“Thank you for your support.”
Bartles and Jaymes
In the gray predawn of history before computers, a pair of elderly gentlemen did a television commercial for a company called Bartles and Jaymes that sold wine coolers. The ads were witty and fun but always ended with their tagline thanking customers.
I loved their commercials. I mention them here as a contrast to a modern commercial with an eye towards demonstrating the difference in American thought over the course of my life. I will let you decide which is best, although you will get my opinion on the way there.
So, Bartles and Jaymes did business by thanking the consumers who supported them. My unnamed commercial of today made much of the fact they were the benevolent supporters of the people who worked for them, completely missing the point that employers are not altruistic. They do not hand out jobs as blessings—they exchange wages for the labor required to produce the goods and services they in turn sell for a profit. Remember that word “profit” we’ll come back to it.
That is how the marketplace of life works. If I wish to have food, shelter, or any other thing I may desire, then I must either produce it myself or trade what I possess for what I want.
If I want to eat pecans, then I must either plant an orchard and grow pecans or I must trade what I have to my neighbor who has a pecan tree in exchange for some of his pecans. I cannot compel my neighbor to make this exchange. I must offer him something he wants at least as much as I want his pecans.
My neighbor happens to have a bad back, so I offer him my labor. In Oklahoma, we say we’ll “pick up pecans (pronounced—kons) on halves”. That is, I will do the bending over to gather the nuts in exchange for half of all I gather.
The exchange must satisfy each party, or it is soon terminated. American workers do this every day. We go to a job where we exchange our labor for money. But, our employer has more expenses to pay than labor. He must pay taxes, pay for energy to power the workplace, he must pay to advertise his business to attract consumers, and a whole list of things. How does he do it?
Profit.
It is not an ugly word. If my employer does not turn a profit from my labor, sooner rather than later, we are both without an income. If he has others who have invested money in his business, they are deprived of their investment and are likewise, without income.
Now, suppose my employer does extremely well with his business. Then, along comes a person who has nothing he wishes to trade. Yet, he wants the goods and services that require money to purchase. So, he petitions the government to take money from my employer, who has an excess and give the money to him.
The government wants this newcomer's vote so it does as he wishes in exchange for that vote. The government increases my employer’s taxes to get the money. What is my employer to do? Being the law-abiding person he is, he pays the taxes.
To get the money to do this my employer has two choices. He can decrease his operating costs to cover the taxes. (Labor is his greatest operating cost), or he can raise the price of the goods he produces.
If he lays off workers, production drops, and less is produced and, in turn, less is sold for sale. There are also now more jobless folks urging the government to give them money. Guess how.
If he increases prices, people will call him greedy, but if he has a product they really want, they will go on buying it at a higher price. If they refuse to buy at the higher price—choice number one kicks in and he lays off workers.
So, which option is the employer likely to try first?
The bottom line is that the taxes get paid, the government looks like a hero, and the customer pays for the tax by paying more for the product. I’m no economist, but I can see this is how business and taxes work.
King Joseph may lay a tax hike on the wealthy, but guess whose pocket it really comes out of? Not the rich man’s and not that fellow with nothing but his hand out—it comes from the shallow pockets of working people.
Socialism—the taking from the productive and redistributing it to give the unproductive an equal share they have not earned is a death sentence for all. It provides no incentive to either the haves or the have-nots. Society, as a whole, cannot manage the production of goods and services, it cannot manage healthcare, it cannot manage infrastructure, it is only capable of managing behavior and that only through force, shame, and blame.
Hands up everybody who wants to raise taxes on Wal-Mart and Amazon. King Joe thanks you for your support.
Maranatha
Comments