I think the purpose of life is to be useful, to be responsible, to be honorable, to be compassionate. It is, after all, to matter: to count, to stand for something, to have made some difference that you lived at all.
Leo C. Rosten
Uncivil Presidential Quote of the Day
"We've decided, let's let them do the right thing one more time. We're going to give them another chance to do their jobs by looking after your jobs. So this week, I'm asking members of Congress to vote. What we're going to do is we're going to break up my jobs bill. Maybe they just couldn't understand the whole thing all at once." - campaign stop, Asheville, NCMaybe Obama just couldn't understand this whole stimulus thing the last time it was tried (in 2009).
Taphandles' US Expansion: A Brief Case Example
Dr. Perry's excellent Carpe Diem blog featured this New York Times' piece. A former business consultant, Paul Fichter, was looking for a feasible business startup idea and came across a business, failing due to high labor costs, supplying tap handles for home breweries. Fichter targeted a market niche in decorative tap handles, creating prototypes out of his apartment, and marketing his products to brewers. The Washington state business started in 1999 and opened its Chinese factory in 2006; it employs about 30 people at headquarters and some 450 Chinese workers. Fichter was looking to broaden his promotional product mix to include business signs and displays; his original intent was to expand his Chinese operations to produce these but instead decided to open up a local factory expected to hire about 150 workers, recently laid off from related work from the construction industry.
What were some of the factors underlying Ficter's decision to build an American plant?
- Tax Changes. Cash/working capital is a constraint for small businesses. The ability to accelerate depreciation (due to last year's tax policy changes) meant that money being used to pay taxes could now be used for business purposes.
- Production-Specific Factors. The new product lines do not require labor-intensive hand-painting of the tap handles and thus could take advantage of increasingly affordable commodity labor saving technology (by a factor of 10). Shipping costs will be lower, particularly for these bulkier items, and it is easier to fulfill orders more promptly. There is an ample supply of relevant skilled American workers.
- Outsourcing Issues. The yuan has appreciated against the dollar, customers demand shorter order delivery times, labor costs are escalating, the supply of relevant skilled labor is limited, transportation costs are tied to an overall trend of rising energy costs, and American management doesn't have reliable, responsive Chinese ombudsmen, even for resolving business-critical issues like power outages.
Political Humor
"Warren Buffett’s company reportedly owes the IRS a billion dollars in back taxes. When he said he wasn't paying enough taxes, he wasn't kidding." - Jay Leno
[No word on whether Buffett is calling audits "financial weapons of tax destruction".]
"The Republican candidates are still looking for ways to stop Romney. See, it's hard to disagree with his positions — because as you know, he's taken every position." - Jay Leno
[Bill Clinton has filled in a lot of positions and emphasizes the need for flexibility.]
Musical Interlude: My Favorite Groups
Moody Blues, "Your Wildest Dreams". My favorite Moody Blues song, and it has to rate among my top 5 songs of the 1980's. It's also one of my favorite music videos. Memorable melody, arrangement, vocals, harmony, lyrics: the song captivated me the first time I heard it, and I've replayed it hundreds of times since. Whatever happened to the crushes and girlfriends of our youth? Do they ever think of us? Timeless...
