Sunday, July 26, 2015

Economic Q & A:

Q: Who operates retail businesses, that pay minimum wage, during the school year?
A: Adults, often with families to support. The adults can't just go home after school or for summer vacation!

Q: What does business do?
A: Invest in an enterprise to create a product or service... Customers buy what you’re selling and you get back more than you put in, or you fail.

Q: What’s your return on investment if very few people are confident enough to spend money?
A: Not much... Your business may sell what people want to buy, but when they aren't confident (don't spend money) your business still fails.

Q: What’s the return on investment from education?
A: Knowledgeable folks to staff your business. ROI is about 20 years for a college grad (pre-K to Bachelor's degree) and 15 years for a high school grad... There’s absolutely no monetary value on an educated workforce; No bankable return on investment.

Education is a long, complex and expensive investment with no direct, cash value; no for profit business can tolerate this cash free ROI.

Q:What’s the ROI on common carrier infrastructure: roads, bridges, water mains, sewers, waste water treatment, airports, seaports, electric power grid, telecommunications grid, etc…
A: People, materials and product can be moved about; life's boring because everything works. There’s no cash value on this return either.

Q: Research and Development (R&D): Capable of being large, complex and expensive... Starts with, “what if,” and goes to some result that may not have recognized value (money or otherwise) for a long time. What is the ROI?
A: Nobody knows... Requires a belief in crystal balls and fortune tellers to get predictions.

Q: What does regulation do?
A: It defines the, “playing field,” and rules of the game. Officials (government) must determine who’s playing by the rules and be able to penalize the rule-breakers. Following the rules might mean no more than predictable, day to day functionality... An environment where one succeeds or fails, on a level playing field, based solely on merit.

It takes a great deal of planning, research, development, time, money and effort to create an environment where an economy can function, let alone thrive. If the background prep is done well: rules are followed/updated/enforced and there are customers with money to spend... Then, and only then, will capitalism work. An economy thrives only if all participants do their part and pay their share of the costs involved.

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