Small Business Economy

Recently I heard a speaker refer to our current economic situation in the United States as an entrepreneurial economy. Trying to summarize his comments is difficult, but it included that most people will not find a single job which allows them to support themselves and their families. He suggested that instead, we should all be spending our free time, doing something on the side which could make us additional money. He asserted that the day is likely coming when the side job will be the only job opportunity we have.

This speaker was attempting to be helpful, and I know that the American dream is best achieved by hard work and original ideas. But I also know that the majority of new businesses fail before ever turning a profit. So while this approach might make a few people succeed in big ways, it is not going to stabilize the US economy as a whole.

The average person doesn’t have a marketable product, nor the expertise to run a business. This fact, causes many people to consider canned opportunities, such as franchises or multi-level marketing. These two types of side jobs often turn out to be predatory and opportunistic, so except for those who have done extensive and careful research, most people will lose money instead of gain.

But even if the majority of people could find success in these side jobs, what would the economy look like? Essentially we would have a preponderance of small businesses, capable of only producing small products. Anything which takes a larger manufacturing process to produce would have to come to us from other countries. The American economy was made strong by being the producer of these goods, and we will not find that same strength in small businesses.

Stabilizing the economy, even in the modern age, I believe will involve bringing some manufacturing and large employers back to the United States. So we need to stop demonizing large employers and make it practical to manufacture in this country once again.

Advertisements

Gas Prices

I have enjoyed the price of gasoline recently, and I am not alone. It has been a breath of fresh air and to pay about $25 to fill up.

Trying to discern why prices are so low, based on the news is difficult. It appears that the media doesn’t think the event is noteworthy, or if they have made a story of it, they have not dug into the why question.

An internet search came up with many possible answers. One source said supply was up because of better methods of producing oil. I suspect this is true in minor ways, but also expect it to be only a part of the story.

Another source indicated demand was down. Of course, this answer should be readily verifiable by a decrease in traffic. So far, I don’t see it. Of course, the impact of producing heating oil as opposed to gasoline is a possible factor, but I can’t figure the heating oil amounts being that much lower either.

A theory of my own is that the nations who sell large amounts of oil to us are afraid of losing their market. It is true we have increased our ability to produce, and some portions of US politics and economy want to become energy stable, if not outright independent. Not only this, but the US is currently in a political fight to build pipelines which will allow for greater and safer production.

Dropping oil prices are a way to making Americans less concerned about our life blood being supplied by other countries. Dropping oil prices make American companies less profitable when making oil locally. And dropping oil prices demotivates those fighting the political battles in favor of American oil.

I am guessing the lower prices are simply the result of us making the world oil supply be a competitive market.

 

Economic Recovery

President Obama spoke in the State of the Union as to the good news Americans seem to be overlooking. He lifted up the example of Rebekah Erler. He explains that she wrote him a letter speaking of their economic struggles and how they had to sacrifice to get ahead. Seemingly they were grateful to the policies of the current administration for creating a climate that allowed them to pull out of their difficulties.

What you might already know, and what was never mentioned in the speech, is that Rebekah worked as a campaigner for Democratic Washington Senator Patty Murray. Based on the timing it is likely that this is the job credited with pulling her out of the recession caused by her husband working in the housing industry.

When you know that part of the story it comes across very differently, doesn’t it? Her job, credited to the white house, was campaigning for the Democrats. In fact, this is the same family that he spent a day with back in 2014 to illustrate his compassion for struggling Americans.

The illustration is an example of some problems I believe I see in our president far too often. First he doesn’t care too much about the exact truth of a situation, but instead cares how he can make it appear in the press.

Second he focuses very closely on the moment, not remembering the past nor learning lessons from it. He expects the rest of America to forget as well, or else he would have at least picked a little more random of an example of economic recovery. After all he wants us to believe people moving up economically are easy to find, so he should have a lot of them to choose from.

Marijuana’s Cost

Recently I saw a news report stating that Oreos could be more addictive than cocaine. Even more recently I heard the statement repeated once again that marijuana is not addictive.

Society is in the middle of a craze of legalizing marijuana. This movement was catalyzed by those who painted it as a miracle drug which is unfairly maligned when labeled as an illegal drug. But other strains of thought are also present. Some thought legalizing it would take a useless burden off law enforcement and correctional institutions. Others felt it was simply a freedom issue and these often advocate legalizing all drugs.

Of course, these ideas came along after a couple of generations grew up with prevalent use of marijuana among young people, movies which glorified marijuana, and politicians beginning to admit to marijuana use.

So all told I have been hearing about marijuana use for decades, with increasingly, the voices singing its praises drowning out those of caution. The road that got us here is likely to be less interesting than where we go from here.

America became great as a land of opportunity. Marijuana use demotivates the user. It may become the single largest force working against America regaining its momentum and strength. It might already be.

Cyber Monday

Congratulations! You have survived Black Friday, Small Business Saturday, and most of Cyber Monday. This year I even heard one news station, refer to Thanksgiving afternoon and evening as Gray Thursday. All of this day naming stems from our desire to see economic recovery. We can expect that in the next few days people will be looking at the sales numbers, and thereby deciding whether our economy has gotten healthier.

While I agree the sales figures reflect the confidence of consumers, I don’t believe this is the best way to analyze our economy. Spending is not necessarily good economically speaking. The economy grows when some product is designed, manufactured, and marketed at a profit. If only one of the steps is done in the United States, then purchasing it on Black Friday is not a boost to the economy.

On Friday, I went shopping. At the checkout line, the cashier mentioned the crowd was smaller than she expected, at both her jobs. She has two different jobs, at two different department stores. Both are part time. Neither provide her with benefits. Both jobs pay barely above minimum-wage. She is a child of our economic age; selling goods produced in other countries, getting her benefits from the government, and having no prospects for a career.

We don’t produce goods in this country because it’s too expensive. Manufacturers have laws requiring they provide livable wages and benefits. Consumers will buy goods manufactured in other countries not thus constrained. So the economy should not just be measured by spending but rather by spending balanced with production. I don’t think I’m smart enough to know how to bring manufacturing back to our country. But I don’t think I’m gullible enough to believe we can heal our economy without it.

Fiscal Priorities

Oliver North coined or quoted a phrase he called the spies credo, “Just because I am paranoid doesn’t mean there isn’t someone out to get me.” While I don’t know much about spy games, or for that matter anything military, I prefer for to have people protecting our country thinking this way. We don’t know what the future holds, but we should choose to be prepared for big and little threats.

Recently the news has talked about policy changes that will decrease the amount of military and military spending to levels similar to World War Two. I have to wonder why we take such actions. It appears to be cost saving actions, which would make perfect sense in light of the fact we have made a habit of spending money we don’t have.

But this action also reflects priorities. We have prioritized overhauling the healthcare system over national defense. Meanwhile the cost of healthcare reform, both federally and individually is crippling us financially. This will guarantee we are not fiscally fit enough to defend ourselves when conflict escalates. I suppose we are supposed to be happier being healthy while subservient to other countries? Well, if this is how it is supposed to work, we had better make ObamaCare a lot more functional.

President’s Day

Money

Happy President’s Day. Is this a day you celebrate?

Some people seem to celebrate President’s Day by going out and trading presidential flash cards for merchandise at local sales outlets. And too many people believe spending is the primary indicator of a healthy economy. It isn’t.

A healthy economy should be marked by jobs and production. Spending in an economy without production will send money out of the country to whoever produced the goods. The jobs supported by it will be part time, near minimum wage jobs, without benefits.

Oh and by the way, despite my joke about presidential flash cards, not every bill of US currency has a President on it.  Can you name two men pictured on current US currency who were never president of the United States?