An economist's review of Obamacare

[deepsouth]

Re: An economist's review of Obamacare

JSJS24- you are correct. My parenjts both own their own companies and that is the solution to the problem if this passes. Copanies that claim to just be breaking even are either paying bonuses and hiding money elsewhere otherwise they will only operate that way so long before cuts are made(usually personel) to make them profitable again

[trip]

Re: An economist's review of Obamacare

There's nothing wrong with your analysis of a business, and that's probably what you would do. Now, of course every year brings different challenges. With your example, I'm assuming you provide no heatlh care, for that amount 3200, you could provide it, and not pay the tax, and cut compensation.

I said two things, one thing, not all companies are profit oriented, jeeze, how did gm go on for twenty years, and also the airlines, if you think board of directors care about shareholders, or the people at the top, that is not how I see it.

I also said, I wanted to "discuss & question" the guy on high value employee concept. I would be interested in how he see's that working, because intrinsically, logically, I don't see how it all ties together.

Mechanics that are paid fifty an hour is an ineficient solution versus some guy at ten an hour, also, mechanics will not want to do that work because most are on bonus......so you end up with more problems then a viable solution.


As I said, first rule in business is if you are at the top pay yourself first, which is why you have all of these public companies with government support, that are losing money and the big boys are getting big bonuses.

[JsJs24]

Re: An economist's review of Obamacare

There's nothing wrong with your analysis of a business, and that's probably what you would do. Now, of course every year brings different challenges. With your example, I'm assuming you provide no heatlh care, for that amount 3200, you could provide it, and not pay the tax, and cut compensation.

I said two things, one thing, not all companies are profit oriented, jeeze, how did gm go on for twenty years, and also the airlines, if you think board of directors care about shareholders, or the people at the top, that is not how I see it.

I also said, I wanted to "discuss & question" the guy on high value employee concept. I would be interested in how he see's that working, because intrinsically, logically, I don't see how it all ties together.

Mechanics that are paid fifty an hour is an ineficient solution versus some guy at ten an hour, also, mechanics will not want to do that work because most are on bonus......so you end up with more problems then a viable solution.


As I said, first rule in business is if you are at the top pay yourself first, which is why you have all of these public companies with government support, that are losing money and the big boys are getting big bonuses.

A lot of small businesses do not provide health care, and if they do provide it it is not based off of the employee salaries. That is another big problem with this bill, it is based off of a fixed percentage of your salary, thus the more you make the more the employer or you pay, regardless of your health. That is ridiculous.

Your view of businesses and profits is distorted. A public company has to worry about profits otherwise people will not be as apt to invest in it. Also, those who are retired and invested in it depend on its growing. Of course, growth increases revenues which is essential, but it takes profits to increase size and improve products. You keep using GM and the Airlines as an example and those are poor examples. They are affected by government regulations and unions and at the same time helped by the government if times get tough and they are on the brink of failing. GM is already bailed out by the government and many people will not invest in them ever again. I won't even by a car made by GM or Chrysler ever again, as I want nothing to do with helping a company run by the government. Step back to reality Trip and realize that the majority of businesses are small and medium sized, not the corporate giants you keep referring to. GM and the Airlines make up an extremely small percentage of the workforce. Assume 100,000 small businesses lay off 5 workers each on average and you are left with 500,000 unemployed, on top of what the giants will lay off. Assume another several thousand will go out of business all together and lay off all of their workers, perhaps another few hundred thousand. The numbers could be staggering, but it is difficult to predict what those numbers will be. At any rate, those jobs will be lost and not replaced. Right now we are facing a lack of growth in the small business sector because business owners fear what policies will come out from this administration and fear of higher taxes and mandatory health care taxes. Thus, businesses are playing it safe for now.

[3Vandoo]

Re: An economist's review of Obamacare

Thank you for removing that. Not sure if that was my actual IP or not, and maybe you meant no harm but I just don't want that stuff posted on the board. If it wasn't my IP then sorry for over reacting.

Fuzo removed it,

no one part you can see it, but that the same info any site have access through your browser

[JsJs24]

Re: An economist's review of Obamacare

Fuzo removed it,

no one part you can see it, but that the same info any site have access through your browser

That was a good one and you got me obviously..lol.

[trip]

Re: An economist's review of Obamacare

Well, I've done quite a bit of small business consulting.

4 out of 5 small business's fail within the first five years, that is 80%, nor from lack of expertise, but lack of sales

taxes, small business people rarely consider taxes as anything more than a cost of doing business, a line item on the sheet

50% of people have a desire to run there own business's

there is a heiarchy in business, take a huge market and it breaks down

1. most market share, 5-6% profit
2. guy similar
3. 7-8%
.....
10. might be as high as 30-40%

i'll use soda's as an example

coke, 36 billion in sales, probably books a profit after all costs of 2 billion

now, jones soda which sells 12 million, might make 2 million

the difference long term is structure of systems set up to do x amount of volume, and over time there are inherent risks etc.

what is cokes goal? not too lose market share, and find new ideas too deploy capital too, they are about as profitable as they can be due to supply demand constrainst, coke can't double prices, well, they could, yet, they'd lose volume and go bankrupt trying support the systems they've built up

my point is that it's not as easy as black and white, a blanket statement

are bankers worried about making profits now? is the small business man, small guy is concerned about sales sales sales, small bizz for the most part, unless there over 50 million in size, which is the line a break point for access to capital, almost always are running a tight and lean ship at the margins

fwiw, small bizz's

1. anything less than a mil is almost micro
2.5-10
3. 15-25
4. 35 ish
5. over 50

[FUZO]

Re: An economist's review of Obamacare

4 out of 5 small business's fail within the first five years, that is 80%, nor from lack of expertise, but lack of sales

And with this scum bag trying to ruin our country this will be even worse now for small businesses

[JsJs24]

Re: An economist's review of Obamacare

Well, I've done quite a bit of small business consulting.

4 out of 5 small business's fail within the first five years, that is 80%, nor from lack of expertise, but lack of sales

taxes, small business people rarely consider taxes as anything more than a cost of doing business, a line item on the sheet

50% of people have a desire to run there own business's

there is a heiarchy in business, take a huge market and it breaks down

1. most market share, 5-6% profit
2. guy similar
3. 7-8%
.....
10. might be as high as 30-40%

i'll use soda's as an example

coke, 36 billion in sales, probably books a profit after all costs of 2 billion

now, jones soda which sells 12 million, might make 2 million

the difference long term is structure of systems set up to do x amount of volume, and over time there are inherent risks etc.

what is cokes goal? not too lose market share, and find new ideas too deploy capital too, they are about as profitable as they can be due to supply demand constrainst, coke can't double prices, well, they could, yet, they'd lose volume and go bankrupt trying support the systems they've built up

my point is that it's not as easy as black and white, a blanket statement

are bankers worried about making profits now? is the small business man, small guy is concerned about sales sales sales, small bizz for the most part, unless there over 50 million in size, which is the line a break point for access to capital, almost always are running a tight and lean ship at the margins

fwiw, small bizz's

1. anything less than a mil is almost micro
2.5-10
3. 15-25
4. 35 ish
5. over 50

Trip, you keep using an academia approach when it really only requires common sense. My brother is a PhD Economist, who teaches entrepreneurship and sees it as clearly as I do. Why do you continue to pull these statistics and numbers on me. The plain and simple truth is so easy for me to grasp: you lay an extra tax on businesses and in return they lay people off or go out of business. This is indeed common since, but you are making it out to be rocket science.

You talk about profits as if they are not even considered at a large company. Have you ever worked for a Fortune 500 company? I was in sales for one, and everybody consumes their products often, though I don't want to mention the name for privacy reasons. Our number one goal as a sales force was to increase the profits of the company. Had we said suggested it wasn't possible we would have been fired I assure you. I can't believe you actually believe that large companies do not want to make profits. I hope you aren't telling the businesses you're consulting that profits aren't important. You see, when you say things like this, that is when I wonder if you are a socialist liberal. And by the way, this is no longer worth debating because you will never convince me otherwise. I see this as clearly as the sky is blue and know of no other way to see it.

Hmm, I take more of your money while you continue to generate the same revenue (if you're lucky because other businesses are affected) and you are going to continue to employ the same amount of people, not cutting costs whatsoever. Interesting.

[trip]

Re: An economist's review of Obamacare

hmmm, let's see 80% of them folks fail, now, why is that, was it TAXES

the cost of doing business is the cost of doing business, a business is always focused on cutting costs over time in lot's of different area's

jeeze, CEO's of major corporations want out of providing healthcare, they are sick and tired of it, they have been for 20 years, they've also been dumping pensions,

fwiw, it's not academia, those are facts, and it's factual that different folks like different strokes

oh, i have no idea what you sold, if it was a one time buy, yeah, they tie it too profits, if not my guess would be they were more concerned with sales volume

profits are tied to the S curve, and all along that curve are lot's of hidding places for costs the bigger the volume

[JsJs24]

Re: An economist's review of Obamacare

hmmm, let's see 80% of them folks fail, now, why is that, was it TAXES

the cost of doing business is the cost of doing business, a business is always focused on cutting costs over time in lot's of different area's

jeeze, CEO's of major corporations want out of providing healthcare, they are sick and tired of it, they have been for 20 years, they've also been dumping pensions,

fwiw, it's not academia, those are facts, and it's factual that different folks like different strokes

oh, i have no idea what you sold, if it was a one time buy, yeah, they tie it too profits, if not my guess would be they were more concerned with sales volume

profits are tied to the S curve, and all along that curve are lot's of hidding places for costs the bigger the volume

Large companies will eventually stop providing health insurance if there is a government option, then we will have a single payer plan.

I will take blame for using the word profit when really I should be saying revenue. But either way, in the end it the bottom line that is affected. Higher revenues yield higher net earnings, which is profit, but not profit "margin."

I am now going to do more of my own research on this for now. I don't doubt that you may be accurate in a sense, but I believe we are misunderstanding each other with respect to the wording. I think you are referring to the profit margin whereas I am talking revenues, which equates to more profits, not higher profit margin. If company x has $1 million in revenues at a 20% profit margin, then increases the revenue to $1.5 million with the same 20% margin, then the margin is the same, but revenues increased $500,000. Thus, the amount of net profit for company x is now higher than previously considering all other factors remained the same, such as the number of employees.

But yes at the company I worked we had to increase sales/revenue. My ratings were based off of how much I increased the sales in my area. Now, our company was a 6 billion dollar company with a sales force of 200+ full time and about the same part time, our product was carried everywhere, my job was to increase the amount they bought from us. Yes, the profit "margin" is still the same on all of the products, but the increased revenue results in higher net revenues and makes my job more valuable to the company. Had I not increased the sales there would be no rational reason to keep me on board. Thus, the sales force increases the revenue which makes it valuable to have a sales force.

[JsJs24]

Re: An economist's review of Obamacare

Well, I've done quite a bit of small business consulting.

i'll use soda's as an example

coke, 36 billion in sales, probably books a profit after all costs of 2 billion

now, jones soda which sells 12 million, might make 2 million

the difference long term is structure of systems set up to do x amount of volume, and over time there are inherent risks etc.

what is cokes goal? not too lose market share, and find new ideas too deploy capital too, they are about as profitable as they can be due to supply demand constrainst, coke can't double prices, well, they could, yet, they'd lose volume and go bankrupt trying support the systems they've built up

my point is that it's not as easy as black and white, a blanket statement

Yes it is a black and white statement. It is the easiest thing in business to understand. Your role as a business owner or CEO is to increase revenues, increase market share, remain competitive and beat the other competition. If you are a public company you sure as heck better worry about this or you will have a hard time keeping investors on board. Why do you think GE stock is so worthless? Worthless CEO who cares nothing about investors and everything about politics. Thus, the share has hit all time lows making it one of the worst companies to have invested in.

Also, Coke better care about increasing revenue or good luck keeping investors. Do you not invest in the stock market. What do you read before investing in a company? Don't you read their quarterly reports and keep an eye on their earnings and losses. Coke spends money on advertising, why do you think that is? It's to increase their market share. They also come out with new products such as energy drinks to increase market share and revenue.

Profit Maximization - total revenue–total cost method relies on the fact that profit equals revenue minus cost, whereas marginal revenue–marginal cost method is based on the fact that total profit in a perfectly competitive market reaches its maximum point where marginal revenue equals marginal cost (wiki).

I am referring to the first method in my argument that added health care taxes will decrease the profits of a company. Added taxes increase the fixed costs which affects the profit.

Profit margin is the following:

Net profit margin = net profit (after taxes) / revenue X 100%

Of course, you would be correct in asserting that profit margin is not affected, however profit as referred to under the total revenue-total cost method is affected. Thus, supporting my point that a company must remain profitable, and works to increase profits via higher revenues.

[trip]

Re: An economist's review of Obamacare

lol, i'm not debating you have too have profits, or what the definition is, how folks percieve those and account for those over time can be looked at a hundred different ways

fwiw, i've worked for 1 fortune 500, umm, merrill lynch, now there only concern use to be "the bank", how much money investors park with them, on average enough money moves on a yearly basis, there cut is 1.5%, now if you are the biggest on on the block, which merrill was, and why they were bought by bank of america is because there bank was 1.5 trillion, now of course stan lynch the new ceo who came in in 2002 wanted to be more profitable then they had been for 70 years, his idea, ummmm, sub-prime, it only took two years too destroy the company with 40-1 leverage, at 1.5% revs were approximately 15 billion of which 4 billion went to the bottom line, ie, profit, he bet it all on black and lost, and every knew what he was doing, cause they all were doing it

i worked also for a fortune 1k company, a private 400 million 80 year old private company that was bought out by a conglomerate that eventually had 125 divisions and 7 billion in revenue, those last 40 aquisitions didn't work out too well, and they robbed peter too pay paul, and ended up gutting alot of the companies and selling them off,

GE worthless, ummmm, great industrial engineering products, no. 1 or no. 2 in many area's, starting in 2006 they have struggled severly in medical products with snafus, not getting mgf facility approvals, etc...........mainly though they had GE Finance which held 585 billion in loans going into 2008, essentially a bank without depositors

invest, hmmm, not really, i buy equities and sell em, what do i read before investing, hmmmm, depends, generally though, stocks do not move, they are moved, so i'm more strategy of price and time oriented

[JsJs24]

Re: An economist's review of Obamacare

lol, i'm not debating you have too have profits, or what the definition is, how folks percieve those and account for those over time can be looked at a hundred different ways

fwiw, i've worked for 1 fortune 500, umm, merrill lynch, now there only concern use to be "the bank", how much money investors park with them, on average enough money moves on a yearly basis, there cut is 1.5%, now if you are the biggest on on the block, which merrill was, and why they were bought by bank of america is because there bank was 1.5 trillion, now of course stan lynch the new ceo who came in in 2002 wanted to be more profitable then they had been for 70 years, his idea, ummmm, sub-prime, it only took two years too destroy the company with 40-1 leverage, at 1.5% revs were approximately 15 billion of which 4 billion went to the bottom line, ie, profit, he bet it all on black and lost, and every knew what he was doing, cause they all were doing it

i worked also for a fortune 1k company, a private 400 million 80 year old private company that was bought out by a conglomerate that eventually had 125 divisions and 7 billion in revenue, those last 40 aquisitions didn't work out too well, and they robbed peter too pay paul, and ended up gutting alot of the companies and selling them off,

GE worthless, ummmm, great industrial engineering products, no. 1 or no. 2 in many area's, starting in 2006 they have struggled severly in medical products with snafus, not getting mgf facility approvals, etc...........mainly though they had GE Finance which held 585 billion in loans going into 2008, essentially a bank without depositors

invest, hmmm, not really, i buy equities and sell em, what do i read before investing, hmmmm, depends, generally though, stocks do not move, they are moved, so i'm more strategy of price and time oriented

I was looking forward to your reply..lol. It seems we understand each other more clearly now.

Bank of America did consider purchasing Merrill, however they changed their mind later on due to the "devastating loses" at Merrill Lynch according to Ken Lewis (CEO of BOA). Henry Paulson threatened to remove the board and management of BOA if it backed out of its deal to acquire Merrill Lynch. Paulson said he made the threat at the request of Bernanke. You can read the article about it here:

http://www.washingtonpost.com/wp-dyn/content/article/2009/04/23/AR2009042302461.html

This should have been illegal and provide grounds for removal of the threatening parties, but of course it is typical politics as usual in Washington.

As for GE, I did not mean they were not a good company, in fact I believe they had always been one of the greatest companies to invest in. However, the current CEO Jeffrey Immelt has performed terribly. I believe he holds his political ideals in higher regard than the performance of his company. Also, he is working with Obama on clean energy technology and getting contracts from the government to the tune of billions of dollars. He also controls NBC, thus one of the prime reasons why their news channels are extremely biased with leftist views and propaganda. He had even ordered the networks to "go easy on Obama" according to a former employer there. I wrote a little bit about this today on my blog actually.

Working in the aeronautical industry I am very well aware of some of the great products GE puts out, especially their turbo fan engines for aircraft. Yet, the stock has performed poorly the last 2 years. Future growth for GE however will be due to the green industry it represents with the aid of the government.