Tuesday, December 6, 2011

How to go broke without really trying

Good Afternoon:

I'll tell you a short tale if I may.
My wife and I moved our family to the small town where we live about 43 years ago.

It wasn't long after we moved here that I needed to go to a lumber yard for something, I forget what. Anyway, the lumber company/hardware store I went to was a flourishing business, with quite a number of employees and lots of customers. One had to wait in line to be waited on.

I enjoyed doing business with this company for quite a number of years, until 15 or 20 years or so ago, when the owner's daughter returned to town from college with a shiny new husband.

The owner of this business then decided that he could at long last retire, and turned the operation of the business he had built up over many years over to his son-in-law.
Some where around this same time, Lowes and Home Depot opened stores in a town across the river from our town, about 15 or so miles away, and predictably, business at local lumber yards and hardware stores began to flag somewhat.

Instead of trying to maintain their business by continuing their fine service and reasonably, if not as cheaply priced, lumber and hardware items and maintain, after a short period of adjustment, the bulk of their clients, the son-in-law decided to make up for the reduction in business by raising the prices on their stock.

This , of course, had the predictable effect of costing the business even more customers, as the amount they could save by driving across the river and shopping with one of the new mega-stores was now even greater, well worth the time and gas necessary to make the trip.

The son-in-law responded by raising the prices even more, and laying off most of his employees, while he was busy hunting, fishing and playing.

I've only been in this business a limited amount of times in the last few years, as I've not had the need, but on one memorable occasion, I needed a gallon of outside white paint, and didn't figure it would pay me to go over the river to save three or four bucks. I found a gallon of paint at the store O.K. I found a can with about a quarter of an inch of dust on the top and discovered when I took it to the counter to pay for it, that the price for this ordinary paint was now close to Forty dollars, instead of the Ten or Twelve dollars it had formerly been. Obviously I put the paint back on the shelf and drove to the mega store.
As I write this, the local, once flourishing store is just about out of business, the son-in-law has run the business into the ground.
The founder and original owner of the business died a few months ago, and I anticipate that the business will close in the near future.

I tell this story as an illustration of how to kill a business, a company, or an organization, or even a Governmental entity.

I very much fear this is what will soon be happening to this beloved country of ours.
By trying to raise taxes on one segment of the population to make up for the taxes no longer paid by another segment of our population, as their jobs are now gone, the United States is doing exactly what the lumber yard did. and why?, well for the same reason. The "New Owner" doesn't know what he is doing, due to a lack of experience.

Now the local lumber yard owner, when asked why his business is off so much has said it was because of the way the founder and his employee's ran the business.....for over 50 years!!!!! I think you'll agree that this is a classic "CYA" by someone who just flat doesn't know what he is doing.

As a single example, look just to the U.S. Postal Service. This week they announced that it would now take more than twice as long to deliver a first-class letter AND would also cost more, as the price is going up on first-class stamps. I guess the P.O. officials are saying," well since we are doing less, we ought to charge more for it to make up for the loss of business due to higher prices and slower service. that ought to do it".

Et Tu, D.C.?



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