The economic illiteracy of Americans — including most who have taken one or more college Economics classes — can be breathtaking. But instead of always complaining about this malady, I decided that with this article, I’d here offer a one-lesson business accounting course that SHOULD be taught in high school (if not at home).

Herewith, a cram course on the fundamental math of a retail business — specifically a fast-food establishment. And why almostallsuch culinary establishments will be cutting back their hours of operation — making that late-night fast-food eatery largely a thing of the past.

Every business has two kinds of costs:

1. Fixed Costs— These are costs that don’t change much from month to month. At the top of the list of fixed costs is usually property costs — mortgage (or rent), taxes, insurance. Add to that franchise fees, accounting cost, some insurance costs, etc.

2. Variable Costs— These costs primarily consist of the cost of goods sold, utilities, franchise percentage payments and… Read More

Rising inflation causes more and more people to expose their profound economic illiteracy. Recently I’ve been fascinated to read the Internet comments of otherwise intelligent people who think that the main cost of a sit-down restaurant meal is the food ingredients. Too many commenters think that the primary factor driving eatery prices up is the greed of the restaurant owners. Anyone who RUNS a restaurant will tell you that in most cases, the cost of what’s on your plate is just a minor and sometimes even a tiny part of the restaurant’s overhead. Especially so for breakfast — which was the meal being discussed on the thread that I was reading. Here are just SOME of the many restaurant costs being ignored by those commenting “economists,” claiming that some/most restaurants are ripping us off: … Read More

Many people (including myself in times past) have often complained that “economics is not taught in the schools.” But that’s a false assertion. Economics IS taught in today’s schools — taught in a very selective, all pervasive manner in just about EVERY class — not just in some economics class. What is “taught” today throughout the education process by economically illiterate teachers is that: 1. Businesses make huge profits. Excessive profits. Downrightevilprofits. 2. Businesses can “afford” to pay more — more taxes, more mandated labor costs, more whatever. 3. CONCLUSION: Businesses need to pay their “fair share” — whichalwaysmeans MORE. Of course, the MSM AND the movie/TV shows preach the same gospel. Facts be damned. So we really should not be surprised it how little most people know about business, costs and profits. A 2015 survey found thatpeople think that businesses make about 36% profit on every dollar of sales.The real profit margin is 6.5% to 7.5%. Roughly 7 cents of every sales dollar is profit (assuming the … Read More

Thomas Del Beccaro, a former chairman of the California Republican Party, is seeking the U.S. Senate seat being vacated in 2016 by Democrat Barbara Boxer. The burning question most people have for Del Beccaro is WHY? The district is a Democrat stronghold, having elected and reelected Boxer since 1993. “There are people who run for office, and people who run for ideas,” Del Beccaro said in an interview. “California has had one-party rule in the U.S. Senate and the California legislature for most of the last twenty years,” Del Beccaro said. “The result has been a state that is number one in poverty, at the bottom in education, and suffering from … Read More

When a business closes it’s doors forever, the impacts are far-reaching. The announcement of the upcoming closure of the Campbell’s Soup plant in Sacramento will have regional and statewide impact. Econ. 101 I may have been a political science student, but my husband is a longtime Sacramento manufacturer. For many years I lived and worked Econ. 101 lessons alongside 250 employees. My businessman husband was an economics major in college and frequently reminds me that economics education in college has seen a dramatic shift. There weren’t many Keynesian economists in universities back then. Unfortunately, today, Keynesian economics seems to be the only economic theory coming out of universities. Keynesian economics is an economic theory stating that aggressive government interventions in the marketplace and monetary policy are the best way to ensure economic growth and stability. Economist Walter Williams has explained for many years the reality of the free market economy in which businesses must make a profit in order to survive: ”In the market, when a firm fails to please its customers and fails to earn a profit, it goes bankrupt, making … Read More

I don’t fit neatly into a box. I am a conservative Republican who doesn’t raise taxes and votes to cut nearly every bit of government spending I can find. But, I am against the wars in Afghanistan and Libya, think we should cut defense spending, support legalizing internet gambling, sponsor a lot of bills to prevent abuse of animals, want pristine, clean oceans and believe we need some government support of home mortgages. No, that is not a box. For those of you who don’t know my background, I am a native Californian raised by two very conservative and politically active parents. “We were Taft Republicans”, my mother often told me to make sure I understood that Dwight Eisenhower was way too moderate for them. The last Democrat I voted for was Sam Yorty for Mayor of Los Angeles in the 1970s. I think he later changed parties. I’m about as Republican as you get. But, my ideology guides my thinking. It does not replace it. I believe that this job is about solving problems. And, there is never only one prescription to right every wrong. Napoleon Bonaparte was certainly the most brilliant military strategist of the 19th century and perhaps ever. … Read More