Category Archives: Big government is the problem

Are teachers underpaid?

Are teachers underpaid? No. That’s not to say there aren’t individual teachers that should be paid more, just as there are assuredly individual teachers that should be paid less (or fired). But the “national conversation” that is being continually pushed (from the left mostly, e.g. see recent Time Magazine spread on “underpaid” teachers) is not so much about worthy star teachers being passed over for raises but rather how the collective known as “teachers” is “underpaid”; identity politics now driven by profession. With credulous acceptance the public will always answer in the affirmative if asked should teachers be paid more because what we have been conditioned to hear instead is, “do these benighted souls deserve more for their selfless work?” With “more” being the unmoored comparative there is no upper bound for “worth.” Their salaries could double every year and every year if asked, “should they earn more” we would nod our heads in bobble-head synchrony.

Please do not misunderstand dear reader, teachers do indeed provide an important service to their fellow man – just as does every other working person. How do we know this? Well, if you earn a salary or income, then that demonstrates how much value you produced. Work in and of itself is not valuable – just ask the guy making mud pies all day – no one is going to pay him a dime (sorry Marx, labor theory of value was laid to rest long ago). The “hardness” of your work is irrelevant – only the result counts. Work is only valuable when subjectively judged to have value by fellow human beings, that is, an offer to trade parts of your work for theirs is made. Value is subjective and not absolute. When people say “teachers should earn more” I always wonder, “ok, what is the mathematical formula that is used to solve for pay of a teacher?” You may believe that teachers serve a more valued role in society than say the movie star or the lawyer, but the distribution of talent in society says otherwise. Labor, like any other economic good, is subject to the laws of supply and demand. The issue with teacher’s pay is summed up nicely in the following quote from the Time article,

“Hutchison’s siblings—an attorney, engineer and physical therapist—all earned graduate degrees, but now she makes half of what they do.” 

Hutchinson (the teacher) makes half of what her siblings make because her siblings all chose careers that are in much greater demand than that of the public school teacher. The path to becoming an attorney or engineer is long and arduous and very few have the skillset to complete it. The supply is thus low and it so follows that demand (and thus pay) will be high. On the flip side is the path of teacher; most people possess the skillsets needed to teach (after getting a 2 year teaching degree). It is an “easy” career (relative to other more highly paid careers), and so that low barrier to entry means many will take up that profession – supply is thus high and so demand (pay) will (all things equal) be lower when compared to professions with limited supply.

Because we are mainly focused on public school teachers this introduces either unions or the regimentation of a public sector workforce structure into the wage equation. In these systems wages are based primarily on seniority rules and have little to do with how effectively one performs their job. Being government run, raises will typically trail inflationary trends (inflation being 100% caused by the government mind you!) due to slow to act legislatures.

A more market-based approach (where teachers could be rewarded directly without concern for the “seniority” of others) would realize the top teachers earning top salaries, thus incentivizing those in other high paid professions to switch careers (if their preference had been for teaching). The end result of this process would be highly paid teachers dominating the profession and driving out the weak or ineffective teachers. If two teachers making $125k each can “out-teach” the same number of students as five teachers making $60k each, then it would be a win for the students, the teachers, and the taxpayer. If we want teachers to make more then let’s unshackle the profession’s public sector regimentation and union demands that maintain a status quo of oversupply driven by the politics of envy.

Tyranny of the Do-Gooders

In 2012 Jeffrey Dallas Gay, Jr. (age 22) died of an overdose of prescription drugs. There is little more tragic than death resulting from something so easily preventable. As a parent the instinct is strong to stamp from the face of this earth that which our child became entangled in. But just as setting a national 5 mph speed limit would be a counterproductive response to death by automobile accident, so too are the knee-jerk reaction of legislators when faced with these sorts of drug related tragedies. Senate Bill 81 was recently introduced into the Georgia General Assembly with the stated goal of trying to eliminate opioid overdoses. As with all such intrusions by the state into the lives of individuals, it leaves in its wake the collateral damage of individual lives sacrificed on the altar of the greater good.

The bill preamble first cites a scary-sounding decontextualized statistics (that roughly 30,000 die annually from opioid overdose – context: 0.008% of the US population) it then moves headlong into the “solution.” Now, if 30,000 people a year were dying because some enemy was lobbing bombs at US cities, then yes, the government should do something about that. But we aren’t dealing with an external foe, rather an internal one, ourselves. Laws on gambling, prostitution, drugs, alcohol, compulsory health insurance, etc. all share in common the well-intentioned desire to protect us from ourselves. But such laws undermine the very idea of a free nation built on individual rights. Do you sell your soul to save your life?

SB 81 purports to solve, or at least mitigate, the opioid “epidemic” by limiting first time opioid prescriptions in the state of Georgia to no more than a 5 day supply. Additionally every pharmacist is required to log all such prescriptions into a statewide database (cough, Big Brother, cough) so usage can be tracked to prevent someone buying “too much” (whatever that may be). Just as someone today can hit a wall if they try to buy “too much” Sudafed so too will the unintended consequence be that some must suffer in agonizing pain because their prescription is “too much” under the eyes of “the law.” But hey, who cares about individual suffering if we think our policy might help someone. What’s next, tracking our grocery purchases to be sure we aren’t “abusing” our bodies by buying the food that makes us less healthy and leading to higher health care costs? The greater good of “public health” would surely allow for such reasoning. Yes, laugh now, but it’s coming one day.

Of course these legislators want their cake and eat it too. The paragraph stipulating no more than a 5-day supply is quickly followed by a paragraph supporting the right of a physician to prescribe whatever they deem medically necessary. So once again politicians get to bask in the limelight of “doing something” while not actually doing anything other than adding yet another layer of bureaucracy for doctors who are already over-burdened with a mountain of regulatory paperwork they have to comply with from the local, state, and federal level.

The sad fact that no one wants to face is there no way to solve the opioid overdose problem other than getting people to follow the prescription on the bottle. And that’s not going to happen because people are people and some people just can’t follow directions. People “abuse” antibiotics as well by doing the reverse, not taking enough. This promotes antibiotic resistance. Indeed, nearly as many people (23,000) die each year due to antibiotic resistance. Why no bills designed to solve that “crisis”? Perhaps because no one is getting high off antibiotics? The desire to stamp out any possibility of artificially induced pleasure seems to be the driving force behind drug policy in this country. Anyone who needs a medication should not be made to suffer the hardship of additional hurdles just to get what they need because a handful of people can’t act responsibly. If you want to make a meaningful inroad toward ameliorating this problem, lobby the FDA to remove rules on side effect disclosures that require events with a 0.00001% chance of happening being listed. This leads to information overload and people just tune out everything. If the warning listed only actual hazards – like death from overdose – people would pay attention. Thus unintended consequence of government meddling leads to “solutions” like SB 81 which will invariably lead to more unintended consequences which can only be solved by yet more rules and legislation. The state cannot remake man through the pen. It must stop trying to do so.

Mother may I?

You walk outside one morning and witness your neighbor struggling to move a tree that has fallen across his driveway. Do you (a) ask him how you can help or (b) compose a letter to request a hearing before the town council in order to request permission to assist your neighbor? You request contains a detailed outline of your proposed methods of assistance whereupon you dutifully wait 2-3 weeks for a response back from said council. If you’re like 99.999% of people on this planet you go with (a). And that right there is what the free market is all about. People identifying a problem encountered by their fellow man, visualizing a solution, and then offering that solution If the solution is desired then people will show their acceptance by voluntarily engaging in trade in order to obtain said solution. If not desired then no such trade takes place.

But that is not the world we live in. There is no free market in the US or anywhere else in the world. There must be a defect in humanity that inflicts some with the instinct to force their ideas of what is normal or right or fair onto those that happen to be in proximity to them. In other words, we have a “permission market” – if you wish to solve a problem and offer the solution to the world you must first seek out the permission of these self-anointed guardian and kiss their ring on bended knee.

A recent example of this ring kissing involves a company “VidAngel” – a streaming service brought to market by two brothers who wanted to stream movies to their home with certain profanity or violent acts omitted. They searched high and low and when they couldn’t find anyone offering such a service, they started one! As an aside, this is how many such innovative companies get a start – unable to find a solution to a problem the entrepreneur solves the problem and then markets it to others with the same problem. CEO Neil Harmon recently explained on the Tom Woods Show podcast that when they started out they knew there would be copyright challenges to what they were attempting (witness the fall of Aereo, another innovative problem solving company) so they made sure to strictly follow the letter of the law. Their service, they contend, falls under the Family Movies Act, which gives consumers the right to filter movies they own – on videotape. So in order to comply with that antiquated provision they actually purchase on the consumer’s behalf a DVD or Blu-ray disc that is dedicated to only that consumer. Then their software allows the consumer to selectively remove certain words or content. Don’t like the “f” word – then delete away! Ok with profanity but don’t want violence? No problem! They were not secretive about their business. They requested licensing arrangements from all the studios. Some granted a license, but for those that did not, they followed the disc per consumer route. Then the big three (Disney, Warner Bros and Fox) decided to put an end to their little endeavor – not alone mind you, but with the help of the United States Federal Government. You see government is here to protect our rights, even the imaginary ones (copyright, trademark, patent and before that, slavery). VidAngel has now been shut down due to an injunction issued from U.S. District Court in California.

Even in the permission market it’s not enough to ask and get permission, you are also subject to the mercurial whims of those in power. Almost enough to make one have second thoughts about starting a business…nah… regulatory uncertainty would never have an impact on business starts and job growth.

In Defense of the Gouger

There was a recent disruption in the supply of gasoline to Georgia due to a ruptured pipeline. The resulting shortage was the predictable result not of the constrained supply but rather busybody price controls imposed by the Governor. The universal support by the public for the Governor’s actions betrays a breathtaking ignorance of basic economics. The law of supply and demand cares not one whit for your desire to maintain a constant supply of a good while forcing its price down.

Not only should “gouging” be “legal,” but in fact welcomed. Gouging ensures a supply of a good even when supplies are constrained. For example, gouging of event tickets ensures that you can get a ticket at a moment’s notice. Although the price is high would you prefer high price and ticket vs. no ticket? Rising prices due to increased demand is the market-natural rationing system. If prices stay low, then no one cuts back and the good is quickly consumed. High prices incentivize conservation so a given supply last longer and is available to those that desperately have a need of it. Hypocritically the state blocks private business from such practice but happily engages in it on a regular basis in the PeachPass toll lanes of I-85. I have personally seen prices go from 7¢ to over $11 for the same stretch. Of course this is a good thing, and the state knows it, so it is rather disingenuous for them to block it in other arenas.

The most common objection is what of the station that raises their prices during the day on the mere rumor of a disruption? They’ve already paid for the gas in the tanks in the ground – how can they possibly justify reaping these windfall gains? Easy. The higher price (and profit) ensures the station itself can buy more from their supplier at the soon to be higher prices. If the gas in the ground cost 25 and is sold for 30, then the station takes from those sales 25 and buys the same amount again. But if they are not allowed to raise prices and it soon will cost 100 to refill the station’s tanks, then they can only buy 1/3 of what is needed and so will run out that much faster each time. If they can charge 120, they can take 100 and fully replenish the tanks ensuring a steady supply.

A tertiary benefit of high prices is as economic alarm. It signals too society that resources are more urgently needed where prices are high. People then swoop in to access that higher profit potential and so the supply immediately begins to swell and prices fall. So even when such “gouging” occurs it will not last long as the market corrects itself naturally. No need for men with guns running around threatening people.

The usual objection here is that people can’t afford the higher prices. Please. No one is going to be filing bankruptcy because they spent extra on gas for a week or so. The above average amounts are no more than typical monthly discretionary spending (movies, eating out, etc.) The prospect of possibly foregoing a few luxuries doesn’t seem like the sort of essential human right that rises to a compelling state interest. Indeed, state intervention only makes matters worse – when it comes to economics, there’s no free lunch.

Never Forget

“We will never forget.” This sentiment is nearly universally applied in remembrance of the September 11 anniversary. But what does it mean? Since most do not personally know someone who perished, it is doubtful it is intended to memorialize a particular individual. Rather, it is intended as a warning to those that attacked us, “I will never forget how you hurt us; you will pay for what you have done.” It is a passive-aggressive remembrance. But when a bee stings someone perhaps it is more fruitful to try understanding why they got stung than to wage war against the hive. Yes, the bee stung me and that rightfully makes me angry, but, perhaps my buddy should not have thrown that rock at the hive five minutes earlier. Maybe, just maybe, that had something to do with it. Sometimes we pay the price for the misdeeds of others. It is not fair. It is not right. We can’t change the past. But we can change the future by learning from the past.

Instead of being led by the nose, we need to start asking the questions we’re not supposed to ask. If the 9-11 assailants did what they did because they hate us for our freedom, then why have there not been attacks on every “free” western democracy for the past two hundred years? For some reason the history books seem to be silent on jihad-style attacks in the 1920’s or 1870’s. I wonder why. It is odd that the “modern” notion of Islamic extremist only developed post 1950’s. Let’s not forget that the US and UK governments played a hand in the 1953 Iranian coup d’état that saw the democratically elected Mosaddegh ousted in favor of a puppet dictator (the Shah). Let’s not forget that the Middle East was arbitrarily carved up by European powers in the wake of World War I and II. Let’s not forget Israel was created in 1948 by the UN by forcible removal of people from their homes. There is no single cause to this mess, but, that is the nature of an abusive relationship. A multitude of transgressions, large and small, will after many years culminate in a response. An abused spouse may long endure abuse until finally one day they strike back, violently. Such events do not occur in a vacuum.

To be clear, this is not “blaming America,” unless you subscribe to the fallacy that America is its government. Consider: my neighbor repeatedly tosses his dog’s poop over his fence into another neighborhood despite their protestations to cease such behavior. Then one day those neighbors toss a grenade back which also results in my house being damaged. I’m going to darn well blame them both! My neighbor’s actions precipitated this response. Stating that my neighbor played a hand in those events does not mean I’m disloyal to my neighborhood and blaming my neighborhood. A member of the group is not the group itself. Repeat after me: blaming our government is not blaming America. That is the lesson we should never forget: the actions of those we elect have consequences.

Faith Healing

The current outrage-du-jour over the skyrocketing price of EpiPens is a perfect example of the effectiveness of a societal indoctrination that leaves us blind to the parasitic ills wrought by the state. The credulous media reports with much indignation and finger wagging over yet another example of an evil profiteering corporation charging outrageous sums for a life-sustaining drug. Clearly this fits with the media’s preconceived narrative that capitalism is bad and we need government to right such wrongs. Case closed. No need to scratch the surface and investigate the cause and effect of this phenomenon. Even those media outlets that do ask the right question and get the right answer are still somehow blind to the necessary solution. They recognize that prices are high because of a lack of competition (a result of patents), third party payment distortions, and cronyist-driven increased demand (fueled by FDA mandates). Even the likes of the Journal of the American Medical Association have admitted as much in a recent article.

“The most important factor that allows manufacturers to set high drug prices is market exclusivity, protected by monopoly rights awarded upon Food and Drug Administration approval and by patents. “

But the universal answer to solve these woes? More of the same: state intervention. If we can’t even imagine a world without state-driven influences in the market then there is only one option that remains – more state intervention. The state is entirely responsible for the current quagmire that is our health care system, but hey, maybe more regulations can fix the problem the first, second, and third set of regulations caused. As they say, if all you have is a hammer, then every problem looks like a nail.

There is no quick fix. The foundation is built upon the sand of wishes and emotion rather than the stone of the unwavering principle of liberty. To solve the problems in the health care market we must dismantle the framework of rules, laws, and regulations that can do nothing but produce this distorted market.

Step 1: Eliminate the patent system entirely. Without patents competitors can instantly respond to prices that get out of control. Novel inventions have a natural period of protection because of secrecy and first-to-market advantages. The more obvious the invention, the more easily it could be copied. Praising the patent system for rewarding inventors with monopoly pricing while simultaneously pining for the low price of generics is the height of cognitive dissonance.

Step 2: End the FDA’s monopoly privilege of being the ONLY agency allowed to review the safety and efficacy of drugs. If the FDA is going to take years to approve a drug or device (resulting in countless needless deaths and higher costs) then perhaps it is time to let competitors help them out.

Step 3: The FDA and its competitors should be financially responsible for their mistakes just like any other company. Presently the FDA bears zero responsibility if they approve a flawed drug. If there existed in any other sector of the economy such a lack of competition and accountability we would be outraged. Yet somehow this state of affairs exists with the FDA and no one bats an eye. Most curious.

It’s almost like society has been brainwashed into the credulous narrative that those in government are not mere mortals but rather angels who are immune to normal human foibles. This blind faith in the supremacy and righteousness of the state has closed our eyes to the truth no less than medieval faith in the Church blinded men to the truth of heliocentrism. Time to question that faith. Our very lives depend on it.

Hooked on FERPA

There is no guarantee in government more assured than a bill doing the exact opposite of what its name implies. The “Affordable” Care Act – need I say more? An early vintage of this phenomenon is the Family Educational Rights and Privacy Act, otherwise known as FERPA amongst college students and their parents. This law, enacted over 40 years ago, purports to protect the privacy of a student’s education records. But, rather than protecting privacy it simply affirms what was already true: that parents, or whoever is paying the bill, could see the results of the product they are paying for, namely any and all records related to their student. Any educational institution denying such access wouldn’t last long as no one would go there. It’s like passing an act guaranteeing the right to eat a meal you paid for. Legislative accomplishment is often measured in answering questions no one was asking.

But rather than protecting privacy, FERPA seeks to undermine it by (a) taking away the rights of the person paying for the education by virtue of the student’s age and (b) carving out a host of exceptions to that privacy for a number of state actors and various “officials” that the student or the parent may very well wish to restrict access to. But they no longer have that right. They had to give it up in order to retain that which they already had.

As both my wife and I attended a “private” college we had no prior experience with FERPA. During the orientation day for the public university where our eldest son is attending we and (based on the laughter in the room) many other parents first learned of the head popping idiocy of this “law.” The school took great pains to underscore the reality that unless our child gave us specific written consent to access their “educational records” we would not even be permitted to pay their housing and tuition bill because disclosure of the amounts owed was an illegal sharing of a student’s educational records. Brilliant. So time to crank up the paperwork machine as 99% of parents “encourage” their student to fill out the permission paperwork just so they can pay their bill. I guess it never occurred to our wise overlords that perhaps it might be more efficient to make the default option the one that the vast majority requires.

I say we had no prior experience with this act because private colleges typically do not receive funding from the Department of Education. However most public universities do. So in that sense FERPA is “voluntary” – all the school has to do is opt out of such funding. But that’s about as likely as a shopaholic cutting up their credit cards. These schools are hooked on this federal money and will do anything the Feds “ask.” If the prospect is losing millions in DOE funding or making students and parents jump through absurd hoops or be grossly inconvenienced, they’ll choose the latter every time. If you make a deal with the Devil, then you play by his rules.

On Brexit

The recent vote to “Brexit” the European Union in Great Britain has provided an opportunity to cast light on the hypocrisy of one side and the irony of the other. The “leave” (pro-Brexit) camp taps into the natural human disdain of involuntary control. From willful toddlers to headstrong teenagers to entrepreneurs – no one likes being told what to do. This instinct is normal and natural. The problem occurs when one conflates ones own sovereignty with the sovereignty of the “my”, e.g. my town, my city, my state, my country. People erroneously view this “regional sovereignty” through the lens of a primitive territorial instinct that says everything I can see is “mine”. This territoriality or regionalism is hypocritical at its best and downright evil at its worst. Regionalism purports to trump the sovereignty of the individual by placing the interests of the collective above those of the individual. In short, the many tell the few what they may or may not do. Now, were these constraints restricted to bans on murder, theft, and rape there would be no complaints. But it does not stop there. The regional collective (city, county, district, state, nation, or treaty union) dictates rules over every minutiae of life.

Every nation-state that seeks independence is guilty of the deepest hypocrisy, as they invariably see no problem leveling the same type of control on their own smaller political sub-units. So yes, seek independence, but be prepared to give it as well (cough, Northern Ireland, cough, cough).

The stay (pro-EU) camp is actually host to two types of irony. The first is the credulous acceptance that a large bureaucratic body is needed to achieve an end (free trade) that could also be achieved were each member state to simply do nothing to interfere with the free movement of goods. Which is easier: employ a thousand men to drain the lake you are sitting in so that you might be dry, or, simply get out of the lake?

The second irony pertains to their secondary goal – human unity. The Centralizers (anywhere) believe they are an enlightened sort whose high-minded goals of inclusiveness, equality, and community stand in opposition to backwards notions of nationalism or individualism. This conceit leaves them blind to the fact that centralization is itself inimical to their desired goals.

Forcing people together into larger autarkic unions strengthens those unions in a way that leaves them more capable of waging war (indeed, Turkey shot down a Russian jet last year knowing full well the EU would back it up in a potential Turkish-Russian conflict). Numerous, small groups are too weak to do this. Their interdependence through trade guarantees peace; the hand and the arm need each other, it would be folly for one to destroy the other. Counter intuitively; the freest individual is likewise the most dependent individual. No man is an island, as they say. We rely on our fellow man, through trade, to provide all that we need. Large trade unions like the EU or NAFTA are superfluous. Trade is the lifeblood of human civilization and existed long before such pan-national agreements. Indeed these agreements, rather than “freeing” trade instead manage it – to the benefit of the political and economic elites within each territory. They transform former explicit trade barriers into new regulations. These regulations stifle trade and growth by extinguishing the entrepreneurial flame before it has a chance to flourish. The EU has 109 regulations governing pillows; Europe is in economic decline. Coincidence?

Centralization foments a unique kind of conflict. Not allowing or creating barriers to leaving the union can do nothing but foster resentment. In the past (and present) it has lead to wars. Fortunately today in the case of Brexit it has only risen to the level of schoolyard insults. Heaping ultimatums or derision on the party attempting to leave (as many in the EU are now doing to Britain) smacks of the sour grapes hurled by a jilted partner when a romantic relationship ends: “hey baby, you’re nothing without me!”

Decentralization of authority achieves the goals of peace, prosperity, and equality because it depends on trade. Two people that but for ideological or religious reasons would never have cause to interact are more than willing to ignore those differences and engage in the “just business” of trade. Once a trade relationship is established, a human relationship will soon follow. Trade humanizes the foreigner, stripping away their “other group” title leaving behind only the person. Trade then has the power to expand both our wealth in things and in each other.

The path to uniting humanity is more, not fewer, groups. We should be promoting the break up of states, not their mergers. If all countries could dispense with this Trumpian siege mentality that implies a country can’t be “great” unless it is also autarkic, the world could achieve the peaceful utopia that the one-world centralizers dream of. Spontaneous order works in Nature. We are a part of Nature. It will work for us as well if we can make the right choice to the only question that matters: shall our relationships be governed by force or choice?

Being a Jerk at Work is a Human Right, Says Labor Board

The National Labor Relations Board (NLRB) recently told T-Mobile that its policy against workplace incivility is illegal. Nope, say the bureaucrats: workers have a right to be surly on the company dime.

The Huffington Post crowed about the ruling in a recent post. The article’s title, “Your Employer Can’t Force You To Be Happy,” betrays a fundamental misunderstanding of the meaning of “force.” The only one employing force in this situation is the NLRB. The only victim of force is T-Mobile. If T-Mobile refuses to comply with the administrative law judge’s order, eventually men with guns would come and haul its executives off to jail.

You Keep Using that Word

For the record, neither T-Mobile nor any employer uses men with guns to compel people to continue working for them. The confusion here stems from a flawed colloquial use of the word “force.” The situation called life requires that we eat, which in turn requires that we work to earn an income to acquire food. That darn Mother Nature forcing us to work! By the same token, if your attitude puts you in a situation where you can’t easily find another job, then that makes your employer the bad guy. Apparently anything asked in pursuit of maintaining that job is a use of force against you.

These are not monstrous expectations.

The employer-employee relationship should be an entirely voluntary one. To the extent that is untrue today is almost universally to the detriment of the employer. Employer rights (that is, the natural right to form mutually agreeable contracts) are severely restricted by an avalanche of labor laws, rules, and regulations.

Rules run the gamut from merely annoying (pay frequency standards) to debilitating (lawsuit risks when firing someone for performance reasons because they happen to be a member of a “protected class”). Somewhere in between is the difficult task of setting even basic conduct standards for employee behavior because of the intractable minefield that is the National Labor Relations Act.

The NRLA guarantees to all employees (irrespective of union membership status) certain “rights,” chief among these being the right to engage in any and all behavior that is conducive toward forming or joining a union. Anything that could remotely be construed to restrict this right is verboten and can earn the employer the label of “criminal”.

Even a rule as simple as stipulating that company resources can only be used for company business is disallowed on the grounds that employees have a right to use company resources to communicate with each other about working conditions. Apparently suggesting employees communicate after hours and using their own e-mail accounts or photocopiers is simply too much of a burden. I mean, who has access to phone service or printers at their house these days?

Government has given an official imprimatur to poor customer service.

The recent NRLB ruling similarly struck down several provisions of T-Mobile’s employee handbook that it viewed as being too restrictive with respect to employees’ organizational rights. Among these included a rule “prohibiting employees from arguing with co-workers, subordinates, or supervisors; failing to treat others with respect; or failing to demonstrate appropriate teamwork” as well as requiring employees to “maintain a positive work environment by communicating in a manner that is conducive to effective working relationships with internal and external customers, clients, co-workers, and management.”

These are not monstrous expectations. People actually want to work in places where management discourages acting like a jerk.

The head-splitting logic employed by the NLRB “judge” is as follows. If an employee is unhappy about work conditions, he or she has the right to externalize that unhappiness to co-workers and customers.

The Right to Treat Customers Poorly?

Being “forced” to cover up unhappiness, in this view, would be tantamount to disallowing their right to free expression of their anxiety over work conditions. This raises the question: what if the employee woke up on the wrong side of the bed? This has nothing to do with working conditions. Surely that is not a protected activity. How are we to differentiate the two?

Government has given an official imprimatur to poor customer service. In a way it makes sense. Government workers are infamous for their ill tempers (think the DMV). But if bureaucrats are able to propagate their own sullen attitudes toward work and service throughout the private sector, they won’t look so bad in comparison.

There is an old workplace humor poster that stated, “Sometimes the best solution to morale problems is just to fire all of the unhappy people.” Let’s start with the scowling faces in government before they make us all as miserable as they are.

Greg Morin

Greg Morin is the CEO of Seachem Laboratories which manufactures equipment and chemicals used in the maintenance of saltwater and freshwater aquariums. He holds a PhD in chemistry from the University of Notre Dame and maintains a personal blog at .

This article was originally published on Read the original article.

Crocodile Tears

We often hear that that manufacturing is dying in the US because of unfair overseas competition. US manufacturers are either going out of business or shifting operations overseas. However global competition plays a role across all industries, not just manufacturing. Something else is at play. US tax policy singles out manufacturing (actually nearly any business dealing in tangible goods) with unfair rules designed to extract more tax relative to a service-oriented business with the same income albeit while claiming the same tax rate. As the owner of a small US manufacturing firm, I have sadly gained firsthand knowledge of the severe disadvantage one must contend with if they have the audacity to try and make or sell goods in the United States.

The signs of this are not immediately apparent since the nominal tax rate for all corporations (non-pass through) is 35%. The trick though is in the sleight of hand where the focus is on the tax rate while it is the definition of profit that is critical. The common definition of profit is any money remaining after subtracting all expenses from revenue. And we all know what an expenses is, right? Anything you spend in furtherance of the goal of obtaining said revenue. Well unfortunately it’s not that simple, at least as far as the IRS is concerned. In business there are both overhead expenses and capital expenses. Capital expenses are not immediately deducted against revenue but rather depreciated over many years. So if you buy a $100k piece of equipment you don’t deduct the $100k, you deduct maybe $10k that year and for the next 9 years. There may be legitimate business reasons to view the numbers that way for accounting purposes however beyond a certain minimal size a business may not use the cash method (which does not employ depreciation) for tax computation but instead must employ the accrual method which invariably yields a higher figure by shifting more future income into the present. This puts such businesses (primarily manufacturing which is a equipment intensive industry) at a severe disadvantage insofar as the part spent but not deducted accrues tax. But it gets worse. Manufacturing maintains inventory and the inventory is treated as a capital expenses as well therefore none of it can be deducted until sold. And even when sold it is not taxed at lower capital gain rates but at higher regular income rates. The IRS knows the game of “heads I win, tails you lose” quite well.

Ironically it is a rapidly growing business that is most susceptible to such tax harm as most if not all the profits are invested back into the company in order to grow the inventory to keep up with increasing sales. So if you make a $1 million but use it to buy $1 million in inventory you owe $350k in taxes even though you don’t have $350k on hand. Oops. So you either have to borrow it, incurring even greater costs, deliberately slow your rate of growth, or just go out of business. But wait, it gets even worse. If you do so well that your sales exceeds $1 million the IRS redefines expense once again (Section 263a) and says a certain percentage of your payroll, rent, utilities, insurance, etc that is indirectly associated with producing the inventory must also now be capitalized into the value of the inventory. This shifts even more money from the expense column to the profit column. So based on pure available cash flow you may have made $350k but based on IRS capitalization requirements they say you made $1million. So the entire $350k you made is sent to the IRS on your phantom $1 million income and you end the year with nothing.

Only manufacturing is subject to these absurd redefinitions of expense and profit. Service industries have no inventory and nearly no equipment so their profit more or less equals their cash flow. Farming gets a million loopholes to avoid these issues. The rules governing profit/income are far more germane to ones tax bill then the tax rate itself. If we want manufacturing to flourish in this country again perhaps we should stop punishing those who try to engage in it while crying crocodile tears about how US manufacturers are fleeing this country.