Par For My Course

For fifteen years I was one of three partners in a manufacturing business, a business that I helped start from scratch, a business that when I left had sales revenues close to twenty million dollars. 

 Before starting the company I met with two friends.  Each of them wanted to leave the company we were all working for.  The three of us knew that the company we were at would soon fold.  The owner had mismanaged the company into the ground, causing many to be fired.  Soon the owner would take the assets out of this failed company and go start another business.  We saw what was coming and so we decided it was time for us to set our sights higher and take care of our futures.

 In the failed company the three of us soon-to-be partners were the three people who knew how to make the equipment being sold.  And, though only one of us had a BS degree there were plenty years of experience between the other two partners. Each of us had met with customers and we knew manufacturing.  We didn’t know all there was to know about running a business but we did want to find out for ourselves. 

 My own experience developed from many years of electrical engineering and design in the manufacturing sector. Over time I managed groups of designers and electricians.  There were also many times when I was a welder, a fabricator, an electrician.  I taught myself how to use AutoCAD and Microstation CAD design software.  I taught myself how to program PLCs and computers.  I went to night school to learn accounting, economics and business.  I took math course, physics and welding. In order to commission equipment I traveled thousands of miles to customer sites across America, Mexico, Canada, and as far as Korea, Poland, Saudi Arabia and Brazil. I learned by applying myself to the task, by learning what I needed and simply by doing.

 After several after-hours discussions at a local bar the three of us decided which day we would leave the troubled company to start our own business.  Being integral to the functioning of the business our concurrent departures would mean that the company would rapidly fold. The company did close within a year.  We went off on our own with no nets beneath us and just our own will to make things happen.

 We began our business in a basement. We invested $3000.00 in start-up capital. We each claimed a share of equity in the new firm, incorporated as a Delaware corporation.

 Now I have to tell you, starting a business with nothing but sheer determination is not easy.  The risk of no immediate sales and therefore no paychecks for weeks and months is ever before you. With this in mind we began to solicit business by sending out business letters telling a broad spectrum of customers about our new venture. We even begged for business, often drastically discounting the sale just to get our foot in the door and to keep it there.

 While we advertised I also set up the computers and the accounting system using what I learned at night school.  I set up the accounts:  Accounts Payable, Accounts Receivable, Assets, Revenue,  W-4s, etc.   

 Over time (almost a year after starting) we received our first purchase order.  I had developed a small position indicating device that could be readily used in the plastics industry to control plastic sheet gauge – a necessary requirement for thermoforming companies. We sold one and then two. I was then sent to California to install the later-to-be patented device. I had to make sure that our product did what we promised it would.  Once it was proven we invoiced our first receivable.

 We slowly gained sales momentum from customers who knew our reputations and knew of our capabilities.  We sometimes over sold ourselves just to get in the door.  There were many quiet anxious days along the way waiting for something bigger to break.  When things did start happening we rented a small industrial building and set up what little we had. As orders came in and invoices went out we were then able to buy computers, software, drafting tables, welders, paint equipment, hand tools and a truck with our company name.

We soon hired staff:  a fabricator. As business continued to grow over a time , a seeming eternity for us with our shoe string budget, we added more and more people.  When I left the company there was over fifty employees on the payroll.  This company, currently housed in a 325,000 sq. ft. building with large overhead cranes, is now doubling it size, building an expansion on the same site.

 The reason I left the business and cashed out was simply the fact that the work of starting a new business is a 24/7 job.  This intensive venture took a toll on me and my family.  There were many nights away from my family.  There were many intensive phone calls with clients.  As the Vice president of Engineering I spent many hours trouble shooting customer problems in person or over the phone from home.  I spent a lot of time interviewing people and then hiring and firing as needed.  I supervised design work and managed over a dozen people, all engineers. I was on call constantly.

 In the early days of our company I multitasked.  There were only three of us and one of us had to go on the road to do the cold calling.  I stayed with my other partner and we did what was needed.  As an order came in I would create the electrical schematics on a drafting board, I would then order the parts. I would receive the parts, sort out the paper work, input accounts payable, print out checks on a line printer and then send out the checks to vendors. I would assemble the large-scale equipment by hand:  I welded half-inch plates of carbon steel to create structural frames; I assembled control panels and wired the instrumentation.  I also spray painted the finished products.  Before that I would power up and test the equipment.  I was front office, plant, truck driver, assembler, engineer and tired but excited.  I was working for myself and creating growing equity.  My piece of the pie was growing.

 Until you’ve done something like start a business from scratch you would have no idea how intense, exhausting, scary and pleasurable it is to make your way in this world with just the work of your own hands.  But the excitement doesn’t stop there.

 As the company grows you hire people.  But it is a scary proposition.  You know you need more help but you don’t know where or when the next order is coming from.  You bite your nails and finally say “OK, we need someone. Place the ad.”

 When you hire someone and train them you’ve given them hope.  At the same time your own stomach is wrenching with the fear that someday you may have to lay that person off if business drops off.  It is all risk, calculated risk and that is what entrepreneurs do best:  find a venture and put themselves and their money at risk in order to create something successful and to gain a return on their investment – an investment of dollars and tons of sweat equity.  Obama knows nothing about what I talking about.

 Obama risks nothing.  He finds safety in numbers, in government. He is the child of safety nets. His absent father gave him no guidance whatsoever about business. It is apparent from Obama’s biographies that Obama learned to hate anything which might smack of colonialism.  And Obama has wrongly conflated capitalism with colonialism.   Obama’s only claim to success is his community organizing.  We can see now that his organizing is nothing more than organizing taxpayer money to the benefit of his political gain.

 No government built our business.  Government with its ever-present paper work and regulations was ever the impedance to growing our business and hiring more people.  Government now, in effect, hinders human flourishing. And I don’t have to tell you that Barrack Obama wants more government and less independent success.  You’ll have to ask him why he hates business and demonizes success.

 Sweat equity built our successful business not government.  And it was not Obama, not Elizabeth Warren, not roads and bridges, not the IRS, not organized labor and not the three thousand dollars of start-up capital back in 1988. We built it with our own hands while paying corporate taxes up to 30%! Obama can kiss my sweaty ass!

 Listen Obama (I know I am speaking to deaf ears) – There is no sweat equity in golfing.”

******

Running On Empty

No, I am not talking about Obama’s campaign war chest.  The “class warrior” who recently made a jab at Mitt Romney with a silver spoon reference regularly charges “regular folks $1000 for a handshake at fundraisers” (see the Sunday April 22, 2012 Chicago Tribune column by John Kass linked in blue below). Class warfare depends on the treasure of the rich in so many ways!

 From Kass’s Sunday Trib column, Obama Ladles Up Hot Bowls of Class Warfare:

And, Obama is of the people, so please forget that presidential media guru David Axelrod just dropped $1.7 million on a gorgeous Chicago condo.

In America, only snobs and fools look down upon someone born poor.  It’s un-American.  But if your father’s poverty isn’t your fault, then, why should your father’s wealth be a sin?

The opportunity to seek wealth is why our people (Kass is Greek) came here, why they left their villages overseas to ride in steerage, seasick, eating black bread and spooning out the stew with wooden spoons, just on the chance that their grandchildren might hold a silver spoon someday…

Romney, of course, took great umbrage at Obama’s silver spoon crack, saying it was aimed at his father, former Michigan Gov. George Romney, a former president of American Motors.

“The president likes to attack fellow Americans,” said Romney on Fox News.  “He’s always looking for a scapegoat, particularly (those who) have been successful like my dad, and I’m not going to rise to that.”

I find both of them flawed.  Romney as the ring bearer for all that’s wrong with the corporatist Republican smothering of the conservative spirit, Obama as the keeper of the federal leviathan, feeding it as it grows larger, squeezing the life out of entrepreneurship.”

 There are two kinds of politicians:  those without personal wealth, and those with personal wealth.  Those with money don’t need politics to make more.  Those without money need friends as they climb the ladder of public service.”

Michelle Obama had such friends…

And the President had such friends.  One is named Tony Rezko.  He’s rotting in a federal prison, although it was Rezko and his wife who put together the strange deal that helped Barack and Michelle buy their dream house in Kenwood that they never seem to visit anymore.

In prison, Tony Rezko doesn’t use a silver spoon.  He uses a plastic fork.”

 Obama, via his constant “fair share” campaign speeches, relates opportunity directly to having money and not to liberty and self-determination.  How strange and how short-sighted this is. 

What Obama is really telling inner-city people is that they are not going to make it, they will not have opportunity until and unless they other people’s money in their pockets. This is “in your face” class warfare, blatant materialism and an obvious trashing of the human spirit.

Underlying Johnny-one-note-Obama’s fair share speeches is the same inane logic of the Left:  if someone has more that means that there must be less for you. But, life is not a zero-sum proposition.  Everyone can benefit from hard work and self-determination and not just those who already have done so and have earned money. 

It is those on the Left who spend all of their time trying to slice the current pie into exactly equal “fair share” pieces.  It is those on the Right who want to make a bigger pie so that everyone can have a big slice of it and can eat it in peace, free from the tyranny of big government.

 Obama’s implied message:  Forget contentment, you must have what others have or you are missing out, otherwise your treasure chest is empty.

 Now with White House silverware in hand, Obama spoons out the parasite-laden bread pudding of class warfare to those standing in the food lines willing to pay a $1000.00 a plate. He lectures to those anxious for any crumbs that may fall from the table of the Dear Leader and to those of the liberal media anxiously waiting another feeding frenzy.

I ask God for my daily bread and He provides.

Minimum Wage Or The Price We Pay For Stupid

I have noticed a definite pattern emerging ever since before the 2008 election of BHO:  many voters have given up thinking and have decided to vote for the popular shills of humanism, otherwise known as the educated elite.

 BHO, the POTUS, is surrounded by Harvard grads, each of whom has been steeped in liberal mores taught by educators who have risen to the level of their incompetence (the Peter Principle).  I like what Tomas Sowell, economist, said about these professors:

 “Too often what are called “educated” people are simply people who have been sheltered from reality for years in ivy-covered buildings.  Those whose whole careers have been spent in ivy-covered buildings, insulated by tenure, can remain adolescents on into their golden retirement years.”[1]

And, Walter E. Williams:

“People who denounce the free market and voluntary exchange, and are for control and coercion, believe they have more intelligence and superior wisdom to the masses. What’s more, they believe they’ve been ordained to forcibly impose that wisdom on the rest of us. Of course, they have what they consider good reasons for doing so, but every tyrant that has ever existed has had what he believed were good reasons for restricting the liberty of others.”

In my estimation the American voter, though often degreed, has become less educated and intellectually apathetic. This voter has become a stage-one thinker – someone who finds some humanist value in a policy, votes for the person promoting it and doesn’t want to think any further about it, believing that they have done their good deed for the day.  Yet, the policy does not operate in isolation and, typically, havoc and damage control ensues when the policy is implemented. Our nation is left ever more crippled.  The Minimum Wage Law (MWL) is one prime example of this stage one thinking implemented and voted for by people who let others do their thinking.

Thomas Sowell in his excellent book the Thomas Sowell Reader, a compendium of his many newspaper articles and essays, wrote an article titled Minimum Wage Laws. Here are some of his thoughts from that article to ponder deeply before the next election:

 “By the simplest and most basic economics, a price artificially raised tends to cause more to be supplied and less to be demanded than when process are left to be determined by supply and demand in a free market.”[2]

 “The unemployed are made idle by wage rates artificially set above the level of their productivity.  Those who are idled in their youth are of course delayed in acquiring the job skills and experience which could make them more productive – therefore higher earner – later on.”[3]

 “Although most industrial societies have minimum wage laws, not all do.  Switzerland and Hong Kong have been among the exceptions – and both have had very low unemployment rates.”[4]

 “Higher costs for a given quantity and quality of labor tend to produce less employment, just as higher prices for other things tend to produce fewer sales. Moreover, higher costs in the form of mandated benefits have the same economic effect as higher costs in the form of minimum wage laws.  The explicit minimum wage rate understates the labor costs imposed by European governments, which also mandates various employer contributions to pension plans and health benefits, among other things.  Europe’s unemployment rates shot up when such government-mandated benefits to be for by employers grew sharply during the 1980 and 1990s.”[5]

 Average hourly compensation in Europe of manufacturing employees in the European Union countries in general is higher than in the United States or Japan.  So is unemployment.”[6]

 “Labor unions also benefit from minimum wage laws, are among the strongest proponents of such laws, even though their members typically make much more than minimum wage rate.”[7]

 “Just as businesses seek to have government impose tariffs on imported goods that compete with their products, so labor unions use minimum wage laws as tariffs to force up the price of non-union labor that competes with their members for jobs.”[8]

 “…when all is said and done, most empirical studies indicate that minimum wage laws reduce employment in general, and especially the employment of younger less skilled, and minority workers.”[9] (emphasis mine)

Thomas Sowell’s article is chock full of empirical information and common sense economics.  I could continue to quote many of his insightful words.  I’ll provide one more series of quotes about minorities and the implementation of MWLs the past century:

 “Again, it is necessary to note how price is a factor even in racial discrimination…It was only after a series of minimum wage escalations began that black male teenage unemployment not only skyrocketed but became more than double the unemployment rates among white male teenagers.[10] (emphasis mine)

 Stage-one voting creates unemployment.  Obama, the educated One, Jesse Jackson and the Congressional Black Caucus should know the facts.   But in ignoring the economic data they choose “navel-gazing, hand-wringing or self-dramatization” to preach a Liberal Utopia that will never arrive on this earth. MWLs produce the opposite effect, in fact!

 Don’t ignore the data. Read. Understand. Think beyond stage-one.  Uncle Sam needs You more than ever.

Again, Thomas Sowell:

 “People who cannot be bothered to learn both sides of the issues should not bother to vote.”[11]

 


[1] Thomas Sowell, The Thomas Sowell Reader, p. 401

[2] Ibid., p. 108

[3] Ibid., p. 108

[4] Ibid., p. 109

[5] Ibid.

[6] Ibid.

[7] Ibid., p.110

[8] Ibid.

[9] Ibid., p.111

[10] Ibid., p. 115 & 117

[11] Ibid., p.397

Note:  Mitt Romney has come out in favor of auto-increasing the MWL.  I am voting Newt Gingrich in the Illinois GOP primary.

Update:  In a 02/07/2012 RCP article regarding Mitt Romney’s faux conservatism, Thomas Sowell said:

“Nor are such consequences of minimum wage laws peculiar to blacks or to the United States. In Western European countries whose social policies liberals consider more “advanced” than our own, including more generous minimum wage laws and other employer-mandated benefits, it has been common in even prosperous years for unemployment rates among young people to be 20 percent or higher.

The economic reason is not complicated. When you set minimum wage levels higher than many inexperienced young people are worth, they don’t get hired. It is not rocket science.

Milton Friedman explained all this, half a century ago, in his popular little book for non-economists, “Capitalism and Freedom.” So have many other people. If a presidential candidate who calls himself “conservative” has still not heard of these facts, that simply shows that you can call yourself anything you want to. “

Thoughts from Uncle Miltie:

The SuperPacked Candidate Will Stop Dragging My Heart Around

While the talking and tweeting heads split hairs over differences in GOP candidates I thought I might throw together the perfect Amalgamated Candidate, a conservative lingua franca Candidate made up of the salutary features of the current nominee field and a personally favored write-in.  The Amalgamated Candidate, synthesized with the DNA of Milton Friedman and Ronald Reagan, categorically rejects Obamic progressivism, Carter Malaise-ism, Soros Europeanization-ism, the Left’s Holier-than-thou-ism, etc. and has…

 …the looks and hair of Mitt Romney (this Mad Men ad model coupled with George W. Bush–ian business experience are the “electabilty factors so desirable to a Washington insider and puppeteer like Karl Rove);

 …Newt Gingrich’s intellectual prowess, his track record which is proven and his savvy in the political realm;

 …Rick Santorum’s heart for family values;

 …Jon Huntsman’s knowledge of the Chinese born of his ambassadorship and his ability to speak Chinese;

 …Ron Paul’s unequivocal passion for the Constitution and for smaller unobtrusive government;

 …Rick Perry’s devotion to God and to civic duty.

 All of the above embodied with Sarah Palin’s moxy and love for America.

Am I missing anyone/anything?