Aa
Help me get rid of some stress if you can!
Ok here's a story for you, last year in March I was feeling depressed at work as a financial planner with the GFC in full swing. I went to the doctor and the prescribed me Endep which launch me into Mania for 4 months. Now I've read that during periods of mania with your brain flying at full speed it can give you genius level problem solving. Well during this time I came up with a new theory in microeconomics which is as follows, quite honestly I don't care who knows anymore as its doing my head in, it goes like this.
"The cheapest way to supply goods and services to create jobs sustainably is at marginal cost."
Sounds bonkers I know particularly when it comes from someone that is bipolar and manic at the time. Well anyway during this period of mania I had massive panic attacks and basically came up with a business plan to put this theory into effect that would in essence be the cheapest way to create jobs continually while at the same time adding other parts to the plan so that it also manages to leave small footprints and not create price wars. I put a fair bit of work into it as basically I thought I had an idea to help end the GFC and create jobs.
Well after coming down from my manic period I took my idea to a few economists and guess what the freakin theory is right. Can you believe it, I couldn't, but it is in fact absolutely true and correct. But now here's the problem.
I simply can't communicate it well enough for anyone to get behind it.
No-one gives a stuff here in Australia about it and I know it's partly because when I came up with it, I simply had a hard time communicating at all. But added to that they haven't given me much time to listen to me explain it or clicked to how it would work i.e. the second part of the business plan which applies the theory. You would have thought if anyone came up with an idea for the cheapest way to create jobs you could get support from someone. Maybe part of the problem is that I'm in Australia which doesn't have an employment problem anymore.
In the end I setup a not-for-profit company to prove how the theory would work, but have got stuck because basically I didn't have any money to start with, let alone run a company and yet I have a brilliant idea. Now I'm basically stuck with the idea, a great business plan, a business setup and simply no cash or voice to get this idea into government and it is causing great stress.
Any time I here about job losses I get really frustrated, also when I hear about Quantitative easing I also get stressed as well because if the theory was used by a government to create jobs fiscally it would theoretically be another way to control quantitative easing at the cheapest possible cost. Something that many governments around the world are trying to do.
I know this must sound like I have a mental disorder, but the reality is I do have a mental disorder and yet it was this mental disorder that gave me the intellectual capacity to come up with the idea which is correct. But if I ever try to explain it to people they think I am nuts.
I've basically now put it on the back burner for the past 6 months, but every now and then I can't help but think I should do something with it.
While I was manic and the GFC was in full swing I felt like I was Noah back in the day walking around with it pouring with rain and everyone panicking about a flood coming and I'm there going "Well I've got these drawings for a really good boat, and if you could just give me a hand building this thing I think I might be able to save a few lives." But no-one helped and so all you can do is slowly chip away building your boat on your own.
It just does my head in thinking about it, I sometimes think I'm like an old inventor in history where no-one will get his idea until about 200 years after he came up with it and he's long gone. It's so frustrating as to me its so crystal clear as to how it would work, but no-one get's it or can be bothered giving me enough time to actually explain it properly in full, not just the theory as that's just the tip of the iceburg on this thing.
Please understand that I'm just frustrated and stressed and am not thinking of harming myself or have had any thoughts of suicide because I haven't thought like that at all. But can you understand how with all the stuff going on in the world right now this could be causing me stress.
Would really appreciate any ideas as to what I could do as a next step with this, as I just want to get rid of the stress.
Forgetting about it and putting it on the back burner doesn't seem to be working.
Hope you can help
"The cheapest way to supply goods and services to create jobs sustainably is at marginal cost."
Sounds bonkers I know particularly when it comes from someone that is bipolar and manic at the time. Well anyway during this period of mania I had massive panic attacks and basically came up with a business plan to put this theory into effect that would in essence be the cheapest way to create jobs continually while at the same time adding other parts to the plan so that it also manages to leave small footprints and not create price wars. I put a fair bit of work into it as basically I thought I had an idea to help end the GFC and create jobs.
Well after coming down from my manic period I took my idea to a few economists and guess what the freakin theory is right. Can you believe it, I couldn't, but it is in fact absolutely true and correct. But now here's the problem.
I simply can't communicate it well enough for anyone to get behind it.
No-one gives a stuff here in Australia about it and I know it's partly because when I came up with it, I simply had a hard time communicating at all. But added to that they haven't given me much time to listen to me explain it or clicked to how it would work i.e. the second part of the business plan which applies the theory. You would have thought if anyone came up with an idea for the cheapest way to create jobs you could get support from someone. Maybe part of the problem is that I'm in Australia which doesn't have an employment problem anymore.
In the end I setup a not-for-profit company to prove how the theory would work, but have got stuck because basically I didn't have any money to start with, let alone run a company and yet I have a brilliant idea. Now I'm basically stuck with the idea, a great business plan, a business setup and simply no cash or voice to get this idea into government and it is causing great stress.
Any time I here about job losses I get really frustrated, also when I hear about Quantitative easing I also get stressed as well because if the theory was used by a government to create jobs fiscally it would theoretically be another way to control quantitative easing at the cheapest possible cost. Something that many governments around the world are trying to do.
I know this must sound like I have a mental disorder, but the reality is I do have a mental disorder and yet it was this mental disorder that gave me the intellectual capacity to come up with the idea which is correct. But if I ever try to explain it to people they think I am nuts.
I've basically now put it on the back burner for the past 6 months, but every now and then I can't help but think I should do something with it.
While I was manic and the GFC was in full swing I felt like I was Noah back in the day walking around with it pouring with rain and everyone panicking about a flood coming and I'm there going "Well I've got these drawings for a really good boat, and if you could just give me a hand building this thing I think I might be able to save a few lives." But no-one helped and so all you can do is slowly chip away building your boat on your own.
It just does my head in thinking about it, I sometimes think I'm like an old inventor in history where no-one will get his idea until about 200 years after he came up with it and he's long gone. It's so frustrating as to me its so crystal clear as to how it would work, but no-one get's it or can be bothered giving me enough time to actually explain it properly in full, not just the theory as that's just the tip of the iceburg on this thing.
Please understand that I'm just frustrated and stressed and am not thinking of harming myself or have had any thoughts of suicide because I haven't thought like that at all. But can you understand how with all the stuff going on in the world right now this could be causing me stress.
Would really appreciate any ideas as to what I could do as a next step with this, as I just want to get rid of the stress.
Forgetting about it and putting it on the back burner doesn't seem to be working.
Hope you can help
The other part to it is actually calculating marginal cost, which can be difficult for some companies but a lot of companies involved in manufacturing actually have a really good understanding on what their marginal cost is, the paint company sure did.
Oh and for those wondering what marginal cost is here is a definition.
Marginal cost is the cost to produce one more good or service.
A good example of those using it are airlines, you know those last minute really cheap flights, they are priced at marginal cost with a bit of profit added.
i.e. the cost to put one more person on the plane, as the plane is already going anyway the additional costs should only be the small amount of fuel, a meal and a couple of other things. Things like head quarter overheads are stripped out as yo are not going to close the company headquarters if the person doesn't get on the plane.
Oh and for those wondering what marginal cost is here is a definition.
Marginal cost is the cost to produce one more good or service.
A good example of those using it are airlines, you know those last minute really cheap flights, they are priced at marginal cost with a bit of profit added.
i.e. the cost to put one more person on the plane, as the plane is already going anyway the additional costs should only be the small amount of fuel, a meal and a couple of other things. Things like head quarter overheads are stripped out as yo are not going to close the company headquarters if the person doesn't get on the plane.
Nup it's quite the opposite, it actually using low cost of raw materials and services to maintain wages and preferrably use excess funds created to hire more staff during a downturn.
The trick is that those supplying the low cost raw materials only do it with say one of their products to avoid hurting their own business, then the goods or services created with the raw materials be sold at normal prices to avoid price wars. In between you have excess funds which you use to hire more staff. Those involved with the campaign get brand bragging rights which will hopefully encourage others to buy other products they sell.
I'll give you an example.
Imagine you are a paint company
You sell a can of paint to say a government department at marginal cost (this is the cost where although you don't make a profit, you don't make a loss either). You only do it with one brand of paint and because you are not making a loss you can continue to do it.
The government then uses this paint on a selected major infrastructure project (not all or it will hurt industry also) and uses the additional funds to hire more staff for painting which will speed up the painting of the job and put more people back to work. The end cost to government would be the same in this example to avoid hurting other industries.
The paint company that supplied the paint then gets to brand its other paint cans as saying it has been involved with this project which they sell at normal prices in paint stores. Everyone appreciates the paint company for helping to put the country back to work and choses to buy this companies can of paint over another from a branding perspective. The government gets the good vibes of putting people back to work. And everyone is happy because they can work again.
The trick is the original can of paint being sold at marginal cost not hurting the paint company as it has excess capacity anyway during this time and they only do it with the one brand of paint.
It doesn't have to all be sold to government either it can simply be sold to other groups that are trustworthy enough not to use it to undercut the rest of the market.
Another example of this marginal costing difference is as follows.
Just say normally it would cost $100 dollars to do a job, of that $100 $25 is used for labour, $50 for the cost of raw materials and $25 for other overheads.
Well now say that the company supplying the raw material chooses to get involved with the job creation project and sell its raw materials at marginal cost which in this case equates to $25.
Now for the same $100 to do the job, you can hire twice as much labour with $50, $25 for the cost of raw materials and $25 for the other overheads.
All it is a reallocation of funds towards labour, and on a short run project by project basis.
I actually took this idea to a paint company here in Australia and they we're happy to be involved I just couldn't get anyone in government to listen to me. My end idea was to use the paint to hire workers to help repaint areas of Melbourne that were devastated by the bushfires last year. We could have bussed people up to the bushfire areas (not far away) each day and had people filling the day they had lost (a large group of people had gone from 5 to 4 days work) up painting things in devastated communities. Simple low skilled labour jobs.
Problem now is we don't have a labour problem in Australia and the simple attempts government had trying to create jobs was installing insulation in people houses and it was unsupervised and rushed and we now have a problem with house fires and people getting killed. So it needs to be controlled when used. but the chance of that happing here in Australia is basically zero at the moment. Other parts of the world is the exact opposite, Spain for example is sitting on 20 percent unemployment.
The theory can essentially work in any industry but works best in areas where labour demand is more elastic, i.e. Where you can hire a greater amount of staff with just a little bit more money.
The trick is that those supplying the low cost raw materials only do it with say one of their products to avoid hurting their own business, then the goods or services created with the raw materials be sold at normal prices to avoid price wars. In between you have excess funds which you use to hire more staff. Those involved with the campaign get brand bragging rights which will hopefully encourage others to buy other products they sell.
I'll give you an example.
Imagine you are a paint company
You sell a can of paint to say a government department at marginal cost (this is the cost where although you don't make a profit, you don't make a loss either). You only do it with one brand of paint and because you are not making a loss you can continue to do it.
The government then uses this paint on a selected major infrastructure project (not all or it will hurt industry also) and uses the additional funds to hire more staff for painting which will speed up the painting of the job and put more people back to work. The end cost to government would be the same in this example to avoid hurting other industries.
The paint company that supplied the paint then gets to brand its other paint cans as saying it has been involved with this project which they sell at normal prices in paint stores. Everyone appreciates the paint company for helping to put the country back to work and choses to buy this companies can of paint over another from a branding perspective. The government gets the good vibes of putting people back to work. And everyone is happy because they can work again.
The trick is the original can of paint being sold at marginal cost not hurting the paint company as it has excess capacity anyway during this time and they only do it with the one brand of paint.
It doesn't have to all be sold to government either it can simply be sold to other groups that are trustworthy enough not to use it to undercut the rest of the market.
Another example of this marginal costing difference is as follows.
Just say normally it would cost $100 dollars to do a job, of that $100 $25 is used for labour, $50 for the cost of raw materials and $25 for other overheads.
Well now say that the company supplying the raw material chooses to get involved with the job creation project and sell its raw materials at marginal cost which in this case equates to $25.
Now for the same $100 to do the job, you can hire twice as much labour with $50, $25 for the cost of raw materials and $25 for the other overheads.
All it is a reallocation of funds towards labour, and on a short run project by project basis.
I actually took this idea to a paint company here in Australia and they we're happy to be involved I just couldn't get anyone in government to listen to me. My end idea was to use the paint to hire workers to help repaint areas of Melbourne that were devastated by the bushfires last year. We could have bussed people up to the bushfire areas (not far away) each day and had people filling the day they had lost (a large group of people had gone from 5 to 4 days work) up painting things in devastated communities. Simple low skilled labour jobs.
Problem now is we don't have a labour problem in Australia and the simple attempts government had trying to create jobs was installing insulation in people houses and it was unsupervised and rushed and we now have a problem with house fires and people getting killed. So it needs to be controlled when used. but the chance of that happing here in Australia is basically zero at the moment. Other parts of the world is the exact opposite, Spain for example is sitting on 20 percent unemployment.
The theory can essentially work in any industry but works best in areas where labour demand is more elastic, i.e. Where you can hire a greater amount of staff with just a little bit more money.
I should say low wages for *most* employees. I've known some people making big money (especially off stock options) as 'regular employees'.
I may be reading it wrong, but it sounds a lot like the WalMart plan over here. They are the lowest price for everything, and the impact of the economic downturn on their company was lower than their competitors.
Low cost, low wages for employees (decent salary for mgmt)... and the company keeps growing.
Low cost, low wages for employees (decent salary for mgmt)... and the company keeps growing.
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