The Job Situation In Howard, KS Thanks To Mr. I.B.Udder & His Milkmaids

[Warph]

As everyone knows, Jobs are in the news.  The lack of them actually.  (Thank you, Mr. BHO)  Unemployment is high and underemployment is higher.  There are, no doubt, many good ideas that could help the economy and many bad ideas to avoid.  I thought it might be worthwhile to think about where private sector jobs come from.  Most basically, new jobs come from people with money to spend who want to spend their money on more people.  Call him/her the employer.  The employer must have money.  He/She may spend their own money or they may borrow money from investors or the bank or maybe the local loan-shark... but somehow they have to have money.  Now this is where it gets iffy... the employer must believe that spending his/her money on new employees will be good for their business.  The employer must be willing to take a risk.... very few new hires are sure things and employers don't know exactly what they are getting with their new employees.  The employer must be fairly confident in his projection of the future.  Yes, risk is inevitable.... but shrewd businesses look to minimize risk.  They want to know what their taxes will be, whether existing laws will be fairly enforced, what regulations will be like, what's happening with their competitors, what's happening with the prices of things they need to buy, what's happening with markets overseas and so on and so forth.  There are a thousand things they'd like to know.  They can't know them all.... but the more predictable their future looks, the more apt they will be to take risks.  Of course none of this matters if the employer is not profitable.  Profits have to be the number one priority.  No business will expand unless profits are increasing, or it is believed strongly that they will.

Okay, let me illustrate.

Lets take a look at Mr. I.B.Udder of Howard, KS and His Milkmaids

Mr. I.B.Udder sells milk.  He charges $5 a gallon.  Everyone in Howard, KS wants milk so everyone pays Mr. Udder $5 a gallon.  But Mr. Udder wants to make even more money.  Maybe he's greedy.  Maybe he wants to give more to his wife Prunella so she can get that new facelift she's always wanted.  Maybe he wants to buy a new boat and go fishing with Sarge and Jarhead.  Maybe he just had a new baby that needs a new pair of shoes and a future college education.  Maybe he wants to bet on horses.  No matter the reason, Mr. Udder... like almost everyone.... wants to make more money.  What should he do?

He could charge more for his milk, but he realizes that at $6 a gallon some of his customers will drive to Moline where milk is only $4.75.  So instead he tries to lower his costs.  He needs $4 to make a gallon of milk, but he'd like to do better.  So next month he replaces his milkmaids with new milking machines from Mr. Pump over in Fall River.  This requires a substantial up front investment, but within a year the milking machines have paid for themselves.  Without having to pay milkmaids, his milk only costs $3 to produce.  Now he charges $4.25.... a savings to his customers and more profit for him.  

This simple example shows how productivity fuels profits.  Mr. Udder found a way to make the same thing for less money.  But, you ask, how is this good for anyone but Mr. Udder?  Well, as the other farmers purchased their milking machines their costs went down too.   So they started to lower prices, hoping to attract more customers.  Mr. Udder did the same.  Even if he is now getting richer, his customers are too.  They save 75 cents on every gallon of milk... paying $4.25 when they used to pay $5.00.  Now they have the same milk as before but more money.  The economy has expanded.

And that's not all, with more money in his pocket, Mr.I.B.Udder goes out to eat more often, which helps Toot's Drive-in, Poplar Pizza, and Sweet & Spicy hire one more cook each.  (Mr. Udder and family are big eaters).  And all the new machines need servicing, so the local repairmen hires an apprentice. The Family Market spends less on milk so they can add another bagger.  Doctor Joe, who is saving money on dairy, has more money to spend so he donates to the future Howard Art Museum which can afford to purchase two new paintings from an aspiring artist from Parsons.  No one knew Mr. Udder's machines would help so many people and create so many jobs.  No one really notices either, but it happens.

But what about the poor milkmaids?  True, they are out of work.  Their lives, at least in the short run, are worse because of the new innovation.  Those dreaded milking machines seemed to have ruined everything.  In fact, the mayor almost outlawed them.  Others wanted to institute a new milking machine tariff to discourage farmers from buying them and to help save milkmaid jobs.  But none of this happened.  Instead farmers kept buying milking machines and milkmaids kept losing their jobs.  Which was really hard on the milkmaids and their families.

And yet, that's not the end of the story.  Some of the milkmaids went to work for Mr. Pump who manufactures milking machines.  His business was booming.  He needed more workers to help make more machines.  So he hired a few milkmaids, as did the local repairman to keep up with the repairs.  And remember, as the price of milk dropped, so did the price of cheese and pizza and yogurt.  Everyone's grocery bill was less.  All of Howard had the same stuff but more money.  So Mr. Wall and Mr Mart decided to open a new thrift store.  Mrs. T. Heilevang, who started watching busy Mr. Wall's and Mr. Mart's kids during the day, decided to open a diaper & daycare center next door to her brand new John Wayne Shooting Gallery.  Because the shooting gallery would wake the kids and cause all kinds of havoc, she hired more former milkmaids to help, as did Mr. Wall and Mr. Mart for their thrift store.  A few of the married milkmaids decided they didn't have to work anymore because groceries were cheaper than they used to be and the family could get by on less.  It was hard and humiliating to lose their jobs, but five years later the whole town is better off because Mr.I.B.Udder bought his milking machines.  There are more jobs.  Families are able to purchase more things.  And there is more ice cream to go around for everyone.

The point of this little tale is to highlight the power of productivity.  Obviously, my story is hugely simplified.  This one example doesn't take into account that some technologies are morally suspect and some people use them immorally.  Virtue is necessary for any flourishing economy.  Economists call it social capital.  It's the fancy phrase for trust, honesty, and the rule of law.  Economies drag when corruption soars.  Every economy needs rules that are justly enforced by impartial rule keepers.  All of this is assumed in the story of our capitalist friend Mr. I.B.Udder.

When we hear the word "capital" we think of money.  But that's not the only, or the most important, kind of capital.  Capital comes from the Latin word "Caput" for "Head."  The most important element in capitalism is the human brain which is located in your "Caput."  The engine of capitalism is drive, ability, and responsibility to create, to innovate, to conquer and subdue.  When we humans make something out of nothing, or when we make the same something more efficiently, we use the human brain.  We turn a black gooey mess into gasoline and sand into silicon chips.  That's the result of human ingenuity, which results in increased productivity.  And it just so happens, that increased productivity leads to profit, and profits are ultimately where jobs come from.

....Warph  

[Wilma]

Warph, what a wonderful "Caput" you have.

[Diane Amberg]

Hmmm. I think I'd keep the milk maids on. Someone still has to wash down the udders, put on and take off the machines, be sure the automatic feeder troughs are working properly and are full, hose down the floors of cow poop and urine, check the temp.of the cooling tanks, be sure the tubes from the milking machines to the cooling tanks are working properly and the radio is tuned to a station the cows like. Someone has to keep the cows moving onto and off the milking carousel, but they do that pretty well by themselves.
That frees up people to open the new creamery that sells any extra fresh certified milk right there at the farm, run the ice cream machines and invent new flavors to pack and sell.  (They'll bribe the milk truck drivers to advertize their products by giving them samples of all the new flavors.)
They'll need cones and cups, napkins, spoons and trash cans, coffee and sodas.  During winter they'll make aged cheeses and still sell milk at the farm. During the fall they add pumpkins and squash, gourds and big pots of chrysanthemums.
The business thrives so they can buy more Jerseys, get more milk to sell milk and cream, and make more ice cream, which uses sugar and flavorings, fruit, nuts and chocolate and freezers to keep it all in.

[redcliffsw]

Certified milk?  Is that the same as government approved milk?  If so, that's not so good.

[Diane Amberg]

State certified as to TB etc. can be sold as raw milk at the farm directly to the public. We've talked about this before. It's just a hypothetical story anyway.

[Anmar]

your scenario is not an accurate representation of our current economic climate.  What you left out was that the guy producing the milk machine is getting tax breaks to ship his factory to china, so those milk maids are still out of a job.  Also, the farmer is getting subsidies from the government and while the farmer and manufacturer are getting rich, they are paying lower and lower taxes while the middle class customers are paying a higher % rate, although they need the money the most.

[Patriot]

your scenario is not an accurate representation of our current economic climate.  What you left out was that the guy producing the milk machine is getting tax breaks to ship his factory to china, so those milk maids are still out of a job.  Also, the farmer is getting subsidies from the government and while the farmer and manufacturer are getting rich, they are paying lower and lower taxes while the middle class customers are paying a higher % rate, although they need the money the most.

Shock!  We agree Anmar.  Not to mention trade agreements that incentivise the purchase of milk produced overseas by cheap farm labor that eventually forces the small and mid-sized local farmer right out of business... and potentially increased medical expenses resulting from citizens drinking lead laced milk from China that was inadequately inspected on import.

[Diane Amberg]

It was just a hypothetical story and but it did spark some conversation didn't it? Some milking equipment is made in the US,some in China.  "Rich" farmers?  Most would never own up to that!

[Warph]

your scenario is not an accurate representation of our current economic climate.  What you left out was that the guy producing the milk machine is getting tax breaks to ship his factory to china, so those milk maids are still out of a job.  Also, the farmer is getting subsidies from the government and while the farmer and manufacturer are getting rich, they are paying lower and lower taxes while the middle class customers are paying a higher % rate, although they need the money the most.

Au contraire mon frere.... now if you want accurate and up-to-date representation of the current economic climate in Howard 2011.... well, to be truthful, it's kinda sad.  Mr. Pump, who moved his company to China, was shot and killed by Mrs. Pump who is now incarcerated at the Lansing Correctional Facility serving a term of life plus 25.  She caught Mr. Pump with Petula Plant and 2 other milk maids in a rather compromising situation.  Mr. Pumps company went bankrupt and has been sold to China who plan to produce Breast Pumps in Mr. Pumps memory. 

To make a long story short... some of the the milk maids working for Mr. Pump decided to follow Petula's advice and go to work for her.  They opened a cat house a mile from the city limits.  The county seems quite happy with the... ahem.. shall we call them donations?.... received from Petula and the girls, so we have a happy ending there.

The dairy farmers were another story.  They were unhappy with the small amount of farm subsidies from Obuma's government so they decided to take the advice from an enterprising retired fisherman and raised a few acres of weed.  The fisherman in turn remodeled a bomb shelter bunker he had and added another 1800 square ft. and hired the rest of Pump's milk maids to cure, package and store the said weed for shipment at a later date.  The County appreciated the farmers and the fisherman's donations. 

As it turned out, the middle class of Howard and the county are paying a lower rate in taxes thanks to the... we'll call it, persuaviness... of Petula and the fisherman with the county powers-at-be.

 

[Patriot]

As it turned out, the middle class of Howard and the county are paying a lower rate in taxes thanks to the... we'll call it, persuaviness... of Petula and the fisherman with the county powers-at-be.

I'm afraid this is where we moved from plausible fiction to pure fantasy.