Demise of Heathkit

Neil Morrison neilsmorr at HOTMAIL.COM
Sun Nov 4 20:38:45 EST 2001


Well, that's pretty much what these books say, except that they point out that the game is also rigged by those with access to the government (and we know who they are)!

One egregious example is that of the owner of Carnival Cruise lines. In 5 years, he made 500 million dollars, virtually all from the USA, and he paid NO income tax to the USA.

Kathy Lee Gifford, doing his ads on TV, paid much more tax on her earnings for that task.

Regards,

Neil

  ----- Original Message ----- 


  Neil Morrison wrote: 
    A good starting point to understand the economic climate surrounding the decline of Heath is ....
  Neil, as easy as it is to point fingers at taxes(federal, state, municipal, etc), that is NOT the real problem with economics. The real problem is the combined effects of inflation and compounding. 
  What I am about to reveal illustrates why the average person ends up behind the eight ball economically. Imagine a hypothetical self-employed person who owns a business. Competition is such that for the past ten years gross income(sales) has been flat(not gone up or down). Assume inflation has averaged 3% each year over this time period. This means business expenses have gone up 30% over the ten year period, if the owner kept the same business system in place. So net income to the owner is DOWN 30%! Now watch this - in addition, real purchasing power to the owner has DECREASED by 30% over this time period because of inflation. So, now ten years later, real net income(purchasing power in his pocket) has gone DOWN by 60% in total!! 

  For an employee who has NOT had a raise in ten years, his net income(purchasing power in his pocket) has gone DOWN by 30% due to inflation. 

  So unless the business owner raises his prices by 6% per year to counter the effects of inflation on his business expenses, and on his net income he is kaput. And unless the employee negotiates an increase in wages of 3% per year, he too is kaput. No you know why the average person can't easily balance his household budget. ECONOMICS - that is why. Harvey. 

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