The Uncertainty

[Gaspar]

Expressed in a very non-partisan way.  Just the facts of the matter.

This guy employs 70,000 people.

Interesting that his advisor gave him a 7%-35% range on the added costs under Obamacare.  One of my clients (one of Tulsa's largest employers) is budgeting 8.5%-33% based on their consultant's recommendations.

[TheArtist]

  They mentioned unions as being an uncertanty.  Interesting. 

You know its fine with me if these big corporations decide not to expand because they are too busy looking at graphs and scratching their heads.  That just leaves more opportunity and makes it easier for us little guys to start new businesses or expand, yaaaaay!   Which is exactly what I have been working on these last few months.

[AquaMan]

  They mentioned unions as being an uncertanty.  Interesting. 

You know its fine with me if these big corporations decide not to expand because they are too busy looking at graphs and scratching their heads.  That just leaves more opportunity and makes it easier for us little guys to start new businesses or expand, yaaaaay!   Which is exactly what I have been working on these last few months.

Good attitude. Small business makes up most of employment in America yet we fret over what soul-less, heartless, disloyal, number crunching corporates belch out about labor, regs and taxes as though they were invented by Obama. Non-partisan my butt. Everything nowadays is partisan.

I remember a professor who told me once that a lot of businesses spend an inordinate amount of time and resources on avoiding taxes, regs and labor, while their competitors concentrate on serving their markets. You are what you pursue. I am planning my retirement business now as I am not one of those corporates who will retire and play golf and the market the rest of my life. I'll work till I drop. Or in my case till I float. Face up. Smiling.

[Gaspar]

  They mentioned unions as being an uncertanty.  Interesting. 

You know its fine with me if these big corporations decide not to expand because they are too busy looking at graphs and scratching their heads.  That just leaves more opportunity and makes it easier for us little guys to start new businesses or expand, yaaaaay!   Which is exactly what I have been working on these last few months.

You do have a point.  I was looking at some of the statistics from Texas this morning, trying to figure out why they've grown so much when the rest of the country has faltered, and it was not what I expected.  I figured it was growth in the energy sector, but most of their growth is in small upstart "mom & pops" businesses.

While the big companies hold back cash and brace for impact, many of the people they let go have take the opportunity to follow their dreams.  This happened in other states too, but not to the degree that it did in Texas, and certainly not enough to have much of a positive impact on their economy.

There is nothing like the freedom of being your own boss, and building your own business.  A small business enjoys the ability to fly under the radar.

Unfortunately some people aren't built for entrepreneurship. They value security over opportunity and don't feel that they have the freedom to take the risks associated with building a business.  These are the people who suffer the most in this economy.  Many of them look to leaders in business to provide security for them in the form of a job.  The most unfortunate of these people look to government for security.  It's a balance that will always be there.  The problem arises when a majority begins to look at government as their sole means of security and regards private industry as nothing more that a teet to drink from.

[we vs us]

I can't watch the vid at work but if it doesn't include the disintegrating Eurozone, the debt ceiling debacle and the intransigence of the Tea Party, and in general the inability to get past the GOP obstructionism, as well as the general fear that a slowing economy is causing amongst pretty well everybody, then it sure as shooting is partisan. 

[Conan71]

I can't watch the vid at work but if it doesn't include the disintegrating Eurozone, the debt ceiling debacle and the intransigence of the Tea Party, and in general the inability to get past the GOP obstructionism, as well as the general fear that a slowing economy is causing amongst pretty well everybody, then it sure as shooting is partisan.  

No, but what is most important in Gapar's initial post is still a non-partisan fact and something I've stated repeatedly:  Get rid of the uncertainty this administration has caused and I think you would see job growth.  A 25 to 28% swing on the unknown costs of a new federal mandate on employers which is directly tied to payroll is a huge unknown.  That's a frightening metric.  If the CFO of a 70,000 employee company still has no idea what the additional costs are, that means there's probably no one in the federal government who can tell you either and that's just plain scary when it comes to job creation.

Why would you hire new people if there's a new, unknown cost getting ready to hit your business in the next year or two?  It matters not to me that a Democrat President and Congress passed this, I'd say the same thing if Republicans had.  I simply don't understand how anyone can be the least bit miffed or confused as to why more jobs are slowly bleeding off out of the country.  A business has got to be competitive to continue to sell their goods and stay in business.  If labor costs are going to necessarily increase the COGS as much as 25%, it's time to start looking for a less expensive labor pool.

FMC and I are considering a business opportunity, but the problem is, we have no idea what additional costs to expect in the coming years as far as payroll costs, so we might as well keep doing what we are.  So much for entrepreneurship!  Or at least if we do this opportunity, we may elect to take a far more active role in the business to help contain costs, but it might mean there's at least two NEW jobs we wouldn't create.

[Gaspar]

I can't watch the vid at work but if it doesn't include the disintegrating Eurozone, the debt ceiling debacle and the intransigence of the Tea Party, and in general the inability to get past the GOP obstructionism, as well as the general fear that a slowing economy is causing amongst pretty well everybody, then it sure as shooting is partisan. 

No, he's just coming at it from a strict numbers standpoint. He's not assigning blame, simply stating how his company has to make decisions based on a 5 year plan and the advice.  In fact, economic issues related to the above are not the primary uncertainty he is siting.  He did cite some of the new regulations related to carbon emissions and EPA standards that will affect his budgeting for transportation, heating & cooling, but that is relatively easy to forecast and not a major concern.

His primary concern is that currently he is spending $ 90 Million a year on health insurance and his consultants say that he can expect that to increase between 7.3% and 35.1% over the next 5 years.  The inability for consultants to render an accurate forecast is the primary source of caution.

This is exactly what we hear from our clients, and the primary reason they are willing to invest money in process improvement over labor or expansion.

[AquaMan]

Business is uncertainty. You make a 5 year plan because you need some framework to operate within. But to think that plan is anything more than a guess, an educated guess, is not correct. You must have some insights when forming the plan but the assumptions are like a weatherman making a long term prediction. They are based on voodoo as much as facts. I never thought IBM, Sears, etc. would fade, neither did they.

Has anyone considered that a lot of the uncertainty is based on every Republican's pledge that the first thing they will do is repeal just about everything the Obama administration has enacted?

That they will totally eviscerate labor and return a lot of responsibilities for social programs to the states? That they will steadfastly refuse to balance off debt reduction with any increase in revenue? Those are huge uncertainties because no one really knows if the T-Party and the current wave of Republican's are capable of winning the next elections. You guys should be livid over their intransigence and threatening of those assumptions.

Conan, you are correct in your assessment of going in to business for yourself. If you cannot fathom yourself dealing with such uncertainties it may not be for you. And I don't mean that in a disrespectful way. You obviously are smart enough and have the spirit. I agree with Gaspar that a lot of folks like being part of a team with security and structure.  I see the small businessman as analagous to the lead goose in a V-formation heading south. He's the leader because he's too stupid to know that the air is smoother towards the back! He's also probably the one the hunter aims at. But nature gave him the best homing system to make up for it.  (Red knows more about birds than anyone around here so correct me if that's myth  

[Conan71]

Has anyone considered that a lot of the uncertainty is based on every Republican's pledge that the first thing they will do is repeal just about everything the Obama administration has enacted? That they will totally eviscerate labor and return a lot of responsibilities for social programs to the states? [/color] That they will steadfastly refuse to balance off debt reduction with any increase in revenue? Those are huge uncertainties because no one really knows if the T-Party and the current wave of Republican's are capable of winning the next elections. You guys should be livid over their intransigence and threatening of those assumptions.

Where are you hearing that uncertainty over a potential repeal of Obamacare and other initiatives is killing job creation right now?

And I don't believe going after organized labor is a Republican initiative.  It's unfortunate that the realities of state budgets, which cannot operate at a deficit, are being painted as an organized run at the unions.  It's not.  It's requisite belt-tightening but it's more salacious if it's put in a political context.  It's a matter of states being able to stay afloat or not.  They can't print money and issue debt on a whim like the feds appear to be able to.

[AquaMan]

Nowhere! And it should be. That's what I'm trying to say. Uncertainty is not a political thing in business. It is a HUGE uncertainty if you don't really know what is going to happen 14 months from now should one of the Republican's be elected and follow through with their agenda.[/color


Republicans have always opposed organized labor and will not lift a finger to stop anything that weakens them. They will gladly frame a state budget crisis with labor costs as the problem if it will work to weaken them. I don't recall any Democratic governors or legislators following Wisconsin's lead. Talk about poor planners. States are incompetent with budgets. Oklahoma is a pretty good example don't you think? Even more uncertainty to think that they will increasingly be expected to fulfill historically federal roles.

[Red Arrow]

I see the small businessman as analagous to the lead goose in a V-formation heading south. He's the leader because he's too stupid to know that the air is smoother towards the back! He's also probably the one the hunter aims at. But nature gave him the best homing system to make up for it.  (Red knows more about birds than anyone around here so correct me if that's myth  

The way I understand it is that the lead goose plows the way and the followers have it easier.  It's kind of like drafting in NASCAR but I don't think the lead goose gets as much benefit as the car in front.  The geese also change postion occasionally.  Watch them for a while and you will see them change formation positions.  They are probably not as stupid as people think.

Draw whatever other conclusions you want.

I don't know if I am the ultimate feathered bird authority here but I have seen the information above about the geese.

[nathanm]

Yeah, it's uncertainty, not a lack of demand. That's why companies are spending so much on infrastructure upgrades, mergers, and the like. Because they're uncertain.

[Gaspar]

AquaMan,

When you make a 5 year plan, it's not voodoo.  It needs to be able to satisfy your creditors who, in many cases, you rely on for cash-flow.  It also must satisfy investors who rely on you to make good decisions with their money. 

You control for every variable that you can.

[nathanm]

5 year plan

Commie. 

[Gaspar]

Commie. 

Ok, that time I really did LOL!  Didn't think of it that way.  Thanks.