

How Entrepreneurs Can Profit with Obama - stanley
http://www.businessweek.com/smallbiz/content/nov2008/sb2008117_260182.htm

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nihilocrat
A lot of this points out why I just don't understand "right-leaning" folk.
Unless you are a huge, faceless corporation you really shouldn't be paying
your workers minimum wage or giving them crappy health benefits, so I don't
see how your expenses in those areas are going to increase or that "It's going
to be good times for workers. Not such great times for employers." Oh no, you
might have to start treating them _slightly more_ like human beings!

A lot of this advice is just that "smart people will find loopholes in the new
tax codes and avoid paying it like they have been for decades", bordering on
tax fraud. He indirectly admits he makes over $250,000 a year, and I hate to
voice a knee-jerk reaction, but he should really be counting his blessings
he's not been on the short end of the stick (living paycheck-to-paycheck
working said minimum wage jobs, for example). Instead, he gets spooked that he
might have to give more of his precious precious money away.

~~~
mseebach
A lot of this points out why I don't understand "left-leaning" folk.

When the minimum is forced up, being better than the minimum gets harder.

If you make it harder to fire people, hiring becomes more risky and especially
smaller firms will think twice.

If you force employers to pay for employees sickdays, and make it illegal for
the employer to even ask you what's wrong, mr. nice guy, who'd never ask
anyway, is cornered by mr. bad boss, who's just looking out for the law.

If you force the minimum wage up, all those jobs worth less than the minimum
wage will not be done. Not a problem for high-tech startups, but if you're the
guy washing staircases at night, and your price goes up, you'll be the first
to go when things are rough. Low salary employees are seldom unexpendable.

If you think you're being unfairly treated at work, protest. If that doesn't
work, quit.

If you need to keep your job because you have credit card debt and the
installments on your new home entertainment center and custom build kitchen
and the mortgage and ... well, you got yourself into the mess, do you really
think it's fair to get the government to bully evil mr. $250.000 into bailing
you out, and imply that he's somehow not deserving of his salary?

~~~
netcan
_A lot of this points out why I don't understand "left-leaning" folk.

When the minimum is forced up, being better than the minimum gets harder._

A lot of that can be drawn out in a straightforward way on an introductory
Economics class chalkboard. It makes sense & no one rational would argue that
regardless of the lvel, employment would stay the same. At $100 p/h, the level
of employment would decrease. On the chalkboard, the biggest most
straightforward effect would be that most jobs paying less then that would
cease to exist. The other effects of pushing the remaining low pay jobs over
the line & a few of the ones close to it up a bit seem to have a hard job of
it to make the whole thing worthwhile.

But the real world experience doesn't paint such a grim picture. Minimum wage
changes, have not been shown in real world case studies to have very much of
an effect on employment rates. The effects are usually cloudy & cannot be
distinguished from the effects of say, a credit crisis.

Now economists can rationalise this in lots of ways. Maybe the labor market
tends to place employers of low wage employees in better bargaining positions,
so when you look at the difference between what a worker is willing to earn
(there is no floor other then what his other options set) & what an employer
is willing to pay (the marginal output of that labor), they settle closer to
the bottom. Perhaps the various wildcards of social & psychological effects of
the difference between a minimum wage job & welfare supplements or some such
wishy-washy effect is screwing with things. You can even come up with all
sorts of circular sounding arguments about stimulating spending by putting
money in the hands of the poor. To put it on the chalkboard you need to talk
abut it in terms of information availability, market power, mobility,
secondary effects etc.

But when you take a step back, there just aren't many good examples of minimum
wage humiliating itself in the same way that grain price floors or wool
subsidies have. For such a heavy handed economic policy it has remarkably
little catastrophe that goes with it. No stockbroker surpluses being dumped on
unsuspecting thord world markets. No stockpiles of teachers that need to be
refined into ethanol at a cost of 20X higher then cane ethanol.

The automatic rejection of minimum wage increases based on the classic
economic theories is not rational.

~~~
noonespecial
_But the real world experience doesn't paint such a grim picture. Minimum wage
changes, have not been shown in real world case studies to have very much of
an effect on employment rates. The effects are usually cloudy & cannot be
distinguished from the effects of say, a credit crisis.

Now economists can rationalise this in lots of ways..._

How about this one? No minimum wage increase yet has exceeded the actual
market value of the jobs in question. They have simply been feel-good placebos
that have marginalized very few real workers while gaining political kudos for
the administrations in power.

Any real attempt to raise the minimum wage too far beyond the market value of
the labor will result in mass unemployment, mass inflation, or both. Its
actually a kind of rationing, and behaves as such.

~~~
netcan
I don't think that is true. There are a large number of people in almost all
countries that earn minimum wage.

In Australia, the minimum wage or equivalent ranges $14-$18 (AUD $1 = aprox
US$0.95 a month ago, approx $0.70 now). This is probably close to the median
for countries of comparable GDP pp. Many employers pay the minimum.

The minimal US minimum wage is relatively low. But there are plenty of other
examples around.

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hooande
Mixed thoughts on this article. The author raised some points that I thought
were good, namely the fact that you don't need to be a direct beneficiary of
the new administration's proposed programs to profit from them. If they plan
to put money into green tech or education, perhaps you could make money by
providing a service to those industries. If after school care centers are
about to become flush with government cash, perhaps they'll need some kind of
software to help them grow.

The downside to this article is that most of it is based what the Obama
administrated has stated it ~wants~ to do. You'd be foolish to actually plan a
business around campaign promises. But these are definitely some things to
keep in mind.

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pg
Businesses generally perhaps, but not startups. I wouldn't advise the average
startup to modify their strategy based on what administration is in power.

~~~
unalone
I think it's useful advice for people who are just starting up now, though. If
you want to be an entrepreneur but don't know what field to start in, playing
along the lines of what the new administration is looking for means that
you're opening in a field that everybody will be watching.

~~~
pg
I don't think so. A better and completely orthogonal compass is to try to see
one's position on the pretty much inevitable path of technological
development. Woz was much better off thinking "What can I do now that DRAMs
have been invented?" than "What can I do now that Carter has been elected?"

~~~
unalone
Okay, I see where you're coming from.

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krschultz
How Entrepreneurs Can Profit with Obama:

As consumer confidence in our government increases (as it always does in a new
administration's honeymoon period), and as the policies of the current and
future stimulus packages take effect, the economy will inevitably improve.

Despite the tax issues, if you thought John McCain's federal government
spending freeze was a good idea during a recession, you don't know much about
economics.

An improved economy means more funding and more customers. Forget the details,
it is hard to make ANY money when the stock market is going down 40% in a few
months and people are saving every penny because they are scared.

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hugh
Wow. Despite the title, that's pretty much all doom-and-gloom.

Alternative possibility: move to another country. New Zealand, frinstance, has
just elected a new business-friendly government, it has lots of smart, well-
educated people and a low cost of living.

~~~
ibsulon
Business friendly in New Zealand would be considered downright hostile in the
US.

~~~
jonas_b
Is that for fact true? I would very much like to believe it since I've spent
some time i NZ and found it to be very hospitable to companies in some
respects.

That would mean that the US kick ass (Im considering relocating to the US
btw).

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auston
My question:

Are "Capital gains rates" different from "capital gains taxes"?

Because he says:

"Capital gains rates will go up, too." -
<http://awurl.com/GC4ypKrSY#first_awesome_highlight>

_and then he says_ :

"He also plans to eliminate all capital gains taxes on startup and small
businesses to encourage innovation and job creation." -
<http://awurl.com/hICQbvM3H#first_awesome_highlight>

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python-nut
so how do I shift profits overseas?

~~~
markessien
Don't be silly. If you are going to be making $300.000 in profits anytime
soon, you will have enough money to hire a tax adviser who will tell you how
to hide this money.

~~~
helveticaman
You won't be able to hide all of it that easily.

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Prrometheus
Sell mugs with Obama's face on them in college gift-shops?

Sorry, didn't read the article.

