"I have a theory about this that postulates that we elect presidents like most of us date."
HK Turnaround Blog RSS Feed Business Blog
4 December 2008 Learn More Is Your Home an Investment? 'The collapse in home values is seen by most people if recent polls are to be believed as a temporary problem that will go away soon.'
27 November 2008 Learn More Meet Me Half-way 'In your own business, if you are in the position of needing to go to your lenders or shareholders for more money to get through the crisis, you need to demonstrate buying the ticket first.'
20 November 2008 Learn More Code Words and Good Questions 'One of the problems with trying to figure out what exactly is going on right now is decoding what it is that our leaders are saying.'
13 November 2008 Learn More Imagine 'Imagine that you opened a business and at first your product was unique and you had a monopoly on its production. Imagine that people just loved your product and couldn’t get enough of it. Imagine that as a result you got very rich.'
6 November 2008 Learn More No Percentage in Pessimism "There is just no percentage in going negative right now unless you enjoy wallowing in misery."

Timing is Everything

Timing is Everything

This week the federally mandated minimum wage goes from $5.85 per hour to $6.55.  Next summer it climbs to $7.25.  Speaking as an employer who has never paid minimum wage to anyone working for me, ever, it makes no difference to my business.  However, I don’t run a restaurant, convenience store, or farm just to name a few affected businesses.  If I did I might ask how increasing my labor costs in a time of looming recession and inflation is a smart thing?  After all, if my business was suffering I would be looking to cut expenses and not increase them.  That always starts with looking at my payroll.  If I have employees “on the bubble” so to speak, an increase in their wage of over 11% might be reason enough to just let them go or cut back their hours.  My only other choice would be to pass along the increase to my customers and that is never the best thing to do in a slow economic period.

Now, I bring all of this up in this election year not because I want to go on and on about minimum wage, as like I said, it really does not affect me personally.  I just want to point out that no matter how well meaning, there are always unintended consequences to what the government does.  When will people get it through their heads that the federal government in particular is a sledge hammer, not a scalpel.  It is just too damn big to be wielded carefully.  So, when it tries to make changes in our economy, they are never minor and at least to my mind, always counterproductive versus just leaving things as they are and letting the free market do its thing.

So here we are in an election year listening to the candidates for president of both major parties drone on about how they will fix everything and the world will be a brighter place for them having been elected.  I have a theory about this that postulates that we elect presidents like most of us date.  We go into it seeing only their “dating manners” and hearing what we want to, then we see who they really are after we tie the knot, and feel betrayed when they don’t turn out to be either our Knight in Shining Armor or our Fair Princess.  It always ends up that way as these figures are the stuff of fairy tales.  Real life is so much more stark, and well, real.

Here’s a thought; we should stop trying to fix things and holding hearings and just let the market do its thing.  Oh sure, people will be hurt in the process.  That is the truth whether we meddle or not and things will still be better for the vast majority of us.  The enemy of good is perfect.  The former is prevented by the unattainable attempt to achieve the latter.

Posted by Herb Kay on Thursday, July 31, 2008

Post Your Comments

If you would like to post comments to this blog entry, please login or register for free.