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Hard Astarboard » Blog Archive » On Parasites and Obamamath

November 17, 2012

On Parasites and Obamamath

Many of us undoubtedly knew by yesterday that Twinkies© are on the cusp of extinction (is nothing sacred anymore!?)

Occupy Wall Street should be rejoicing. They want to “end corporate greed” and, yesterday, they ended it. It was only a one source of corporate greed among many, but I’m sure there will be more successes in spreading virtue (and poverty) in the near future. Reuters reports that Hostess Brands is going bankrupt. This is not the “let’s reschedule our payments” kind of bankruptcy, but the “sell every piece of hardware we have to whoever will bid for it” kind of bankruptcy.

So the corporate greed of Hostess Brands is now ending. No longer will they want to make money. No longer will they heartlessly buy ingredients at the lowest price they can get to make sugar snacks and white bread at a price point where consumers will buy them. No longer will they fight with their unionized workers to get them to accept lower pay or lower benefits.

Yes, here’s that link again.

Let’s read it all

This disaster shows that saying there is no more “greed” is another way of saying there is no longer anything to attract a profit motive. Which is another way of saying, consumers will have to go elsewhere to get what they want. Unjustifiable pensions and other burdens have led to the point that the company can no longer make a profit. As a result, there is no Hostess Brands to hire people or buy from suppliers to provide bread to consumers. Are the unionized workers better off now?

What people need to understand is that this is not just something that happened due to union greed and stupidity. This is also our current administration’s plan. The reason we had an auto bailout is that GM had become virtually a healthcare provider that made a few automobiles for sale. And GM and others are undoubtedly going to do it all over again—only to be bailed out again. That is how the totalitarians want it. They want corporations to be arms of the welfare state. Bailing out companies that go bankrupt from bestowing benefits means that the taxpayers are the ones bestowing benefits. It is just Blackwater for the welfare state—handing out freebies in Detroit rather than shooting people in Iraq.

The state wants a few giant corporations that can be controlled and that can do social experiments to pave the way for “gay” “marriage” benefits and other politically correct dreams. This gives us a few token CEOs to go about the country styling as capitalists who can publicly promote higher taxes or other things as ways to make “the wealthy pay their fair share.” But these things will never hurt them because they are in a protected club. Since the state is currently at war with calories, Hostess Brand is not welcome into that club.

What about those more than eighteen thousand workers who are now facing unemployment? That too is a win for the government. They will now be able to pose as the rescuers, putting new families on welfare and boasting about how they are helping these people. In a great economy this might not work. But we are living in the new normal and, as Rahm Emanuel said, the government never wants to let an emergency go to waste.

Obamacare is a great example of how the government “outsources” welfare to corporations but is happy to take direct control over it when it can. Some see Obamacare (not without reason) as a huge piece of corporate welfare to insurance companies, forcing us all to sign up with them, and helping the big companies gobble up the small ones. Others see Obamacare as designed to make private healthcare untenable so that we are forced to become directly dependent on government—a “single-payer system” as all the cool people call socialized medicine.

Either way, the state wins and consumers lose. Doing without Twinkies will be easy. Much more important products of “corporate greed” will soon also be disappearing.

That, friends, is spot-on.

Then there’s the aforementioned Obamamath.

From Godfather Politics…

Papa John’s CEO John Schnatter is in trouble with the Left because, like several business owners since the re-election of the Man Who Would Be King, he has said he must reduce employee hours and possibly lay off workers to deal with the costs of Obamacare and the increasing number of regulations coming out of the Obama Administration.

The Left’s knee-jerk response has been to call for a boycott because Schnatter is wealthy and therefore he should just absorb any increase costs. Or the other analysis floating around the leftist blogs and places like Forbes is that Obamacare would only mean an increase of 14 cents per pizza, therefore Schnatter is just being evil, conservative and political.

Schnatter has said Obamacare could cost up to $8 million per year. The Left’s argument goes that $8 million is just a “drop in the bucket” for a company with total operating expenses of $1.131 billion last year.

A little analysis of the numbers published by Forbes, however, reveals a slightly different picture.

Papa John’s had total revenue of $1.218 billion last year, according to Forbes. That means a total profit of $87 million. Sounds pretty good, right?

According to Forbes, Papa John’s has more than 4,000 stores worldwide. Divide that $87 million by 4,000 and you get a per-store average profit of only $21,750.

Now, assuming Obamacare only applies to U.S. stores, then if we knew Papa John’s total U.S. stores (which Forbes doesn’t mention), we should be able to figure out per-store additional cost to U.S. franchisees.

Just for the sake of argument, let’s guess that half the franchises are in the U.S. Let’s also assume the upper estimate of $8 million by Schnatter is correct, then that would be an additional $4,000 cost per store on average, bringing average per-store profit annually down to $17,750.

I’m not familiar with all the ins and outs of owning a franchise, but I assume that $17,750 profit gets divided between Papa Schnatter, shareholders and the actual franchise owner.

That’s not enough money to feed a family, and that’s why Obamacare hurts small businesses and the middle class.

That’s what the Left doesn’t get. And that’s why re-electing Obama is going to kill this country.

Amen! :-(

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2 Responses to “On Parasites and Obamamath”

  1. The Gray Monk Says:

    Seems to me that all those fancy MBA waving Democrats and left wing supporters need to take some basic lessons in accounting - or perhaps be made to actually run some of these businesses under their own rules.

    I suspect most would go bankrupt fairly rapidly.

  2. Mrs Wolf Says:

    Gray Monk

    Very true, they would fail, or at least experience abrupt revelations that would cause them to make 180 degree adjustments in order to survive.

    Look at the union supportive New York Times, for example, moving the bulk of their printing operations to Florida, where the same unions can’t sink them as the bakers’ union has now sank Hostess.

    Unfortunately, the well heeled set who are the backbone of this whole push for socialism are situated well out of the way of the kind of damage others sustain because of their political influence, so they just go on screwing everybody else and patting themselves on the back, ignoring the aftermath of what they have wrought.