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Say What?

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If you're waiting for the government to make you whole, move to Sweden!

As the current economic crisis worsens it is past time to take a good look at what is really going on. We are essentially dealing with a reappraisal of what things are worth, including your labor. In a nutshell value (or your real need) has been going south (no reflection on Southerners). To put it another way the things we formerly considered worth acquiring are costing more than we are willing to pay. You start holding on to your cash when (1) it seems limited or (2) when you may get a better deal by waiting. But wait, there is another argument worth making.

We have people running businesses who can only sell ice cream in the summer. We have managers, big and small, who are hitting the ceiling as in the Peter Principle.  We have both men and women trying to make a go of something when they can’t spell “bottom line,” much less figure it out for themselves. Now I am not talking about just the little guys. We seem to have folks in high places who considered last year’s bonus as some sort of stamp of approval when in reality they are more lucky than brilliant.

A case in point is the way newspapers are moaning and groaning about the loss of readership. Apparently it has never dawned on the publishers that there are alternatives that we consider more worth our time. The publisher that starts cutting down on the number of pages in his paper is in a death spiral. Look at it this way.

By reducing the size of the paper you are making it less worthwhile reading. Carried to the extreme the paper will eventually be only one page, at which point the bird cage liner will have to be a grocery sack.

The solution is to make any publication  more worthwhile reading. Instead of firing a few reporters, hire some really good ones (with or without a resume) who will generate stories not to be found elsewhere. Rather than can them just cut their pay to better reflect what they are worth in terms of readership.

If Starbucks is going to close a bunch of stores it has apparently never occurred to the brains that a cup of coffee is no  longer worth $3.50 or more. You figure out a way to make your customers able to come back, not go somewhere else or learn to do without.

The airlines are doing the same kind of a job. Instead of making flying a great experience between the Transportation Security Administration (government) and the plane owners (free enterprise) they have made flying a real hassle. Cutting expenses by doing away with the snacks and substituting a bag of peanuts (hopefully uncontaminated) is one sure way to get an F. Then start charging for baggage and you have another couple of  demerits. If the big boys play their cards right they can start using smaller planes and eventually may not have to bother with passengers at all. The railroads proved that works and that was 40 years ago.

In the days when I had to inspire my salesman I came up with this metaphor about hours, that they could use to encourage gasoline dealers to stay open longer.

A dentist graduates from the dental college and establishes his objectives including income. He surely but steadily achieves his goals. He then thinks it is time to join the country club so he can play golf with the other dentists, doctors and lawyers. The game is fun and in order to improve his handicap he has to play more and to do that he has to reduce the number of days his office is open. He also has to increase his fees to make up for the reduced income.

In time, the club really became important and his  handicap went down. Eventually the dental practice was reduced to a few old timers on whom the doctor became so dependent that a life insurance policy on them wasn’t such a bad idea. In other words, you can finesse yourself right out of business or work. The Boeing workers who struck last year should be having second thoughts, if they are capable. Can it be possible that the head of the local convinced his members that if the company got in trouble they had no ownership? Try that one out on the GM line workers.

In 1935 when I started earning a living they didn’t lay people off, they just adjusted the salaries to reflect what the market would support. When what you make won’t sell the value of the labor involved just went down.

And lastly... if you don’t like looking at your books it is past time to start liking them. If you don’t know how to cost the product you are making you had better look for a crash course in cost accounting. If you don’t have an intimate relationship with your checkbook take the time to do so. The name of the game has to be making the system work not pumping in government funding. If you are waiting for the government to make you whole, move to Sweden! No matter what the Messiah says there is no free lunch and that includes yours and mine.

Getting better acquainted with the basics can be refreshing. This is the real world!

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Author info

Paul Rechnitzer Paul Rechnitzer Transplanted 30 years ago, Paul is a retiree from the oil business who knows no other place he would rather live and breathe local history.

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