A Chinese retailer has turned political theatre into gold when a shoe store offers discounts based on your aim with a shoe at a Bush image target. Who will turn this fad into a mania?
Saturday, January 3, 2009
Bush Shoe Duck Promo
Friday, January 2, 2009
Trade Lead: New Service Business
With so many stores closing, extra caution must be taken when extending credit to customers. Even governments can fail to pay, and if they go bankrupt, you are unlikely to collect your receivables. Ratings agencies failed miserably leading up to the 2008 econ debacle, largely because they had lost their relatively free market standing back in 1975 as part of the NRSRO efforts of the SEC. (When people claim free markets and deregulation caused the 2008 econ debacle, they either ill-define free market or ignore the fact that regulations were different, not eliminated - and I would say made different for the express political purpose of rewarding groups different than were rewarded under the other regulations.)
At any rate, the chaos continues unabated, and there is money to be made. The key factor determining which customers will make it or not is whether they can service what debt they have with reduced income. This takes time. Checking credit gets dicier now since so many people are finding themselves in trouble quickly, so a traditional credit check may show no problems. It takes time to check into the debt status of potential customers. If someone could devise and quick and easy way of determining this at the small business level, (Dun & Bradstreet is not effective at our level, I think there would be a strong market in these times.)
Actually, Dun & Bradstreet would be good to study since its genesis is in precisely the chaos from government intervention of the markets that occurred in the 1800's and adjustments made in the other depression of 1930.
Bush Vs Obama Policy Differences
I ask people to name one policy difference between Bush and Obama, and usually the answer is "health care." (I am surprised by this, but since Obama is promising to escalate the war in Afghanistan, that is no longer different). The problem with that answer is Geo Bush signed into law the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, which required he mislead the congress on its costs, which former US Comptroller General David M. Walker has called this "...probably the most fiscally irresponsible piece of legislation since the 1960s... because we promise way more than we can afford to keep." And people say the democrats are profligate when it comes to health care spending!
I perceived in one argument a premise that the Obama would support different items being subsidized therefore, there is a difference in policy.
Of course my argument is more radical than priorities in what to subsidies, my argument has to do with free markets vs. government intervention. I find it common when the argument is clarified thus, the fallback positions are something along the lines that without government oversight, we would have chaos. We have chaos now, which is being managed buy government picking winners and losers, fiddling with quality, and rationing.
Both Bush and Obama are for subsidized and government controlled medicine. And middle east policies, and the bailouts. Not only are they identical in policies, they are now dressing identically, down to identical lapel pins.
Curing Mosquitoes
I've argued elsewhere for alternative thinking in offering medical care, at one point suggesting that instead of curing humans of malaria, cure mosquitoes, since malaria is something they carry.
Apparently researchers are close to doing just that with another disease carried by mosquitoes, dengue fever. For the poor mosquito, I am afraid, the cure is worse than the disease.
MSIE Losing Market Share
In this article analysts claim that firefox web browser is gaining share while MSIE is losing share. One reason stated is people are doing more web surfing at home, and they tend to have "other than MSIE" when using their own equipment, rather than at work.
Microsoft will announce it is laying off 15,000 of it's 90,000 employees in January 2009.
Tuesday, December 30, 2008
Who Makes Money on Infomercials?
I ran into someone intimately connected with the George Foreman Grill project, and got in a few questions... check out both parts.
Cultural Capital
When governments arrogate control of banking and currency unto themselves, they gain the power to manipulate the economy to political ends. This power is profoundly subtle when exercised through the diffuse experience of the economy. And when trouble erupts, the powers that be can always blame it on, as we see here in USA today, immigrants, or some other outside group, often the Jews in the West.
When interest rates were manipulated down by the Federal Reserve Bank under Alan Greenspan, excessive consumption was precipitated and production capacity was expanded to meet the demand.
Since credit was cheap and easy (the regulators pushed for lower standards and some lenders broke the rules) people scrambled to borrow money to expand production. More store, bigger stores, mini-storage, more closets in bigger homes to store more, California Closets to organize and fit more in storage, companies installing garage storage bays for the home, home depot offering storage sheds for the yard, wine cellars in homes to store the wine. And huge landfills to store the packaging and older models soon discarded.
The debt was assumed to acquire capacity. The capacity was expected to serve markets or needs. The false premise that real estate never goes down, that we are in a new era of markets only go up, that business only expands proved to be inaccurate, in spite of the fact there was plenty of clear, available, articulate arguments to the contrary. People believe what they want to believe.
The debt remains constant, but the income is dropping fast. The value of means of production, the capacity itself is dropping fast.
The question when judging creditworthiness of customers is can the dwindling returns on the operations of the customer cover the debt obligations?. if no, they fold, If yes, they survive.
Learn this and you know who to do business with. There are other red flags to watch out for: big orders, slow pay and carriers who will not accept shipments to your customer on a “freight collect” basis.
There is a simple solution to these problems, and that is bankruptcy, the rule of law, under which people take responsibility for their actions. Falling prices, and the destruction of businesses, and bankruptcy means people who were foolish take the loss. The losers gain cultural capital. The loser’s children learn not to be foolish like the parents were.
Instead we have bailouts and stimulus packages. Now people learn there is no personal responsibility in business. People learn the wrong way to do business, and worse yet, they do not learn the right way.
Too many people believe war ends economic depression, I am afraid enough believe it make it an option.
Too few people will accept bankruptcy, too few will accept freedom and responsibility.
Freedom to test beef to export, freedom from regulations that break the small to serve big...
Who's Got The Clout?
Minyanville gets it exactly right on the continued bailouts, and ends with teh proposition that it gets down to political clout. There is more... the republican powers that be know that with war all slates are swept clean, and th3e democratic powers that be know people will put up with anything if you promise them someone else will have to pay for their healthcare.
More Stores Folding
Chanel is laying off, which represents a smart move when your customer base is shrinking, and if they do not have unmanageable debt, they will survive. Obama's coming bailout will not help any business (except those who help themselves to the money)because the money will not create customers or make debt go away. Don't sell to stores who cannot pay you from profits.
Honey Laundering
China is being attacked again, this time for the fault of unscrupulous USA dealers, who find money to be made in honey in a world of silly restrictions, taxes and regulations that promote a false sense of security. If we got rid of the "anti-dumping" punitive taxes on honey imports from some countries, and then got rid of all inspections so that task fell to the importers, then we would have a safe, rational, economic source of honey.
Since government intervention has distorted the market, the bad is driving out the good. Honey is being transshipped effectively, and more honey of less quality is going through the system. As an importer I know and care where my goods come from. Because of regulation, people who do not care can get in the business and make a killing, harming all of the legitimate businesses. As the unscrupulous get lower prices, the scrupulous must do the same or suffer.
Blaming China is foolish, since "China" has nothing to do with this. Unscrupulous USA people, pay people overseas to sell and ship exactly what some unscrupulous USA importers demand. How are honey dealers to know what the market is for honey in USA unless the person paying them, the USA importer with money, tells them? The problem is entirely here in USA, and can be solved here, easily and quickly.
The Seattle PI joins the rest of the USA govt-run media in the libel of China for faults within the USA.
Monday, December 29, 2008
Cherry Exports
There is an old term, "shipper load and count" in which the shipper is responsible for what is loaded up. A relatively insignificant part of the economy, cherry exports, may be hammered by the fiction that government can secure the trade lanes, but if all rules were enforced (which is not impossible) almost all commerce would halt. This is chaos.
BusinessWeek's Top 10 Startups
Arrrgghh... no wonder small business is so ignored... this is typical of media and academia... if you do not found a company based on debt and welfare-queenism, you won't be in the top ten.
Sunday, December 28, 2008
On the Other Hand...
Government unions cost can be up to 75% of the income, as in Vallejo, Ca.
In Florida, as at the University of Washington, management help themselves to second incomes by retiring one day and restarting the job the next...
As Steve Miller sings... "Ah OOOO.. take the money and run..."
USA Labor Rates
United Auto Workers are well paid. If you add up their wages and all benefits, the component cost of union labor in a Big Three auto is about 8.4%. Labor assembles the cars. The design, engineering, sourcing raw materials, legal and accounting, marketing, transporting to a dealership and preparing it for sale, executive compensation and other costs – are all under the control of management.
If labor agreed to work for free, no wages or benefits, no pensions, no nothing, absolutely nothing, and signed a 100 year contract to this effect, it would not be enough to save the Big Three automakers.
The problem is management, not labor. Nonetheless, we are told the problem is labor. US Census says labor adds over $200 an hour in value to a car. Competent management has vast areas where it could control costs and become competitive. But USA management knows it does not have to. Labor leadership, under the control of the USA government will agree to labor cuts. At the same time management will be bailed out. Jimmy Hoffa would not put up with this.
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