Friday, October 17, 2008

The Crack in Obama's Argument 
So now the whole world's piping up with nutty arguments about Joe the Plumber, who informed Obama that he's planning on buying a company that "makes" $250,000 per year.

The libtards are arguing two things:

1.) Joe the Plumber doesn't know the difference between GROSSING $250,000 and PROFITING $250,000.

2.) Plumbers don't make $250,000 per year.

No, journeyman plumbers don't make $250k per year. But plumbing CONTRACTING firms sure as hell do, and do it pretty often.

Look, here's a study from Yellow Pages that finds that plumbing firms typically gross $172,000 per year from a Yellow Page display ad alone!

Figure about a 40% margin per job and that gets you to a gross profit (before fixed expenses) of .40 x 172k or $68,800.

Put two Yellow Page ads in two different cities within an hour of your business and you've got $137,000 gross profits. Firms in cities which are inland could easily place in four phone books, which takes them to $275,000. Firms in my home city of Fort Lauderdale, Florida could easily place ads in the Palm Beach, Fort Lauderdale, and Miami phone books. We're a special case because there are no cities to our East to serve, and the closest major city to our West is 90 minutes away across the Everglades, which would make our firms uncompetitive when you factor in three hours of drive time to and from a job in Naples. Still, if this study is true, Yellow Page revenue alone would generate a pretty hefty portion of that 250k in a lot of markets.

And that's before the contractor got his first referral from a happy customer, before he got his first commercial plumbing job, or won his first bid with a municipality, state or federal agency. Those are typically narrower margins, but contracts can be very large, even for modest sized firms.

A reasonably successful plumbing contracting firm with a few crews on the road and a couple of lucrative contracts could earn $250,000 in profits without batting an eye.

But look who's reporting on this!

Almost no cub reporters have ever owned a home. Certainly very few journalists and producers in the NYC media complex own homes. They've never dealt with a plumber directly, other than to show him the way to the bathroom through the living room. Very few reporters on the story have ever signed a check for a plumber's services directly. What they don't realize is that a solid journeyman plumber outearns the garden-variety reporter handily... and that the owner and principals of a decent plumbing firm handily out-earn even the executive editor levels of newspapers and magazines in almost any market you care to name.

Most of them, however, have not read the excellent personal finance book The Millionaire Next Door. They have no idea how small business works.

For example, had the reporter spent any time in private industry doing business development, he or she may well have learned how to look up actual contract awards - specifically to small-businesses, as defined under GSA Contract regulations. A search on FedBizOpps for awards granted over the past 365 days limited to small-businesses operating under the NAICS code for plumbers and plumbing contractors will turn up quite a number of awards that would put a firm close to the 250k figure by themselves.

The first one I looked at was an award to a small firm to do water chiller maintenance at an Air Force facility on Tybee Island, Georgia - a contract of $206,000 by itself.

This single galley sewer and HVAC upgrade at a single US Coast Guard Station in Destin, FL resulted in a 306,000 award to a small business, Enola Contracting Services, Inc. Figure a nice 30 to 40 percent markup they took for themselves (they'll be subject to bacon wages, and will have to figure in a margin of safety, since it looks to me they'll be subbing most of the work out).

Those were just the first two I opened. And that is just the ones on Fed Biz Opps limited to small businesses. My point is that even small plumbing firms will routinely enter into contracts that are worth six figures at a pop, not even counting private commercial projects which are not publicly available on the internet. A plumber who has a few crews on the road and can accurately price his services to maintain a 40% margin can quite feasibly muster 250k in gross profits - at which time the plumber will do his best to spend down profits to provide pre-tax benefits to himself and his family, through retirement plans, key person and split dollar insurance arrangements, deferred comp, employee benefits, etc.

As the son of a roofer, I find the libtard tendency to look down their noses at plumbers to be grossly offputting.

And that's the nut of the argument.


Splash, out


I find this entire debacle very distasteful. A man dares to ask a question from politician who comes to his neighbourhood and press attacks him? It does not matter what the background the person has - what matters is what the politician answers to the question.

I was convinced before, but this certainly underlines it to me that Obama presidency would be bad for USA and bad for world at large. Man who is worshiped this much and has media fawning over him this much will be dangerous.
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