Posted on 12/13/2008 8:50:55 AM PST by SeekAndFind
When the jobs report for November came out last week, many so-called "experts" were shocked at the massive loss of an estimated 533 thousand jobs. Even a Time /CNN organization called "The Curious Capitalists" were at a loss to explain it.
Let me attempt to help out these "curious capitalists" (though I am still skeptical that anyone working for CNN or Time is either curious or a capitalist). I caused part of this job loss and I know precisely why; the election. The results portend big trouble for small business.
The job destruction process has started. We are about 20% of the way through our ramp down process and on schedule to complete the shut down by spring 2009. Watch the financial news and you will see continued job cuts each month. We are not alone in our strategy. Far from it. Atlas has shrugged all over the country.
Like many business owners, we are no longer willing to take all of the financial and legal risks and put up with all of the aggravation of owning and running a business. Not with the prospects of even higher taxes, more regulation, more litigation and more emboldened bureaucrats on the horizon. Like others we know, we are getting out while the getting is, well, tolerable. Many who aren't getting out are scaling back.
We learned just this week that getting out of business is harder than we thought. Take Republic Windows & Doors of Chicago, where being out of money and out of paying customers apparently does not give a business the right to shut down. Nor does it give that business' bank the right to withhold credit. According to the unions, Jesse Jackson and the Governor of Illinois (yes, THAT governor), this company must continue to pay its employees salaries and benefits.
But pay them with WHAT? Liberals seem to be clueless as to where "the money" comes from. They love to tax, regulate and redistribute wealth -- all the while decrying the very profit motive that created it -- something they do not understand. If they did, they would not naively insist that a business that is out of money, out of customers and out of credit stay open so as to pay employees.
And that is but one example of why the lay-offs of November 2008 - which will be part of George W. Bush's statistical record - fall in reality on the Obama election. Business owners understand that the election of 2008 just gave a lot more power to people who think like these liberals in Illinois. For crying out loud, an Illinois liberal is now "President elect" and he chose another one for his Chief of Staff. He chose Michigan liberals for his economic team. Illinois and Michigan are broke!
It is no secret that owners circulated endless emails leading up to election day discussing lay off plans were Obama to win. Entrepreneurs instinctively understand the danger posed by larger liberal majorities in power. The risk-reward equation and fierce independence spirit of start up businesses are anathema to the class warfare, equality of outcome and spread the wealth mentality of the left.
We have very little appetite to have our lives run by elected or un-elected officials like Barney Frank and Jamie Gorelick. We have no appetite to be taxed even more by the likes of Charlie Rangel. These clowns destroyed Fannie Mae, Freddie Mac and our entire economy as a result. Congress, by their own admission, cannot even run their own damned dining room with a captive customer base! Some of them refuse to pay their own tax burden. Why in the world would we subject ourselves to their ilk armed with the unchecked powers of the Oval Office and both houses of congress and a massive army of bureaucrats?
We got into business to be independent. We will get out for the same reason.
The fact that Obama is not in office yet is irrelevant. Businesses must see "around the corner" and plan accordingly. Rightly or wrongly, business owners see a huge anti-business shift in motion and they are making preparations NOW. We do not want to have business illiterates like Chris Dodd dictate our decisions from the comfort of his home made possible by a quid pro quo Countrywide mortgage.
(As the owners of Republic Windows are finding out, government will nose their way into your business even if you are not thriving.)
Most of the kind of people who start and run businesses are by definition trying to opt out of depending on anyone else -- be it a large corporation or government -- for their welfare. We take on tremendous risks and responsibilities. We do so expecting a better than average return. Since we require nothing from government, most of us deeply resent and resist being pestered by government.
For nearly 30 years, I have been one of these business people. It was an amazing journey and literally involved blood, sweat and tears. But now I am done. This election screams that we are going to see a deterioration of the risk-reward equation and the ability to be left alone. Apparently, any appreciation of our crucial place in the economy is lost on over 50% of the voters as well as those they elected.
So, like many business owners, I will "stay home" so to speak. Others more brave than I are opting to try and stay in business by cutting way back on purchases and payroll. They have already started. They are not waiting for the little sign on Obama's lectern to be updated to the official Presidential seal. November 2008 job losses belong to "The Office of the President Elect." I know. I caused some of them, and I know why.
Depends on whose eyes you're looking thru...The work I do means nothing to me 'cept it's compensated with money...
Good catch! I could have written this article .................. FRegards
This is a terrific post. It spells a lot of things out for us economic ignoramuses.
Thanks.
<<<<My sentiments exactly :)
Perhaps. But in the grander scheme of things, it was the goods or service you produced that has value to society, not the money you were paid. Another way of expressing this is if you had a billion dollars and did nothing with it but count it, the money has no value to society beyond it's appeal to entice someone to produce goods and services that you might exchange some of it for. The people that would do “work” to get your money might not value the work they do much either, but chances are, if you don't value it, you won't give them any of your money. Unless they're the government, in which case they are going to take your money, and give it to those who don't work.
While I can’t speak to Dan(9698)’s specific situation, I can tell you about some of the business incentives available in Oklahoma as I help businesses get qualified for some of the incentives offered. Most states have similar incentive programs to attract to new business as well as to help incumbent businesses to grow by hiring additional employees.
The primary “tax break” in OK is a percentage rebate (up to 5%) of new employee payroll for new/expanding businesses in certain categories (NAICS code specific) if they will add $2.5mil in new payroll within 12 quarters. Obviously, this is for large businesses (they can get rebates for 10 years as long as they continue to qualify) but small business also has a program (7 years) they can qualify for when hiring as few as 5-15 people, providing they qualify by location, wages paid, etc. Further details @ www.okcommerce.gov
Other possibilities that are explored include an Investment/New Jobs tax credit, possible property tax abatement, sales tax exemptions (primarily manufacturers), former Indian lands tax incentives (covers most of OK), etc.
While I agree that businesses of all sizes have a tough row to hoe in the current economic climate, various kinds of assistance and incentives have been available.
Many, many years ago, I was an employee of a business that was established solely for the purpose of losing money in order to gain a government benefit. The management, obviously, couldn't tell the employees what the story was. So we, noticing a dearth of customers, and reasoning that no customers meant no job, went nuts trying to find, keep, and grow the base of customers. Which, of course, drove the management crazy. They kept spending more money and hiring more employees, trying to drive the company into the red. We kept working harder and more productively trying to keep it in the black. After a year of pulling their hair out, they finally came up with a solution... firing everyone competent. Now, I realize that lots of American companies have done the same thing, but this was one of the few occasions when it was intentional.
Thank you Albion.
>>>Lots of businesses, especially small ones, get lots back in terms of tax breaks, credits, low interest loans, etc.
Yeah, I know. Businesses are lowly suppliants who should be more thankful for any reductions in pain offered by the masters above.
I am so sorry. I hope she finds her silver lining...
You should propose these to your legislator. One bright spot in an otherwise dismal election is that we sent a Club for Growth backed freshman to the Pennsylvania House in a district which has been represented by Democrats only ever since its creation in 1969.
You never told me you worked for GM ;-)
Cheers!
Thanks for the ping!
“Most states have similar incentive programs to attract to new business as well as to help incumbent businesses to grow by hiring additional employees.”
That’s well and good, but most of us small businesses are not large enough for any state to try to attract us. Most of us have maybe 3-8 employees, so there’s no incentive for a state to get us to move. Nor are we manufacturers. So the above incentives aren’t relevant to most of us. And the programs you cite later also have nothing to do with the typical small business. Add 2-5 million in payroll? You are kidding. Most small businesses would kill for that figure in total sales, much less payroll!
Walk down the street: the businesses on both sides are the typical “small” businesses that pay all the freight with no incentives or tax breaks involved.
“Would you be willing to hire contractors?”
Sure. In fact, when one employee moved to another state, we replaced him with a forklift and “casual” labor when needed for particular activities. It has been far less expensive and far less troublesome.
You’ll do OK as a self-employed person. This is because the government will be happy to have you off their payroll, and won’t expect to pay your medical expenses since you are self-employed, and “getting rich”.
But, if your business is in high enough demand that you need to hire someone, expect to pay them TWICE what you get paid...when you include SSA co-pay, health insurance, and any number of add-on taxes.
I speak from experience, when I had a software company until 2001. After 9/11, I lost all my business. Everyone got help, except me. because I was self-employed, everyone thought I had a nest egg stored away for rainy days.
If I had a nest egg, the buzzard destroyed it.
bookmark
....resulting in an extended depression.
You may be correct that in signing the 2006 Pension Relief Act, he signed the death certificate for the Republican Party.
for later
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.