Filed under: Capitalism, Conservatism, Economics, Economy, Free Markets, Freedom, Heartwarming, National Security, Politics, The United States | Tags: New Hampshire Campaign Stop, Nice Response!, Senator Marco Rubio
A campaign stop in New Hampshire, and Marco Rubio has a very nice response to a question from an 11 year old girl. Would be nice to see a lot more of this on the campaign trail.
Filed under: Capitalism, Economics, Economy, Free Markets, Taxes | Tags: American Business, Profit Margins, What Makes an Economy Grow?
A random sample of American adults were asked the question: “Just as a rough guess, what percent profit on each dollar of sales do you think the average company makes after taxes?” For the Reason-Rupe poll in May 2013 — the average response was 36%. That response was very close to historical results for a poll from ORC for a similar but slightly different question.
How do the public’s estimates of business profit margins compare to reality? According to a Yahoo!Finance database for 212 different industries the average profit margin for the most recent quarter was 7.5% and the median profit margin was 6.3%. There was not a single industry out of 212 that had a profit margin as high as 36%.
That bit of misinformation drives a lot of bad legislation, for example, the effort to make $15 the minimum wage. If Walmart made $36 profit on every $100 of earnings, then they should certainly be able to pay their workers a little more. But Walmart’s profit margin in the most recent quarter was 3.1% — and a completely different story. For every $100 in sales for Walmart, the state and local governments get an average of $6.88 in sales taxes ( and as much as $9.44 in Tennessee, $9.16 in Arizona). Did you notice that Walmart is closing a lot of stores?
But what about Big Oil? Major integrated Oil and Gas make big profits don’t they? Nope. A below average profit margin of 5.1%. If people realized that their estimates of profit margins were five times too high — would it help to understand why their wages weren’t higher for beginning workers? Would it help to understand how government regulation that imposes big costs on a business puts a damper on business growth and expansion? Or why our economy is not growing as it should?
Government does not make money. It just spends other people’s money, and not often wisely. A growing economy comes from encouraging business to grow and prosper. It’s pretty easy for a business to move from a 6% profit margin down to barely breaking even if sales drop. And that 6% profit margin depends on a lot of correct decisions and correct executions of the decisions.
When the big new thing that you thought would be a huge success just isn’t — there you go. For small business the difficulties are even greater, and the reason so many small businesses have closed up shop. And the failure of the administration to understand these basics is why the business startup rate is in the tank. Who needs to take an enormous risk when tomorrows regulation may destroy the whole thing?
(source: Carpe Diem blog by Mark Perry at AEI)
Filed under: Bureaucracy, Capitalism, Democrat Corruption, Domestic Policy, Economy, Free Markets, Freedom, Progressivism, Taxes | Tags: Free Market Capitalism, The Federal Debt, Wealth and Poverty
Our wealthiest citizens, the top 20% of the economic pie, pay 70% of all taxes. The poorest 20% pay 3/5ths of one percent of all taxes. So we have to raise taxes on the wealthiest citizens to be “fair” or “balanced.”
There is, however, a problem. If you confiscate the entire wealth of the richest citizens — every penny the Forbes 400 have — it would cover one year’s federal deficit.
Raising tax rates on everyone in the top 2% of the wealthiest citizens would not cover one year’s federal deficit.
Washington borrows $188 million every hour.
I wrote this down a while back, I’m not sure just how long ago, but I can assure you that nothing has improved. Food for thought.
— “How You, I, and Everyone Got the Top 1 percent All Wrong“ by Derek Thompson, The Atlantic
— “Obama orchestrated a massive transfer of wealth to the 1 percent,” by Matthew Gray, New York Post
There is, of course, an answer. Wealth is created by the free market and capitalism. Free people are endlessly inventive, and the hope of improving your financial situation, making a new idea the next big thing, becomes in a free market the opportunity to succeed. Where did Uber come from? Or telephones unconnected to phone lines that are actually tiny computers keeping track of everything and entertaining you as well?
Getting rich or richer, improving your situation, or changing your life is commonplace in America, yet in many parts of the world it is impossible to move beyond the status into which you were born. I cannot understand why the Left cannot think beyond “income inequality.” They are still stuck back in the French revolution railing against the opulence of the King and all his court. “It’s not fair” they whine.
Some people simply want to get rich — that probably accounts for all the Powerball tickets sold. Some want to accomplish something worthwhile. Some want to move to a better neighborhood. Some want to build something important, others want to discover something new. If you know or are convinced that you can never move beyond where you are — I guess envy is all you have left.
Filed under: Bureaucracy, Crime, Democrat Corruption, Domestic Policy, Health Care, Law, Police, Politics, Progressives, Progressivism, Regulation, Unemployment | Tags: Homeless Encampments, Legalizing Marijuana, Seattle Radio
Policeman — The homeless population is up by about 400 percent. They’ve come here for the pot.
(Marijuana is now legal in Washington State.) If you are thinking of voting for it in your state, you might want to reconsider.
Filed under: Bureaucracy, Capitalism, Democrat Corruption, Domestic Policy, Economy, Education, Free Markets, Freedom, Politics, Progressivism, Unemployment | Tags: Black Unemployment, Larry Elder, President Barack Obama
A question that seems appropriate for Martin Luther King Day. Here’s Larry Elder, appearing for Praeger University. President Obama, was elected as the first Black President of the United States, with expectations that he would do much to improve the situation of blacks in the country. Instead his economy has been more devastating to the black community than anyone else.
Worrying about the black vote has meant more welfare and fewer jobs. The Keystone XL pipeline promised 13,000 high paying construction jobs, but that was trumped by Tom Steyer’s promised $100 million to the Democrats for rejecting it. Obama’s excuse was that construction jobs are only ‘temporary.’ Of course they are, but successful work on one construction job means a leg up on the next construction job. The unemployment rate for blacks has been nearly twice the rate for whites.
The Left does not understand the effect of incentives. A study from the University of Chicago concludes that “in response to the recession, several U.S. safety-net programs changed in ways that discouraged employment. Unemployment insurance, for example, was made more generous in multiple ways. Eligibility rules for food stamps were reduced, waivers from work requirements were granted, and the monthly benefit amount was increased.”
People are not apt to look hard for work, or even accept a job offer that is not quite as good as hoped, when remaining unemployed is made more comfortable. Sounds ‘mean,’ perhaps, but what people need and what the country needs is not the comfortable unemployed, but the happy and independent worker.
The most surprising of Obama’s initiatives was his failure to support the D.C. Opportunity Scholarship Program. He has worked hard to get rid of it, yet it has benefited so many black children. Inexplicable. But the teacher’s unions don’t like the scholarship program.
The Left has long believed in, essentially, buying votes. Bernie Sanders and Hillary Clinton are busily engaged in trying to compete in benefits they will give to those who vote for them. Free college tuition (where does the money come from?), and a false assumption that every child must go to college. Higher taxes on the rich (exceedingly modest benefit) and “the rich” are often those who create jobs. Raising the minimum wage has been clearly shown to be a job destroyer. Universal pre-school may be welcome baby-sitting, but any educational benefits have disappeared by 3rd grade.
What we need is a healthier economy that is creating jobs for everyone. The Obama administration has hampered growth with raised taxes on productivity, and a huge burden of regulation.