Tuesday, November 11, 2008

Part II: The Great Depression 2009

…First, you like the idea of making money from your product. But, you want to diversify and make more than just one watch thingy. Wall clocks. Time Pieces. Fine Jewelry with time pieces. Big velvet paintings of Elvis with a clock in the bottom corner. Then maybe instead of just one store, maybe a couple more, in different cities. So far, business is booming and people are loving their new watch thingys. (Some have even bought the Elvis clocks, too!)

Meanwhile: Uncle John is liking the idea of really sitting on his duff and making money. He starts thinking to himself….”Hmm… I could make a lot more money by acting as a bank myself to start-up businesses.” So, he begins a business a bank. He makes a lot of money by providing loans to others for businesses. Of course, in order to start up this type of business, he himself requires start up capital… he gets his from the Government.

The problem is, the Uncle John is a greedy old man that likes money more than anything. Small business he supplies capital are fine, but he wants to get into other areas as well, for bigger and fatter fish. So Uncle John gets into other loans. Things like, oh…Home Loans. Suddenly Uncle J is loaning monies out to big and small businesses, and mortgages. Problem is, CEO John realizes there’s more money lending to home seekers than to small businesses. Even with big companies, he has to wait for their quarterly profit reports to get his money…sometimes only once a year. Loaning money out for home loans he gets his money now.

Back at the “wristwatch thingy company”, things are also cooking along. But, you yourself have become a little greedy. After all, after this time you deserve a good life too huh? A wife. Some children. A couple of trips overseas. A nice house. All this requires MORE MONEY.

Well, it seems that an awful lot of people now are wearing your wristwatches and other companies too have sprung up as your competition. Especially some of these companies from overseas that are making the wristwatches at half your costs, and selling them at a fraction of what you can sell them. Well, some of this you can laugh off. After all, you’ve earned a solid reputation as a skilled watch maker and you know these “upstarts” are just flashes in the pan.
Still, being the cagey businessman you assume you are, you begin looking into ways of trimming your costs, so that you too may be competitive. After looking entirely at the numbers your accountant gives, you discover that your biggest cost is your employees! Why, the scoundrels are eating up nearly 50 percent of your earnings. Especially Igor…since he’s been there the longest, he’s making nearly as much as you are! Well, we’ll find a way to get rid of him!!

Then you hear about this outrageous new Federal law called NAFTA that completely exempts you from taxes if (ONLY IF!) you relocate some of your business in another country. No kidding? Well, you start out “outsourcing” you phone centers and service departments. Before long, you looking at relocating the whole kit an’ caboodle to a far off country called China….

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