Tag: business

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free trade & free markets too much government

Retreat to Atlanta

California, Yamaha, brain drain, business, escape, taxes

“California is the place you oughta be” — or so sang Jerry Scoggins for The Beverly Hillbillies. That may still hold true, if you are an oil millionaire retiring to a pleasant climate.

But if you are trying to make your fortune, the direction is outbound.

Take, for example, the case of Yamaha Motor USA.

The company’s big bike sales — motorcycles 500cc and up — went way down during the last dozen months, 19 percent. And since Yamaha’s operations are in California, hits to revenue like that intersect alarmingly with ongoing hits to the cost of doing business. 

Which explains the decision to move the company to “just outside of Atlanta, Georgia,” as reported by Jensen Beeler in Asphalt & Rubber.

“It should be an obvious statement that California is an expensive place to operate a business,” Beeler explains. “The state isn’t known as being a tax haven for corporations, the property values are high, which means buildings are expensive, and the standard of living for Los Angeles is one of the highest in America, which means that employees have to be paid a premium as well.”

And Beeler’s report does not even mention the state’s regulatory burden.

Problem? Southern California is “where the bulk of the motorcycle industry resides,” and Yamaha will face some difficulty being so distant from its industry’s major talent pool.* But there are a few automotive and motorcycle companies in Georgia, so Yamaha is not alone.

Indeed, if politicians continue to wreak havoc on their business sector, the Golden State bike industry will lose more than just Yamaha.

This is Common Sense. I’m Paul Jacob.

 

* The company will keep “a small cadre of Yamaha employees” behind in Cypress, California, focusing on testing and racing.

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Illustration by JGill (running silhouette from Max Pixel)

 

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Accountability folly free trade & free markets ideological culture local leaders moral hazard nannyism property rights too much government

Amazon’s Jeff Bezos Is …

Jeff Bezos, Amazon, Seattle, taxes, homeless tax, business

A half a year ago, when trying to make sense of the much-​publicized search for Amazon’s “HQ2” — a second headquarters city, away from Seattle — I concentrated on the subsidies that cities and metro areas were apparently throwing at Amazon.

It all seemed desperate, indecent.

But there was a story behind the story. Amazon has every reason to be looking for an escape route from the Evergreen State’s biggest city. 

The city’s leadership is nuts. 

“Seattle City Council members have finally released draft legislation,” the Seattle Times’ Daniel Beekman wrote last month, “for a new tax on large employers that would raise $75 million next year to address homelessness.”

The council blames the big companies for enticing workers into the city, thereby driving up rental costs and housing prices.

The tax would be on employee hours, would go into effect next year, and “in 2021, it would be replaced by a 0.7 percent payroll tax on the same category of companies,” explains the Seattle Times.

Now, if you tax something you discourage that something. That’s why progressives like sin taxes on sodas and fast foods. To discourage consumption. 

So when progressives seek to tax big producers, they are apparently trying to tax away the housing crunch by driving away big business.

Amazon reacted. It put a halt to an expansion project.

“Jeff Bezos is a bully,” said Kshama Sawant, the confessed socialist, speaking for the council. “I think we are in broad agreement on that.”

If that is her attitude, and that of the council — and the consensus of the city’s denizens — then what Amazon’s Jeff Bezos really is?

A “good businessman.”

This is Common Sense. I’m Paul Jacob.

 

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Photo by JD Lasica

 

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Accountability folly free trade & free markets local leaders nannyism property rights responsibility too much government

How to Ruin a Thoroughfare

city planner, city planning, Portland, Oregon, Better Naito, business

Cities require some planning. But the further beyond a certain minimum, the greater the ease with which a central planning authority can be captured — by zealots with more stars in their eyes than brains in their heads.

Portland, Oregon, is a case in point. Students from Portland State University had this brainchild: “Better Naito,” a project to transform SW Naito Parkway to “enhance the lives of pedestrians and bikers along the Waterfront,” as Jessica Miller of Cascade Policy Institute explains. Their notion was to reduce “car capacity from two lanes to one” during the peak season (actually more than half the year), opening up the cordoned-​off lane to folks walking and riding bicycles.

I’m not kidding.

Though proponents of the program enthuse about the “positive feedback” from the public, they tend not to deal with complaints from adjacent business owners, who now “see fewer shoppers” and must accommodate “employees who experience longer commutes.”

Opponents are organizing. The Portland Business Alliance promotes its petition with a simple question: “How Exactly Is ‘Better Naito’ Better?”

Portland is a prime example of the New Urbanism in action, which seems set on creating cramped places for people to live and discouraging folks from using their own cars. I’ve talked about this before, focusing on planning critic and Cato Senior Fellow Randal O’Toole. He has long been fighting the city planning cranks who appear dubious about their very job: providing roads and sewers and waterways that serve the all a city’s citizens, native, newcomer, and traveler alike.

My advice? Sign that petition, if you vote in Portland. 

The rest of us better plan to take a hard look at our city planners.

This is Common Sense. I’m Paul Jacob.

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folly free trade & free markets general freedom ideological culture moral hazard nannyism national politics & policies property rights responsibility too much government

Minimally Mugged By Reality

minimum wage, business, pay, workers, fallacy, profit, Bernie Sanders

It should shock no one: forcing businesses to pay steep minimum wages ends up pushing some businesses out … of business. Yesterday I looked at what minimum wage laws can do to low-​skilled workers. Today, consider the employers. When we make it harder to turn a profit, it becomes harder to profit. Businesses that can’t at least break even close their doors.

Many business owners are inclined to promote, politically, politicians who in turn support minimum wage hikes. Do they change their minds when mugged by reality? Alas, the trauma alone won’t convert a person to principled allegiance to free markets. 

I was reminded of this fact by a story about business owners in Minneapolis who stress their Sandernista credentials. 

“I’m a bleeding-​heart liberal and I’m a big Bernie Sanders supporter,” says businesswoman Jane Elias, an art store owner. “But this whole flat-​out, $15, one-​size-​fits all is just wrong.” Another victim, restaurant owner Heather Bray, says she’s a “proud, proud progressive.” But: “The arithmetic doesn’t work. People will not continue to go to budget-​conscious restaurants when they’re no longer budget-conscious.”

So … arbitrary minimum-​wage demands don’t add up in light of the demands of running their businesses under their particular circumstances. Well, no disagreement here. But take it further, please. Keep doing the math. The bottom line is that everybody, not just you — and always, not just sometimes — has the right to make his own decisions about his own life and property.

And profit by it.

This is Common Sense. I’m Paul Jacob.

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Accountability folly free trade & free markets general freedom initiative, referendum, and recall nannyism national politics & policies property rights responsibility too much government

Minimum Shock

minimum wage, closure, restaurant, business, prohibition, wages, pay, Berkeley, San Francisco

“Three restaurants vacated the Bay this week, with Berkeley’s Bistro Liaison getting the most attention,” the San Francisco edition of Eater informs us. “It’s a bittersweet exit for the owners, who plan to start new careers.”

The week in question was in February. But this was not an isolated event. Sixty-​four Bay-​area restaurants and fast food joints closed their doors this last winter.

That is a lot of closures.

Why?

Every eatery has a different story, but the entry December 17* provides a big clue: minimum wage hikes.

Citizens should hardly be surprised. They got what they asked for. The minimum wage went up to $13.00 per hour last July, and will go up another two bucks next year. And this was the result of a citizen initiative. “On November 4, 2014, San Francisco voters passed Proposition J, raising the minimum wage to $15.00 by 2018,” the City Office of Labor Standards and Enforcement tells us. 

And the thing about minimum wage laws is that they do not — either by magic or by law — directly raise any wages. They, by law and quite directly, prohibit wage contracts below the minimum established. 

Businesses then react, struggling to accommodate the newly imposed costs. Sometimes they keep all their employees and economize on other inputs, but often they must re-​arrange hours and workers and whole production schemes.

If hemmed in elsewhere, they just go out of business.

Just as one should expect, according to the law of supply and demand.**

Citizens might wish to reconsider. That is, initiate a measure to repeal a previously successful initiative … that gave us this unsuccessful policy.

This is Common Sense. I’m Paul Jacob.

 

* The entry reads thusly: “OAKLAND — alaMar Kitchen and Bar as you know it is shuttering on December 17, but will reopen in the new year with a fast casual format. The owner points to minimum wage raises and the cost of doing business in the Bay Area as the reasons cited for the closure/​change.”

** It is often said that businesses just “raise prices” and “pass along the costs” to consumers in general, but, for reasons of supply and demand, they cannot do this without decreasing sales and thus revenue.

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Accountability free trade & free markets insider corruption national politics & policies responsibility

United States of Corruption

Romney, Trump, crow, corruption, dinner, illustration

When Hillary Clinton assured her insider sponsors (as we learned through WikiLeaks) that there would be a crucial difference between what she tells the people and what her actual policies would be, she was not merely admitting to a private and a public face.

The President is legally, and by honor, bound to serve the American people, not Goldman-​Sachs. What she was confessing to was more than the mere appearance of a conflict of interests.

She boasted a plan of betrayal.

In that light, President-​elect Donald Trump’s international business deals seem … what? His first diplomatic meeting — with Japanese Prime Minister Shinzo Abe — included his daughter and partner-​in-​business Ivanka.

It seems to at least wander into conflict-​of-​interest territory, if not stake claim and hoist up a flag proclaiming Trumpistan America!

So I was very pleased, yesterday, when the President-​elect vowed to step out from the running of his global business and branding empire.

Earlier, he had brushed off conflict-​of-​interest concerns, saying he could run his empire and … ours.

Apparently, his new White House appointees have convinced him that this business dealing while President was a huge problem. “I feel it is visually important,” he explained Wednesday morning, “as president, to in no way have a conflict of interest with my various businesses.”

Thanks, Steve Bannon?

Or, maybe, Mitt Romney, with whom he dined* the night before?

I hope Mr. Trump follows through with this, as well as distance himself from business partner Ivanka as unofficial policy advisor.

Americans did not reject Corrupt Hillary only to wind up with a Corrupt Trump set.

This is Common Sense. I’m Paul Jacob.

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Romney, Trump, crow, corruption, dinner, illustration