New Politics

This story is kind of interesting, because it’s the classic example of a story where the lede was chosen on sexiness, not because of what the story is really about. The hook is a “whodathunkit”.

But to my mind, that’s not what this story is really about. What it’s really about is how our capitalist society is pitting corporate interests against entrepreneurs, a story that needs to be told more often. A lot of entrepreneurs are Republican voters, because they buy into the racism, the class warfare, and the anti-minimum wage mentality. But they are actually hurting their own interests with this voting habit, because the hyper-capitalism that claims to be “free market” (even though it’s about stomping out free entrance into the market and real competition) pits corporations against small businesses as much as against working people. And the whole issue with gas prices is a perfect example of that—rising prices are causing independently owned gas stations to lose business and therefore money.

Selling gas is such a poor way to make money that a lot of convenience stores are getting out of the business altogether.

In other words, oil companies are sitting around raking in record profits, keeping oil prices high through an effective oligarchy that would be illegal in a sane chaturbat society that actually valued having free markets, and they can do this because they have a distribution system where the middleman who actually sells the gas to the consumer can be squeezed until he’s selling their product at a loss. That’s what our “free market” has led to: Entrepreneurs who have been transformed through the power of corporate might into the same exploited labor, but without the option of forming a union.

More. The corporate capitalism of the present day is all about making sure servitors never never turn into competitors. Since entrepreneurs make scarier potential competitors than working people do it makes sense that the corporate squeeze would be applied to them with even greater vigor.

I’m curious, can anyone point me to an article, report or whistleblower that explains the oil companies profits while using some hard inside numbers? I remember when exxon posted a profit of 10 or 12 billion in a quarter I was shocked at the number but what does it really mean? Is exxon really gouging the market? Is it just too successful? Is demand coupled with speculation causing this? What is the proposed fix? I see all kinds of people saying they are making too much, that the gas we pay for at the pump is too high-priced and shouldnt be. Is that necessarily so?

Franchisees and others do usually get royally screwed by the parent company, check out the UPS store debacle, but what exactly should we propose? Businesses cant get into a contract with a willing participant if the terms are too much in the parent ocmpanies favor? Does the franchisee have no responsibility? Seems kind of like “predatory” loans. Does the homebuyer have no responsibility? Sorry for so many questions.

It used to be that we could make 15 or 20% on a full system with software and accessories and now we’re lucky to make 3% and have to pass all charges like shipping onto the client where we made enough to absorb that cost due to the profit margin.

Now companies like Dell and HP make the huge money and small shops like us have to rely on services and labor to make any money.

It will soon be only the bug boys left as Dell, HP and the others start doing their own local consulting and Jasminelive services and labor.

I don’t know how long it will last. Soon we may have to quit the business that gave us such a thrill and kept me busy for so many years.

I don’t have a background in economics, but it seems to me that if it is really the case that a business loses money on credit card sales, the business need not offer credit card purchases. I certainly wouldn’t expect any store to keep restocking a item, however popular, if it sold for less than its cost.*

Alternatively, the business could raise prices across the jasmin live board (my understanding is that credit card arrangements prohibit raising prices on only credit card purchases). It is possible (and economically expected) that a businessperson who is making a given average profit per sale before accepting credit card sales will adjust prices so that the combined profit on card and non-card sales yields (at least) the same average profit per sale as before. That means higher prices if total sales don’t increase and possibly lower prices if total sales do (because of the convenience of sales, or competitive advantage over non-card merchants).

Either way, the fees for credit card purchases are just another cost of doing business that must be accounted for when determining the price at which to sell goods and that are, eventually, passed on to the customer. The only people who have a legitimate complaint are the ones who carry cash to subsidize my card-paying ways.

This is NOT to defend the tactics employed by the credit card companies to set up card payment or the monopoly they currently have, and certainly not a defense of their myriad of other unsavory business practices. Just a pet peeve.

Except that it’s not really a perfect ‘loss leader’ situation, because there is no real incentive for anyone to go in and buy a twinkie or a sixpack of beer or whatever. This is truer and truer as more gas stations offer pay-at-the-pump, which means you don’t even have to go inside and get tempted by the pickled pigs feet or whatever at the counter.

And of course in some parts of the country there is no incentive for corner stores to also offer gas. There’s a bodega on my block which offers the exact same goods and services as your typical suburban gas station, at the same prices, sans gas.

The loss leader idea works when you actually have a captive audience — for instance movie theaters, which turn little or no profit on the ticket sales and thus charge $5 for popcorn and sodas (which are almost all profit). Or at WalMart, because so many people in rural areas are forced to depend on them for necessities; you can offer ground beef or underwear or whatever at a loss, then tempt people with stupid junk that costs the same as it does everywhere else.