The iPhone will set you back anywhere from $499-$599 depending on the storage capacity (4GB-8GB). According to websites like engadget we’re being raked over the coals for a cell phone.

Ok, so here’s my take on this whole thing…

So what if the iPhone costs (in parts) $264. You think a company like Apple wakes up one day with a product that they can sell? What about research and development costs? What about shipping? What about the support staff training? What about that liberal dirty word… PROFIT!?

Apple buys the parts for (for the sake of argument I’ll use the magic number via engadget) $264.85 (8GB model). Now they have a pile of parts… who/what puts them together to MAKE the iPhone? Chances are there are people AND machines involved. Now the people have wages that have to be paid by Apple, and the machines cost money to engineer and build. All of that costs millions of dollars. Now that Apple has BUILT the iPhone, it must then put it in some fancy packaging (which also requires engineering and design). Apple now has to build up interest in their product, so they have to pay someone to develop an advertising campaign.

Outside of the hardware, what both engadget and isuppli (the company responsible for the component tear down costs) fail to take into account is the software on the phone that performs all those nifty iPhone magical features. The iPhone runs a customized build of Mac OS X. So you’re talking about a COMPLETE rebuild of your key OS to make it compatible with a mobile device. On top of developing the OS to even RUN the phone, you have to still develop an upgrade to iTunes for both Mac OS and Windows so that it will work with the iPhone. You even have the costs of developing an infrastructure for AT&T because, lets face it… this is THE first phone anyone has done that activates out of the store.

So right about now you’re talking MILLIONS of dollars being spent and the product is still unavailable to the public.

Now, here you are, facing a heaping pile of demand for this product due to the excellent job marketing the product (not to mention word of mouth evangelism thanks to your user base), so you have to set a price that will both a)sell the product and b)not deplete your supply channels.

So Apple set the price to $599 (8GB model)… made you stop and think about WHY you need the phone didn’t it? Would you have stopped for a nanosecond if Apple had slapped a price tag of $299 on that bad boy?

Gee people, it seems like we’ve ended up on my favorite topic… Supply and Demand. There is ENOURMOUS demand for this product, and as things are Apple can only make them so fast, thus capping the supply chain at so many iPhones available as they are made. If Apple had set the price of the iPhone too low, not only would they NEVER be able to recoup their expenses in bringing you the product… they would run out of supply faster than you could say “iPhone”… in turn causing a MASSIVE influx in bad press that could potentially harm sales across the board.

Yes the iPhone is expencive and yes the PARTS don’t cost much, but there’s a lot more in the picture than the parts. Ever stop to think how much the PARTS for your BMW cost?

Do people even have the slightest idea of how supply-side economics works?

Gas prices aren’t just some arbitrary number. They are based in full on the average wholesale price that a dealer (read: gas stations) paid for each gallon of gas in their inventory.

Those wholesale prices are based on what the gasoline suppliers (ExxonMobil, Shell, BP, etc.) pay to refine crude oil, which is based on the price of crude oil – which is directly based on the Oil Futures Market’s price for a barrel of crude oil.

The Oil Futures Market is DIRECTLY related to conditions in the middle east and OPEC and Russia’s MONOPOLY on crude oil.

We also pay more for gas because China’s and India’s demand have DOUBLED in the last 5 years.

I can’t believe how many people see gas prices as the result of “evil corporations,” when in fact, gas prices are the direct result of supply and demand!

Casey

“The Democrats know what needs to be done. Again, we’re working trying to try push this agenda forward. The other day the oil companies reported the highest profits in the history of the world. I want to take those profits and I want to put them into a strategic energy fund that will begin to fund alternative, smart energy; alternatives and technology that will begin to actually move us toward the direction of independence.”

Hillary, like many Socialists, believes that the profits of privately traded companies are free for the taking regardless of the fact that those profits belong to the shareholders of ExxonMobil. Shareholders such as retirement funds for teachers, police, firemen, etc. Shareholders aren’t always rich businessmen like they would love for you to believe.

Exxon reported profits of $39 BILLION dollars in 2006. That’s PROFIT… What was their profit MARGIN?

According to recent poll data, the average American feels that a “fair” profit margin is roughly 20%… so then how could Exxon’s PROFIT be unfair, if their profit margin only fell into the 11.5% range for Q3 of 2006.

Well obviously to people like Hillary, that EVIL ExxonMobil is just making too much damned money and she just has WAY too much she wants to spend it on. Oh, and in case you didn’t know… this woman would love to run your country.

On a side note, I used to work for a furniture retailer, and our profit margin ran close to TRIPLE ExxonMobil’s at any given point throughout the year. PURE EVIL I tell you!

I HAVE A PLAN!

Well that’s nice, but up until the other day no one would tell anyone else what that plan was. That was, until the DNC published their New Direction for America. You see, the DNC has control of Congress… at least that’s what they’re saying prior to the November elections.

A portion of this plan has to do with the great “equalizer” known as minimum wage. According to them, the measly $5.15 National Minimum is just too paltry to be acceptable, they think a more welcome number like $7.25 an hour is needed.

I have a serious issue with giving our unskilled workforce an overnight $2.10 raise for nothing.

The first rule of Economics 101 is that if your costs increase, to maintain your profit level your price must increase also. Increase your prices and demand will usually go down. If my business relies on unskilled labor at the current rate I will be forced to reduce my costs to stay competitive. I will probably not hire or layoff unnecessary labor. For our champions of the little man and job creation in D.C. known as the DNC, this is totally contrary to what they are saying.

Many people will try tell you that the largest employer of low wage workers are large corporations and big business making the proposed increase in the minimum wage seem insignificant because to most, eating into the profits of big business seems acceptable. After all, they’re not doing anything with that money except paying it to their CEO’s.

On the other hand the Small Business Administration, who state that 54% of min-wage earners work for employers with fewer than 100 employees, and 2/3 work for employers with fewer than 500, has made a different conclusion. Not to mention that small businesses account for approximately 2/3 of all new jobs created annually… these businesses are also THE most susceptible to job losses.

Age, education and skills are, and should be the motivating factors behind wages, not “just because it’s a nice thing to do”. 50% of minimum wage earners in the US are younger than 25, one-third of which have less than a high school diploma, according to the Bureau of Labor Statistics. Minimum wage is not intended as a dead end position. It’s a starting point. Around 90% of all minimum wage earners in the US earn a raise within one year. Do a good job and get rewarded.

With that in mind, can someone please explain to me how a $2.10 raise for our minimum wage workforce is GOOD for our economy and workforce?

Well it seems like the government once again is sticking their hand into our pot without permission, and deciding for us, who does what and with whom.

One of THE biggest names in cheesesteaks, put up a sign after a period of frustration from people who attempt to order in languages other than English. The sign was posted near the window where orders are taken and reads as follows:

This is AMERICA … WHEN ORDERING SPEAK ENGLISH.

The city’s Commission on Human Relations filed a “discrimination” complaint against Geno’s for posting the sign. Rev. James S. Allen Sr. stated that the sign violates human rights because it is discriminating based on national origin and it makes foreigners feel uncomfortable.

Owner Joey Vento defends the sign saying that ‘it is an immigrant’s duty to learn the language.’ and I agree with him 100,000%. I don’t care who you are, the fact that I live in a country where the majority of us speak English (and where Congress is in the process of declaring it our national language) it’s pathetic that I must “press 1 for English”, or seek out merchandise that is labeled in English so I know what I’m buying.

Geno’s is a PRIVATE business, therefore by the very nature of our economy has the right to deny anyone of their service. If they want to deny service to all patrons who refuse to speak English, that is their right. No shirt, no shoes, no service anyone?

Simply because there are people in this country that don’t speak our language, DOES NOT make it mandatory for the businesses in this country to accommodate them.

Lets take the example of bags of ice. The store in question regularly sells bagged ice for $0.75 a bag. The area this store is in gets hit by a VERY bad storm and because of this, demand for commodities like bagged ice increase as people are fleeing the area.

The store in question falls under the jurisdiction of these anti-price gouging laws so it is forced to KEEP it’s bagged ice at $0.75 a bag for fear of being forced to close up shop or pay some INSANE fine. Floods of people come in and, because the ice is so cheap buy up his entire supply. Some people grabbing up more than they need “just in case”.

NOW, had this “threat” not been in place, the owner of the shop would have been able to assess the situation, notice how much his ice was “in demand” and adjust the price of the bagged ice accordingly as to stretch out his supply as much as he can. Say he increases the price of his bagged ice to $2.00 a bag… the customers coming in search of ice that REALLY need it will think twice before they overstock on bagged ice and as a result, will level out the supply and demand curve for this shop.

The politicians that push for these laws, aren’t dumb… they know what these laws will do to the areas they affect. It’s about nothing more than looking good to the segment of the population that is ignorant to basic economics so they will send their vote in their direction.

Oh come on Lay, did you REALLY fool yourself into thinking “I don’t know / I didn’t know” was a rock solid defense against the charges that were laid before you? Heck “I don’t know” wouldn’t even work for me when I was 6. Why it would work for someone who was caught red handed in one of the biggest corporate greed scandals is beyond me.

I hope they have comfy beds where you’re going because that’s a heck of a lot of time they’re handing you.

Recently Maryland Democrats did their thing, and overrode Gov. Bob Ehrlich’s veto of a bill that required ‘large’ employers (read: Wal-Mart) to set aside a percentage of their payroll costs, to provide healthcare for their employees. Wal-Mart is the only employer in the state, which the new law applies to, so this was an obvious stab in their direction.

I don’t know Maryland law, but it seems quite wrong to me, that a State has the right, to tell a private business what they have to do with their money. If Wal-Mart felt that it was necessary to put solid gold faucets in their public restrooms, and they had the money to do it, the State has ZERO say in that matter. If they want to pay their employee’s $.05 above the minimum required wage limit for that region, so be it… it’s their money and their business.

Sadly, Wal-Mart will probably comply with this law in order to keep their stores open in Maryland… but personally, I’d love to see them pull out of there and ignore any requests to come back.