Posted on 08/21/2010 11:23:35 AM PDT by Comrade Brother Abu Bubba
THIS IS WHY THERE ARE NO JOBS IN AMERICA by Porter Stansberry
I'd like to make you a business offer.
Seriously. This is a real offer. In fact, you really can't turn me down, as you'll come to understand in a moment…
Here's the deal. You're going to start a business or expand the one you've got now. It doesn't really matter what you do or what you're going to do. I'll partner with you no matter what business you're in – as long as it's legal. But I can't give you any capital – you have to come up with that on your own. I won't give you any labor – that's definitely up to you. What I will do, however, is demand you follow all sorts of rules about what products and services you can offer, how much (and how often) you pay your employees, and where and when you're allowed to operate your business. That's my role in the affair: to tell you what to do.
Now in return for my rules, I'm going to take roughly half of whatever you make in the business each year. Half seems fair, doesn't it? I think so. Of course, that's half of your profits.
You're also going to have to pay me about 12% of whatever you decide to pay your employees because you've got to cover my expenses for promulgating all of the rules about who you can employ, when, where, and how. Come on, you're my partner. It's only "fair."
Now… after you've put your hard-earned savings at risk to start this business, and after you've worked hard at it for a few decades (paying me my 50% or a bit more along the way each year), you might decide you'd like to cash out – to finally live the good life.
Whether or not this is "fair" – some people never can afford to retire – is a different argument. As your partner, I'm happy for you to sell whenever you'd like… because our agreement says, if you sell, you have to pay me an additional 20% of whatever the capitalized value of the business is at that time.
I know… I know… you put up all the original capital. You took all the risks. You put in all of the labor. That's all true. But I've done my part, too. I've collected 50% of the profits each year. And I've always come up with more rules for you to follow each year. Therefore, I deserve another, final 20% slice of the business.
Oh… and one more thing…
Even after you've sold the business and paid all of my fees… I'd recommend buying lots of life insurance. You see, even after you've been retired for years, when you die, you'll have to pay me 50% of whatever your estate is worth.
After all, I've got lots of partners and not all of them are as successful as you and your family. We don't think it's "fair" for your kids to have such a big advantage. But if you buy enough life insurance, you can finance this expense for your children.
All in all, if you're a very successful entrepreneur… if you're one of the rare, lucky, and hard-working people who can create a new company, employ lots of people, and satisfy the public… you'll end up paying me more than 75% of your income over your life. Thanks so much.
I'm sure you'll think my offer is reasonable and happily partner with me… but it doesn't really matter how you feel about it because if you ever try to stiff me – or cheat me on any of my fees or rules – I'll break down your door in the middle of the night, threaten you and your family with heavy, automatic weapons, and throw you in jail.
That's how civil society is supposed to work, right? This is Amerika, isn't it?
That's the offer Amerika gives its entrepreneurs. And the idiots in Washington wonder why there are no new jobs…
Regards,
Porter Stansberry
"The best defense is a good offense" - Carl von Clausewitz
Open up the laws and regulations on business creation, capital flow, and trade and you'll see the US prosper yet again. Retrenching and closing the trade borders like you want will force the US to continue to wither on the vine.
It is almost impossible to open and operate a manufacturing plant in the US, follow all the government mandates and regulations, pay your taxes, provide decent pay and benefits to your workers and make a profit. It is almost impossible to do it and break even.
If you know a way to do it my hat's off to you. I sure can't figure it out
You made the guy's point for him. His point being that government regs are responsible for running jobs out of the US and we have to turn that around.
Exactly! Well said, sir.
No, CNN's always been on a kick that it's evil capitalist bastards that have conspired with the Government to ship all our jobs overseas so the fat-cat CEOs can buy new yachts. It's not the Government that's doing it, it's the Corporations doing it just to chase that last dollar.
CNN's solution is to eliminate all trade altogether, and take every dollar earned overseas as a punitive measure. Force the jobs back. Which, of course, will never, EVER work.
Thanks!
My experience has been that most of those who rail and shout against “outsourcing jobs” and “the collapse of the USA” are typically a mix of the following:
- isolationists
- workers, not business owners/creators/builders
- union laborers
RARELY will you find a person who actually created, built, and runs a business hold the position of CNN and others like him. The problem is NOT “free trade”; the problem is we do NOT have free trade BUT we have massive Government control and regulation.
Businesses often face the choice of relocating overseas or shuttering altogether. Most choose the former, and keep some income and some jobs rather than lose everything.
Do you have a clue why?
EXACTLY.
One start up I’m involved with was INSISTENT on using only American manufacturing.
Sadly, they simply could NOT make their price point that way. However, using a few China sourced parts, they could.
Their delimna? Stick with “American made only,” and have NO business. Or buy from China and create at least a few jobs here.
According to some here, they are evil outsourcers. The reality is that thanks to our government run for and buy the leech class, THEY HAD NO CHOICE.
And what about tarrifs? Those would just make the Chinese sourcing infeasable, putting them back to creating NOTHING.
It’s about the leech class: Those in suits who use government power to distort the market, those in the unions who do the same re the labor market, and those in the underclass who let their votes be bought.
That’s the root cause. Another word for it is “corruption.” Until we address that, we’re stuck. If we don’t, we’re sunk.
The education system didn't break down. It has **never** been broken and was **purposely ** designed ( by liberals) to produce the all the ills you **correctly** listed.
Our modern system of system of schools opened in the mid-1800s to early 1900s.How many generations is that now? 5 to7 generations of citizens?
So?...Question: What happens if 5 to 7 generations of children are schooled in socialist-funded, godless, compulsory, government owned and run, prison-like schools?
Answer #1:(a) The Free Trade fraud; (b) an enormous expansion of government at all levels accompanied by outrageous taxes and regulations; (c) a massive influx of "Third Worlders" into our country (d) the breakdown of our education system; (e) Equal Employment Laws and political correctness; (f) The moral collapse by a significant number of Americans i.e. drugs and unrestrained copulation-this list could go on.
Answer #2: 5 to 7 generations of Americans indoctrinated in government schools learned to be comfortable with taking their neighbor's money, thinking godlessly, being comfortable with government compulsion, being a prisoner of the state, and having government run and own their very lives! Isn't that enough to cause all the problems you listed?
The liberals who invented our system of modern goverment schools, and who have always controlled teacher training and curriculum development,**WANT** it that way.
Solution #1: Conservatives must get the nation's children into schools that are NOT socialist funded. That means private schools. These private schools must thoroughly integrate their family's Judeo-Christian faith and our nation's founding principles into every minute of their school day.
Solution #2: Conservatives must work to shut down every government school, padlock the buildings, arrange to have them completely razed, burn the debris to ashes, and salt the earth where they stood!
The following written by Tocqueville,( 1830’s **BEFORE** our modern government schools) in his book, DEMOCRACY IN AMERICA could NOT be written of America today. Would you agree that if citizens were as well educated as those that Tocqueville found in 1830 that we would not have the problems you listed? He wrote: ( read and weap!)
“...every citizen ...is taught...the doctrines and the evidences of his religion, the history of his country, and the leading features of its Constitution ... it is extremely rare to find a man imperfectly acquainted with all these things, and a person wholly ignorant of them is a sort of phenomenon.”
“On the frontier,...no sort of comparison can be drawn between the pioneer and the dwelling that shelters him.... He wears the dress and speaks the language of the cities; he is acquainted with the past, curious about the future, and ready for argument about the present.... I do not think that so much intellectual activity exists in the most enlightened and populous districts of France’ “.... “It cannot be doubted that in the United States the instruction of the people powerfully contributes to the support of the democratic republic; and such must always be the case...where the instruction which enlightens the understanding is not separated from the moral education..”
ping
Well remember, from the perspective of a "progressive", the government all by itself created the national economy, built the transportation infrastructure, provides the national defense, and buys off the poor not to riot - without all of which the entrepreneur would have no hope of operating, anyway. The least he can do is pay 70% of his lifetime profits in gratitude. :)
EXACTLY.
The real irony of CNN’s position is that it requires giving the government (ie, part of the leech class) MORE power.
Great article.
My own background is entrepreneur. I’ve started 5 businesses on 4 continents, all in manufacturing. I started a manufacturing (loudspeaker) business in the US (Lynnwood, WA), did the same (on contract) in Sint-Pieters-Leeuw, Belgium, did the same (a venture I co-owned) in Valparaiso/Vina del Mar, Chile, and now own/run an engineering/manufacturing company in Hong Kong and a farm in Thailand.
For 13 years, I’ve been “the man” who founded, built, and ran the company. I was the source of the pay for dozens of people. I’ve been the sole source of my paychecks for 15 years. My signature is on that line, not someone else. So my viewpoint is probably different from guys like CNN who draw a paycheck from someone else, who don’t run and build the businesses.
My company in the US (the ones in Belgium and Chile ran in parallel at different times) ran for 9 years before I finally shut it down. I built it from literally my garage and myself to 20,000 square feet, 35 employees, and millions in annual revenue.
After the 2007 tax season ended, my accountant showed me the reality of the situation: 51% of every dollar of revenue - GROSS receipts - was going back out in taxes. Social security, income taxes, capital gains (distributions), B&O (WA State tax on gross receipts), sales taxes, L&I payments, unemployment insurance, etc. At that point - where I was working 12 hours a day, 6 days a week to keep it all going - I decided to shut it down and move elsewhere. I wasn’t working for myself or my employees or my clients, I was working for the Government.
I found every one of my employees a new job, and shut down. And re-opened overseas in HK and China just 4 months later, and saw my tax and Government intrusion drop by at least 70%. I’m thriving now, versus barely keeping my head above water over here. And Thailand is even better...
It’s not the labor costs, or the leases, or the overhead that’s the big difference - it’s taxation and regulation. No OSHA requirements about how old your ladder can be, or having to have seat belts on all your forklifts, or having required health insurance coverage, etc.
In terms of taxation and regulation, I’d say Belgium and the US were tied for about the same level (which is sad - the US is as bad as the EU). Chile was MUCH better than either, and HK and Thailand are even better still.
I didn’t leave the US because I’m a traitor or sell-out. I moved out economically because the US didn’t want me. The Government made it much harder to succeed, the Government’s leaders and media constantly branded me as an evil bastard only interested in screwing my employees (when in fact, 13 of my employees earned more than I did), and railed that I was never paying my fair share, even though half of every dollar was going right out to the various governments.
I’d love to come back, but that simply is not an option with the current climate and leadership. Why would I voluntarily move my businesses back when I would suffer higher taxation, a massive increase in intrusion (like having to change all the doorknobs to ADA compliant knobs when everyone that worked for me had two function hands), and high restriction on what I can do and how fast I can do it?
The US succeeds as well as it does in spite of the Government, not because of it. If it took the approach of what you see in Chile or most of Asia, the US economy would be 3 times as strong, and we’d have zero unemployment in a matter of 5 years. But it would mean guys like CNN would “lose” because the regulations, tariffs, restrictions, and taxation would all be lowered.
America isn’t just a physical location; it’s a spirit and ideal. Individualism, entrepreneuralism, innovation, rewarding risk and succeed. It’s dying in the physical states of the US, but it’s catching on like a firestorm in Asia, and so will continue in one form or another.
From what I understand, that stipulation of legality isn't really true. Think about how many criminal enterprises have been brought down, not because of evidence of their criminal wrong doing, but because the principals got sideways with the IRS. In other words their real sin was not cutting the government in.
What you've said so wonderfully is replicated throughout this country. I am constantly amazed at the strength of this economy, which refuses to die quickly under the beating inflicted on it by the current ruling class. That strength is not without limits, however, and the economy will eventually succumb, I am afraid, unless there is a true regime change. By that I mean not just a few more Republicans in congress --- Republicans that, when it comes to economics, are often as socialist as Democrats --- but a true regime change. I am not very optimistic in this regard, having witness over the years class warfare and open hatred of "fat cats" (capitalists) on this, supposedly conservative, forum.
Some time in the near future, my friend, you may perform yet another service to this country, for which you are uniquely qualified. Perhaps it will take an almost complete downfall, but this country may still revive itself. If it does, you'll be one of the few people who embodies what it once was and may once again be. I very much hope that will be the case.
I wish you much continuing success, whether physically here or elsewhere. And, please, do not have any reservations about your efforts abroad: what else are you supposed to do if your love for this country is unrequited?
If I had a chance to do so in person, I would a be great pleasure to shake your hand. Be well.
1. The government takes it from our checks 14.5% counting what your employer puts in. The employer half represents the wages you “did not get” from him.
2. The portion they take (social security and medicare taxes) are considered part of your income so you pay taxes on a tax. To put it simply they take and tax it again.
3. They then take the money and use for current debts. There is no lock box, the money is gone.
4. When you retire(if you can) they will “give you” a small portion of it back as social security retirement. However, this money is then considered income and they will then tax you on this. If you die before collecting anything you lose it all. Your adult children get nothing.
You spouse “may” get a small amount.
The short version is as follows:
They tax you.
They tax the tax.
They spend it now but not on you. (Embezzlement)
They give you some of it back and tax it as income.
If you die before collecting they keep the money.
Do you see a problem with this?
1. The government takes it from our checks 14.5% counting what your employer puts in. The employer half represents the wages you “did not get” from him.
2. The portion they take (social security and medicare taxes) are considered part of your income so you pay taxes on a tax. To put it simply they take and tax it again.
3. They then take the money and use for current debts. There is no lock box, the money is gone.
4. When you retire(if you can) they will “give you” a small portion of it back as social security retirement. However, this money is then considered income and they will then tax you on this. If you die before collecting anything you lose it all. Your adult children get nothing.
You spouse “may” get a small amount.
The short version is as follows:
They tax you.
They tax the tax.
They spend it now but not on you. (Embezzlement)
They give you some of it back and tax it as income.
If you die before collecting they keep the money.
Do you see a problem with this?
It’s not the labor costs, or the leases, or the overhead that’s the big difference - it’s taxation and regulation.
Hmmm, interesting -- you actually found your employees a new job.
Allow me to congratulate you: I have been at a place where the employees were told "we are done with cuts" ; and when employees asked "What can we do to make sure our site stays open" the respondent (a non-US citizen, and in management) said with a supercilious smirk, "Make yourself a valuable commodity."
Two months later the site was closed down; even executives who had been with the company ten years were not spared.
(I, and several more skeptical co-workers, had used the intervening time to look for new positions: I had a nice 10-day break, the others had new slots within three weeks. Not everyone was so lucky, or talented, or whichever. And these were professional, white-collar jobs, too. The very "knowledge jobs" which were supposed to replace the blue collar jobs being sent offshore.)
BTW, it is interesting that several people on this thread have commented that the only people complaining about Free Trade and wage arbitrage are employees. That sounds a bit like Carly Fiorina's "No American has a right to a job."
Fine; but then, no employer has a right to a profit, if you're going to play that game.
And (come to think of it) the claim that "it isn't the wages but the regulations" -- while it might be true of manufacturing -- isn't true of software or high-tech. Otherwise, why the rush of H1-B employees?
Cheers!
Tell me again the gross profit margin, net profit margin, and cash on hand at Microsoft.
Compare their profit margin to (say) Exxon or Coca-Cola.
Then tell me Microsoft's cheaper competition which is going to eat its lunch unless it cuts employee pay.
Cheers!
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