Column #319    October 15, 2021Businesses in the Crosshair

A recent poll indicates 38% of the population approves of Biden’s performance. Does that mean 38% of the folks reading this column do not understand what it takes for businesses to thrive? If so, then the public and private education systems are doing a horrible job of educating Americans about free enterprise and how it works. So, maybe I need to explain how even a little business, like Slanker Grass-Fed Meat, must function in order to be sustainable.1

Professional politicians, bureaucrats, the military, and nearly all other government employees (including teachers and professors at universities) have a totally different perspective on life than do folks in the private sector. It’s built into their DNA by time-tested risk and reward influences.

What hones their thinking? First, governments do not earn money. They just confiscate it from the economy’s productive sectors. Second, since governments have the power to “just take it,” that makes bureaucrats and professional politicians feel powerful and entitled.

How individual government entities get and spend money is a really big influencer. Most government-type entities get regular annual funding. Usually the department managers plan to spend their entire budgets because saving money is discouraged. If some funds are left over, the next year’s budget will most likely be reduced. If every dime is spent, it’s more likely that their funding requests for the next year will be fully funded or even increased!

Rarely are government workers held accountable for what they do other than every once in a while a few professional politicians are swapped out. Most often pay scales and benefits for government workers are impacted more by tenure than merit. Equal outcomes discourage rather than incentivize workers to be more efficient and better. Since many bureaucracies have the power to make up regulations and enforce them, many government employees have a holier-than-thou attitude. And . . . if they create more regulations that calls for more regulators which bolsters the need for more funding, more power, etc.

Our federal government is a good example of waste rather than profit. Its actions show us how much respect it has for those of us who are forced to pay for the salaries, the taxes withheld, and benefits that are provided to every government worker. Just recently we learned that a couple hundred miles of panels for border fencing, which were purchased last year, are currently being stored rather than used. In fact, for eight months the government paid the builders millions of dollars per day not to finish building the wall. At the same time a border crisis was created which now costs American taxpayers tens of millions of dollars per day. Another example is that during the Afghanistan pullout, about $10 billion worth of military hardware was abandoned and left in the hands of the Taliban.2 3 4

Following the initial 14-day shutdown to slow the spread and open up more hospital beds for treating COVID-19 victims, some bureaucrats and professional politicians took it on their own to continue the shutdowns. Their barbaric medical tactics (shutdowns, masking, etc.) were continued even after 14,981 Medical & Public Health Scientists and 44,167 Medical practitioners signed the Barrington Declaration. The Declaration: “As infectious disease epidemiologists & public health scientists we have grave concerns about the damaging physical & mental health impacts of the prevailing COVID-19 policies, & recommend an approach we call Focused Protection.”5 6

To counter some of the negative impacts of their mandates and continuing shutdowns bureaucrats and professional politicians paid people not to work with money they borrowed on behalf of productive citizens. Did the taxpaying American workers ask for continuing shutdowns followed by mandates for vaccines and masking? Did the small business owners who lost everything agree to sacrifice their businesses and life savings in order to comply with shutdowns? Did Americans demand masking and vaccine mandates? Did private sector workers agree to go deeper in debt to pay laid-off workers to sit at home and, for many, make more money doing nothing than when they worked?

The answer is “No” to all of these questions. All of the damaging decisions were made independently by bureaucrats and professional politicians.

Our governments have borrowed trillions of dollars to fund the schemes of bureaucrats and professional politicians. And with money pouring out to nonworkers, who are not providing services nor making goods, the private sector workers who kept working had to work even harder to keep the loafers supplied with trinkets. This outpouring of printed money has pushed demand for goods in excess of supply and prices are soaring as a result. The consequences of these policies will take years to unwind and here’s why . . .

When costs soar, businesses are faced with shrinking profit margins. Profit margins shrink quickly when costs for labor, raw materials and finished goods, basic services, and capital (rising interest rates and falling stock prices) are all going up at the same time. In addition, Congress is talking loud and long about increasing taxes on businesses. This means every possible cost of doing business will be increasing while consumers grow more concerned about the future. If consumers pull back just a little that puts downward pressure on prices when businesses are desperately in need of raising prices. This is what is starting to happen right now.

(Keep in mind that a tax on a business is a cost of doing business that must be passed onto consumers. That’s why, one way or the other, it’s only the productive people [workers] who pay all of the taxes collected. It doesn’t matter what the professional politicians and bureaucrats call their tax targets. If nobody works in the private sector, there is zero money available for the collection of taxes.)

Unlike governments, businesses (small and large) require profits to be sustainable. Businesses are always trying to lower costs, improve productivity, invent and improve products and services, be thrifty, do more to keep customers and attract new business, and keep and expand their loyal and dedicated workforces. Businesses cannot just make people buy their stuff. They have to earn everything they get. And it’s only from the productive sector of the economy that governments can extract their booty.

Like businessmen everywhere, I’m feeling the squeeze. Because the government paid workers not to work, my grass-fed meat business saw its labor costs increase significantly in the past 12 months. It became almost impossible to hire new people. Employees had to work overtime to keep customers happy. The increasing payroll reduced net cash flow. At the same time inventory costs in the form of livestock prices, transportation, and processing increased. That meant more cash was locked up in the freezer just to maintain the same inventory levels. Costs increased for maintenance, fuel, services, shipping supplies, delivery services, insulation, and dry ice. As always, we remain in a highly competitive environment with giants who have advantages of scale, albeit with less healthy meat that sells for less. So it’s not always an easy decision to raise prices. Amazingly, our meat prices are essentially the same as they’ve been for quite a few years. But that may have to change.

Obviously this is an interesting dilemma with many moving parts. Unfortunately, most of the parts indicate that at some point our prices will have to increase. To counter that, we are hoping that soon the various government agencies will stop their deliberate, across-the-board, antibusiness edicts. More Americans are going to have to realize that it’s only the working people in the private sector who support the entire nation by paying ALL of the taxes today and into the future. Take away their ability to be productive and the entire country will collapse like as if it was shot in the head.

Sane Americans need to be more vocal to change the trend. That includes letter writing to politicians and letting them know their jobs are on the line.

To your health.

Ted Slanker

Ted Slanker has been reporting on the fundamentals of nutritional research in publications, television and radio appearances, and at conferences since 1999. He condenses complex studies into the basics required for health and well-being. His eBook, The Real Diet of Man, is available online.

Don't miss these links for additional reading:

1. Could Biden Have Screwed More Things up in Just 10 Months? By Joseph Curl from The Washington Times

2. Biden Spending $3 Million Per Day to Not Build Border Wall by Robert Law from Center for Immigration Studies

3. Biden Administration Cancels Remaining Contracts for Border Wall by Caroline Downey from National Review

4. Here’s the List of Billions in Military Equipment the US Left Behind for the Taliban by Brad Polumbo from Foundation for Economic Education

5. Fauci Open to a 14-day 'National Shutdown' to Stem Virus by Hope Yen and Aamer Madhani from Yahoo Lifestyle News

6. The Great Barrington Declaration