October 3, 2009
Jobs, Jobs, Jobs
Grapevine, TX (JBB) -- "We're here to create jobs in Morris County," says Stuart Vanderslice of the National Tool and Dye Works, as he sets up his let's-get-some-tax-breaks-before-we- build-the-factory office. "We're here to invest in the people of this county."
Why do corporations say this?
"We feel a responsibility to our employees," says Randall Winkelstein of Treetop Airline Express as he announces a new health plan that's actually farmed out to another company. "We're a people company."
Jobs! Jobs! We got your jobs right here! Step right up and get some jobs!
First of all, any Wall Street analyst who hears any president of any publicly-traded company saying, "It's all about jobs, we invest in people," blah blah blah, should instantly tell his customers to stay so far away from that stock that the parchment wrinkles up and turns to dust. Any executive whose first priority is jobs is a terrible executive.
I have several friends who are businessmen at pretty high levels. They'll do anything to avoid creating a job--which is one reason all of them are successful. When they have a company that can't avoid having employees, they're constantly looking for ways to have less of them.
The ideal company would not have a single employee. It would be pure capital, generating more pure capital. And the ideal of the ideal would be a capital investment company that only invests in other capital investment companies that don't invest in any companies that provide actual jobs. I don't know if such a company exists, but that's what they're all looking for--if they know what they're doing.
A job is a messy long-term contract. Sure, you can get out of it. You can fire the person--maybe. Sure, you can hedge your liability by recruiting young people who don't care much about things like retirement benefits. Sure, you can cut down your amount of real wages by requiring the employee to provide his own equipment, or work in his own space, or work overtime for nothing.
But ultimately you've got this wild card in your business-- this human being that can cause all kinds of problems, like not doing what you tell him, quitting, goofing off, getting pregnant, breaking his leg on your work site, developing a disability that cuts down his efficiency, forming a union, and creating the need for other human beings who have to watch what he does. No matter how much you like the guy or gal, in a theoretical sort of don't- wish-them-any-harm way, he's a drain on the whole works.
Hasn't anyone noticed that, whenever a corporation announces "massive layoffs," the stock goes up the next day? A job is like an order for bulk steel. If you can do without it, you should. That's why, when a new company goes into a new town and announces a new facility, I'm always amazed that a) they say their purpose is jobs, and b) the media buys it.
Their concern is not jobs. Their concern is capital. If they were good businessmen, they would say, "We're coming here because we think we can hire the fewest possible people at the lowest possible wages while getting the maximum tax breaks on the cheapest available space." That is the definition of a good company.
So how many jobs will you be creating?
"Eight hundred!" they say proudly. (It means six hundred. Next year they'll say they didn't need as many people as they thought they needed.)
So the first question should be, "Are they jobs for people who live here?"
The company may just be transferring workers from another place, or accepting resumes from all over the country. The factory may still be good for the town--because of the capital-- but they could be creating zero jobs for the actual residents of the town.
In a few cases, some local group will hold their feet to the fire and say, "But are you hiring locally?"
"Of course!" says J. Edward Finley of the Public Relations staff. "We believe in the people of this town."
Once again, bad business call. A businessman who knows what he's doing wouldn't care whether the workers came from China, as long as they were the cheapest workers at the highest levels of productivity. In fact, this is why so many American companies have subsidiaries in China.
The next question that should be asked--but rarely is--is, "Where will the revenues of the company be banked and reinvested?"
There will always be a local bank involved--even if its deposits amount to 1 per cent of the company's income--but the bank will be held up as a "local partnership."
 The ideal company, on the other hand, would have no local partnerships. It would be global in thinking and practice. If it could pay the factory workers out of an account in Switzerland, because that was where it got the best return on its money, then that would be the only wise decision to make.
So at this point--where there are precious few jobs being created and precious little capital remaining in the area--the next question should be, "What binding agreements will you sign regarding local hiring and local community investment?"
The answer will be something involving the Boys Club, the elementary school, the American Legion Post, and the ladies gardenia society. And, oh yeah--the janitors will be hired locally. "We believe in giving back," will be the answer of T. Bernard "Slim" Philby, the executive in charge of community affairs. So for a few handouts of five or ten thousand per charity, they'll avoid this whole issue of the bank deposits and the reinvestment.
Which is exactly what they should be doing. It's the nature of the beast.
And then they'll ask for tax breaks. And they'll get them. Because the City Council believes in a "healthy business climate" and wants to "encourage local development."
The way to encourage local development is to take actual cash--taxes--from the company that's locating here because it's an attractive capital-investment location, and then recycle that cash back into what they, the locals, decide the place needs. Why so many City Councils will decide that, yes, after all, they're putting money into the community in their own way--essentially abandoning their political duty--is one of the great mysteries of modern times.
"But we don't want to make such a big company angry at us. After all, there's all these jobs."
These are grown men, too. It never ceases to amaze me.
September 29, 2009
A Humorously Inclined Informational Product
Grapevine, TX (JBB) -- "You'll be hearing from my lawyer."
People actually say this. People actually let these words escape their lips.
"You've got yourself a LAWSUIT, buddy." And we're supposed to be terrified.
Actually, nine times out of 10, everything IMPROVES when it gets turned over to a lawyer. That way you don't have to talk to the Angry Guy anymore.
Here's another one:
"Nobody wants a lawsuit."
 Really? Then why do we have a billion-case backlog in the courts? I would say that almost EVERYONE wants a lawsuit. People want lawsuits who don't even have LAWYERS.
About the most unthreatening thing you can say is, "You'll be hearing from my lawyer."
My standard answer is, "Which century will he be calling?" Most of what a lawsuit is these days is unreturned phone calls and conversations that go in circles.
"Well, I guess we could ask for a hearing." "What do you mean you guess? You're a lawyer." "Well, the judge may or may not hear us on this, and if he does hear us, it's probably 50-50 that he would rule against us."
"So what are you saying?"
"I'm saying we could ASK for the hearing, but we might not get it. This judge doesn't like this type of hearing."
"So what can we do?"
"I'll call the counsel for the other side. Maybe he'll give us part of what we want."
"Part of what?"
"Well, he's not going to concede anything, even if we're right."
"Why is that?"
"That would be malpractice."
"It would be malpractice to admit the existence of an undeniable truth, simply because it does not benefit your client?"
"Well that's not how he would think of it."
"What else can we do?"
"We could ask for a hearing."
This process will put you to sleep after a while, but it's not what I would call SCARY. When people say, "I'm filing a lawsuit," I think, "I bet you're the kind of guy who loves the accordion, too."
A lawsuit, in the 21st century, is a conspiracy among two or more people to argue for the next three years via email.
I don't mind if you don't, but wouldn't a quick game of Scrabble settle it a lot more efficiently, and with exactly the same chances of the right person winning?
Just don't threaten me. It's beyond boring. It's so far beyond boring that we're into the area of the comatose here.
It's like threatening someone with a 24-hour poetry recital in a foreign language. It's not a pleasant prospect, but it's not like you can't sit it out if you have to.
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