Category Archives: Business

COVID-19 Has Left Some Corporations With Lots Of … CASH

Business, COVID-19, Economy, Labor

Short term mañana thinking is endemic in business, too.

Were companies prepared for these “black swans,” these “highly improbable events” like corona virus? It turns out, as The Economist observes, that,

It might be possible, in principle, to self-insure against a disastrous drop in overall demand by sacrificing margins in order to build up buffers and to keep open strategic options the company will probably never willingly choose to use. But good luck convincing investors of that approach. Strategies which pay off handsomely in the event of even the worst case are terribly expensive.

Given the wealth transfer initiated from small to big business, due to the structure of the state’s stimulus, it is no surprise to learn that gargantuan business has endured quite well:

… many companies are already sitting on stacks of cash. Few boast sofas as plumply padded as Apple, Microsoft, Amazon, Alphabet and Facebook, which have $270bn in net cash between them, enough to finance many countries’ covid-related fiscal stimulus. But the total cash holdings of the world’s 2,000 biggest listed non-financial corporations increased from $6.6trn in 2010 to $14.2trn today.

Finally, PPE Domestic Production Capacity Predicted To Take Off

Business, Capitalism, COVID-19, Free Markets, Government

Thankfully, the domestic production of personal protective equipment (PPE) is predicted to vastly expand in the next five years.

Back on March 5, a full month before government’s “experts,” national and international, stopped fumbling, lying and dissembling about the effectiveness of masks, I foresaw what IBISWorld, an industry research company, now confirms. I wrote:

A rise in consumer demand for this product, reflected in empty shelves and relatively higher prices, will galvanize business to hire more workers and produce more of the coveted commodity.
Prices are crucial. They are the street signs of the economy. The thing the socialists will soon insist on controlling (“price-controls”) and suppressing are the vital signs of the economy. In particular, scarcity and high prices are vital signals. Mask these natural market indices, and you kill off the knowledge needed by manufacturers and entrepreneurs to decide whether to rush into the production of surgical face masks and N-95 respirators.
Masks and all others pandemic prophylactics are currently exorbitantly priced to reflect high demand and subsequent scarcity. These prices have already been taken by producers as a signal to accelerate productions.

IBISWorld now forecasts an “increased emphasis on domestic production capacity in the interest of national security.” It expects “the industry’s trade balance to shift from a deficit to a surplus over the five years to 2025.”

SEE: “Unmasking Statist, Socialist Propaganda About ‘Face Masks”’(March 5)

IBISWorld further reports that “the PPE manufacturing industry has seen an unprecedented surge in demand for N95 masks, respirators, face shields and gloves. The industry’s largest operators are operating at maximum capacity and are currently or intending to expand their domestic production capacity within the year.”

For this, we owe the profit motive, not American leaders. As a rule, the latter have no compunction about leaving their pliant people in the lurch during disasters.  The U.S. government knows its loyalists will do anything, including to deny COVID is real, to help their leaders save face.

 

Home Is Where You Ship Your Masks To: Chinese Multinationals Ship Supplies To The Mother Ship

Business, China, Economy, Globalism, Nationalism, Nationhood, Trade

Liberals think you can easily compel a production line into existence (by using the Defense Production Act, for example). However, to get a production line going is difficult: it’s expensive and time consuming. You might have the design on paper, but you lack the hardware, the tools, the components, and material.

The Economist (4/11/2020):

… the manufacture of masks .. might look simple, but producers need sterile factories and sophisticated machinery to churn out melt-blown fabric. Upfront costs would be hard to justify if the virus were quickly snuffed out. So in January, the early phase of the outbreak, Chinese firms began by scouring the world for masks rather than by making more of their own. It took government action to change that. Officials offered subsidies to firms producing safety gear: promising not outsized gains but an avoidance of losses. China went from making 20m masks per day before the crisis—half the world’s output—to nearly 120m by the end of February.

The Chinese, unlike the American government, took care of business. True: WuFlu originated in China, in the city of Wuhan, in particular. So the Chinese knew in advance they had a bad one on their hands, well before our buffoons awoke to the reality of corona virus.

But it’s not like the US government ever puts its own first, urgently. The Chinese, however, look after their own. Ostensibly international, Chinese companies operating in Australia—Risland and the Greenland Group, in particular—began vacuuming up tons of medical materials, in the host country and beyond, between January 24 and February 29, in order to send back to the Mother Ship, China.

Via the Daily Mail:

China imported more than two billion masks and 25 million pieces of protective clothing from overseas before the coronavirus outbreak reached pandemic levels, it has been revealed.

On Thursday a Chinese government report emerged detailing its foreign trade for the first two months of the year, when the country was at the peak of its virus crisis.

As COVID-19 infections began to spread across the globe in January and February, China saw a ‘rapid growth in imports of commodities and key consumer goods’.

More than 2.46billion pieces of medical materials, including masks and protective equipment, were inspected by National Customs in China between January 24 and February 29, according to the report. …

It comes days after Chinese organisations operating in Australia were reported to have sent bulk medical supplies to China at the height of the crisis.

Chinese-owned property developer Risland Australia was reported to have flown 80 tonnes of medical supplies on a corporate jet to Wuhan in late February.

Video footage emerged showing boxes of surgical masks stacked up at Perth airport before being sent to Wuhan on February 8 – when there were 15 cases of coronavirus in Australia.

Another Chinese property company, Greenland Group, retasked its employees to purchase face masks, hand sanitisers, antibacterial wipes, thermometers, Panadol and other medical items in bulk for shipment to China.

Greenland bought up three million surgical masks, 500,000 pairs of gloves and bulk supplies of sanitiser and antibacterial wipes in Australia and other countries where the company operates.

The goods were hoarded at Greenland’s Sydney headquarters and were sent to China in January and February.

The upshot? The host country, Australia, suffered severe shortages:

… Video footage emerged showing boxes of surgical masks stacked up at Perth airport before being sent to Wuhan on February 8 – when there were 15 cases of coronavirus in Australia.

Another Chinese property company, Greenland Group, retasked its employees to purchase face masks, hand sanitisers, antibacterial wipes, thermometers, Panadol and other medical items in bulk for shipment to China.

Greenland bought up three million surgical masks, 500,000 pairs of gloves and bulk supplies of sanitiser and antibacterial wipes in Australia and other countries where the company operates.

The goods were hoarded at Greenland’s Sydney headquarters and were sent to China in January and February.

MORE.

*Image courtesy Daily Mail.

Big Corp America Is No Country For Small Biz Or Individualism

Business, Conservatism, COVID-19, Critique, English, Ilana Mercer, Individualism Vs. Collectivism, War

Face it, we live in a country in which, increasingly, big corporations with political clout prevail in the economy. In politics, it’s the factions with the biggest corporate donors and the slimiest lobbyists: their politics and policies rule the day.

What is particularly sick-making is not only that a (subsidized) sham like “Tesla is allowed to reopen in defiance of the shelter in place order,” applied diligently to small companies—but that Tesla doesn’t care to protect its employees.

Hardly a good corporate citizen.

Resentment Builds When COVID-19 Reopening Rules Apply To Some Businesses, But Not Others“:

“At the beginning we immediately closed our store, shut off our lights, put up messages to the community saying ‘we’re all in this together and we’ll be back,” said Marcy Simon, co-owner of Ashby Flowers.
But even now, the tiny shop is not allowed to bring flowers outside for curbside pickup by customers. It’s legal in the rest of Alameda County but Berkeley has its own health rules that say florists can only deliver. Meanwhile large Whole Foods Market right next to it–which also sells flowers—has a long line of people waiting to get inside.
Simon is like a lot of others who thought they were doing the right thing, but are now starting to get mad.
“I think that many people are now definitely looking for ways to get around the rules, there’s no question about it,” she said.
Clinical psychologist Judye Hess says that shouldn’t be a surprise. She says people naturally lose respect for laws when it feels like they’re being unfairly applied.

This mentality applies across the board. How many times, over 20 years, have I heard the shameless refrain from conservative outlets that, “We won’t syndicate a column that doesn’t come from the major syndicator”? To be syndicated by a major syndicator you have to parrot received opinion pretty much on everything. Neither can you be a stylistically risque, interesting writer. With few exceptions, monotony of style and mind are a must if you are to be syndicated.

Other than “too idiosyncratic,” there were the other refrains around the time my column was first syndicated unsuccessfully (2001 or 2002), chief among them were these: “You are neither Republican nor Democrat. And you don’t support Bush’s war.” (The Iraq onslaught was supported by most members of the duopoly.)

The idea that the gritty little gal or guy carries the day, or that individualism is cherished in the USA: These are fallacies in my experience.

*Image via Mises