“Why Weren’t You Prepared for a Downturn?”

I am seeing comments here and elsewhere from liberals, mostly, who snootily ask why all businesses don’t have cash reserves to survive multiple months with no income. The attitude is equally stupid and condescending. Very few businesses carry enough ash reserves to survive months with zero revenue. This is particularly true for small businesses that survive on cash flow. They may have a line of credit, but that usually requires it to be secured by the owner(s) personal assets. But before accessing that line of credit, which is a loan, the business owner must decide if they are willing to risk their house and other assets when the government might just shut them down again – or business might never return to its previous level.

This attitude drips with the undertone that the businesses that go bankrupt because of the government enforced recession deserved to go under. You see, they weren’t prudent and had months of expenses set aside in cash. Never mind that these same liberals gripe when companies hoard cash because they are not spending it on employee wages or community projects. These companies deserve it.

What about government?

With government revenue collapsing, shouldn’t government have been prepared? Some states and local governments have a rainy day fund. Is it enough? Do they have one at all? If these governments weren’t prepared for an economic downturn, why should the taxpayers bail them out through higher taxes or more debt? As mayors and governors bemoan the lack of tax revenue, shouldn’t liberals demand the same level of foresightedness and prudent fiscal management that they are demanding of the local tavern owner?

Nobody could have reasonably anticipated that the government would shove us from a booming economy into a depression overnight. Businesses will go under through o fault of their own. Some governments might have to do the same. The difference is that government caused this depression. The business owners did not. This is not a normal economic cycle. This is an artificial depression caused by the totalitarian actions of government.

63 Responses to “Why Weren’t You Prepared for a Downturn?”

  1. dad29 says:

    In another combox here, someone noted an estimate of 100K small businesses to close due to The Imprisonment.

    That’s only the beginning.  Oftentimes, a small biz can take a hit and become a “walking corpse,” not going under for several more months or a even a few years downtrack due to the vagaries of cash-flow.

    For example, following the 9/11 attack, the country also ‘came to a pause’ but BK filings did not peak until 2005.  In contrast, the ’07 recession saw about 5 years of BK’s, each year around 1.4-1.5 million.

    Some are optimistic about a “V” recovery.  I’m not, but it would be very, very, nice to see.

  2. Kevin Scheunemann says:

    Another excellent post!

    I am also tired of seeing these idiotic, uneducated, stupid, liberal posts.

    If a restaurant has $6000 per month in fixed costs between electricity, insurance, mortgage, lease, utilities, property taxes, etc, it can take as much as 100k in sales to cover that! Each dollar in sales could have as much as 94 cents in variable costs in COGS, labor, taxes, royalty, advertising, repair, cleaning supplies, etc, etc.

    If you were down for 2 months, now you need 200k in incremental sales to catch up. Some food facilities it is not physically possible.

    This is also not even calculating a personal owner paycheck.

    I am convinced liberals, in general, are economic Gumps.

  3. jjf says:

    So if Owen ran the zoo, what would’ve happened in this pandemic?

    Remember when the UW had reserves?  Who asked to dispose of them, and why?

    Liberals have businesses, too.  Asking why businesses don’t have cash reserves is not a political question, Mr. Red Dawn.  It’s just a business question.

    Do you think it’s smart to have cash reserves?  How much and in what situations?  Elementary question, really.

    If you have a business that runs on slim margins, golly, then downturns of any kind will swamp you.  If it’s not a pandemic, it could be Walmart opening up a new big box across the street.  It could be losing your best bartender.  Or in the case of many small Wisconsin bars, the unspoken secret is they’re hurting because they’ve lost their illegal gambling revenue.

    I see inside many small businesses.  Many are run poorly.  That’s their right, right?

    I remember an otherwise reasonably successful business I consulted for, I’d grown a segment of their business from near-zero to perhaps 30% of their revenue over the course of a few years, and I had to sit down with the owner and explain the concept of multiple levels of markup, with percentages, on the whiteboard, to show all the steps from cost of goods to retail price.  You know, because he really didn’t understand it, or how to do the math to work backwards or forwards on that chain.

    Does a business that doesn’t make a profit “deserve” to go under?  What about a business that has a fire?  A tornado?  A flood?

    What does a market bubble look like to you while it’s happening?  Years before?  Or in hindsight?

    Why does the taxpayer bail out government?  Because your ancestors thought it prudent to have a government?  Didn’t you read the Federalist Papers?

  4. Jason says:

    16 stupid questions in that diatribe and vomit.  Congrats jjf, you’re making JV look “smart”.

  5. jonnyv says:

    I have never griped when a corporation or business has “hoarded” cash. That is their right.

    I have about $3000/month in fixed costs for my business. I have eaten those costs for the past 2 months with no revenue. And my business can afford to do it for about 3 more months before I have to dip into personal reserves. I worked with one of my vendors to push back some rental costs for a month by adding it to the end of the contract.

    But most of the people commenting here are RHINOs. They like to talk a big ideology game, but when a small business owner who pays thousands in taxes every year gives the opinion that businesses should have a reserve, they attack and give excuses. And they still avoid the question.

    jjf brings up another point. Whenever the gov’t has surpluses, Owen (and republicans) yell that they should give it back to the people. So they don’t believe in surpluses or rainy days for gov’t, but scream when they need it. It is a typical republican tactic.. hamstring the gov’t as much as possible and then yell that they are not efficient. Yes, the gov’t will have to tighten it’s belt, and probably cut costs.

    Ultimately living paycheck to paycheck or on a cash flow isn’t a strong business plan. I feel for them, but if they fall away hopefully a stronger business will flourish.

  6. Randall Flagg says:

    jonnyv:

    Excellent point on the RHINO’s here.  When something happens outside an individuals/families control like an illness, and that family needs help (such as food assistance), this crowd is all over them.  Asking them why they didn’t prepare.  Denigrating them for taking assistance.

    And yet here, they change their tune.  The hypocrisy in the RHINO crowd is amazing!

    I, like you, feel for the businesses.  However they took the risk decision to do what they did.  Sometimes it pays off, sometimes it doesn’t.  That’s business.

  7. Jason says:

    >jjf brings up another point. Whenever the gov’t has surpluses, Owen (and republicans) yell that they should give it back to the people. So they don’t believe in surpluses or rainy days for gov’t, but scream when they need it. It is a typical republican tactic.. hamstring the gov’t as much as possible and then yell that they are not efficient. Yes, the gov’t will have to tighten it’s belt, and probably cut costs.

     

    Sorry, jjf brought up a false dichotomy and you made it bigger.

    Most here say that if the Govt has a surplus, and the choice is to spend it or give it back, the obvious choice is to give it back.   Something Evers will never do.   I think through Owens’ writing, he like me, would like to see responsible amount in a rainy day fund, and then the rest given back.

     

    Sorry those nuances are lost one you JV.

  8. Randall Flagg says:

    Jason:

    What do you feel is a reasonable rainy day fund?  For businesses an individuals it is often recommended they have 3-6 months.  Should government have the same?

  9. Jason says:

    Lots of variables go into that, and I don’t profess to know them all.  I do know I’d rather have any surplus locked into a rainy day fund, than spent on things like street cars, LED advertising banners for a baseball team, handing money to public schools in a time of enrollment decline, etc.  Foregoing that, give my money back to me (allowing for the broader application of “my” and “me”).

    Wouldn’t you?

  10. Mar says:

    Randall, the government should have a reasonable rainy day fund that is truly for a rainy day.
    But in the end of the day, whose money is the governments rainy day fund?
    It’s the taxpayers.
    If a small business has a rainy day fund, it’s for the business.
    If a large publically traded company has a large rainy day fund, it should belong to the stockholders.

  11. jjf says:

    Owen’s upset about the word “deserve.”  He thinks businesses “deserve” to be in business.  He didn’t like it when he thought someone said a business “deserved” to be out of business because of their poor planning.

    I think if he was a true free marketer, he wouldn’t be so emotional about it.  The market giveth and the market taketh away.   The pandemic wasn’t created by government.  The government(s) responded to the public health crisis.

    If it was typhoid, would Owen think nothing should be done?  Get government out of the way, let people eat where they want?

  12. Jason says:

    Poor jjf contradicts himself in a single paragraph and doesn’t even realize it.

    >I think if he was a true free marketer, he wouldn’t be so emotional about it.  The market giveth and the market taketh away.   

     

    >The pandemic wasn’t created by government.  The government(s) responded to the public health crisis.

  13. Mar says:

    “The government(s) responded to the public health crisis.”
    And yet when the crisis ended, many government(s), mostly Democrats, keep the lockdowns effect when the public health crisis ended.

  14. jjf says:

    Mar, this ain’t over.  Not by a long shot.  And you know it.

    Jason, I don’t see what you see.  Point it out.

  15. Jason says:

    jjf
    You need to show some personal responsibility for your enlightenment
    It’s never too late to learn something new.

  16. Mar says:

    Yes, jjf, let’s listen to the TV medical experts.
    The ones who were constantly wrong.
    Like the ones who said Georgia would explode in new cases. And they were wrong.

  17. Randall Flagg says:

    >

    Lots of variables go into that, and I don’t profess to know them all.  I do know I’d rather have any surplus locked into a rainy day fund, than spent on things like street cars, LED advertising banners for a baseball team, handing money to public schools in a time of enrollment decline, etc.  Foregoing that, give my money back to me (allowing for the broader application of “my” and “me”).

    Wouldn’t you?

    I agree.  Id rather have it in a rainy day fund than spent on a jobs agency who can’t keep track of if the handouts actually created jobs and has businesses default on loans who should have never gotten them in the first place.

     

  18. Randall Flagg says:

    >>Very few businesses carry enough ash reserves to survive months with zero revenue.

    Just because  a lot of businesses don’t carry cash reserves to survive for 2 months doesn’t make it right.  Most people don’t have adequate savings for that period either.

    Owen:  do think that is OK?  Should individuals have 2 months savings?

  19. jonnyv says:

    If I choose to work at a $10 an hour job my entire life and can never afford to put away a savings or retirement, conservatives say, “Hey, that is your choice. You should have improved your situation.”

    But if a someone chooses to open a business that works on cash flow and can’t save enough for emergencies… well that is clearly different to them.

    Everyone has and makes choices as to how they want to live and what businesses they want to start. Risk / reward system. Personal responsibility. That is what I always hear.

  20. Mar says:

    jonnyv, I would have more respect for the business person trying to succeed by taking a risk.
    But I also respect the person doing the $10 job if they like the job and that’s the best they can do.

  21. Le Roi du Nord says:

    And the same RINOs were all over giving Foxconn truckloads of public money, condemning property, and mortgaging it for decades into the future. How many flat screens have they produced?

  22. jonnyv says:

    Mar. I am in total agreement. I respect both people, and want both to succeed. No one wants to live paycheck to paycheck if they don’t have to.

    This is a once in a lifetime (hopefully) pandemic. The strong will survive.

  23. dad29 says:

    So they don’t believe in surpluses or rainy days for gov’t,

    WALKER pumped up Wisconsin’s ‘rainy day’ fund.  Which conservatives here (or in Wisconsin) expressed strong disapproval of that?

    We’ll wait.

  24. guinness says:

    Dad,

    Don’t ask the hard questions, because they won’t get answered.

    Funny how the world news got the economy to shut down over Corona, but not influenza. Influenza hasn’t gone away and is still killing people around the world. What makes Corona any more of a threat other than getting all the panic press?

  25. Kevin Scheunemann says:

    All the liberal deflection on this thread.

    Awful. Just awful.

     

  26. Mar says:

    Guinness, I’ve been asking that since day 1. No answers from the local Chicken Littles here.

  27. dad29 says:

    What makes Corona any more of a threat other than getting all the panic press?

    Begin with this fact:  Trump is a germophobe.  So when some Brit, who has been terribly wrong about every damn thing, says 2 zillion Americans will DIE!  DEAD!!!!  2 ZILLION!!!!

    Trump paid attention.  IOW, they suckered him.  For a while, he let them play, but the longer it went, the more their DIE!!!  DEAD!!!!! UMPTY-ZILLION!! screeching looked really……ummmhhhnnnn………fishy.

    Trump is no fool.  So he let them continue their DIE!!! DEAD!!!!! ZILLIONS UPON ZILLIONS!!!!! rants and their strangulation of the economy.  And sure enough, the Normies figured it out.

    Then:  the surfers in CA., the haircutters in TX and MI, the demonstrations, the civil disobedience in NYC……heh.

  28. jjf says:

    Dad29 continues the “Trump must be a genius” conspiracy feel-good, while ignoring his statements that show he really doesn’t understand much at all.

  29. dad29 says:

    Jiffy settles the question, as usual.

  30. Randall Flagg says:

    jjf:  Man the Trump worshipers make themselves known quickly, don’t they.   I can just imagine them saying their prayers:

    “Our Trump,

    Who art at Mar-a-Lago,

    Hallowed be thy name….”

  31. Le Roi du Nord says:

    RF:

    Great commentary. Welcome.

  32. jjf says:

    “And don’t forget, we have more cases than anybody in the world. But why? Because we do more testing. When you test, you have a case. When you test, you find something is wrong with people. If we didn’t do any testing, we would have very few cases.”

    Yeah, he’s a genius, Dad29!

  33. Mar says:

    Once again, jjf, and Randall please chime in because the other Tweedle Dumb, Tweedle Dumber and Tweedle Dumbest refuse to answer this question: which Democrat would have done a better job than President Trump?

  34. Randall Flagg says:

    “which Democrat would have done a better job than President Trump?”

    1)  Pete Buttigieg

    2)  Andrew Yang

    3)  Amy Klobuchar

    4)  Ruben Gallego

    5)  Seth Moulton

    By the way, I put Biden about .000000001% above Trump.

  35. Mar says:

    At least you are honest about Biden.
    I think only a business person of a large company could have pulled it out. Not a full time politician.

  36. Mar says:

    And Randall, I’m glad you didn’t include ex-president Obama. He would have been a total disaster.

  37. jjf says:

    Randall, you’re new here, so now you’ve learned that you can answer Mar’s question, but he’ll be blind to your answer, and he’ll ask it again later as if you’d never answered it, and that time he’ll turn it around to Obama again, too.

  38. Jason says:

    >and that time he’ll turn it around to Obama again, too.

    You’re confused again Jiffy, you mean how Leroy will bring up Walker and Foxconn and then disappear from the discussion forever.

    Or how you will ask 16 innane questions that do not relate to the topic and then disappear from the discussion forever.

  39. Le Roi du Nord says:

    Obama would have done a great job.  He even left the new administration the pandemic handbook that trump ignored and later lied about, claiming it didn’t exist (it did)..  Then mcconnell lied as well, but at least he admitted he was wrong.

    My golden retriever is a registered independent, and he would have done a better job than trump.  But mar already know that.

  40. guinness says:

    Anybody but Trump? Right.

    Clearly the standard Liberal Trump hate response. Who needs a good reason when you can blame him. Never ending frustration from the sad, pathetic losers looking at four more years of accomplishing nothing while despising the man that took it all away. I really feel sorry for you. All that anger, negativity and unhappiness.

  41. dad29 says:

    He even left the new administration the pandemic handbook that trump ignored and later lied about, claiming it didn’t exist (it did)..

    Wrong again, LeeeeeeeeeeeeeeeeeRoy.  Obama left a 69-page pamphlet.  When the procs were tested in January, they were largely deficient–so Trump & Co. built a new, FAR more comprehensive, and actually useful book.

    My golden retriever is a registered independent,

    Oh.  I guess that makes you a typical Democrat operative.  He “votes” by mail, right?

  42. jjf says:

    Jason, what does Jason do?

  43. Mar says:

    jjf, you are the Helen Keller here. Deaf and blind. Did you even read my post above the Obama post. Didn’t think so.
    And we now we have Le Roi admitting to a crime. But at least his dog doesn’t lie like Le Roi.
    And Obama was a community organizer. He had no real job before he became president.
    We also know that his cronies and himself were corrupt to the highest degree.
    But at least he is not as bad as Cuomo and the governor of New Jersey where they killed thousands and thousands of nursing home residents.

  44. Le Roi du Nord says:

    mar:

    What crime did I admit to?

    And BTW, Obama was a US senator prior to being President, just like 100 other folks like mcconnell.  I’m sure they would disagree with you.  And you lied again.

  45. Mar says:

    You registered your dog to vote. That’s a felony. Maybe you can share a bunk with Bubba who will make you his date.
    Being a senator is not a real job.

  46. Le Roi du Nord says:

    Is it?

    Then maybe we shouldn’t be paying any of them.   Regardless, you are lying.

  47. Mar says:

    “Then maybe we shouldn’t be paying any of them.”
    Works for me. Many get richer being in the Senate, even if they didn’t get a salary.

  48. Le Roi du Nord says:

    Hey mar, looks like you are backing away from the criminal accusation.  Just like your idol, trump.

  49. Jason says:

    >Is it?

    It’s election fraud according to the WEC.

    Wis. Stat. § 12.13(1)(a)-(h)

    Whoever violates s. 12.0912.11 or 12.13 (1)(2) (b) 1. to 7. or (3) (a)(e)(f)(j)(k)(L)(m)(y) or (z) is guilty of a Class I felony.

  50. Le Roi du Nord says:

    j:

    You are beyond help. I never said I registered the dog to vote, and in WI you don’t need to register party affiliation. Don’t ever call anyone stupid again.

  51. Mar says:

    Le Roi, you really want me to repeat the accusations that 1 idiot accused you of? Seriously, I will, if you insist.

  52. jjf says:

    Le Roi, I don’t have a dog, but I also registered him to vote.

  53. Mar says:

    Not getting enough attention at home again, jjf?

  54. jjf says:

    Oh yeah, I’ve got plenty to do.  Emails from Obama and George Soros just arrived, so I have work to do!

  55. Le Roi du Nord says:

    mar:

    If you feel the need to make more false accusations to be more manly there isn’t much I can do about it. Sane folks would know you’re lying.

  56. Randall Flagg says:

    >Oh yeah, I’ve got plenty to do.

    > Emails from Obama and George Soros just arrived, so I have work to do!

    I just got mine too jjf.  After watching the Trump supporters abandon the ability to think independently for the last 4ish years (and members of religions for my whole life), I have decided to join them and have someone else do my thinking for me :)

    Is there a left wing equivalent to Alex Jones I can watch?

  57. Jason says:

    >You are beyond help. I never said I registered the dog to vote, and in WI you don’t need to register party affiliation. Don’t ever call anyone stupid again.

     

    So share an image of your dogs registration as an independent.   You want to play word games, I played along.   Prove what you said.

  58. Mar says:

    Well, Le Roi, a few months some idiot accused you being a child molester. And they did so many times. You never denied it, if I remember. I didn’t believe it and even stuck up for you when no one else did.
    Maybe it was just you making those accusations to make you look like a poor me character.

  59. Le Roi du Nord says:

    mar:

    Correct, someone did make those utterly false accusations.  And they made the same accusations against others on this site that they disagreed with.  And I didn’t respond one way or the other because there was no sense in debating him/her/it. They got their 5 seconds of fame, albeit on the back of a lie.

    And now you are presenting your own lie to get your fleeting fame, “Maybe it was just you making those accusations to make you look like a poor me character”.

    What a small and petty life you lead, dredging up a lie, claiming that you defended me, and then proposing the same lie.  Pretty sad for someone as highly educated as you claim.

  60. Le Roi du Nord says:

    j:

    My dog is registered with the IKC.

  61. Jason says:

    Idiots Kennel Club?  I thought you were bragging about your dog being smart?  Or is it due to Owner Low IQ?

  62. Mar says:

    Le Roi, I did not want to bring it up, but you put in a position to bring it up.
    I never saw the guy bring up accusations against jjf.
    But like I said, you never denied it, I don’t think you are a pervert but i just go where the facts go.

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