DID YA HEAR? 80% of the over 250K crowd is "Small Business"!

[Tech_Esq]

Kitten, I must not have said what I was trying to say very well if you came away with that idea. My focus is not really where supply meets demand. In other words, I'm assuming that that if you are forming a business, it's because you can supply some good or service that people want to one degree or another. (the degree = profit or loss).

My argument is more concerning supply-side econ in creating the environment where business creation and capital formation are likely. That was Reaganomics and the antithesis of what Obama is advocating/doing now. Supply-siders reduce taxes on the people with capital so they have extra money to put at risk and then are more likely to do it either directly (forming a business) or indirectly (investing in others who are forming businesses). Also, reducing government regulations that inhibit the formation and growth of businesses and reducing the cost of money (interest rates and inflation).

Does this make every person with money run out and create a business? Nope. But more than the other way. If you tax the hell out of the people with money, how many are going to be able to run right out and start a business? If people can't start businesses, then you do not grow the economic pie. Instead you just have to reslice the pie you have. The pie might shrink, but seldom will it grow. You just have more people competing for fewer resources.

 

[Tech_Esq]

I would not know what to buy or what to supply the customers with, without having a read on their demand....your supply may be low for that demand, so then you beef it up or supplement it with similar products, or your supply may be too high for that demand and then you liquidate it with costly to profit, mark downs....

There has to be demand for the product, before any business person in the world, would put all his money in to supply.... honestly, this is how it works....

And yes, of course there has to be capital to fund the supply for the demand, but with a good business model, with the testing of the marketplace on the product's demand, you can find funding through your bank or through smart business men with money to spare, or start really small with your supply until it pays for itself to meet the rest of the demand....

regardless, the demand has to be there....this is the rule, at least in being a Buyer for a Corporation.

thye demand wont matter one bit if they cant afford the price you have to charge

As a Buyer, price is always a calculation in the demand....

What did you sell it for last year, what will they pay for it this year...if your costs go up and demand was healthy prior to such, then you calculate this in to your purchase for this year's demand and buy less, but sell something more of another item that you misjudged demand and it is higher than you expected.

Also, if the previous years demand for the product was so great, and the price of the product this year was going to have to retail for $10 bucks more than last year for the same product because your cost of goods went up or taxes or duties went up or there was a shortage in one of the materials in the product or freight costs went up drastically because of gasoline prices rising or any number of reasons the same product costs more this year than last year.....instead of taking the buying less of that product because the demand will be reduced with the retail at $10 bucks more, OR YOU CAN TAKE THE APPROACH to buy the hell out of it, double what you bought last year and promote it barely above margin on it's sale price and get your return on investment and profits through mass selling it, at the lower margin.

Basically Dive, no one is boxed in...even if prices rise on one of your products.

If it rises on all of your products, then it rises on all of your competitor's products as well, so if it had a demand before, it will still have a demand afterwards...

I went through a leather crisis once, back in the 80's...when leather couches and leather chairs made their way back in to fashion and most every home in America....i bought women's shoes, the prices of all of our shoes for women went from about 29 bucks on average to $39 bucks on average from one season to the next.....we, the business, prepared for the worst.....there was no way women would pay 30% more for their footwear from one season to the next....this was super inflation....no way would it be accepted, so we bought low...we still would meet sales plan because each shoe would be selling for a higher price so this actually kept our salesplan flat....but with less items actually being sold.

Talk about being caught with our pants down....the consumer couldn't give a hoot about the 30% hike and we ran short on inventory and had to scrample to place more purchases to fill the demand.

Demand is a strange thing....those that can read it, will be your success stories in business, because they will have the right amount of supply bought to serve the demand appropriately and profitably.

Demand comes first then supply or projected demand, then supply.

I AM NOT SAYING supply is not important, it is very important, but the demand is what drives the proper supply....for any business....we projected our salesplan, down to the item, translating such in to a dollar figure of what was needed in inventory, in the supply.

Care

And back to my point. Taking your story what would have happened if you could not source any shoes because all the suppliers you had available were sold out?

Again, my point isn't that supply DRIVES demand, that's stupid. The point is, if you want to grow an economy, you make it easier for people to form businesses to supply the demand that exists in the market. This provides additional jobs for people and increases salaries and tax revenues. That's why tax revenues can increase while marginal rates decrease. As more people are put back to work eventually the market for people reaches a tension and price for people increases. This causes increases in wages and, as a result, tax revenues.

But, it's all academic at this point, we won't be seeing any of that for years.

 

[KittenKoder]

Kitten, I must not have said what I was trying to say very well if you came away with that idea. My focus is not really where supply meets demand. In other words, I'm assuming that that if you are forming a business, it's because you can supply some good or service that people want to one degree or another. (the degree = profit or loss).

My argument is more concerning supply-side econ in creating the environment where business creation and capital formation are likely. That was Reaganomics and the antithesis of what Obama is advocating/doing now. Supply-siders reduce taxes on the people with capital so they have extra money to put at risk and then are more likely to do it either directly (forming a business) or indirectly (investing in others who are forming businesses). Also, reducing government regulations that inhibit the formation and growth of businesses and reducing the cost of money (interest rates and inflation).

Does this make every person with money run out and create a business? Nope. But more than the other way. If you tax the hell out of the people with money, how many are going to be able to run right out and start a business? If people can't start businesses, then you do not grow the economic pie. Instead you just have to reslice the pie you have. The pie might shrink, but seldom will it grow. You just have more people competing for fewer resources.

Our business laws for starting a business are skewed ... in a bad way. There was a reporter who did an experiment once, and went to every country to figure out how easy it would be to start a business, the best model was in Japan, without more money than rent for the shop space and product costs he was able to open a business. One flaw in our country is that they require too much to open the business to begin with, unless you are lucky and can find ways around it (I know a few who have). A good way to measure how easy it is to start a business is how much it costs. So startups tend to either start with massive debt to begin with or are started only by the wealthy. This however isn't directly connected to the taxes they have to pay.

Because of all this regulation in the corporate world (not just taxes) our businesses are less likely to stay strong as a whole, this is why many move to other countries or are bought by corporations in other countries. This is one reason I am for deregulation, if they did I wouldn't just do freelance, I would actually start a business (v-game most likely).

 

[Care4all]

thye demand wont matter one bit if they cant afford the price you have to charge

As a Buyer, price is always a calculation in the demand....

What did you sell it for last year, what will they pay for it this year...if your costs go up and demand was healthy prior to such, then you calculate this in to your purchase for this year's demand and buy less, but sell something more of another item that you misjudged demand and it is higher than you expected.

Also, if the previous years demand for the product was so great, and the price of the product this year was going to have to retail for $10 bucks more than last year for the same product because your cost of goods went up or taxes or duties went up or there was a shortage in one of the materials in the product or freight costs went up drastically because of gasoline prices rising or any number of reasons the same product costs more this year than last year.....instead of taking the buying less of that product because the demand will be reduced with the retail at $10 bucks more, OR YOU CAN TAKE THE APPROACH to buy the hell out of it, double what you bought last year and promote it barely above margin on it's sale price and get your return on investment and profits through mass selling it, at the lower margin.

Basically Dive, no one is boxed in...even if prices rise on one of your products.

If it rises on all of your products, then it rises on all of your competitor's products as well, so if it had a demand before, it will still have a demand afterwards...

I went through a leather crisis once, back in the 80's...when leather couches and leather chairs made their way back in to fashion and most every home in America....i bought women's shoes, the prices of all of our shoes for women went from about 29 bucks on average to $39 bucks on average from one season to the next.....we, the business, prepared for the worst.....there was no way women would pay 30% more for their footwear from one season to the next....this was super inflation....no way would it be accepted, so we bought low...we still would meet sales plan because each shoe would be selling for a higher price so this actually kept our salesplan flat....but with less items actually being sold.

Talk about being caught with our pants down....the consumer couldn't give a hoot about the 30% hike and we ran short on inventory and had to scrample to place more purchases to fill the demand.

Demand is a strange thing....those that can read it, will be your success stories in business, because they will have the right amount of supply bought to serve the demand appropriately and profitably.

Demand comes first then supply or projected demand, then supply.

I AM NOT SAYING supply is not important, it is very important, but the demand is what drives the proper supply....for any business....we projected our salesplan, down to the item, translating such in to a dollar figure of what was needed in inventory, in the supply.

Care

And back to my point. Taking your story what would have happened if you could not source any shoes because all the suppliers you had available were sold out?

Again, my point isn't that supply DRIVES demand, that's stupid. The point is, if you want to grow an economy, you make it easier for people to form businesses to supply the demand that exists in the market. This provides additional jobs for people and increases salaries and tax revenues. That's why tax revenues can increase while marginal rates decrease. As more people are put back to work eventually the market for people reaches a tension and price for people increases. This causes increases in wages and, as a result, tax revenues.

But, it's all academic at this point, we won't be seeing any of that for years.

true enough....

but know that in a recession, demand has dropped off a cliff....INVENTORY IS BACKED UP ....employment has dropped and money is not as easily had for customers....you can have all the supply and businesses supplying it, and it won't matter, one iota...if people don't have the money to buy the products, your business fails, no matter how low the business is taxed or how cheap they can get their money.....

i will settle on it being an equal marriage, not one, can do without the other, to make things work!

 

[KittenKoder]

One possible solution would be to go back to the basics. Cut out all the "middle men" who end up just inflating the costs for no reason than just communicating. These middle workers were needed when our communication was still primitive ... but now with the connectivity possible they are not needed and do nothing more than inflate the costs for the consumers.

 

[Care4all]

i'm saying that conditions have to be good for middle america, a strong middle class with disposable income before the supply side can make any money, off of their money...

lowering the middle class tax burden would be a factor in an increased demand(sales) for various products as well....driving business owners to invest more, in supplyimg it.

a tax cut for supliers is not the only way to increase business...imo/

cutting taxes on either could spur it.

 

[DiveCon]

i'm saying that conditions have to be good for middle america, a strong middle class with disposable income before the supply side can make any money, off of their money...

lowering the middle class tax burden would be a factor in an increased demand(sales) for various products as well....driving business owners to invest more, in supplyimg it.

a tax cut for supliers is not the only way to increase business...imo/

cutting taxes on either could spur it.

and you wont get that by class warfare

and cutting taxes on BOTH is that spurs it

 

[Tech_Esq]

i'm saying that conditions have to be good for middle america, a strong middle class with disposable income before the supply side can make any money, off of their money...

lowering the middle class tax burden would be a factor in an increased demand(sales) for various products as well....driving business owners to invest more, in supplyimg it.

a tax cut for supliers is not the only way to increase business...imo/

cutting taxes on either could spur it.

My thought on this is if you try to give a tax cut the the "middle class" that's most of us. Thus, the expenditure is diluted. In the present case, we get a tax cut of $13/wk this year dropping to $8/wk next year. I don't know about you but, that's not exactly going to change anything for me. Having said that, the cut was not cheap by any means, it was just diluted because of the size of the middle class.

I think for your point to be true, we would probably have to do a $500 Billion or $1 Trillion tax cut for the middle class in order to spur demand side buying at a level that would make a difference.

What I really think is, at this point they could have just given us all a billion dollars and called it a day. It probably would have been cheaper too.

 

[Care4all]

i'm saying that conditions have to be good for middle america, a strong middle class with disposable income before the supply side can make any money, off of their money...

lowering the middle class tax burden would be a factor in an increased demand(sales) for various products as well....driving business owners to invest more, in supplyimg it.

a tax cut for supliers is not the only way to increase business...imo/

cutting taxes on either could spur it.

and you wont get that by class warfare

and cutting taxes on BOTH is that spurs it

yes both...

but in a recession this doesn't always work....because of so many unemployed ....demand/sales could be down.... thus stimulus, spending of money that we would not spend to kick start, or so the theory...

spending money increases demand for ''something'' which creates businesses to invest in what that demand/something is, this takes hiring people....more hired people, more people with disposable money to spend...the ''kick start''....

care

 

[Patriot2009]

really?
well, you will see it soon enough
the shit Obama is doing will be passed on

Although Obama is in no way going to be helping much (more likely he will hurt business) Care did make a great point. Without the demand there would be no business at all, unless people really like wasting money on producing things that are not wanted or needed. The flaw is that luxury items are not really changing in price except by the normal effects of the economy while products and services which are needed keep going up faster. But that's another topic.

The trouble with the demand side argument is that it assumes supply. You assume that just because you have money and want something that it is available for you to buy. This is a uniquely American view. We have everything available to us here so it is impossible for us to envision desiring something and having the money for it, but it not being available for us to purchase. This is everyday in many places in the world.

Why is that life everyday in some places? Because there is no supply, either because of the lack of foreign trade, the lack of transportation and/or the lack of domestic production, the people are deprived of goods they and and would purchase.

Why is that? Looking just at the domestic front, because capital formation is retarded by government policy or instability. Either of which will prevent capital formation. What does that mean? It means people who have the money are not willing to put it at risk in the environment that has the demand.

Let's look at Somalia as an extreme example that makes the point. Would you invest your life savings to create a business in Somalia? Hell no you wouldn't, provided you are in possession of your faculties. The reason is that the country is too unstable. There may be plenty of demand, but what difference does that make if you aren't sure you could profit from it? What would I with all this money instead? I would invest it in an overseas market or set up a business in a foreign country that has a good environment for business.

I see that you’re a big fan of Ronald Reagan and that you’re apparently a proponent of so-called supply side economics.

You must not be aware that David Stockman, the Reagan Administration architect of the trickle down “theory” wrote a book entitled The Triumph of Politics: Why the Reagan Revolution Failed, in which he admitted that the “theory” was a fraud perpetrated on the American people by Reagan and his cabal.

 

[Care4all]

i'm saying that conditions have to be good for middle america, a strong middle class with disposable income before the supply side can make any money, off of their money...

lowering the middle class tax burden would be a factor in an increased demand(sales) for various products as well....driving business owners to invest more, in supplyimg it.

a tax cut for supliers is not the only way to increase business...imo/

cutting taxes on either could spur it.

My thought on this is if you try to give a tax cut the the "middle class" that's most of us. Thus, the expenditure is diluted. In the present case, we get a tax cut of $13/wk this year dropping to $8/wk next year. I don't know about you but, that's not exactly going to change anything for me. Having said that, the cut was not cheap by any means, it was just diluted because of the size of the middle class.

I think for your point to be true, we would probably have to do a $500 Billion or $1 Trillion tax cut for the middle class in order to spur demand side buying at a level that would make a difference.

What I really think is, at this point they could have just given us all a billion dollars and called it a day. It probably would have been cheaper too.

hahahahaha! no arguement here on that!

the $13 bucks is ridiculus....save the money!!!

or focus it on something else with a better return on investment, bang for the buck....

 

[Tech_Esq]

Although Obama is in no way going to be helping much (more likely he will hurt business) Care did make a great point. Without the demand there would be no business at all, unless people really like wasting money on producing things that are not wanted or needed. The flaw is that luxury items are not really changing in price except by the normal effects of the economy while products and services which are needed keep going up faster. But that's another topic.

The trouble with the demand side argument is that it assumes supply. You assume that just because you have money and want something that it is available for you to buy. This is a uniquely American view. We have everything available to us here so it is impossible for us to envision desiring something and having the money for it, but it not being available for us to purchase. This is everyday in many places in the world.

Why is that life everyday in some places? Because there is no supply, either because of the lack of foreign trade, the lack of transportation and/or the lack of domestic production, the people are deprived of goods they and and would purchase.

Why is that? Looking just at the domestic front, because capital formation is retarded by government policy or instability. Either of which will prevent capital formation. What does that mean? It means people who have the money are not willing to put it at risk in the environment that has the demand.

Let's look at Somalia as an extreme example that makes the point. Would you invest your life savings to create a business in Somalia? Hell no you wouldn't, provided you are in possession of your faculties. The reason is that the country is too unstable. There may be plenty of demand, but what difference does that make if you aren't sure you could profit from it? What would I with all this money instead? I would invest it in an overseas market or set up a business in a foreign country that has a good environment for business.

I see that you’re a big fan of Ronald Reagan and that you’re apparently a proponent of so-called supply side economics.

You must not be aware that David Stockman, the Reagan Administration architect of the trickle down “theory” wrote a book entitled The Triumph of Politics: Why the Reagan Revolution Failed, in which he admitted that the “theory” was a fraud perpetrated on the American people by Reagan and his cabal.

I would say that we have a decidedly different view of politics and economics. Whether Stockman wrote what you characterize or not, the fact of the matter is that after the radical departures Reagan took the "prime" interest rate was not 21%, the inflation rate was no longer 18%, the unemployment rate was no longer 9%. The misery index was a thing of the past and so was stagflation.

So if that is a fraud perpetrated on the American people, I'd like some more of that fraud please.

 

[oreo]

Some people can't understand win-win.

Reagan was one of those with his Piddled on Theory. Even this was a repeat from the past.

The horse eats as many oats as he wants and the sparrow might find some edible oats left in the horse manure. More accurate a picture than trickle down.

Last week I said Republicans own the illegal immigrant problem because it is these small business' that are hiring the illegals.

Then the right wingers came back and said, "bobo thinks all small business' are Republican owned".

Well wouldn't you say 80% are owned by Republicans?

Are you some kind of ditto-head or something? It's been the republican party that is building the wall to keep illegals out of this country. It's been the conservative wing of the republican party that stated absolutely no amnesty for illegals. Others wanted to fine those in this country illegally.

It's the democrat party--who have been calling to cut e-Verify from the budget--the only effective tool that employers can use to verify citizenship. It's the democrat party that uses illegal immigration to buy votes of minorities that are legally in this country--whom have relatives & friends in this country--whom are a illegal--that they want to keep here.

If you're stating that republicans are the "only" ones who own businesse's in this country-- you have just given me the biggest compliment of my life. Meaning that republicans are the producers of this country & democrats are the parasites.

 

[oreo]

"Also, most businesses that fail it's because there is no demand for their products or services, either because of a better supply or that the supply is simply not needed."

Not true: 9 out of 10 new businesse's fail within the first year. Usually because of bad business management practices--not because there was no demand for their products or services.

 

[oreo]

The trouble with the demand side argument is that it assumes supply. You assume that just because you have money and want something that it is available for you to buy. This is a uniquely American view. We have everything available to us here so it is impossible for us to envision desiring something and having the money for it, but it not being available for us to purchase. This is everyday in many places in the world.

Why is that life everyday in some places? Because there is no supply, either because of the lack of foreign trade, the lack of transportation and/or the lack of domestic production, the people are deprived of goods they and and would purchase.

Why is that? Looking just at the domestic front, because capital formation is retarded by government policy or instability. Either of which will prevent capital formation. What does that mean? It means people who have the money are not willing to put it at risk in the environment that has the demand.

Let's look at Somalia as an extreme example that makes the point. Would you invest your life savings to create a business in Somalia? Hell no you wouldn't, provided you are in possession of your faculties. The reason is that the country is too unstable. There may be plenty of demand, but what difference does that make if you aren't sure you could profit from it? What would I with all this money instead? I would invest it in an overseas market or set up a business in a foreign country that has a good environment for business.

I see that you’re a big fan of Ronald Reagan and that you’re apparently a proponent of so-called supply side economics.

You must not be aware that David Stockman, the Reagan Administration architect of the trickle down “theory” wrote a book entitled The Triumph of Politics: Why the Reagan Revolution Failed, in which he admitted that the “theory” was a fraud perpetrated on the American people by Reagan and his cabal.

I would say that we have a decidedly different view of politics and economics. Whether Stockman wrote what you characterize or not, the fact of the matter is that after the radical departures Reagan took the "prime" interest rate was not 21%, the inflation rate was no longer 18%, the unemployment rate was no longer 9%. The misery index was a thing of the past and so was stagflation.

So if that is a fraud perpetrated on the American people, I'd like some more of that fraud please.

100% agreed--but I'll bet most of the argument here comes from younger people who did not get the opportunity to see what a misery index was--under the Carter administration. Therefore, most are regurgitating what they have heard from their political pundents. They have no clue what Ronald Reagan did to straighten out that horrible GREAT RECESSION. And he did fix it.

However, if we want to look a the bright side, they're certainly going to have the opportunity to experience a real misery index under this administration. Then they will also get an education in what government policies work & which ones don't. We understand it, we have lived through this before & actually survived it. We know that the worst thing anyone can do in this type of economy is "raise anyones" taxes. We understand also--that government has to stop spending "our money" on ridiculous wasteful programs that have nothing to do with stimulating the economy.

After this is over--they'll get it too.

 

[manu1959]

there are all these folks that have no clue what life was like in the 40' and 70's the last time all these programs were rolled out.....and everyone seems to think clinton created the dot com industrial revolution.....and worst of all their first hand political experience is 8 years.....

 

[Ravi]

I see the latest Republican buzzword is "class warfare." Editec must be rolling over in his grave, figuratively speaking.

 

[DiveCon]

I see the latest Republican buzzword is "class warfare." Editec must be rolling over in his grave, figuratively speaking.

because that is exactly what it is
and its not new
you are way too naive

 

[Ravi]

I see the latest Republican buzzword is "class warfare." Editec must be rolling over in his grave, figuratively speaking.

because that is exactly what it is
and its not new
you are way too naive

Yeah, right...it's not class warfare when the entire country bends over backwards to give capitalists every benefit to succeed.

 

[editec]

thye demand wont matter one bit if they cant afford the price you have to charge

As a Buyer, price is always a calculation in the demand....

What did you sell it for last year, what will they pay for it this year...if your costs go up and demand was healthy prior to such, then you calculate this in to your purchase for this year's demand and buy less, but sell something more of another item that you misjudged demand and it is higher than you expected.

Also, if the previous years demand for the product was so great, and the price of the product this year was going to have to retail for $10 bucks more than last year for the same product because your cost of goods went up or taxes or duties went up or there was a shortage in one of the materials in the product or freight costs went up drastically because of gasoline prices rising or any number of reasons the same product costs more this year than last year.....instead of taking the buying less of that product because the demand will be reduced with the retail at $10 bucks more, OR YOU CAN TAKE THE APPROACH to buy the hell out of it, double what you bought last year and promote it barely above margin on it's sale price and get your return on investment and profits through mass selling it, at the lower margin.

Basically Dive, no one is boxed in...even if prices rise on one of your products.

If it rises on all of your products, then it rises on all of your competitor's products as well, so if it had a demand before, it will still have a demand afterwards...

I went through a leather crisis once, back in the 80's...when leather couches and leather chairs made their way back in to fashion and most every home in America....i bought women's shoes, the prices of all of our shoes for women went from about 29 bucks on average to $39 bucks on average from one season to the next.....we, the business, prepared for the worst.....there was no way women would pay 30% more for their footwear from one season to the next....this was super inflation....no way would it be accepted, so we bought low...we still would meet sales plan because each shoe would be selling for a higher price so this actually kept our salesplan flat....but with less items actually being sold.

Talk about being caught with our pants down....the consumer couldn't give a hoot about the 30% hike and we ran short on inventory and had to scrample to place more purchases to fill the demand.

Demand is a strange thing....those that can read it, will be your success stories in business, because they will have the right amount of supply bought to serve the demand appropriately and profitably.

Demand comes first then supply or projected demand, then supply.

I AM NOT SAYING supply is not important, it is very important, but the demand is what drives the proper supply....for any business....we projected our salesplan, down to the item, translating such in to a dollar figure of what was needed in inventory, in the supply.

Care

And back to my point. Taking your story what would have happened if you could not source any shoes because all the suppliers you had available were sold out?

Again, my point isn't that supply DRIVES demand, that's stupid. The point is, if you want to grow an economy, you make it easier for people to form businesses to supply the demand that exists in the market. This provides additional jobs for people and increases salaries and tax revenues. That's why tax revenues can increase while marginal rates decrease. As more people are put back to work eventually the market for people reaches a tension and price for people increases. This causes increases in wages and, as a result, tax revenues.

But, it's all academic at this point, we won't be seeing any of that for years.

It was all academic then, too.

We gave the superwealthy the largest tax cut in our adult lifetimes.

Did we see the economy thrive? No, in fact quite the opposite.

The money they got went into debt instruments, overseas investments, and stock market bubbles.

There's nothing wrong with stimulating capital formation when capital formation is needed.

But when it's NOT needed (like when Bush got that tax cut passed) then all it does is put too much money into the hands of too few people who will NOT invest it into job producing businesses.

It's the DEMAND side which is hurting now.

Hence this so-called stimulus package.