’m going to give a brief class on businesses and corporations. I’m hoping to enlighten those Ivy League intellectuals that run the news rooms of CNN, NBC, CBS and ABC. God knows, SOMEONE needs to have a talk with them.

Guess what Ms. CNN-Reporter? ALL costs of businesses are borne by the consumer. Did you hear that? The consumer pays ALL COSTS. Instead of repeating this ad nauseam, I’ll just ask you to re-read the first sentence of this paragraph fifteen times.

Costs of doing business include rent, salaries, fuel, energy, raw materials, office supplies and equipment, legal fees, government regulation, lawsuits and, are you ready for this one…….. TAXES. Yep – even corporate taxes – are paid by the CONSUMER. These costs are passed on to the consumer in the price of the product. And, if you didn’t already know, a corporation isn’t even a person – it is merely a piece of paper filed away in a law office.

Now, what about the investors, you know, the stock holders? Hey, maybe they are the evil, greedy ones CNN talks about. Let me ask you a question, Ms. CNN. Suppose a stock broker calls and wants you to invest in the ABC Corporation, a little start up firm that makes ATWs (advanced technology widgets). The price per share is $10. You understandably ask about the company’s profit potential. ABC Corp, your broker tells you, has no intention of making profits – EVER. So, if the company does well, your share price will never be more than the $10 you originally paid. If they don’t do well, you’ll lose your money. Also, since they don’t want to be greedy and make a profit, there will never be any dividends paid to you. So – are you ready to invest? At the bank in a safe, secure CD, you’ll get 3% on your money. If you invest in ABC, at best, you’ll merely get your money back and, at worst, you’ll lose. Is this a difficult decision? If a corporation doesn’t make profits, no one will invest in their business.

Hey, Ms. CNN – are you still with me here? Or am I moving too fast?

Ok, let’s review - if a company doesn’t pass along its costs of doing business to the consumer it can’t make a profit. If it doesn’t make a profit, then investors won’t invest and there won’t be any companies.

During the Clinton administration, Big Bill was hot on raising the minimum wage. A businessman challenged Bill complaining that the higher wages would hurt his business. Yale and Rhodes Scholar Bill replied, “just raise your prices.” Guess what Bill, if I get a raise yet the cost of everything I buy goes up at the same time, my raise is meaningless. I’m in the same spot I was before I got the raise.

The left keeps proving to me over and over again that they are the “feel” people. They make all decisions based on how they feel and never seem to bother using their heads. Yes, it does feel kind of good to hate big corporations. It feels good to point your finger at something or someone else on which to blame your own problems even though it solves nothing. Ultimately, you will be the one that is hurt, not the corporations. You will be hurt either in having to pay more for goods and services, by losing your job or you will watch your investments, your pension, your IRA and your 401(k) values drop like a stone falling from a tall building. If you ultimately drive corporations out of business or out of the country, it will be the employees and again, the investors who are hurt. It’s pretty difficult to hurt a piece of paper – or didn’t you know.

Hey – guess what Ms. CNN, that’s exactly what is happening right now. Stock prices are falling just like that stone off of that imaginary building and with it Americans are watching their savings and retirement funds fall dramatically in value. It started, interestingly enough, as soon as Obama got the democrat party nomination and began his war on business.

Now do you understand? Or will you need another class?

1 comment:

Anonymous said...

Kick em when they up, kick em when they down