by Bill Ruesch

READ ON

The tag line to Talking Through My Hat is Printing, Publishing, and Observations. This particular post falls more in the category of Observations–or does it? We all know that the printing industry is changing, but did the changes have to be so catastrophic? Printing News Magazine recently posted an article on downsizing that contained these words in the first paragraph, “The latest financial crisis seems to have affected our industry like no previous recession. Record numbers of printers have closed or consolidated. Staff, salary and work hour reductions have become common themes.” To read more see, Implementing a Right-size Plan. It is a good article.

WILL THE REAL BOGEYMAN PLEASE STAND UP?

Goldman Sachs is in trouble with the S.E.C. It’s all over the news. Whether they are guilty of the charges against them I don’t really know, but I’m concerned that they are being singled out to take one for the team. You see, diversion is a common ploy used by government to pacify the populace. If they can hold up one bad apple and convince us that the problem will be solved by the censure, restriction, or removal of the perceived enemy all will be made right. Our anger will dissipate and we the people will continue blindly following and believing our leaders who are, after all, just sincerely protecting our interests.

DON’T BELIEVE IT!

The anger of the American people that arose from the financial collapse and bailout is justified. If they try to convince us that it was just because Goldman Sachs went renegade–don’t believe it. The problem is much bigger than one company. The problem was created by the congress in collusion with the financial industry.

I was one who was once convinced that the Free Market would make everything right. Doesn’t the idea of a free market make sense? After all, free people make choices based on what they want and how much they are willing to pay. Industries either find ways to provide the goods and services desired by the consumers or they go out of business. That’s free enterprise, and who could possibly be against free enterprise?

WRONG!

For most of my life I’ve been wrapped up in a warm pink bubble secure in the belief that the Constitution guides our government and protects our interests--wrong! Our elected officials have become masters of illusion. They pledge their hearts, minds, and souls to serving the people and upholding the Constitution and then they and their lobbyist buddies huddle in secret places to find, or create loopholes.

I was convinced that FDR was a socialist and that his policies were the real threat to the American way of life, but Roosevelt put restrictions on the banks that kept them from pulling the shenanigans that led to this deepest recession since the Great Depression and nearly toppled the financial systems of the entire world.

WHAT HAPPENED?

Deregulation is what happened. Deregulation was proposed by Ronald Reagan during his administration. Again, it seemed like a good idea at the time. Then came the Savings and Loan collapses. We slowed deregulation for a time, but over the years culminating with Bill Clinton, one-by-one all of the FDR restrictions were removed. Did deregulation make life better for consumers? At first it did–maybe. Then chaos reigned. Without rules the financial industry went wild. They started offering mortgage loans to people who didn’t have to prove they had the ability to repay those loans. Who thought that was a good idea?

Goldman Sacs executives were, and apparently still are, at the top of the gravy chain. By some miracle they finally got caught by the S.E.C. Like the SEC didn’t know what they were up to long before this–right? They along with other bazillion dollar a year execs plotted to sell derivatives and created other financial vehicles to muddy the waters and obscure the big secret that the nest egg had already been sucked dry. In reality there wasn’t a nest egg at all! A good-faith contract knowingly offered to a party that does not have the means to meet the terms of the agreement is not an asset–duh.

GOVERNMENT TO THE HIGHEST BIDDER

The banking interests have been funding lobbying like they never have before. The LA Times had this to say about lobbying expense,”The biggest spender was JPMorgan Chase & Co., whose lobbying budget rose 12% to $6.2 million, enough for the firm to have more than 30 lobbyists working for it. Among other banks, spending on lobbying rose 27% at Wells Fargo & Co. and 16% at Morgan Stanley.

“I have never seen such a scrum of bank lobbyists as I have in the last year — and I’ve worked on quite a few bank issues over the years,” said Ed Mierzwinski, a lobbyist for the U.S. Public Interest Research Group, a coalition of state consumer organizations. It seems like everybody is out of work except for bank lobbyists.”

SURPRISE, SURPRISE!

In retrospect, is it any wonder that this foolish behavior would lead to collapse? We were told two years before it happened that there was a housing bubble, but even our personal Realtor was convinced that prices were going to continue to escalate. For awhile he seemed to be right. The home we bought for just over 300 thousand, climbed to 500 thousand+ over the next two years. Lucky for us we bought low and with a mortgage payment we could afford, so we haven’t been in danger of foreclosure.  What is our house worth now? Closer to what we paid for it originally. At least we aren’t upside down. Thank goodness for that.

We have survived, so far, the housing bubble. What we are fighting everyday, however, is the aftershocks of the recession. All the banks are raising interest rates so they can recover, at our expense, the losses sustained from their bad decisions. People have had to cut back on purchases they would have normally made. Because of belt tightening by consumers, business saw decreases in sales and governments local, state, and federal saw resulting decreases in taxes so governments have been trying to recoup their losses by raising rates, fees, and taxes where ever they can.

WHEN WE CAN LEAST AFFORD IT

When we can least afford it, the poor taxpayer/consumer is being squeezed for every dime. Does Goldman Sacs deserve to be on the chopping block? I’m pretty sure that they do, but they aren’t the only ones. The system needs a huge overhaul and needs it now starting with reintroducing all of the FDR era banking restrictions.

For more of my thoughts go to: http://wp.me/pqeFo-qV and http://wp.me/pqeFo-v5

I thought it was time to move off the China subject and go to something else, but there have been a rash of comments on this site and on my printing groups on LinkedIn that I’m going to post another China related blog in an attempt to address those other concerns.

Are American families, homes, and jobs worth defending?

Sometimes I can’t believe my ears. What has happened to America? Americans used to fight for their rights, but now our fight begins by laying down our guns. Our motto seems to be “why try; it won’t do any good anyway.”

Chinese printers market their low ball prices in the United States aided by two main things:

• Their costs are one-tenth of ours. How did I arrive at that figure? It was easy; I know how much minimum wage is in the US. Remember this wage is mandated by the government. Employers have to pay it. They also have to pay matching Social Security, so the real figure is much higher. I also read an article in Reuters that discussed how much the average factory worker earns in China. Without matching Social Security, they earn 1/10th.  Suppose you are a Chinese printer marketing to the US, how difficult would it be to come in at half the price when your labor costs are less than 1/10th? Who is making the real money here? The Chinese workers? Ha!

• China plays hardball when it comes to International Trade. They are members of the WTO, but you don’t have to look far to see filing, after filing, after filings of Chinese trade violations for anti-dumping and anti-subsidies. Some states have a three times you are out law to penalize career criminals. If we held China up to this same standard they would right now be serving several consecutive lifetime sentences. They can import some products to the US for 2-5% duties. We, on the other hand, have to pay some 24% to sell there. It is wrong, it isn’t fair, and it is killing the US economy.

Since our government won’t help, and the business elite are benefiting from cozy relationships with foreign countries, there is only one thing left to “we the people,” and that is our collective buying power. If enough of us refuse to buy Chinese, Pakistani, Indian, Mexican, or any other products made from cheap labor we can turn the tide.

Some say that it is unfair to blame these countries because it is the American consumer who really controls the prices. Of course I want low prices, but not at the expense of putting myself or my neighbors out of work. I don’t know about everyone else, but if presented with two identical items and one is made in the US and the other in China I would rather buy American, even if it was a little more. I would not choose Chinese industry over American.

What about the automobile business, didn’t the Japanese do the same thing? No — they didn’t. They didn’t compete solely on price, although they used price at first to get our attention. What they did is build a better vehicle than the crap being pumped out by Detroit. I hate it that we lost this giant industry to foreign competition, but we deserved to lose it. Not because of the workers but because of the fat cats at the top who left the office every day counting their lavish bonuses while steadily guiding their companies into bankruptcy. Bonuses for bad leadership — whoever thought that was a good idea?

We are experiencing a 10% unemployment rate in the United States right now, primarily because of a few bankers who used vast lobbying power to influence congress. Our government systematically deregulated the banking and financial institutions until we got chaos. Those who believe in free markets, take note, without some control everything goes to hell, quickly.

There is an axis of evil to coin a phrase from George W. Bush. Americans are being crushed economically by Wall Street Bankers, the US Congress, the Insurance industry, and unfair foreign competition. Until these four entities are brought to task it is going to do nothing but get worse. Do you hate 10% unemployment, reduced wages, and increased working hours? That is just a start. Over the next few decades we will see 25% unemployment, salaries cut to the bone, and typical working days of 16 hours. Once Wall Street has us where they want us, poor, starving, and desperate we will be competitive with China, because we will be reduced to their level. Welcome to the new America, the one world government, the one fashioned by the true axis of evil.

I’ve been waiting a little longer than usual to make this post. My last post the top 5 reasons print brokers p.o. printers is still drawing a good response and I didn’t want to lose any readers before proceeding, either that, or I just didn’t get around to it yet. Both excuses are probably true to some extent.

My promise at the end of the last post was that I would toss out some ideas to reduce friction between Printing Brokers and Printers so that both could benefit. That particular promise will have to wait until the next post as I continue to explore the understanding gap that exists in commercial printing sales.

The following thoughts are mine alone. I would really hope that readers would go to the bottom of the post, past the hat logo, tags, categories, and click on comments. This is where you can leave your opinions. I do have to approve which opinions are accepted, but I promise I only delete those who appear to be spam, or who may incite a law suit. Other than that, you can disagree with me all the live-long day and I’ll let it go through.

I’ve learned that my vantage point is rarely the same as another’s. Just because someone doesn’t see things my way,  doesn’t necessarily make them wrong. I like to say, “I could be wrong about that, I’ve been wrong before, and I’ll probably be wrong again.” The world might be a better place if we all let go of the idea that we have to be right, or I could be wrong about that too. See how it works?

I’m going to be addressing printers primarily, because in my experience it is the printers, who more than print brokers, cut off their noses to spite their faces. Again, please feel free to disagree.

In a conversation with a print rep the other day, we agreed that the negativity thrown at print brokers is  often undeserved. Instead printers should look toward their hired sales representatives. A print broker is more vulnerable, and has to walk a tighter line, in other words a broker has much more too risk. Involving themselves in transactions that are shaky can ruin more  than just a certain project.  The name of my company, for example, is Bill Ruesch Print Broker, LLC. If I screw up, I tarnish my name, my company name, and risk  my entire career. A printer’s sales rep on the other hand can botch something big-time and maybe get fired, but they can, and most always do, migrate to another printer where they can start over.

I read a survey a long time ago that concluded that the mindsets of a successful entrepreneur, a salesman, and a criminal were very similar. To be good at any of those three paths there had to be a willingness to accept a great deal of risk. It seems that the riskier the better. Printing company owners, sales representatives, and print brokers all have risk in common, but it is the effect on careers that makes the critical difference.

For commissioned sales people have immediate needs. You can’t feed the family or pay the mortgage if you don’t earn a paycheck. Therefore, they are often tempted to ram a square peg into the round hole. I don’t care how big the printer is, no company can efficiently serve the needs of every customer. The printer needs work, the sales rep needs a commission, and the customer, unfortunately, sometimes comes up short. And don’t say it never happens at your company because it does. See my previous post about withholding information from a customer to the benefit of the printer.

This may sound like I’m being critical of company sales reps — I’m not — I’m only being critical of the marginal ones. To tell the truth I have a great deal of admiration for those who work for one company. I’ve been there, done that, myself. I often wondered why there were few older folks working in sales. One reason is that it is nearly impossible to please management. Either you are bringing in too much work, or not enough, and the line for the exact perfect amount moves daily. The stress is wearing.

I can tell you that as a broker I don’t miss the constant harangue, not at all.

Print brokers make their living at bringing print jobs to printers able to do the job. They work very hard at finding a good fit. Theoretically a print broker will only bring in jobs that hit the printer’s sweet spot. Sweet spot jobs are those that the printer is best equipped to do.

My point is that brokers are more likely to bring work through the doors that is a better fit, and because it is, it usually runs smoother with fewer complications. Doesn’t that have real intrinsic value? It is one of the many invisible benefits brokers bring to the table that are overlooked by printers.