Saturday, January 28, 2012

Whatever It Takes vs. Personal Transformation


One often hears the phrase "whatever it takes " in regards to building a business. The idea is to get the job done, one may have to compromise, get creative, or perhaps bend rules. Certainly it means one may have to draw on extraordinary resources to get the job done.

What if what is needed is actually some sort of personal transformation to "get the job done."

What if one finds that their expectations for success are not met with what they bring to the process, so instead of searching for compromises or rule bending, they instead find that an internal personal change is what is needed.  I guess this is a form of "whatever it takes," but I suspect it is a rarely considered path

It is becoming clear to me that one of the most attractive parts of self-employment is personal transformation, but that is always the most part or life, let alone self-employment.





Friday, January 27, 2012

Full Faith & Credit

Geo Soros, who has bought and paid for the Occupy Movement, "predicts" a riot among his minions in the Movement.  Well, isn't that why he paid for them?

Capitalism provides for concentration of wealth from the savings of many into the hands of a few.  The means are fractional reserve banking and usury (love of money is the root of all evil, and Soros is money.) People do not care for impoverishment, even when impoverishment is condign punishment for participating in a system they know is wrong.

In any event, Capitalism is legitimized and protected by the state, which has a monopoly on violence.  For the dollar to remain the reserve currency, and for Soros, whose wealth is reckoned in dollars to remain "rich", USA must make clear to the rest of the world that not only can it extend its power, but more importantly, it maintains control over the USA taxpayers.

When all debts, public and private, can be paid (and can only be paid) in our monopoly currency, all wealth is defined in terms of USA money.  AS long as the USA govt can credibly maintain it can tax the American people to back any debt, then our money remains good, more or less.  At the point that is called into question, then our system falters.  See Greece.

Greece is spending huge amounts on weapons and security systems.  So is USA.  Instead of freedom, we are building camps, wiring borders and setting up walls for precisely the same reasons, in the same order, that East Germany used for building the Berlin Wall.

That the state is ready, willing and able to employ violence is a common youtube theme.  But for people concerned with wealth, as in their own, proof that USA will crack down hard on any dissent is welcome.

That the Occupy people will turn violent would show the resolve of our government when it cracks down good and hard.  The wealthy will rest easy.  For the rich, violence in the streets cannot come soon enough, and the satisfactorily violent response, in these uncertain times.  And if it does not come soon enough, the FBI is there to provoke violence where otherwise there would be none.

Anyone who advocates or takes part in violence is working for the bad guys.  Whether or not he who makes the suggestion works for the govt. After violence, it only gets worse.


Thursday, January 26, 2012

Good News For Apparel Importers

Mish Shedlock has a graph that seems to show massive inflation and dropping demand for apparel in the USA, starting about Oct 2010.  If so, this is great news for anyone starting an apparel business, because those importers with fixed overhead and debt to service will find they cannot stay afloat under these circumstances.  Otherwise perfectly viable businesses will fail, creating a vacuum for new businesses, with lower overhead (your business) to come in and fill the void.  This will help prices drop, and we cannot have an economic recovery without massive falling in prices, wages, costs, taxes, etc.  Don't feel bad, plenty of people knew what was going on, so anyone failing had it coming.  They can start up from scratch, just like you are.

But there may be another interpretation of the graph, and that is, clothing importers are going up market.  The graph shows the price per M3 of fabric garments...  it does not show the quality of the fabric or the complexity of the construction.  I do not know the answer to this question, but one could find out by studying the HTS and NTDB trade data.

Either way, it is a good time to start up.


Tuesday, January 24, 2012

The Beginning of the End of Starbuck's

Starbucks began testing the sale of beer and wine in Seattle a year or so back, exactly the right thing to do in this economy, and that is go up market. They are also carefully testing, which is very smart.  They see the middle class is being slaughtered in USA, so they are going after the market that still has money.

Now here is the problem for Starbuck's and every other business in America: if a business is making money, it is subsidized.  The subsidies cannot go on, and that which cannot go on will end.  In time, this market will dry up too.  At that point, the Starbuck's brand will die with the customer base.

JCPenney and Sears were closely identified with the rural, rock-solid, ag world of USA 100 years ago, and never transitioned. Both businesses live off a life-line of usury, which offers diminishing returns given its predatory nature. That world is gone.  Walmart is the suburbs and freeways and welfare checks, still going strong.

Who has money for $4 coffees?  People on their way to work, people married to people on their way to work.  Who is working?  Vast swathes of government workers, and growing, including military, law enforcement, lawyers, etc.  Medicine.  Ag.  Banking and financial services. Education. Web-related industries.  Some housing. No matter what you mention, it is heavily subsidized.  Without China lending us money, we cannot keep these going.  When they stop, it will get even rougher, for far more people.

We have no alternative.  If those "jobs come home" There is no one ready, willing or able to do the work.  The Chinese people were culturally adept and personally eager to embrace modernization and industrialization. They were quite ready for freedom.  Not so in USA.  Entitlements, and an aggrieved sense of entitlement, reigns.  Just look at the Tea Party, with its insistence on revenge where we never insulted, the Occupy Wall Street, demanding they share with the rich in the looting of the poor.

Why is nobody demanding freedom to work?  Why is there no candidate pushing this point, not even Ron Paul (he is for it, but not pushing it.)  Because there is no demand that can be registered.

It is out there.  But it is very marginal. It is showing up in gray and black markets.  As you build your business, pay special attention to other small businesses.  Regardless of what happens, and the troubles ahead, the inconsequential businesses today will survive the changes, in the measure they have real customers who make valuable things and services.

If you invest in the means of production to serve an ersatz market, when they market evaporates, your means of production, in effect your savings, will become worthless.  Think of Bowling Alleys circa 1968. Wineries in 2012.

Be careful as to whom you organize to serve. make sure your customers actually produce something viable and sustainable.  You will grow with them, and your investment in the means of production will increase in value.  So, the means of identifying such customers becomes important.

We have the means, with what I have been teaching, but we need to find more like them faster.  Is there a way to do so?  hmmmmmm...






Monday, January 23, 2012

Apple, New York Times, Jobs, Cheap Labor

25 years after I began teaching that cheap labor is not a factor in international trade, New York Times gets around to saying the same thing.  Let's go through their article:


The president’s question touched upon a central conviction at Apple. It isn’t just that workers are cheaper abroad. Rather, Apple’s executives believe the vast scale of overseas factories as well as the flexibility, diligence and industrial skills of foreign workers have so outpaced their American counterparts that “Made in the U.S.A.” is no longer a viable option for most Apple products.

***As long as we insist on capitalism, instead of free markets.***

Apple has become one of the best-known, most admired and most imitated companies on earth, in part through an unrelenting mastery of global operations. Last year, it earned over $400,000 in profit per employee, more than Goldman Sachs, Exxon Mobil or Google.

***The small import company I worked for in 1980 earned $156,000 per employee... quite good, but because of USA tax and regulation policy, those companies no longer exist.***

However, what has vexed Mr. Obama as well as economists and policy makers is that Apple — and many of its high-technology peers — are not nearly as avid in creating American jobs as other famous companies were in their heydays.

***Our country is in trouble because we have submitted to utter idiots that do not understand that a company hires the people necessary to get the job done.  That is what Apple has done.  No more  No less.***

Apple employs 43,000 people in the United States and 20,000 overseas, a small fraction of the over 400,000 American workers at General Motors in the 1950s, or the hundreds of thousands at General Electric in the 1980s. 

***And the United States government made sure that our economy failed.***

Many more people work for Apple’s contractors: an additional 700,000 people engineer, build and assemble iPads, iPhones and Apple’s other products. But almost none of them work in the United States. Instead, they work for foreign companies in Asia, Europe and elsewhere, at factories that almost all electronics designers rely upon to build their wares.

***It is where electronics are made. ***

“Apple’s an example of why it’s so hard to create middle-class jobs in the U.S. now,” said Jared Bernstein, who until last year was an economic adviser to the White House.
“If it’s the pinnacle of capitalism, we should be worried.”

***Well, it is the pinnacle of government intervention, which is a part of capitalism.***

“Companies once felt an obligation to support American workers, even when it wasn’t the best financial choice,” said Betsey Stevenson, the chief economist at the Labor Department until last September. “That’s disappeared. Profits and efficiency have trumped generosity.”

***Betsey costs taxpayers hundreds of thousands of dollars per year, plus a astonishing pension to come, and she hasn’t the slightest idea about work and business.  It was never the case that business owners thought in the terms she imagines.  ***

Companies and other economists say that notion is naïve. 

***But she will never lose her job.***

Though Americans are among the most educated workers in the world, the nation has stopped training enough people in the mid-level skills that factories need, executives say.

***Now we are getting to it, our management vs their management.  Our management assumes entitlements that other management world wide understands they must earn.  USA management costs too much to do too much.***

Apple was provided with extensive summaries of The New York Times’s reporting for this article, but the company, which has a reputation for secrecy, declined to comment.

***Apple makes products for consumers, not comments for newspapers.  People buying apple products do not want to pay for executives who waste resources talking to newspapers.***

They say Apple’s success has benefited the economy by empowering entrepreneurs and creating jobs at companies like cellular providers and businesses shipping Apple products. And, ultimately, they say curing unemployment is not their job.

***Exactly.  Unemployment is the result of failed government policies, which all fail, because they all miss the point.  It is freedom, not regulation, that makes for such as Apple computer.***

In its early days, Apple usually didn’t look beyond its own backyard for manufacturing solutions. A few years after Apple began building the Macintosh in 1983, for instance, Mr. Jobs bragged that it was “a machine that is made in America.” In 1990, while Mr. Jobs was running NeXT, which was eventually bought by Apple, the executive told a reporter that “I’m as proud of the factory as I am of the computer.” As late as 2002, top Apple executives occasionally drove two hours northeast of their headquarters to visit the company’s iMac plant in Elk Grove, Calif.

***Yes, then came the taxes and regulations that Prop 13 and tax avoidance and money laundering that followed.  Roll back taxes and regulations and government to 1980 and you’ll see manufacturing come back home, but to an unappreciative public, one in six of whom buys food with food stamps.***

In part, Asia was attractive because the semiskilled workers there were cheaper. But that wasn’t driving Apple. 

***They  writer still cannot state it correctly.  Note the internal contradiction: went to Asia for cheap/did not go to Asia for cheap.  This writer is not disciplined.  Which is it? Did they go for cheap, or not?  “But that wasn’t driving Apple.”   Finally.  Right. What I have been saying for 25 years.***

For technology companies, the cost of labor is minimal compared with the expense of buying parts and managing supply chains that bring together components and services from hundreds of companies.

***Now you are getting it, but not only technology companies, but toys, and clothes and everything else.  ***

For Mr. Cook, the focus on Asia “came down to two things,” said one former high-ranking Apple executive. Factories in Asia “can scale up and down faster” and “Asian supply chains have surpassed what’s in the U.S.” The result is that “we can’t compete at this point,” the executive said.

***O yes, we can, but we will not.  USA is now about war, torture, usury, detention and other awful things.  We cannot compete because of election fraud, we can no longer vote the people in office who would get government to back off and allow the free market to restore USA.***

When an Apple team visited, the Chinese plant’s owners were already constructing a new wing. “This is in case you give us the contract,” the manager said, according to a former Apple executive. The Chinese government had agreed to underwrite costs for numerous industries, and those subsidies had trickled down to the glass-cutting factory.

***Yes, the US Govt does this for Boeing, Microsoft, GE, etc.  If the US Govt did not crush entrepreneurs, then no doubt someone would have figured out how to cut glass and make money in USA.***

Apple’s executives had estimated that about 8,700 industrial engineers were needed to oversee and guide the 200,000 assembly-line workers eventually involved in manufacturing iPhones. The company’s analysts had forecast it would take as long as nine months to find that many qualified engineers in the United States.
In China, it took 15 days.

***Bingo.***

It is hard to estimate how much more it would cost to build iPhones in the United States. 

***Only if you have no idea how to cost out products.***

However, various academics and manufacturing analysts estimate that because labor is such a small part of technology manufacturing, paying American wages would add up to $65 to each iPhone’s expense. Since Apple’s profits are often hundreds of dollars per phone, building domestically, in theory, would still give the company a healthy reward.

***Nonsense, the management costs would sink Apple.  And we’d have nothing, as we have nothing in medicine, autos, clothes, so many other industries.  the problem is not labor, it is the host of regulations, pure nonsensical in fact, that USA management must attend to.***

But such calculations are, in many respects, meaningless because building the iPhone in the United States would demand much more than hiring Americans — it would require transforming the national and global economies. 

***No, it would require transforming the USA economic polity, something that will not happen, because of the election fraud in USA.***

Apple executives believe there simply aren’t enough American workers with the skills the company needs or factories with sufficient speed and flexibility. Other companies that work with Apple, like Corning, also say they must go abroad.

***Chinese managers are freer than USA managers.***

Manufacturing glass for the iPhone revived a Corning factory in Kentucky, and today, much of the glass in iPhones is still made there. After the iPhone became a success, Corning received a flood of orders from other companies hoping to imitate Apple’s designs. Its strengthened glass sales have grown to more than $700 million a year, and it has hired or continued employing about 1,000 Americans to support the emerging market.

***Freight is cheap, the problem is management.***

Corning was founded in America 161 years ago and its headquarters are still in upstate New York. Theoretically, the company could manufacture all its glass domestically. But it would “require a total overhaul in how the industry is structured,” Mr. Flaws said. “The consumer electronics business has become an Asian business. As an American, I worry about that, but there’s nothing I can do to stop it. Asia has become what the U.S. was for the last 40 years.”

***Right, but we cannot have  change in economic polity in USA.  USA business is war, and financing war.  Nothing else.***


There were employment prospects in Silicon Valley, but none of them panned out. “What they really want are 30-year-olds without children,” said Mr. Saragoza, who today is 48, and whose family now includes five of his own.

After a few months of looking for work, he started feeling desperate. Even teaching jobs had dried up. So he took a position with an electronics temp agency that had been hired by Apple to check returned iPhones and iPads before they were sent back to customers. Every day, Mr. Saragoza would drive to the building where he had once worked as an engineer, and for $10 an hour with no benefits, wipe thousands of glass screens and test audio ports by plugging in headphones.

***Your government policies at work.***

Paydays for Apple
As Apple’s overseas operations and sales have expanded, its top employees have thrived. Last fiscal year, Apple’s revenue topped $108 billion, a sum larger than the combined state budgets of Michigan, New Jersey and Massachusetts. 

***Apple provides far more value than all those states combined.***

The biggest rewards, however, have often gone to Apple’s top employees. Mr. Cook, Apple’s chief, last year received stock grants — which vest over a 10-year period — that, at today’s share price, would be worth $427 million, and his salary was raised to $1.4 million. In 2010, Mr. Cook’s compensation package was valued at $59 million, according to Apple’s security filings.

***B O R I N G ***

After two months of testing iPads, Mr. Saragoza quit. The pay was so low that he was better off, he figured, spending those hours applying for other jobs. 

***It has never occurred to him to start a business, like Steve Jobs once did.***

On a recent October evening, while Mr. Saragoza sat at his MacBook and submitted another round of résumés online, halfway around the world a woman arrived at her office. The worker, Lina Lin, is a project manager in Shenzhen, China, at PCH International, which contracts with Apple and other electronics companies to coordinate production of accessories, like the cases that protect the iPad’s glass screens. She is not an Apple employee. But Mrs. Lin is integral to Apple’s ability to deliver its products.
Mrs. Lin earns a bit less than what Mr. Saragoza was paid by Apple. 

***Doesn’t matter.. she produces more and lives better on that money.  If your reason for being is making war, what does it matter which way you suffer for your criminality?***

What remains unknown, however, is whether the United States will be able to leverage tomorrow’s innovations into millions of jobs.
In the last decade, technological leaps in solar and wind energy, semiconductor fabrication and display technologies have created thousands of jobs. 

***All nonsense industries, made up and subsidized by the people who brought us the Chevy Volt.  We ain’t getting out of this, because we are not willing to end election fraud.***




Capitalism is Dead, So What is Next?

At the world confab for capitalism, the World Economic Forum in Davos, which only represents the rich, the powers that be agree that the system is dead, it's over, so they need to think up what is next.  This is a great opportunity for free lancers to come up with a new system.  And the new system will win if it confirms and elite in power, and continues the fundamentals of exploitation.

As is usual in these cases, there will be war, suffering dislocation, etc, as a new order is hashed out.  The more self-employed you are, trading in non-subsidized goods and services, the better off you will be.