Monday, February 7, 2011

A basic misunderstanding of HOW business works.

Anyone here an EMPLOYER? How about an EMPLOYEE? How about a STOCK HOLDER? Do you understand the basics of what the difference is?
I can tell you who doesn't know those basics. He lives at 1600 Pennsylvania Avenue, Washington, D.C.
Obama: Corporate Profits "Have To Be Shared By American Workers"

The employees DO NOT share in the profits. They agree, when going to work for GM or Granny's Biscuit Shop, to work for "X" dollars and cents per hour, or some preset salary. None of us expects a cut of the PROFITS. Payroll goes on the expense side of the spreadsheet.
By definition, profits are the money that a business has AFTER paying the rent, AFTER paying for raw materials, AFTER making payroll, AFTER paying taxes, AFTER paying utility bills, etc, etc, etc.
Profits go to GM stock holders OR to Granny as a sole proprietor. Conversely if there are NO profits GM stock holders and Granny are STILL responsible for all those bills and payroll. And if GM and Granny can't pay them, they close the doors. Neither Granny nor GM go to the employees with a bucket looking for help.
OHHH, wait, if there is NO profit, Granny goes bust, and GM goes to Obama for a bail out. So I guess there was a difference in profits being spread around. Granny HAS to profit to keep the door open. GM just asks non-stock holders, normally called 'tax payers', who won't get a share of profits for a tax free loan to keep the doors open while they get their water fowl in linear mode.
Either way, employees don't share in any PROFITS. But unless you've ever worked where that profit / loss system existed, you don't know that. Mr. Obama is THAT person.


blue said...

sounds like socialism to me

Spider said...

Steve, you probably misunderstood our fearless leader. The employees DO share the profits, under a communist system, which is what he's trying to install. I'm sure his plan will also mandate that the employers work for the employees. It's all very Karl Marx.

Schteveo said...

No, if you go back and look Spider, there are NO profits under Communism, because they don't get HOW to create wealth. It's just like Obama, no basics. The Russians killed, jailed or ran off most of the people who knew how to run businesses.

Plenty of people knew how to make steel or tools from steel in Russia pre-Stalin. But unless someone manages the flow of raw products, labor force, etc there is no profit.

All that completely ignores the idea of working FOR your pay. In Communist / Socialist countries, you get paid whether you work or not. Steel output from the USSR was always a fraction of ours. Even though they had more capacity that did the US. Low incentive breeds low output.

It's the same reasoning these maroons use that leads them to believe that higher taxes have no effect on business decisions. It's why Obama told the Chamber of Commerce to "...find some way to hire more people."

He just doesn't get it and I doubt, at this late stage of his life, that he ever will.

BOW said...

I would like to ansewr "no" to the first 3 questions......but I can't.