Tag Archives: zEconomy

How to Get More of a Thing

Posted on July 6, 2009 | Leave a comment

I have posted a in the last week about getting less of a thing here and here.  I posit that when something becomes more expensive you get less of it.  As that same thing becomes less expensive, you get more of it.  For example, when you tax jobs, you get less jobs.  When you reduce the price of beer, you sell more beer.

Real life example is here.

MAIDE — Dirt could start moving as soon as August on a new $1 billion facility Apple is planning to build in Maiden, officials said Monday.

Catawba County commissioners and the Maiden Town Council approved incentives at a Monday evening meeting for the project, which is expected to create roughly 50 jobs 60 miles northwest of Charlotte.

The local incentives approved Monday are on top of changes to North Carolina law intended to attract the technology company. In June, Gov. Bev Perdue announced the expansion just hours after signing legislation that will cut the California-based computer company’s tax bill in this state by about $46 million over a decade. Apple must agree to invest $1 billion over nine years in land, property and equipment to qualify for the benefit.

See how easy this is?  When you reduce thhe cost of doing business, you do more business.  Funny that.  Truth and Facts!

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Posted in Economy, Education, Politics: North Carolina

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How to Get Less of Something: Only More

Posted on July 5, 2009 | 1 comment

Last week I posted about how to get less of something; raise the price.  You see, as price goes up, demand goes down, that’s how it works.  If you sold 3 cases of beer at a buck a bottle, you could expect to sell less than 72 bottles at 2 bucks a bottle.  Now, this isn’t all bad news.  Sometimes, the supply is limited.  Take, for example, a concert.  You can only fit so many people into the RBC Center.  So, what sense would it make to price the tickets where the demand exceeds the supply?  Rather, a shrewd business manager would continue to raise the prices until the demand met the supply exactly.  Anyway, I digress.

In our story, the Great State of North By God Carolina has only begun, Be-GUN, to talk about assessing state sales tax for on-line purchases made as a result of pass though retailers.  Wow.  That’s a lot to think through.  But it works like this.

Say, as readers are flocking to this site by the ones and twos, I decide to cash in on the traffic.  I make a deal with randomsite.com and put their advertisement on the side of my web page.  Then, as my gentle readers clock though to randomsite.com and make purchases, I get a percentage.  The beauty of Capitalism.

Now, however, North Carolina is wanting to apply sales tax to those purchases made as a result of click through programs.

Much like our local pub above, these retailers are seeing sales go down as a result of prices going up.  After considering their situation, costs, benefits and other tricky business school kinda stuff, they decide to end their commission relationships with their on line partners.

Net/net – North Carolina sees the same amount of sales tax dollars as they would have without the law.  Namely $000,000.00.  And, this is the best part, North Carolina residents who run websites see a reduction in their incomes.  Further, we have to assume that these North Carolina residents are reporting the income that they make as a result of these relationships.  That is, they have to submit as income and then pay State and Federal income taxes on any money that they make.  Now the state, AND Obama, is losing the State Income tax revenues too.

Awesome.  Simply by talking, just talking, about such a tax, we have seen two on-line retailers leave the market.  The latest?  The NewsandObersever is reporting that Overstock.com is ending their arrangements with North Carolina partners.

The real slap in the face for Carolina?  This concept is SO insane that even the Govna’ of California, The Terminator, vetoed a similar bill in California.

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Posted in Economics, Politics: North Carolina

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How to Get Less of Something

Posted on June 28, 2009 | Leave a comment

Tax it.

If you want less alcohol being sold, tax it.  Same with cigarettes.  Do you wanna have fewer homes built in a certain area?  Tax new home construction.  This is true of all things.  People will buy less of something when that thing is more expensive.  This concept is very powerful; and should be equally obvious.  When you ask someone on the street to identify their favorite beer and then present them with the option of buying as many of them as they want at $10 a pop, think they’ll buy more or less than if you offered that same beer at $0.50 a bottle?  Right.  Me too.

However, when you get politicians involved you get different responses that you might expect.  Now, I’m not sure why this is the case, but I suspect that it has more to do with politicians enjoying the fruits of power than anything else.  But, you could also argue that politicians are just like everybody else and they just don’t KNOW certain things.  And so it should not be surprising when corporations walk away from States who want to tax business.  Remember, when you tax a thing, you get less of it.

The law hasn’t even passed yet and already North Carolina is getting “less of it”.

Amazon.com said Friday it has pulled the plug on commissions for North Carolina Web sites that make referrals to the online retailer, because a law designed to collect taxes on some of its sales transactions could soon be enacted.

Seattle-based Amazon said it wrote to Web site operators, telling them its “Associates program” will end after Friday. Web sites that posted links to the company about its products have received up to a 15 percent cut on sales.

As I mentioned, this law is only being considered at this time, it hasn’t been voted on or sent to the Governor.

But the Legislature is considering a provision in its final budget plan designed to collect sales taxes on these so-called “click-through” transactions.

Competing House and Senate plans both contain the provision, so it’s likely to be in the compromise budget proposal that could be approved in the next several days.

Rather than driving money OUT of North Carolina, how about our State Government just reduce our spend, by, say:

North Carolina expects to collect an additional $13.2 million in the coming fiscal year on the “click-through” transactions and by companies collecting sales taxes on music, video and software downloads purchased electronically, according to a legislative fiscal analysis.

I don’t know, 13.2 million?

Just another example of our Government trying to do too much.

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Posted in Economics, Politics: North Carolina

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Not the End, but The Beginning of Worse

Posted on June 26, 2009 | Leave a comment

I was reading the News and Observer this morning and saw that Smithfield Packing finally succumbed to the kudzu that is Unions.

Smithfield Packing, union agree on NC contract

TAR HEEL, N.C. — Smithfield Packing Co. and a union that worked for years to organize a huge North Carolina slaughterhouse say they have agreed on their first contract for the plant.

I have not yet taken the time to check and see if Smithfield Packing is a publicly traded company or not, but I am sure that the value of this company just took a 10% hit.  Not only that, but employment in the company went down today as well.

I repeat, there is nothing, not ONE thing that is good about unionization within a company.  Unless, of course, you are a Union official.

Unions effectively tax …  [company] investments by negotiating higher wages for their members, thus lowering profits. Unionized companies respond to this union tax by reducing investment. Less investment makes unionized companies less competitive.

And a less competetive company is a company that is not as valuable as a more competitive compant.  If you need further proof that Unionization is a bad thing, take a look at the States with the highest unemployment rates and see how many of them are Union states and how many are right to work.

Heck, I’ll save ya the time:

1 Nebraska Right to Work
2 North Dakota Right to Work
3 South Dakota Right to Work
4 Wyoming Right to Work
5 Utah Right to Work
6 Iowa Right to Work
7 Montana Forced Union
8 Oklahoma Right to Work
9 New Hampshire Forced Union
10 New Mexico Forced Union
41 Kentucky Forced Union
42 DC Forced Union
43 Tennessee Right to Work
44 Ohio Forced Union
45 North Carolina Right to Work
46 Nevada Right to Work
47 California Forced Union
48 South Carolina Right to Work
49 Oregon Forced Union
50 Michigan Forced Union

Interesting list, huh?

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Posted in Economy, Politics: North Carolina

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The Damage Done by Unions

Posted on May 30, 2009 | Leave a comment

I have long felt that Unions in America are not only hurting the companies, but they hurt the workers too.  In short, Unions are damaging to the economy as a whole.The current exhibit in this long list of such exhibits?  The bond market.

Reuters reported last week that the bond market has turned.  What once was a very well understood relation between companies, unions and bond holders has suddenly been turned upside down.  Or, if not upside down, it’s at least been turned to the point that no one knows which way is up.  See, the point of buying a bond is that the bond is considered “secure”.  This term, in legalize, is meant to convey certain rights in the event of bankruptcy.  As it is now being played out, this right is being denied, or attempted to be denied to the bond holders of the auto makers; Chrysler and GM.

See, Mr. Obama is trying to put the bond holders behind other, more politically advantageous groups, in this case, the Unions.

…the Obama administration is offering most of the recovery value of those companies to “a favored political class, in this case the United Auto Workers…

What does this mean?  It means that people buying bonds are no longer going to do so with the secure knowledge that they are going to “get theirs” in the event the company has to declare.  And, you may ask, what does THAT mean?  It means, for companies with bargained for employees, that they are going to have a harder time selling their bonds and raising the money they need to conduct business.  And that, my friends, is BAD for business.

The whole concept is a strange one.  Politically attractive, sure, but strange.  See, on one hand, almost ALL of America is upset right now with “investors”, “speculators” and other groups of people that might have been making money when the banking crisis hit.  Most people feel that somehow it wasn’t the individual home buyers or the government that caused this problem, but that it was the folks trying to make money by floating that money.  So, Obama has a huge lever in the court of public opinion.

Then, of course, those bondholders are not united or organized.  While they may trend to act as a group, there is not formal organization and certainly they don’t have “members”.  So, by helpin the unions out, you have helkped out a very organized outfit complete with mind numbing numbers of people who just wait to be told what to do.

The other area that this is so concerning is that we seem to have people who actually believe that money just flows.  From somewhere.  Just waiting to be picked up.  And that if I don’t have enough of it, well then, by gawd, someone must have my share of it.  So I am going to go take it back.  Sigh.  I get so tired of that mentality, so so tired.

However, in the end, I really think that it is this movement toward the support of the Union that is going to be the largest threat to NC.  I just wonder if anyone else sees it.

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Posted in Economy, Politics: North Carolina

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Mandatory Sick Leave, Vacation and Minimum Wage

Posted on May 29, 2009 | 3 comments

So, recently over at Applied Rationality we have been discussing legislating Mandatory Sick Leave.  Dave seems to be of the opinion that we should mandate paid sick leave to all employees while I maintain that such a benefit more resembles increased pay and would reduce the incidence of labor.  Minimum wage has long been a favorite of mine and this new legislation seems to be another version of the same.

I think it’s exactly this type of legislation where we as conservatives fall down and really fail to serve the public.  As champions of this type of legislation, it is the Left that is doing the PR job of getting out there and shaping the message.  They are in front of the cameras talk about laws that will help the “Average American”, the “Working Man” and “America’s Middle Class”.  They are getting the message out in the nightly newscasts, newspapers and magazines.  And they are doing it well.  They have been able to successfully shape the public opinion to the point that most of the nations feels that it is the Liberal Left and the Democrats who are standing up for the rights and well being of the average guy.

And we are letting them.

We don’t have anyone that is able to go out and change the shape of the conversation.  We don’t have anyone that is willing to take this law, conduct the research and bring the message into the homes of all people everywhere that this tpe of legislation HURTS the very people it is aimed at helping.  By mandating such demonstrably bad policies, what we are doing is legislating those of us who can least afford to be out of a job–out of a job.  We are building a scenario where employers are going to reduce the number of employees on their payroll.  And they are going to begin with the least skilled most marginal among their employees.  Rather than helping people, this law and others like it is destructive.

And we are letting them.

Now, I’m not willing to give the Democrats enough credit to come up with one of these Black Helicopter theories that says they are doing this on purpose in order to create a dependent Nation.  I really really don’t think they are that, umm, well, thoughtful.  I really do think that they are trying to actually help people.  I do.  But they are wrong.  They are taking the easy way out and, it just so happens, that this easy way out plays very well in the court of public opinion.  But the facts remain, this is horrible legislation and we know it.  Or should.  And we should be singing and shouting it out from rooftops all across America.  And we should be changing the tone of the conversation that it is Conservatives who are championing policies that actually DO help people.

Of course, we should then actually enact that policies…but thats another post for another day.

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Posted in Economy

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Obama: I Inherited This Crisis

Posted on February 11, 2009 | Leave a comment

How many times do we have to hear The Blessed Leader report to the fainting masses that the financial crisis we find ourselves in was given to him by the previous administration?  I have been listening, and so far as I can tell, it’s every time he’s in front of a camera.  Now, I get it.  He wants to separate his time; Pre – Blessed Leader and then, well, you know, just Blessed Leader.

The problem that I have with this is not so much that he says it, after all, they have all said it. Dubya said it when he took over the recession from Bubba.  Bubba from 41 and Reagan from the Peanut Vendor.  They all say it.

However, in this case, Obama has it wrong.  You see, another disadvantage of being a Senator turned President is that you can actually be called on your record.  I mean, Obama was part of the organization that CREATED the mess that his current President self inherited.

And as it concerns Fannie Mae and Freddie Mac, he was warned and woo’d, to the tune of ranking #3 on the Active Leader Board.  Does that register?  Senator Obama, he of 4 short years, ranked 3rd on the currently serving members of the Senate.  John Kerry, who has been serving since forever, has only taken 6 large more than Obama.

And he has the stone to say that he inherited this.  He created it.

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Posted in Economy

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The Recession – How Bad Is It?

Posted on January 20, 2009 | 1 comment

So, for some time now, we have been in this recession.  And for as long, we have heard, from everybody, that this economic collapse is as bad as it’s ever EVER been.  From the beginning, from the very beginning, I have had my doubts.  Not only as to how long this has actually been going on, but also as to how bad it really is.

First, the beginning.  The classic definition of a recession is two consecutive quarters of negative economic growth.  Contrary to what the think tank responsible for calling recessions says, this did not happen until October of 2008.  As such, it is very reasonable to say that this current economic downturn is only a very recent event.

Now, onto the depth and width of the downturn.  How bad is it?  How bad, really, are we struggling?  To answer that, we are going to have to go look into the many different economic indicators.

[As I type this, I am actually hearing Anderson Cooper say “No one alive has seen conditions as bad as we are seeing right now.]  Dood!

I am going to make this a recurring theme here at TarHeel Red.  I want to come back and visit how bad we have it compared to our recent past and our historical past.

Let’s look at one; Unemployment.

We are currently at 7.2%.  This represents the highest rate we have been at since……the Great Depression?  No, not even close.  Unemploymenet was higher as recently as January 1993.  IN fact, the current trend is that we have only 3—THREE—months of rising unemployment.  If you wanna go a little more negative, we are at 8–EIGHT—months of rising or static unemployment.    This compares with 11 such months as far back as, again, 1992 and 1993. In fact, there have been 81 months of higher unemployment since 1980!

Imagine that.  As recently as 1980, we have had 81 months of unemployment higher than we are seeing right now.

Do you see this in the media?  Are we hearing that, yes, we are seeing a rough patch but things seem to be alright so far?  No.  The main stream media is continuing to regurgitate this mantra of worst ever, worst of our lifetime, worst since……

So tell me.  How bad is it?

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Posted in Economy

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