It's 2013 and look what Obama hath wrought! I asked TSH's own financial expert, noted economist Tim Dimas, to comment on some of the trends we observed sprouting up from the Hoople Heads on the left as 2012 came to a close. A fitting way to ring in the New Year!
Tim's Take
Clearly Joe hasn’t discovered the photos or videos I posted online under a pseudonym involving a pair of jumper cables, a saddle, and a gallon of motor oil, since he’s asked me to return for another round of economic and fiscal commentary.
Poor Papa John’s
Last month, “Papa” John Schnatter said that because of the taxes involved with Obamacare, he would be forced to cut back hours and raise prices for consumers. Cue the media calls of “foul” and liberal resolutions to boycott the pizza place. These liberal boycotts intrigue me. First it was Chick-fil-A, when their founder simply said he supported “Biblical” marriage - the media and left were in such a frenzy you would have thought that the president had covered up a terrorist attack on a U.S. consulate, blaming it on a stupid YouTube video, and forcing his Secretary of State and CIA Director to fall on their swords for him while lying to his sycophant media handlers for two weeks. Curiously, the Starbucks CEO came out in support of Barack Obama, but judging by the lines in my local Starbucks, that hasn’t stopped caffeine-addicted hounds like me from dropping $5 for a frothy espresso drink. No matter; it’s not out of “tolerance” that I refrain from invoking a fatwa against liberal companies, its pure addiction.
The boycott against Papa Johns is puzzling, because if we pretend that all those hippie fools with “co-exist” bumper stickers actually DID boycott and it hurt Papa John’s bottom line, people would get laid off and even more hours would be slashed. But that would require medium term logical thinking on the part of said liberals. Clearly, I’m expecting too much. But here’s the defense of Papa John’s, friends. If you’re a liberal, it’s complex, so bite your lip and keep reading (for the articles, of course!):
It’s his company. He can do whatever the hell he wants.
That’s it. Period.
“Oh, but all food employees should have access to…” (yawn)
“But he’s making so much money off of...” (yawn)
It’s his. He owns it. He can pay them all minimum wage (I’ll save my anti-minimum wage rant for another day). His employees are there voluntarily. If they don’t like making $20 16” pizzas (I mean, seriously, Mr. Schnatter), they can go work at Domino’s. Or Pizza Hut. I don’t care. They aren’t beholden to the joint. The only defense necessary for Papa John is that it is his company to conduct however he wants. That’s a very difficult concept for some people. I suppose if you want to go through with the boycott, you’re certainly welcome to do so, as long as you are cognizant enough to understand that what you’re boycotting is the right of a CEO to conduct his company however he wants. I know, I know, you don’t like how he’s conducting his business. So I presume you approve of the politics of all the companies you buy from? Do all the places you give your money to meet your pathetic liberal litmus test? After all, liberals hate Wal Mart, but Sam Walton was one of the largest contributors to Obama’s Super PAC (http://washingtonexaminer.com/wal-mart-heir-funding-obama-big-time/article/2511391#.UKmQRY7A8Rk). Figure out on which side your bread is buttered before you start boycotting.
Remember the guy that came up with the X-Men cartoons in the early 1990's? Of course you do! It’s Rick Ungar (http://en.wikipedia.org/wiki/Rick_Ungar)! He also created “Biker Mice from Mars”, which sounds like a Bucky O’Hare rip-off if you ask me. Rick got tired of creating animated kid's series' and took odd jobs until he was hired as the token liberal at Forbes. I hadn’t realized Forbes was a right-wing rag, but whatever. Forbes is where he has combined his vast business acumen with drawing Mystique’s underboob to comment on pizza and football (duh!). His article (http://www.forbes.com/sites/rickungar/2012/11/17/peyton-manning-papa-johns-pizza-and-the-nfl-will-the-nfl-drop-papa-johns-as-an-official-sponsor-over-obamacare/) is probably getting more play than he ever did in high school off the field, or than T.O. is getting on the field this season.
When I read Rick’s piece (that felt funny) I scratched my head. His main issue with Papa John’s is that by the company denying their employees medical insurance, they will go to the emergency room, where hospitals will pass the cost onto medical insurers, and thus him. That’s an odd stance for a liberal to take. “Yeah, healthcare for everyone, including illegal immigrants. But if I have to pay one cent for a Papa John’s employee…” It’s bizarre, especially coming from a lefty. Rick is funny, but I don’t think he means to be. “Token” would be better off just going back to sketching Rogue or Gambit.
When I read Rick’s piece (that felt funny) I scratched my head. His main issue with Papa John’s is that by the company denying their employees medical insurance, they will go to the emergency room, where hospitals will pass the cost onto medical insurers, and thus him. That’s an odd stance for a liberal to take. “Yeah, healthcare for everyone, including illegal immigrants. But if I have to pay one cent for a Papa John’s employee…” It’s bizarre, especially coming from a lefty. Rick is funny, but I don’t think he means to be. “Token” would be better off just going back to sketching Rogue or Gambit.
Twinkies and the Unbearable Lightness of Hostess
The untimely demise of Hostess has brought unions in the US to the forefront of the political discussion – again. Hostess is saying that the unions essentially strangled them and forced them into bankruptcy. Good people from the rust-belt (who are biased in favor of unions whether they want to admit it or not) say that’s nonsense and that Hostess was paying top dollar to their executives a week before the bankruptcy. Not to sound like a broken record, but can someone show me where it is written that a business has to answer to anyone but it's owners? Here’s a concept: if the workers are unhappy, they can leave. “But all the manufacturing jobs have moved!” So move to another city. “But they’ve all moved overseas [because of Mitt Romney] to China.” So get a new skill set. “But…” There’s ALWAYS an excuse with liberals. Just ONCE I’d like to meet a liberal that can take it on the chin and not always be stringing up some line of garbage to justify their bizarre views on things. If I were Hostess, I would have declared bankruptcy just to bust up the union. You know how Alexander the Great cried the day he realized he had conquered the whole world? I cried the day my dad told me that union busting was illegal; until that day my career plan was to undermine and sabotage unions. If you’re SEIU and you hire purple-shirted thugs to beat people, that’s legal. If you’re hired by a corporation to intimidate union people, that’s criminal (Full disclosure: after the Hostess bankruptcy I bought two boxes of Twinkies – in good faith – with the intent of selling them on eBay at a later date. The two boxes lasted 10 days).
A. A company has no obligation to anyone but it's owners. That obligation is to make money. That’s not an opinion, that’s a fiscal fact. This is a MANTRA in business school.
Q: “Why does a company exist?”
A: “To create value for its shareholders.”
Liberals, conservatives, and moderates alike recite it. You don’t have to like it, but it simply is. Arguing against it is like being angry that gravity exists.
B. “There’s no such thing as a free lunch.” Please stop calling Obamacare “Free Healthcare”. It’s not free. Someone somewhere is paying for it, even if it’s not you. If you understood that it wasn’t free, you might ask questions like “who is paying for it? How are they paying for it?” But then again, if you understood basic economics, you probably wouldn’t be excited by something as invasive and pathetically partisan as Obamacare. I will always be amused by liberals that try to tell me about this dumpsterfire of government overreach. Of course, these liberals don’t know what I do for every waking work-hour (I’m currently a consultant on the Obamacare contract). But yes, please forward me that HuffPo or Mother Jones article. You read an article during your smoke break. Please, enlighten me.
C. In light of the tragic Connecticut school shooting, gun-hating fools couldn’t politicize the issue fast enough. Innocent children lay in body bags, and already Jabbas like Michael Moore, RINOs like David Frum, and dipstick Democrats like Chuck Schumer were chomping at the bit to take away guns. The sadly ironic thing here is that when people threaten to take away guns, do you know what the general public does? They arm themselves as quickly as possible, stockpiling guns and ammunition at an alarming rate. I’m starting to think that gun manufacturers and Democrats are in business together. This is simply the playing out of supply and demand as a result of scarcity (the basic building block of economics). Odds are, though, that if you understood supply and demand, you wouldn’t be a gun-hating Democrat in the first place.
But understanding the relationship between stockpiling weapons and Democrats that call for gun control requires self-reflection. Allow me to illustrate:
D. Here in Maryland, Democrats are proud individuals. I don’t just mean that they are self-absorbed; they are genuinely pleased with being Democrats. One of the ways they do this is by caking their cars with bumper stickers that say “DEM” with a Maryland flag under it, accompanied with a plethora of stickers for as many Democratic candidates as they can fit on their car. As a rule, Democrats are insulated: they are wholly ignorant to a world outside of their own. Democrats in blue states are ignorant to the idea that there are conservatives that live amongst them. But they are also ignorant to how silly their pride is – they live in a state that favors their opinions 70% - 30%. In lay terms, 7 out of 10 of their fellow citizens believe exactly the same things they do. But to them, that is cause for celebration. They’re proud of that homogeneity, and when someone dares to speak up, they shout them down in a chorus. I don’t believe that Democrats are evil people – I just believe they lack any power of self-reflection. Progressives are dangerous not only because they are statists, but because they genuinely believe in their hearts that they are the only ones capable of leading the nation into a state of progress. They believe that the world would truly be a better place if tomorrow all conservatives and Republicans and libertarians were dead. Republicans have enough cognizance and suspicion of government to know that you need checks and balances. Make no mistake about it, ladies and gentlemen, them Dem's hate you. But they need each other, and I think that is partially why they are so energized and pat themselves on the back when they insulate themselves into their islands. This is why, when they are in the overwhelming majority, they cake their cars in bumper stickers proclaiming that fact. I spent most of my undergraduate years arguing against professors and entire classes that believed exactly the opposite of what I did. I cannot imagine a world where a liberal would get up in front of 50 conservatives and attempt to plead their case logically. It doesn’t happen.
How is this related to economics? In the financial world, there are always opportunities because of inequities in the markets. I don’t own a Ford vehicle, but I buy Ford stock because I believe in their business model and think they are undervalued. I see an opportunity and I take it (Full disclosure: This is an illustrative example, not stock advice. This article is not and never will give stock advice. Invest at your own risk). Democrats are unwilling to be that objective. A Democrat can’t see the situation for what it is. You can’t argue whether GM’s stock price is going to rise or fall, because all a Democrat sees is that Obama propped up the stock, therefore it has to be good, and all you wind up getting is “If you don’t like GM stock you hate America.” They really aren’t capable of further thought. Which brings us back to the Papa John’s boycott. I don’t care for their pizza, and I think their product is overpriced. I can admit that, still patronize their company, and have a conversation with someone about the pros and cons of said company. Democrats don’t have that ability. They see a policy that challenges their worldview and they cry foul. Remember the Maryland Democrat example: they need each other; they can’t be objective. A Democrat can’t say “Eh, I don’t like their union stance, but I love my Twinkies so I’ll keep buying.” I can proudly say “Apple is a super liberal company but I just cannot live without my iPhone.” These issues and approaches to business, boycotts, and finance are inherently wrapped up in their worldview. The savvy conservative will seek to exploit these weaknesses for social and economic gain.
Footnote: I liquidated my position in Ford (F) in early December. I have no plans to short or long the stock in the next 72 hours.
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