But not great yet. Getting there.
Wednesday, December 17, 2008
Sunday, December 7, 2008
The auto bail out, put in small town perspective
Let's suppose the town of Keithland, population 3000 has a grocery store, Jim Dixie. It serves the population of Keithland and provides jobs, about 20 full and part time employees. Jim's is a great place to work. You work hard, but the pay is 1.5-2x higher than you can get anywhere else for unskilled labor work, and best of all you can't get laid off! Well, technically you can, but you still get paid; you just show up for work and sit in the breakroom all day and still get paid for months, even years! They also provide a pension beyond belief, lots better than anyone else in America. What does it matter, the company can afford it, the guy at the top just bought himself a brand new Cadillac Escalade.
As time goes by things change without Jim Dixie changing with them. A Super Walmart went up in Esteeville, 10 miles away. Jim Dixie never really carried a lot of low fat foods, because it was just a fad anyway. The economy slowed down, more and more people quit buying at Jim Dixie because they were overpriced for what they sold. Jim Dixie was facing a finacial crisis, so ownership decided it needed to improve the cash flow situation with a bailout from the city.
Jim Dixie's basic arguement was this: We are a vital part of Keithland and we are a big part of the community. We provide something vital, and if we go under there are a lot of people that are going to be unemployeed, and that for sure is going to put a big dent in the city of Keithland's budget.
So the city fathers put their head together, and ask the owner: "How much do you think you need to keep afloat?"
JD: "I'm thinking about $730,000."
Fathers:"Wait a minute, what's your business worth anyway?"
JD:"Well, the building and fixtures are worth about $500,000, but we have to pay out a lot in pensions, bonuses, advertising, etc. We can't lay anyone off, and we promised the shift managers big bonuses"
Fathers:"Wait a minute. How are things going to improve so the city doesn't get stuck with the tab?"
JD: "The grocery store in this town is vital! Just think of the jobs lost and what that will do to Keithville if we have to go bankrupt!"
Fathers:"Well what happens if you go bankrupt?"
JD: "Well, someone else will come along and buy it."
Fathers: "So what you're saying is that someone will come along and probably do a better job at staying competitive with Super Walmart down in Esteeville."
JD: "Maybe, but we've promised all these employee's huge bonuses and overtime and sitting around doing nothing and getting paid. That's all going to go away!"
Fathers: "??"
This is in a nutshell what the conversation is like in the auto industry. This particular bailout would cost the city of Keithland about $250 per person in the city. I intentionally made the number of employees the same percentage of Keithland as what the auto industry is in the United States.
As time goes by things change without Jim Dixie changing with them. A Super Walmart went up in Esteeville, 10 miles away. Jim Dixie never really carried a lot of low fat foods, because it was just a fad anyway. The economy slowed down, more and more people quit buying at Jim Dixie because they were overpriced for what they sold. Jim Dixie was facing a finacial crisis, so ownership decided it needed to improve the cash flow situation with a bailout from the city.
Jim Dixie's basic arguement was this: We are a vital part of Keithland and we are a big part of the community. We provide something vital, and if we go under there are a lot of people that are going to be unemployeed, and that for sure is going to put a big dent in the city of Keithland's budget.
So the city fathers put their head together, and ask the owner: "How much do you think you need to keep afloat?"
JD: "I'm thinking about $730,000."
Fathers:"Wait a minute, what's your business worth anyway?"
JD:"Well, the building and fixtures are worth about $500,000, but we have to pay out a lot in pensions, bonuses, advertising, etc. We can't lay anyone off, and we promised the shift managers big bonuses"
Fathers:"Wait a minute. How are things going to improve so the city doesn't get stuck with the tab?"
JD: "The grocery store in this town is vital! Just think of the jobs lost and what that will do to Keithville if we have to go bankrupt!"
Fathers:"Well what happens if you go bankrupt?"
JD: "Well, someone else will come along and buy it."
Fathers: "So what you're saying is that someone will come along and probably do a better job at staying competitive with Super Walmart down in Esteeville."
JD: "Maybe, but we've promised all these employee's huge bonuses and overtime and sitting around doing nothing and getting paid. That's all going to go away!"
Fathers: "??"
This is in a nutshell what the conversation is like in the auto industry. This particular bailout would cost the city of Keithland about $250 per person in the city. I intentionally made the number of employees the same percentage of Keithland as what the auto industry is in the United States.
Saturday, November 22, 2008
It's the crazy season
Here we go!
Time for the traveling to begin, and like clockwork the first thing I see this morning is snow on the ground. Yes, it is dance and cheer season! Maybe it won't amount to much, but it could be a long drive to Omaha today.
As much as I hate the long drives, the estrogen overload, the missing football every other weekend, etc, there's nothing more fun than watching your kid do well on something they work hard at.
But this weekend is Omaha. Ugh. About the only thing we can do in Omaha with the little free time we get will be to go to the Upstream Brewery and get the open face sandwich we've been craving. That, or go hang at the mall where the kid opened up with the gun last Christmas. :)
Time for the traveling to begin, and like clockwork the first thing I see this morning is snow on the ground. Yes, it is dance and cheer season! Maybe it won't amount to much, but it could be a long drive to Omaha today.
As much as I hate the long drives, the estrogen overload, the missing football every other weekend, etc, there's nothing more fun than watching your kid do well on something they work hard at.
But this weekend is Omaha. Ugh. About the only thing we can do in Omaha with the little free time we get will be to go to the Upstream Brewery and get the open face sandwich we've been craving. That, or go hang at the mall where the kid opened up with the gun last Christmas. :)
Friday, November 21, 2008
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