Tuesday, February 24, 2015

Dean Smith and Wallace Wade: Teachers of Life, Not Just 'Coaches'


How were Dean Smith and Wallace Wade most alike?

'They saw themselves as 'teachers' first and foremost'.

'What's that you say? 2 of the most successful collegiate coaches in the history of college sports in America thought of themselves as 'teachers' first and 'coaches' second? Are you kidding me?'

It's true. Of course, it helped them a ton that they were great strategists, tacticians and geniuses of the sport they coached as well. And great recruiters, let's not ever forget that.

However, at the heart of both men was the heart of a 'teacher' in the truest sense of the word.

Dean Smith has been eulogized for the past week by many people and writers, as well it should be. The theme of 'greatest college basketball coach ever' and 'retired with most wins ever' at the time has paled in comparison to the other attributes Coach Smith had towards his players and University, most of which indicated a selflessness of the man and a desire to teach young men how to become men.

95% of his players graduated with a degree from The University of North Carolina at Chapel Hill. That may be a record that will never been reached by any coach in the future due to the pressure to 'win at all costs' which usually means 'at the cost of the student not getting a real education'.

Know what Coach Wade used to tell his recruits to play football at Duke University from 1931-1950?

'Duke University will do far more for you in your lifetime than you will ever do for Duke University on the football field'

Meaning: 'Come to Duke, go to class in substantive courses, get your degree and you will be able to live a full and wonderful life regardless of whether you get drafted to play in the pros or not'

Of course, back then, pro football players made $100/game so playing pro ball was not as lucrative or as attractive as it is today. The average salary of a NFL football player is about $2 million per year notwithstanding the fact that a few QBs make $25 million per year.

Coach Wade was recruited to come to Duke from the University of Alabama Crimson Tide where he coached 3 national championship teams in the 1920s including such teams as the 'Thundering Herd of Red Elephants' in 1931 which must be where Alabama picked up the association with their elephant logo.

Know what he wanted in his negotiations to come to Durham to coach a lowly football program after winning 3 national titles at Alabama, then and still a hot-bed of college football?

He wanted to be: 1) head football coach, of course; 2) Athletic Director, which makes sense and 3) Director of the Intramural Athletic Program for all undergraduates.

Director of Intramurals? That would be like Dean Smith wanting to be the director of the UNC fraternity flag football leagues and all the indoor intramural basketball, wrestling and racquetball leagues during the winter and softball leagues in the spring!

Coach Wade thought it was important to be the Intramural Director. Simply because he was a teacher first and foremost and wanted to be a molder and shaper of men's character, morals and ethics, all of which come to light during any athletic contest. Just watch and see how different players react to bad calls by a ref next time you watch a game.

Coach Smith believed in the team first, not the individual player. That is why he was the 'only person who could hold Michael Jordan below 20 points per game' goes the old saying. (actually it was 17.7 ppg)

The team was always stronger than the individual, Coach Smith preached. He invented the 'finger point' to the guy who passed the ball to the guy who got an easy shot because of his unselfishness and game smarts. He invented the 'run-and-jump' which was a variation on the trap defense. He invented the huddle at the foul line to call the next defense.

And...he invented the Four Corners offense. (or as he claims, he saw an Air Force team do it one time and he adapted it for his use at Carolina). If there ever was a way to teach people how to use your head to win a game, Dean Smith figured out how to do it regardless of the talent level he had on his team which was mostly great as the years went by.

He said of the Four Corners: 'It was a way to tell the other team that we owned you. Completely'. How demoralizing for the other team. And it was simply an impossible offense to practice against in freshman ball at Carolina.

But you know what Coach Smith and Bill Guthridge and the entire Carolina coaching staff put at the highest priority year-in and year-out?

'Going to class'.

If you wanted to run 32 flights of steps in Carmichael long ago, all you had to do as a varsity or jayvee player was skip a class and the next thing you knew, you were running up and down 32 sections at Carmichael with a 20-lb vest strapped to your chest and back. Try that sometime.

Dean Smith and Wallace Wade could not have been more apart on the political spectrum than any other two men on the face of this planet. Coach Smith was an active proponent of liberal causes from civil rights to nuclear freeze movements. Wallace Wade supported conservative causes and candidates such as Ronald Reagan and Jesse Helms.

You know where they both seem to be very similar?

They believed in the meritocracy of sport. That is, the best should play because the best players give your university the best chance of winning. Regardless of race; regardless of background.

Coach Wade played in the 1916 Rose Bowl as a guard on the  Brown University team with one of the first black All-Americans ever, Fritz Pollard. In 1938, Coach Wade took his southern Duke team up north to play Syracuse which had a black running back named Wilmeth Sindat-Singh who had been adopted by Indian parents. Coach Wade could have canceled the game or asked that Singh not play because of racial attitudes at the time but he didn't.

Coach Smith recruited the first black player to play at Carolina, Charlie Scott in 1967. Scott had been insulted in a Davidson, NC soda shop when a coach named Lefty Driesell took him there to seal the deal to have Scott join the Davidson Wildcats under Lefty who had Davidson in the top 5 in national basketball polls at the time.

After the incident, Scott supposedly told Driesell: 'I think I am going to play at Carolina, Coach'. No doubt Lefty got that guy fired from the soda shop for helping him lose one of the most talented players in the nation at the time.

Both Dean Smith and Wallace Wade won a lot of games for The University of North Carolina and Duke University, respectively. That is for sure.

Perhaps their most enduring legacy, or at least should be, was their dedication to the noble ideal that college athletics should be used to shape and mold the character of young men and women and help them get a solid broad-based liberal arts education while in college. Not to have college athletic programs used over-abundantly as a springboard to the NFL or NBA.

Less than 1% of all college athletes ever get a chance to play professional sports, About the same amount of high school athletes ever get the chance to play at the collegiate level. A star high school athlete has a far greater chance of becoming a neurosurgeon, a business person, a lawyer or astronaut than becoming a professional athlete....assuming he takes advantage of the opportunity and goes to class every day and works his butt off like every other student who wants to achieve the same outcome.

It is true that the highest average lifetime earnings by any Carolina undergrad major is geography. Mainly because Michael Jordan was a geography major, which to his credit, he promised his parents and Coach Smith he would come back to get even as a star with the Chicago Bulls which he did.

You would have to imagine that both Coach Smith and Coach Wade would be saddened by the almost ridiculous commercialization that has taken place in college athletics over the years. They both played a part in that commercialization, mainly because they put out so many great teams that people wanted to watch play in person early on and then later in the Smith era, on television.

However, regardless of whether or not they contributed to the commercialization of college sports or not, they both held true to their basic principles that colleges and universities are there primarily to educate the minds of  young people and train them to be productive citizens for the future. Not to be mere steppingstones on the way to a professional career.

We don't know if Coach Smith or Coach Wade would agree with this but maybe college sports should adopt the same rule that exists in MLB.  A high school baseball prospect has to decide whether to sign right out of high school and go into the minor league baseball system or go to college and not be eligible for the draft until after their junior year. That would be a minimum of 3 years for the athlete to go to class with other students and learn what it really means to be an academic student above and beyond being a jock on campus.

Plus, if they don't become the next Clayton Kershaw of the Dodgers, they have an education they can use to start a business or get a job somewhere.

Nothing is ever perfect about college sports. It never has been. But in a world of imperfections and downright scams and disappointment in many athletes and programs, Dean Smith and Wallace Wade have set the standard for what collegiate athletics can, and should be all about.

Like the Philosopher Kings, we'd all be fortunate to see more 'Coaching Teachers' like them.


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Friday, February 13, 2015

Medicaid Expansion in North Carolina

Medicaid-The PAC-Man of Government Budgets
We are always interested in what people say to justify what they want to do politically.

Sometimes what they say lines up with the cold hard steel facts of business, economics, accounting and basic money principles.

Most times, it does not. Sadly.

Let's take a cursory look at the issue of whether or not to expand Medicaid coverage in North Carolina under the ACA. It is a very complicated issue involved hundreds of billions of taxpayer dollars each and every year across the nation, both state and federal. Very few people, including many legislators, even know what the difference is between Medicare and Medicaid, truth be told.

Here's the basic deal offered by President Obama and the Democrats who controlled Congress in 2010 when they passed ACA:

'States that expand Medicaid can get the federal government to pay 100% of the costs of expansion for the first 3 years PLUS 90% of the expansion cost for the next 2 years!'

You can almost hear some carny barker like Billy Mays selling Oxy-Clean on television saying: 'But wait! There's more!' 


It sounds too good to be true, yes?

Let's see if it is too good to be true:

Medicaid expansion would probably add on 600,000 new enrollees on top of the roughly 1.8 million North Carolinians who are now on Medicaid. That would mean 2.4 million out of the over 9 million people in North Carolina would be on Medicaid.

Not everyone stays on Medicaid forever.  The average length of time on Medicaid is estimated to be about 9 months per enrollee. However, at any one time, the number of North Carolinians on Medicaid is about 1.8 million people for now.

The current budget for Medicaid in North Carolina is just under $14 billion this year. Accounting solely for inflation and current expectations of program growth, it is reasonable to see this number grow to $15 billion soon and possibly to $16 billion in a couple of years.

Out of the $14 billion now spent on Medicaid's 1.8 million enrollees today, roughly $4 billion is paid by state taxpayers through the state general fund as passed by the General Assembly bi-ennial budget; $10 billion is paid by the federal government. The official Medicaid split for North Carolina is 65% federal/35% state.

$14 billion divided by 1.8 million enrollees amounts to $7777/person spent each year in Medicaid. This number is vastly skewed by the fact that roughly 50% of the entire Medicaid budget is spent on nursing home care and not on every single Medicaid patient every year. But for argument's sake, let's use the $7777/person figure for purposes of illustration.

Let's assume North Carolina today accepts the ACA deal of 100% coverage for Medicaid expansion in years 1-3 and 90% for the next two years, what will that cost in absolute budget terms?

For 600,000 more enrollees at roughly $7777/head, that totals an additional $4.6 billion more spent on Medicaid in North Carolina per year or the first 3 years. Regardless of whether there is a 100% or a 90% match paid by the federal government. Probably this figure will be a lot higher.

'See there! North Carolina would get $4.6 billion more per year from the federal government scot-free to pay for these people who need health care! What could be wrong with that?'

For one thing, this is not 'free' money from Washington like it is some Monopoly money in a game. YOU are paying for the federal match share of Medicaid through your federal taxes paid to Washington just like YOU are paying for the state match share of Medicaid through state taxes paid to Raleigh.

Assuming you are paying personal income taxes of some form, that is. Close to 50% of American taxpayers pay only payroll taxes and excise taxes, not personal income taxes.

Medicaid is not paid for by your payroll taxes even though it is an entitlement just like Medicare. It is funded entirely through general funds allocated by the government every year, not paid for by a dedicated payroll tax sources such as is the case with Medicare.

About 25% of the new expanded Medicaid spending will probably be paid by more debt borrowed abroad. So what? We have already hocked our kid's futures to the tune of $18 trillion and counting...why not add on about $1 billion federal debt more for 5 years so we can expand Medicaid coverage in North Carolina?

The second problem comes when the high 5-year Medicaid ACA matching payments ends, say in 2020 if expansion happens in 2015. What happens then? *

Well, what happens then is that the historic 65/35 federal/state match comes back into play where North Carolina no longer gets 100% or 90% of the Medicaid expansion paid by the federal government but has to start paying the 35% match again. Forever. Including the 600,000 expanded coverage universe of Medicaid enrollees.

'That doesn't sound like a lot' we can hear advocates of expansion say.

Well, again, 35% of an additional roughly $5 billion in added Medicaid costs amounts to an additional $1.75 BILLION per year that North Carolina taxpayers will have to pay forever, adjusting upwards for inflation annually.

That would be on top of the $4 billion NC taxpayers are currently playing for our state share of Medicaid expenses as it is. The total would be at least $5.75 billion in 2020 if North Carolina expanded Medicaid coverage this year and probably another billion or two more if Medicaid costs keep expanding as they have annually for the past 30 years.

Want to guess where this additional $1.75 billion per year will come from in 2020 and beyond? It almost certainly will not come from more taxes since the GOP is likely to retain control of the General Assembly for the next 5 years at least. Plus, people already feel overtaxed and over-burdened as it is.

If you think they are not over-taxed, try running for any office anywhere in NC on this Walter Mondalesque platform: 'I will never cut spending anywhere and I will raise taxes everywhere to pay for more state government spending across the state!'

You will have a better chance of running the gauntlet unscathed than you will getting elected that way.

That additional $1.75 billion in Medicaid spending will come from where it has already come from in the state budget under Democrat and now Republican control: public education, transportation and every other program ending in '-tion' in the state budget.

Medicaid is the PAC-Man of state and federal budgets. It (and Medicare) have gobbled up increasingly larger shares of taxpayer dollars in Washington and across the states such that the other discretionary programs are much smaller as a percentage of the overall budgets than they were just 10 years ago.

You want to pay teachers more in salary? Or support higher education through the UNC system? You will not be able to do it if Medicaid chews up an additional $1.75 billion of state tax dollars in 2020.

The entire state budget today, sans the federal matching programs, is only about $21 billion. $1.75 billion would be an additional 8% of the state budget by 2020 and it could be more.

The North Carolina Medicaid program has had a long history of not being managed very well and having to go back to the General Assembly at the end of legislative sessions to ask for an additional $300 million to $500 million to pay the bills in the last 5-6 years. The first priority of business is to figure out how to oversee and manage the existing Medicaid program so that costs can be controlled while offering the best care possible to our state's Medicaid recipients.

We have explained before why we think Medicaid MCOs (Managed Care Organizations) are a good idea whose time has come for North Carolina. For one thing, they typically produce better health outcomes for the very people who need better outcomes the most, the poor and indigent, simply because they are assigned health care caseworkers who monitor and counsel their every health care decision and move.

For another thing, MCOs can possibly finally get North Carolina's state Medicaid budget costs under control with or without expansion. If Medicaid expansion ever does happen, the costs to the taxpayer and the other programs in the state budget will be mitigated significantly.

The main point here is to point out that the old adage of 'There is no such thing as a free lunch!' is very much true. Especially in the ACA Medicaid expansion issue.

On the House Budget Committee, when tough decisions needed to be made, someone would invariably say: 'This is why we have to be the adults in the room'.

Adult decision-making that takes into account both the short- and the long-range implications of expanding Medicaid is important at this time.

Just have all the math and the arithmetic at your side.

* Medicaid Expansion is complicated as heck as you can well imagine. Some advocates will say this is a good deal because the ACA, 'as written' does not call for a sunset of the 90% federal match specifically. It can be read as saying the 90% match can 'extend for as long as it is sustainable or until Congress says it can't be that high any more'

Which stands to reason since no prior Congress can bind the arms of any future Congress.

Here's some important information you can read that explains how the states will have to adjust to the realities of the federal budget pressures going forward, regardless of whether or not Congress explicitly repeals the 90% match going forward after the 5-year period.

No budget guy we have talked with in DC is willing to bet the farm that after the 5-year expansion in any state, the Medicaid federal match will stay that high and not revert back to the historic norms for each state.

in NC, the match is 65/35 fed to state. In Mississippi, for example, it is 73/27 or something like that.

Chuck Blahous is one of 3 Medicare/SS Board Trustees and has worked on entitlement issues in the US Senate under Senator Alan Simpson and in the Bush White House for 8 years.

He has written a pretty detailed explanation of what states face when considering Medicaid Expansion....here's the summary version: http://www.economics21.org/commentary/expanding-medicaid-conflicting-incentives-facing-states

full version here is you really want to dive in deep here: http://mercatus.org/sites/default/files/Blahous_MedicaidExpansion_v1.pdf

After you read those two reports, you might want to read this in detail and depth....it is a 10-year forecast from CBO about everything in the federal budget.

https://www.cbo.gov/sites/default/files/cbofiles/attachments/49892-Outlook2015.pdf

Deficits are expected to go back up to $1 trillion around 2020, if not sooner.

It is very highly unlikely Congress is going to allow Medicaid expansion stay at 90% under continued upwards budget pressure. There are too many inherent contradictions such as where a pregnant woman at 60% of the federal poverty line gets a lower reimbursement rate from the feds than a childless adult with double the income,

It is the 'Law of Unintended Consequences' again. Such contradictions will lead to more review of the ACA going forward, not less.



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Sunday, February 8, 2015

President Obama's National Prayer Breakfast Speech

'Christians: Get Off Your High Horse!'
What is the big deal about President Obama's speech to the National Prayer Breakfast?

After all, there's no secret that some people have used Christianity to further their misguided or horrific goals in the past.

Possibly the worst and most polluted human life form with a brainstem that has ever lived, Adolf Hitler, tugged at the strands of the diminishing thoughts and writings of a declining Martin Luther who became increasingly more anti-semitic as he aged, to justify what came to be known as 'The Final Solution' as he and his henchmen exterminated at least 6 million Jews during World War II and possibly millions more.

Mentally and morally sick and corrupt people will grasp at any ethical or religious straw they can to justify their abuse of power. It is somehow embedded in human nature to do so.

Which is precisely what the Islamist terrorists are doing today in the name of the Prophet Muhammad and Islam.

Which begs the serious question:

If the President can say that certain Christians have used Christianity to justify slavery and Jim Crow laws in the South, why can't he also say that certain Muslims have used Islam to justify jihad and kill infidels such as Americans wherever they can?
What is so difficult about that? This President seems to be ever-willing to blame America first, Christianity first, capitalism first for all the national and global ills but he is simply unwilling to cast blame on other nations, other religions or other government systems the world over for much of anything.

It is like President Obama sees himself as 'The Great Apologizer' for past American sins or something.

Here's the official transcript of the President's speech as put out by the White House immediately when he began talking at 9:13 am on February 5, 2015. Read it for yourself and see what you think.

Based on the fact that this was issued at 9:13 am makes you have to believe that his comments about the Crusades and Jim Crow were not ad-libbed or a deviation from the written text but rather a fully-thought-out-in-advance-and-vetted-with-staff-and-speechwriters-beforehand planned statement.

For the most part of the speech, there seems to be no controversy or unusual language in it. Just another of the usual run-of-the-mill political speeches at a religious event which is not as easy as it sounds to pull off unless you have seen it up-close-and-personal.

But here are the incendiary words that have set off like M-80s in the Christian community around America:
'And lest we get on our high horse and think this is unique to some other place, remember that during the Crusades and the Inquisition, people committed terrible deeds in the name of Christ.  In our home country, slavery and Jim Crow all too often was justified in the name of Christ.'
'Lest we get on our high horse?'  What sort of language is that for the Leader of the Free World to use at a religious meeting of any source?

The essence of President Obama's misguided words as heard by many Christians, whether fairly or not, in the audience at the National Christian Prayer Breakfast and in the general public was this:
'Christians are no different than the ISIS terrorists who are now slaughtering, beheading and burning innocent people to death in Iraq and Syria'
Talk about bad timing. Talk about an unforced error. 48 hours after witnessing the horrific immolation of the captured Syrian pilot who was locked in a cage like an animal before being doused by gasoline and set aflame, President Obama and his team somehow inexplicably chose to compare Christianity to these radical ISIS terrorists right when everyone still had that horrific image in their heads.

We can not see Winston Churchill in Parliament comparing the atrocities of Hitler to the Anglican Church of 1939 or even the Crusades. We can't see FDR on December 8, 1941 comparing the Japanese terrorists who bombed Pearl Harbor the day before to the institution of slavery in antebellum South.

There was no equivocation faced with the dangers of severely demented and dangerous political and military leaders in Germany and Japan. These ISIS killers are clearly cut out of the same bolt of poisoned cloth as were Hitler and the Japanese Imperialists from Hirohito on down through the military leadership.

Almost immediately upon the conclusion of the speech, we were contacted by a person we highly respect who was steaming about the speech as he was driving down the road somewhere. He has the added benefit of having served our country in the Afghanistan war theater for many years and has an acute understanding of the political situation over there, especially among the Muslim nations and factions we are facing.

Here's what bugged him the most about the President's speech:
  1. The timing was awful.
  2. It played into the narrative of the radical terrorists
  3. The President of the United States should not be giving our opponents and people who want to kill Americans any sort of support by comparing us to the Crusades since they already believe the US is part of the history against Islam from the Crusades which essentially ended in the 13th century.
It's no coincidence that the Taliban and other Islamic extremists regularly refer to the United States and its coalition partners as "crusaders." By invoking the Crusades of history, the Taliban and other such groups create a "thematic frame" to lure recruits and others by recalling supposed horrors against Muslims. By also pointing back to the Crusades, the President of the United States utilizes the same thematic frame, which only serves to amplify extremist messaging.

We could go on all day about this but suffice it to say that we are looking forward to the day when we have a US President once again who can see the good in America despite the warts and moles and cancers we have had in our past.

One thing the President could have said at the National Prayer Breakfast about Christians in America is that they were the driving force behind the abolition of slavery in perhaps the first eradication of slavery in recorded human history. The Transcendentalist movement in the Northern churches produced the abolitionists who pushed for the end to slavery almost from the beginning of our Republic.

William Wilberforce in England pushed relentlessly for the end to the slave trade in Britain almost solely because of his devout Christian faith.

America and Britain and other western cultures may not be perfect.  Certainly there are, and have been, inequities in capitalism, the Christian Church and democratic republics in history.

Winston Churchill probably said it best in one form or another: 'Democracy is the worst form of government...except for all the others that have been tried from time to time in history'

Maybe the same can be said for Christianity in the religious belief world as well.

It is our job to constantly try to make things better whether through our political views or our religious beliefs or just because it the right thing to do. It would help to have a President share in the basic inherent goodness of democracy and Christian belief to help lead us and the world towards that better tomorrow.

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Thursday, February 5, 2015

'Morning Mika' And The Minimum Wage



We were somewhat stunned to see the interview above on 'Morning Joe' recently, not because of the content of the story but because of the reaction and body language of Mika Brezinski, one of the co-hosts.

(Why isn't it called 'Morning Mika and Joe' yet, you have to wonder in these days of equality and all that?)

We thought this was an important lesson not only in the distance many in the media seem to be away from the 'real world' of everyday life where normal people run normal businesses or have normal jobs but also because of the lack of serious understanding about how our free market system works in the first place.

If you don't want to watch the entire 7-minute segment*, here's the basic story line. Alan Beatts, a small bookstore owner in San Francisco, of all liberal and tolerant and accepting cities in America, is going to shut his business down due to the mandated $5/hour hike in the minimum wage that the city recently passed into law.

'That doesn't sound like a very big hike to me', Ms. Brezinski said after Mr. Beatts told his story in a very calm and matter-of-fact manner.

Of course not. $5 is not a big deal to most people. Certainly not someone who is making $2 million per year in salary according to some sources. (Joe Scarborough pulls down $4 million per year which is not bad for a show that may have 367,000 people watch at any moment during their 3-hour morning segments. That is $10/viewer for Morning Joe; $5.67 for Morning Mika according to the Daily Beast.)

But what about to the small businessman such as Alan Beatts, owner of Borderlands Bookstore in San Francisco? How does a $5/hour hike in the minimum wage affect him? He is the 'owner'; certainly he can afford that, right?

Well, let's do the simple math:

He has 3 minimum wage employees. $5/more per hour means his costs go up immediately upon implementation of the new wage scale $15/hour. He has to pay his workers for at least 8 hours per day as they rotate on shifts; time-and-a-half for overtime or holidays and weekends perhaps.

If it is just a straight 8-hour workday for all 3 minimum wage workers, that is $15/hour x 8 hours/day or $120/day in extra costs to Mr. Beatts.

'That still doesn't sound like a lot of money to me!' we can hear Ms. Brezinski exclaim.

Of course not. $120 shouldn't be a big deal to a 'fat cat, wealthy business owner' who are all presumed to be the Koch Brothers by the news media for some reason.

The reality of life in America is that for every Koch Brother, there are probably 13.5 million small business owners in precisely the same situation as Mr. Beatts of Borderlands Bookstore in San Francisco, California. Maybe millions more.

To put this in the bottom-line context, which is important in any business, that $120/day in marginal increased costs to Mr. Beatts amounts to $26,400 over a 220-day work year, just in minimum wage hikes alone. When overtime and holidays are factored in, it could be $36,400 or more.

Mr. Beatts said that the new minimum wage on San Francisco will drive up his costs close to 39% alone not counting any other factor.

In addition to that, he will have to pay his manager more simply because the minimum wage has pushed up the wage scale across-the-board. Every other non-minimum wage worker will want to see his/her hourly wage or salary go up in commensurate scale which will add more costs to his bottom line.

What will Mr. Beatts have to see happen in his bookstore when the minimum wage goes up to $15/hour for his 3 employees to make it work? That is right...he would have to see more books sold on a daily basis to produce enough new revenue to generate a gross profit of at least $121/day to stay ahead of the game.

Is that even possible in these days of Kindles and on-line books against the backdrop of the average American reading only 1 book per year in all likelihood?

Mr. Beatts doesn't think so. So he is making plans to close his bookstore in San Francisco.

So what will happen to these 3 minimum wage workers and the manager? You are correct. They will be laid off unless they can find other work in which case they will leave Mr. Beatts all along to pack up his belongings and close down his shop that he probably bought/built with savings out of his own pocket or credit cards he maxed out to the hilt to get the original inventory of books on the shelves to sell in the first place.

If they can't find other jobs, they will apply for unemployment benefits which will drive up the costs of government and mean higher taxes which will mean another round of more debt and more spending and more central planning by government.

This is one reason why we think everyone who runs for public office should be forced to show proof that he/she had any experience running a business, even if it was a lemonade stand growing up or delivering newspapers back when people used to read them every morning.

Running any business at any level is very difficult work.We have said it before but it bears repeating again: These business people deserve a Congressional Medal of some sort just for taking the risks and making the investments and having the skills to run a business so the rest of us can be employed by them because: 1) we lack the skill to run our own business: 2) we are too risk-averse to put all of our savings at risk to start a business with no assurance that it will even succeed at some point in the future or 3) we just prefer to do our job, go home and let the owner do all the worrying and fretting every night.

What oftentimes sounds like a 'good thing' to do, such as raising the minimum wage by 30% as in the case of San Francisco, many times winds up hurting the very people that political advocates say they are trying to help.

Ask Mr. Beatts and his 3 minimum wage workers.


*( click on the link above if you are receiving this via email distribution to see the entire interview)

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