Tuesday, November 18, 2008

What Drives Economies

Do you think that any of the idiots who we elected to office have any clue what actually drives an economy?  Of course they do not.  Nancy Pelosi, Barack Obama, and Harry Reid are completely clueless when it comes to matters that affect business.  Mark my words, their ideas are going to turn an already terrific situation into a catastrophic one.

As I write this, the panhandlers from the auto industry are on Capital Hill begging for billions to save their asses.  This includes the leaders of the unions.  They want to suck all they can from the taxpayers just like the greedy executives on Wall Street did with the $700 billion bailout money they received a month ago.  Of course, since that crook Paulson is in charge, we have no idea where the money went.

We are going to see an expanding of the mandates the Federal government is going to require.  The Revolution knows it is time to start gearing up.  We are nearing the Great Depression II and these idiots have no clue as to why.

Let me ask you a question:  why did China emerge as a developing nation over the last 10 years?  The answer: cheap labor.  We started to produce things over there since the cost of labor was peanuts compared to here.  History shows that money always flows where labor is cheap.

The auto industry shows this also.  Why are the Japanese manufactures better able to handle this crisis?  Because their labor is cheaper when you take into account the absurd contracts the Big Three agreed to with the UAW.  These companies should be in bankruptcy all because labor wanted more.

We are going to see mandates on healthcare which will raise costs for businesses.  Also, the unions will gain more power with the anticipated passing of the Employee Free Choice Act.  This piece of garbage (I mean legislation) will return us to a 1930s style of labor.  People will be intimidated into signing for union representation when they don't want it.  This will be the nail in many businesses coffin.

How is this all going to play out? It is really simple.  Those businesses which have the opportunity will move more of their services offshore.  We saw this trend emerge over the last 20 years and it will increase.  Markets like India, China, and other Asian nations provide labor at a fraction of the cost.  Why deal with the union when you can eliminate all headaches by heading overseas.

Then there are the companies which do not have this as an option.  What do they do?  They simply go out of business.  The one thing Obama and his cronies missed is that labor is the largest expense most businesses have. Often, when things get tight, the best solution is to lay people off.  Drastic reductions in payroll will allow companies to become more successful in the long term.  They are stronger entities when they "turn the corner".

The policies that will be implemented by the Big Three Morons (Pelosi, Reid, Obama) will give the unions more power.  Thus, the option of getting rid of people will be removed.  Let me ask you, if there is a slowdown in business, do you think that a company can make up for the losses by cutting back on the number of pencils?  Of course not.  Without the option of reducing the payroll, companies are going to be forced to close.

Many are anticipating 8% unemployment over the next few years.  I think this is too low.  There are going to be hundreds of thousands of small businesses forced out by the policies of these three Morons.  I figure we will experince close to double digit unemployment by 2011.  This could be sped up if they have a really active first 100 days.  Then, we might see this wonderful time by the middle of 2010.

History backs up all these arguments against what they are doing.  The defenders of government handouts point to the fact that Reaganomics caused this problem.  Certainly that was a part of it.  The supply siders are just as much at fault.  However, the answer is not overregulating and overmandating the private sector.  This will eliminate jobs not create them.

One final thought:  I find it humerous when the politicians talk about creating jobs.  They have no clue how to create a job other than to expand the government payroll.  Cheap labor is what fuels growth.  Any policies that increase the burdon of business having access to this commodity will lead to the destruction of that system.  Just look at communism to see the fallacy in that belief. 

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