Herman Cain: It's Your Fault if You're Unemployed

[Coito ergo sum]

Throw up some import tariffs against cheap labor countries like China to remove their price advantage and jobs will come back home.

Either that, or we'll just do without the inexpensive manufactured goods that we currently take for granted, because we won't be able to afford them any more.

Or, both. The point of the tariff is to keep prices up, not lower them. If tariffs increase prices to the point where demand drops to unsustainably low levels, then the products will become unavailable. Tariffs tend to push prices up, so the higher the tariffs the higher the prices, except that higher prices tend to reduce demand, and the lower the demand the lower the prices. Tariffs can't be lowered by a business, though, and so the tariff sets a floor on price. If demand goes down enough, then prices can be forced so low that the sales must be made at a loss or not at all.

The key to tariff setting is to set the tariff at a level the industry can absorb, not too high that prices are driven too high up, reducing demand substantially, but not too low that they are inconsequential. They aren't always bad things, but they require smart, reasoned application by people who know what they're doing. The entity I least trust to be smart and reasonable in matters of fiscal policy is a government bureaucracy. They tend to get pushed by the vicissitudes of politics.

[Coito ergo sum]

Here's my contract for anyone working for me - I tell you what to do and you do it. Pretty simple, actually.

Oh, hang on, I don't have anyone working for me any longer, because I've shut down the company. Got regulated out of business by the USDA. Guess those folks will have to go pick fruit while I live off my wife's salary. But hey, at least I'm not taking advantage of any poor proles any longer, that's good, right? It's more "fair".

Living off you're wife's salary? That is unfair. You need to be "giving according to your ability," and your wife's salary is unfair to the extent that it provides her anything more than ".,..according to her needs." The fact that she has extra money to support your sorry ass is exactly what is wrong with this capitalist system. She earns excess, while others earn nothing or very little.

You're a 1%-er!!!!!

[Coito ergo sum]

Here's my contract for anyone working for me - I tell you what to do and you do it. Pretty simple, actually.

Oh, hang on, I don't have anyone working for me any longer, because I've shut down the company. Got regulated out of business by the USDA. Guess those folks will have to go pick fruit while I live off my wife's salary. But hey, at least I'm not taking advantage of any poor proles any longer, that's good, right? It's more "fair".

I understand the overall sentiment, re: expecting employees to work, but taking it to the extreme makes no sense, either. If someone is hired by a company, let's say, as a tailor, and the tailoring work the company has for a particular week is done by Thursday, of course it's reasonable to expect the employee to do related work such as organizing the stock or preparing tailoring-related chores. But hiring someone as a tailor, and then telling them to clean a toilet or build a cathedral or they're fired, just doesn't make sense (to me).

I agree, and most of the time the company's tailor isn't told to clean the toilets because people operate under similar rules of reason to the one you've espoused. However, it's really not our business, is it? I mean, if the boss says to the tailor - look, the tailoring part of our business is pretty slow, so I can either have you do other menial tasks around here, or you can go home for 2 days each week without pay, it seems there ought to be nothing "unlawful" about that discussion. If the tailor is too proud to do non-tailor menial work, he doesn't need to do it. If the boss doesn't need the tailor, he can let him go.

I mean - what would you do if you ran like a cleaning business that had a tailor. Say you took people's shirts and pants in for cleaning, and if they needed something sewn or hemmed or repaired, or even altered, you had a tailor on site to service your customers. For some reason this month, barely anyone is bringing in any tailoring work, so you're not bringing in tailoring revenue sufficient to pay the tailor's salary. Why would you be required to pay the guy to do nothing, rather than salvage some value from his salary and have him do other things, like help with the dry cleaning or laundering aspect of the business, so that you don't have to pay another employee on top of the tailor you're already taking a loss on?

[Coito ergo sum]

I don't have anyone working for me any longer, because I've shut down the company. Got regulated out of business by the USDA. Guess those folks will have to go pick fruit while I live off my wife's salary.

Or they found a job with a caterer who could cope with them. By closing your business down you left an opportunity for someone else to fill the demand. The market remains.

When our unlamented leader, John Howard, introduced the Goods and Services Tax (GST, essentially a Value Added Tax) in 1999, thousands of small-business operators, truck owner-drivers, corner shops, IT consultants and whatnot, failed to cope with the increased paperwork and closed down instead. Guess what happened next? No, the transport industry did not grind to a halt. There were no sudden shortages of milk bars (drug-stores to you) in the neighbourhood. Computer systems of companies did not break down for want of repair or maintenance. What did happen, was that thousands of new business people who were not daunted by the new obligations took over from the one's who shirked them. The Australian economy did not miss a beat. Neither demand nor supply of goods and services decreased at all, but we got rid of many business owners whose main occupation seemed to be to whinge about 'government interference'. They were replaced by business owners with a 'can do' approach, and competence to match.

What happened was further consolidation of those industries into larger, and larger businesses who are better positioned to their huge amounts of capital, as compared to small business owners operating on a shoestring. You ever wonder where the "local businessman" went? Where did the "family owned mom and pop store" go?

[Coito ergo sum]

If a business can't pay its staff enough to live on without killing them then its not a business society needs (even if the owners want it). Obviously you can over regulate so there is a balance.

"Enough to live" doesn't tell us anything. How much do you decree to be that figure? Lots of people "live" on minimum wage. Is that "enough to live?" Or, is what you really mean: "enough to live at a level that I have deemed to be reasonable based on my experience?"

As for pro-business it sounds like an innocent term but then so does pro-family as well which isnt really defined by what by what its pro but what its against. Interestingly pro-family to me means lots of paid holiday, maternity leave , free/subsidised child care which some people might say is anti-business.

Of course kids are vile and should be used for compulsory organ donations so I'm not pro family

The issue is one of balance, really. To suggest to sole proprietors of small businesses that if they hire a stock clerk to help them unload trucks and stock the shelves that on top of paying the guy you have to give them paid holidays, maternity/paternity leave, free child care, and the like, then you're increasing considerably that guy's cost and his risk. He gets locked in to these costs long term. When a business is small, it operates with less cushion than a Wal-Mart, obviously. So, the more of these obligations you stack on the backs of sole proprietors, and small businesses of 1-50 employees, the less likely they are to hire people until they are really, really overburdened. Sometimes they just can't free up the capital to keep such high payroll costs, and they just can't do it.

These are costs of doing business. And, what I've noticed from the left is a fairly cavalier attitude toward "costs of doing business." It's like, "oh, that's just a cost of doing business that the business has to deal with..." and hand wave it away. However, government policy in this regard, if too onerous, can drive lots of folks out of business, like laklak describes. Business is a risk. Laklak probably had a lot of his own money tied up in hard assets and at risk in terms of payroll and other fixed and variable costs associated with his business that he closed. At a certain point, the increase risk of loss just doesn't justify staying in the business. That doesn't help anyone.

Does there need to be regulation of the employment relationship like there is regulation of other aspects of the economy. Sure. But, to approach it from perspective of actually hurting business, seems to me to be bass ackwards. Unless a person works for the government, they most likely work for a business. Business is what produces stuff. Is it American business and industry that we really want to hurt? Stick it to 'em?

[Coito ergo sum]

Big business = Federal government.

Under the Repugnican system Big Business owns the Federal Government.

You are of the impression that under the current DemonRat system, big business does not own the federal government? Cough cough....solyndra...cough cough...bailouts...cough cough....billions funneled to banks and financiers...cough cough....stimulus money handed over and wasted...cough cough....crony capitalism....

[Schneibster]

What has happened here, particularly in the food production industry, is small producers that cannot afford the increased cost of the ludicrous new Federal regulations

Maybe you could be a bit more specific.

[Gawdzilla Sama]

Big business = Federal government.

Under the Repugnican system Big Business owns the Federal Government.

You are of the impression that under the current DemonRat system, big business does not own the federal government? Cough cough....solyndra...cough cough...bailouts...cough cough....billions funneled to banks and financiers...cough cough....stimulus money handed over and wasted...cough cough....crony capitalism....

I was awake when Reagan authorized the current fiasco.

[Hermit]

You ever wonder where the "local businessman" went? Where did the "family owned mom and pop store" go?

That's another aspect of capitalism. When I was a child, just about all our food was bought at shops across or a little along the street we lived in. We had two grocers, a baker, a Konditorei, and a tailor within five minutes' walking distance, or less. This was in a residential area, and there was nothing extraordinary about our street. Unless my father had to buy a new car, decided to buy one of those newfangled amplifiers, or something like that, we simply had no need to go shopping for our needs anywhere else.

Then this huge store opened in the city. The owners opened similar establishments in other cities around the same time, and due to their buying power they were significantly cheaper than our local shops. All of a sudden we made weekly trips to the Kaufhalle. It took a few years, but eventually there was not a single shop left in the street I grew up in.

Small businesses have a much smaller chance of succeeding today because the chains of supermarkets (mhhh, supermarkets) smother their chances of succeeding with their buying power. That's capitalism at work again. No longer does a shopkeeper pump milk from his bulk container into the two-litre container you brought along. Now you reach into a chiller and grab a carton containing the stuff yourself. So efficient. So labour-saving. So small-business killing. So, no, I don't wonder where the local businessman and the family-owned shop went. I know what happened to them. They've been pushed out by bigger fish. At best they have become a franchisee. More likely though, wage earning or salaried employees of Coles-Myers or Walmart.

[Coito ergo sum]

What has happened here, particularly in the food production industry, is small producers that cannot afford the increased cost of the ludicrous new Federal regulations

Maybe you could be a bit more specific.

http://fairfoodfight.com/2010/04/22/foo ... l-farmers/

[Coito ergo sum]

You ever wonder where the "local businessman" went? Where did the "family owned mom and pop store" go?

That's another aspect of capitalism. When I was a child, just about all our food was bought at shops across or a little along the street we lived in. We had two grocers, a baker, a Konditorei, and a tailor within five minutes' walking distance, or less. This was in a residential area, and there was nothing extraordinary about our street. Unless my father had to buy a new car, decided to buy one of those newfangled amplifiers, or something like that, we simply had no need to go shopping for our needs anywhere else.

Then this huge store opened in the city. The owners opened similar establishments in other cities around the same time, and due to their buying power they were significantly cheaper than our local shops. All of a sudden we made weekly trips to the Kaufhalle. It took a few years, but eventually there was not a single shop left in the street I grew up in.

Small businesses have a much smaller chance of succeeding today because the chains of supermarkets (mhhh, supermarkets) smother their chances of succeeding with their buying power. That's capitalism at work again. No longer does a shopkeeper pump milk from his bulk container into the two-litre container you brought along. Now you reach into a chiller and grab a carton containing the stuff yourself. So efficient. So labour-saving. So small-business killing. So, no, I don't wonder where the local businessman and the family-owned shop went. I know what happened to them. They've been pushed out by bigger fish. At best they have become a franchisee. More likely though, wage earning or salaried employees of Coles-Myers or Walmart.

...pushed out by bigger fish who are better able to pay the costs and expenses associated with taxes and onerous regulations...

As I said, Wal-Mart can afford to hire an HR and Benefits department to deal with the myriad of labor and employment issues. Sam's Bakery and Deli can't. Sam's bakery and deli is on a shoestring budget, and making him give his stock clerks maternity/paternity leave, a month of paid vacation, and other such perks quickly becomes prohibitive. Wal-Mart can soak it up easily.

[laklak]

What has happened here, particularly in the food production industry, is small producers that cannot afford the increased cost of the ludicrous new Federal regulations

Maybe you could be a bit more specific.

Sure. What happened is the USDA did two things, force their HACCP program on small producers (see the link CES posted) and they expanded the definition of the interstate commerce clause once again. I was regulated under both the Florida Department of Agriculture and the Florida Department of Hotels and Restaurants, for the food production (bacon, sausage, pickles, hot sauces, etc) and the catering/concession business respectively. I did business only within the state of Florida, so I did not fall under USDA jurisdiction. USDA decided that anyone selling food products through a website could sell across state lines, even if they specifically stated on their site that the did not ship interstate. Then they expanded on that - anyone selling wholesale to anyone with a website was also engaged in interstate commerce. Then they expanded even THAT, by stating that anyone who bought any raw material from another state was engaged in interstate commerce, even if what they bought was toilet paper or plastic bags or cleaning supplies.

Their regulations are absurd. They require pasteurization of jerky, for example - meaning that jerky (or biltong, as I called mine) cannot be dried meat any longer, it must be cooked to an internal temperature of 170 F (even if you include the usual disclaimer about eating raw or undercooked meat products). They require businesses to provide, free of charge, separate office space for a USDA inspector. They regulate everything from the temperature of your water heater to the size of your bathroom. They require handicapped access. As a small producer I simply could not afford the additional 25-40K required to move to new facilities and meet their new regulations, PLUS the 3-4 month downtime while I waited for them to process my application and send out their inspectors.

As CES said, I had my own capital and a LOT of my time invested, and ended up simply shutting down the operation. I personally know of 4 small producers in the Central Florida area who have shut down, and one small bottling/canning plant, all for the same reasons.

EDIT on rereading I realized that it looks like they took two separate actions, when in fact it was really the expansion of the interstate commerce clause that allowed them to force HACCP on everyone, so it's a two-for-one deal.

[Coito ergo sum]

Big business = Federal government.

Under the Repugnican system Big Business owns the Federal Government.

You are of the impression that under the current DemonRat system, big business does not own the federal government? Cough cough....solyndra...cough cough...bailouts...cough cough....billions funneled to banks and financiers...cough cough....stimulus money handed over and wasted...cough cough....crony capitalism....

I was awake when Reagan authorized the current fiasco.

He did it by decree? Or was it the overwhelmingly Democrat controlled House of Representatives and Senate that had a little sumpin' to do with it?

[MrJonno]

These are costs of doing business. And, what I've noticed from the left is a fairly cavalier attitude toward "costs of doing business." It's like, "oh, that's just a cost of doing business that the business has to deal with..." and hand wave it away. However, government policy in this regard, if too onerous, can drive lots of folks out of business, like laklak describes. Business is a risk. Laklak probably had a lot of his own money tied up in hard assets and at risk in terms of payroll and other fixed and variable costs associated with his business that he closed. At a certain point, the increase risk of loss just doesn't justify staying in the business. That doesn't help anyone.

Over regulate and all businesses go down, tax revenues fall and society falls apart but the sole purpose of governemnt/society should not to be allow businesses to succeed at any cost. If the only way a business can succeed s to treat their employees at an under acceptable standard then its better than business goes under and its employees are looked after us all (via welfare).

Acceptable standards are of course up to debate but not whether there should be one, fundamentally if you start a business and you employ someone you take on responsibilities not just for protecting your capital but that employees welfare . The employees obviously have a responsibility as well but its a shared one

[Gawdzilla Sama]

He did it by decree? Or was it the overwhelmingly Democrat controlled House of Representatives and Senate that had a little sumpin' to do with it?

The deregulation was the dream of his owners, and they worked hard for it. The safeties put in place after we figured out what caused Black Friday were removed on his watch. If you don't give him hell for that then you can't yell at Obama.