This is What Pisses Me Off About The Democrats

[Statler Waldorf]

Appeal to authority is only a logical fallacy when the authority doesn't provide any evidence. Even experts must have reasons to believe what they do. Had I just said, "I'm an MBA and I say so" without making a case, that would be a fallacy.

Then why mention the MBA at all? Why not just present the evidence? You’ve never understood the appeal to authority fallacy though.

Let me map it out for you in greater detail, complete with number crunching, since your [sic] slow to accept the facts.

Facts? What on Earth makes you think that hypothetical scenarios about widgets are somehow “facts”?

Here's the scenario: I and two other businesses, run by conservative Tea Baggers, make and sell widgets. Our companies are the same size at first. We each have five employees, sell 100 widgets a day at a price of $100 each. Our fixed costs are 35%, our variable costs are 60%.

I am not sure what a tea bagger is but ok.

So daily sales of Teabagger Widgets inc., GOP Widgets Inc. and Progressive Widgets Inc. (me) are all currently $10,000 a day. All of our fixed overhead costs are $3,500 and our variable costs are $6,000, making $500 our net daily income.

I could have guessed which one was you.

In theory, "variable costs" such as supplies and labor, will vary with the unit sales. In practice, greater inefficiencies can be attained when you are close to capacity. During slow times, your labor costs will be less efficient even if you are careful to lay off workers. When workers are close to peak capacity, they are going to be more efficient in production. However, to keep it simple for this exercise, labor is considered variable.

You provide nothing to support any of this but ok.

In theory, "fixed costs" will remain the same no matter how many units you sell. These would include insurance, rent on the building, certain office staff members, etc. In reality, these too may be somewhat variable. If your production increases to a point, you may need a larger building, for example. Again, to keep it simple, fixed costs will be fixed.

Ok.

One day the government comes along and raises the minimum wage we can pay our workers. Our variable costs (including labor) increases to 62%, making the total $6,200 and our net daily income is reduced to $300.

Ok.

Tea Bagger Widgets lays off a worker. GOP Widgets raises their prices to $102 a unit to compensate. I decide to bit [sic] the bullet and maintain prices and labor force as they are, accepting the reduction in my contribution margin.

If you did not know what the other two companies were going to do what would compel you to do this? You’re ascribing yourself a level of omniscience in this scenario that is unrealistic.

Teabagger Widgets is now expecting 4 workers to do the work of 5. Without some competitive advantage in automation, this is impossible without something suffering.

Bare assertion. I see no reason why this is impossible.

If automation WERE possible, we'd all do it anyway, regardless of the government.

Another bare assertion. You’ve already stated that you are willing to take a loss out of the kindness of your heart, I find it hard to believe you’d lay off workers simply in order to automate.

So your bringing that up is a red herring.

Not at all, I have personally seen it happen.

Quality goes down, mistakes from a fatigued, overworked labor force goes up, delivery times are delayed.

Again, I see no reason as to why any of this must necessarily occur.

Teabagger's sales suffer with disgruntled customers getting upset with the reduction in quality and the late deliveries of the product. Let's be nice and say they only lose as many customers as needed to re-establish production equilibrium and their sales go down to 80 units a day.

If they reduce to 80 units a day the quality would then go back up because each employee is only producing 20 widgets a day. You’ve just proven my point; all you have successfully done is cost an employee their job.

GOP Widgets also loses customers as some of them will go for lower priced competition. Why pay him $102 when you can pay me $100? To keep it simple, let's say he loses sales to the same equilibrium. He has to lay off one worker and is now down to 80 units a day.

Now you’ve cost two workers their jobs.

Progressive Widgets hires both laid off workers and picks up the extra disgruntled customers, bringing my sales up to 140 units a day. Since 35% of my costs are fixed, some of that sales increase is gravy that goes to my bottom line. But to spell it out in numbers:

Nice sleight of hand. What money are you using to hire these two employees? You already “bit the bullet” and reduced your profit margin to only $300/day, how are you affording two new employees (you cannot say from the additional 40 widgets sold a day because you do not currently have the employees to produce more than 100 widgets per day)? You’re stuck at 100 widgets per day with five employees and two people lost their jobs thanks to the government increasing the minimum wage. Of course now there are only 260 widgets being produce daily in this market (down from 300) which would in turn drive the price of widgets up; so not only have you cost two people their jobs but you have also made it so that I can no longer buy as many widgets as I once could thus driving the power of my hourly wage and everyone else’s for that matter down. Nice work.

While my labor costs have gone up, I have more than made up for it in volume.

Nope, your volume cannot increase until your labor first increases; cart before the horse.

My employees are happy. I'm happy. My stockholders are VERY happy. I'm going to get a lot of atta-boys at the next Board of Directors meeting and take home a nice bonus. The CEOs of my competition are going to be fired and their replacements will have a big mess to clean up.

A delightful fantasy, but unfortunately nothing more.

Are we learning yet?

Nope, I already knew that fantastic hypothetical scenarios based on unrealistic conditions prove nothing. I’d need something to actually support any of this nonsense.

You can have all the free speech you want. You just can't buy more. Money is not speech. A rich man should not have more speech than a poor man.

“You can have all the free speech you want as long as you keep your mouth shut.”

If I want to buy airtime to say whatever I want, and if someone wants to sell it to me it’s my right to do so. Take your fascism elsewhere.