Trickle Down Economics

Let me tell a story about a man I know, which will help explain why I consider myself fiscally conservative, and believe in the idea of trickle down economics. 

This man is older, maybe early 60's. For most of his career he worked in a normal office job. He is intelligent and hard working, and was able to see a fairly progressive rise in his career. However, economic hard times were faced, and several times he found himself the victim of cutbacks and downsizing. 

Sometimes these stints were short, but sometimes they were longer. Savings started to diminish. Relocation became a necessity. But he and his family landed on their feet eventually, and things picked up where they left off. 

All the while, this man held the dream of one day owning his own business. Not having a boss anymore. Being able to make real changes to a company - to advance in the industry and provide a better life for his employees. Several years ago, after another lay off, he began exploring his options - looking for investors, investigating small businesses, building a team to work with. After much looking, he found a small manufacturing business in another state. With the financial backing in place, he bought the company and took over as President of the corporation. His first goal was to raise the company's profit enough to offer his 60 or so employees health care. 

Like any small business, his depended on getting raw materials from his suppliers and customer contracts.

A supplier who faces supply shortages due to financial constraints. Increasing fuel charges for delivery vehicles. Customers who are upset at getting their products late and at higher costs. 

Your customers - major companies themselves - are receiving products late and at higher costs, thus limiting their ability to recoup their expenses. Cutbacks are required to keep themselves afloat. 

Contracts are cancelled. Banks are unable to extend additional credit because they have no money after putting their chips on the line and coming up short. Interest rates for business credit goes through the roof. Without additional credit, his ability to purchase the supplies needed (now costing more than before, thus cutting into the company's income) is non-existent. 

His company hits hard time. Executive staff takes pay cuts to prevent staff layoffs. But its not enough. Not nearly enough. Fewer customers buying fewer products. 

The board meets to discuss its options. It looks like the worst case scenario. Chapter 11 Bankruptcy. Massive layoffs, possibly the entire staff of the manufacturing plant, and administrative staff. 

For small business owners, when the company they own declare Chapter 11, its almost a certainty that the primary owner will have to declare bankruptcy as well. In doing so, the only thing you're entitled to personally is $15,000. Anything else, they sell. 

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This is just one example. And its not meant to be a sob story. Its just an example of why the notion of trickle down economics and the importance of small businesses. If this current economic crisis continues for long, this story will repeat itself across the country. 

Small businesses are the backbone of this country. They employ a vast majority of the employed people of this country - jobs ranging from fast food and convenience stores to government contractors, to numerous industrial workers. 

And that's why corporations receive so many tax breaks - because they employe a vast majority of the work force, either currently or at some point in their lives. 

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Essentially, and in it's simplest form, the entire economic system is a huge pyramid scheme. 

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And that's the only reason I really can even begin to support this economic bailout. Buy buying the bad mortgages (which have no real capital behind them)  from the the banks - in theory - we'll free the banks up to offer additional credit to companies (these are usually 3-month loans), which allows smaller companies to purchase needed (or additional) materials to keep business going, and keeping their employees, well, employed. 

That's not to say that I'm supporting giving $700 billion away. But something has to happen, or things could get a lot worse.

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Jesus fucking tap dancing christ. Why don't any of you (2-3) readers out there ever tell me to shut the fuck up about the serious shit? 

Honestly, I'm going to be the old dude living by himself with 3 dogs. I'm gonna be outside 8 hours a day holding the hose pretending to water the lawn. And all I'm really doing is waiting for someone to come by and do something annoying so I can yell at them. 

I mean, yeah, I can't wait for those days. Being old and cranky and crazy seems awesome. 

But I'm not there quite yet. Sometimes I just need someone to tell me to knock it off, stop being Debbie Downer, and have some fun. 

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I promise, I'll try my best to make this more of a light-hearted and fun place to come and spend some time. Just as soon as those damn kids stop loitering in front of my house.