Ari’s Brother

By now you’ve read the whiny op-ed in the WSJ by Ari Fleischer’s brother, explaining that the evil government is to blame for him not hiring more employees. Putting aside the fact that Bogen’s main business is… as a contractor for various government entities (via), this comment at OTB was pretty informative:

The fact is that if Mr. Fleisher’s company has to buy an extra box of paper clips it will cause them to go belly up. He’s in not position to hire anyone regardless of tax policy.

The reason Mr. Fleischer’s company isn’t hiring has nothing to do with taxes or the policies of any administration. It’s because his business has been in decline for a decade. As the CEO, that decline is his fault. All his complaining about taxes and benefits is just a smokescreen for his own incompetence.

The world changed around them a decade ago and they failed to adapt. In 2000, their annual sales were 66 million dollars with cash on hand of 12 million. By 2003, sales were down to 55 million and cash was down to 6 million. That was before the financial crisis and under the allegedly pro business policies of the previous administration. In 2009, sales were down to 44 million and cash was down to 2 million. They manages to lose 17 million dollars that year and got a carry back refund of some 5 million dollar. Mr. Fleischer should spend less time complaining about taxes and more time thinking about how he can correct 10 years of mismanagement.

Don’t take my word for it, read the balance sheets yourself.
http://www.bogen.com/aboutus/financials/#historical

Can a brother get a “Heh-indeedy?” I think Mr. Fleischer should join the rest of the productive people out there and go Galt.

And on a serious note, it still amazes me that companies do not include the amount they pay in benefits (especially health insurance) on their pay slips to employees. You want to change the cost of health care- start mandating that be put on every employee’s paystub.

46 replies
  1. 1
    MNPundit says:

    There’s a reason I referred to Ari as a “walking pestilence” whenever I discussed him during the Bush era. Good to know it applies to his brother too.

  2. 2
    MikeJ says:

    With the hed “Ari’s Brother” I assumed this was about Rahm! Or the Sasha Grey arc on this season’s Entourage.

  3. 3
    Zam says:

    I guess taxes would be an easy deflection for a failing business model, since everyone just simply hates taxes because they are taxes.

  4. 4
    Comrade Javamanphil says:

    Conservative Business men can never fail, they can only be failed.

  5. 5
    tom p says:

    What the F is up with the site? 2nd day in a row I cannot read anything here without scrolling all the way across a page for 15 lineal feet. I like this place, but I don’t like it that much.

  6. 6
    burnspbesq says:

    Are you referring to the employer contribution? Because the amount that is deducted to cover my share is listed on every direct deposit notice. And employer match to my 401(k) deferrals is broken out on my quarterly reports from the administrator.

  7. 7
    John O says:

    LOL…Mr. F. couldn’t even grow the business during the go-go Bush years of crony government contract work, with someone VERY deep on the inside?

    Can you say, “bad businessman?” I knew you could.

    Of course, the other explanation is that the Bush Admin did Mr. Fleischer’s company no favors. I guess they needed some.

  8. 8
    Ross Hershberger says:

    Bogen used to be the David Bogen company. 50 years ago they made pretty great electronics and I still have some. David Bogen died about 35 years ago.

    I’m reading this blog on Chrome and I have experienced no screen anomalies.

  9. 9
    Nylund says:

    This reminds me a bit of a guy I met who was complaining that Obama’s new taxes (that don’t exist) were destroying his business, which was making stationary and cheap diaries and journals. I kept thinking, “or maybe its because things like, computers, the internet, blogs, facebook, twitter, etc. have had a negative impact on people’s desire to write things with pens on pieces of paper.”

  10. 10
    beltane says:

    While it may be fashionable to complain about the government, it should be pointed out that our private sector has devolved into one of the most pathetic engines of growth ever devised. All I see are a group of overpaid executives struggling with each other over who gets to best spot at the government teat. Between tax breaks, regulatory capture, and the out and out fleecing of defense contractors, we have a “private” sector that is almost entirely subsidized by the taxpayer. In exchange for out largess, we get shoddy goods, inferior service, and a terrified work force.

    Perhaps the easiest solution to our problems would be to take our corporate overlords by the hand, tell them how wonderful and “innovative” they are, and then repatriate them to a remote island in the Pacific.

  11. 11
    MikeJ says:

    For those with reading problems (of the software sort, not education), an earlier thread determined killing javascript (or at least the ads that are driven by them) will fix the formatting problem.

  12. 12
    Violet says:

    And on a serious note, it still amazes me that companies do not include the amount they pay in benefits (especially health insurance) on their pay slips to employees. You want to change the cost of health care- start mandating that be put on every employee’s paystub.

    Totally agree. But isn’t there some problem with doing that because the tax breaks corporations get for offering health benefits affect the actual money spent on them? Or something?

    But still, pay slips should show the real cost of every benefit the employee receives. That would definitely change the health care discussion.

  13. 13
    Ross Hershberger says:

    If you go to their Employment page NO POSITIONS AVAILABLE is there in big letters. OK, we get the message. OTOH, if you were trying to attract business and mollify investors would you advertise that you’re too strapped to hire? That’s just terrible management.

  14. 14
    PurpleGirl says:

    @Nylund: There is still a market for those things, however the people who buy them want good paper and bindings on the blank books. He isn’t studying who his customers are.

  15. 15
    beltane says:

    My husband’s employer provides this information once a year, as does the federal government to its employees. The problem is that only geeks such as myself pay attention to these things. A flashing neon sign may help draw attention to the dollar amount.

  16. 16
    superfly says:

    @Violet:

    And on a serious note, it still amazes me that companies do not include the amount they pay in benefits (especially health insurance) on their pay slips to employees. You want to change the cost of health care- start mandating that be put on every employee’s paystub.

    I’m sorry, but what is the logic here?

  17. 17
    Davis X. Machina says:

    @beltane: If only rent-seeking were an Olympic event….

    And as for the island, it’ll do until we can build a B ark.

  18. 18
    sab says:

    @Violet: The Affordable Care Act requires employers to include cost of health insurance on the W2.

  19. 19

    I am so sick of whining corporate toadies. They are in the midst of a vast experiment in which they see how much profit they can make by eliminating employees AND customers.

    I’m thinking it’s not going so well.

  20. 20
    Omnes Omnibus says:

    @beltane: What has that remote island ever done to you? What a horrible thing to do to it.

  21. 21
    trollhattan says:

    Man, that’s a fine pantsing of Bogen and herr Fleischer there.

    Also, too, Carly Fiorina wants to bring like corporate skilz to the senate, because She knows bidnez!.

    Heaven help us.

  22. 22
    SiubhanDuinne says:

    @Davis X. Machina #17:

    And as for the island, it’ll do until we can build a B ark.

    And here all this time I thought that was spelled “barque.”

  23. 23
    SP says:

    I get it on every monthly pay slip, along with all other contributions that are split (dental, 401k, transit, life insurance.) Health care is about $1000/month on the employer side. What the hell am I going to do about it, though? I already know it sucks, employer only offers 2 plans so it’s not like I can shop around or commit suicide by denying employer coverage and trying the individual market. When there’s no market for something, how does educating people help at all?

  24. 24
    beltane says:

    Last week, the big question was “Do the rich need the rest of us?” when the real question should have been “Do the rest of us need the rich?”

  25. 25
    MikeJ says:

    @beltane:

    “Do the rest of us need the rich?”

    White meat or dark?

  26. 26

    My husband started doing that at his work abotu 10 years ago. It’s not every week but once a year his employees now get a summary of how much they receive in benefits.

    He said his employees resent it: “No one ever made a big deal about what we’re getting before.”

    You just can’t please some people.

  27. 27
    That's Master of Accountancy to You, Pal (JMN) says:

    @MikeJ: I think that meat’s a little too rich for my taste.

  28. 28
    Steve M. says:

    Putting aside the fact that Bogen’s main business is… as a contractor for various government entities….

    Well, I didn’t mean to imply that that was his main business — just that it’s part of the business. And that seems bad enough, if you think the government is as evil and rapacious as he does.

  29. 29
    MikeBoyScout says:

    Mr. Fleischer should spend less time complaining about taxes and more time thinking about how he can correct 10 years of mismanagement.”

    Well, such a dramatic change in responsibilities shall surely require an equally dramatic increase in salary, which, of course, shall only be achievable with dramatic staff cuts.

  30. 30
    Xandar says:

    My employer does put healthcare contributions on the paystub, for me and my wife they pay about $900 a month. We’re in our 20s and have made 1 ER visit in about 4 years when I sliced my thumb.

  31. 31
    Anne Laurie says:

    @SiubhanDuinne: It’s a Hitchhiker’s Guide to the Galaxy joke. From Wikipedia:

    Golgafrincham is a red semi-desert planet that is home of the Great Circling Poets of Arium and a species of particularly inspiring lichen. Its people decided it was time to rid themselves of an entire useless third of their population, and so the descendants of the Circling Poets concocted a story that their planet would shortly be destroyed in a great catastrophe. (It was apparently under threat from a “mutant star goat”). The useless third of the population (consisting of hairdressers, tired TV producers, insurance salesmen, personnel officers, security guards, management consultants, telephone sanitisers and the like) were packed into the B-Ark, one of three giant Ark spaceships, and told that everyone else would follow shortly in the other two. The other two thirds of the population, of course, did not follow and “led full, rich and happy lives until they were all suddenly wiped out by a virulent disease contracted from a dirty telephone”.

    Hand to goddess, I have heard geeks say “So-and-so just got off the B Ark” as a replacement for “… just fell off the turnip truck”.

  32. 32
    Yutsano says:

    @Anne Laurie: Wifey haz not read the Hitchhiker series yet. Therefore she assumes all jokes she does not understand are Douglas Adams by default. She appreciates the explanations however, I’m still working on corrupting her.

  33. 33
    karoli says:

    He also failed to note that those benefits he pays for are fully deductible on the corporate tax return, so he double-counts the tax cost but doesn’t bother with the savings. I was going to write a post about it but you’ve really hit all the high points.

  34. 34
    Karmakin says:

    @superfly: The thinking is that by showing how much the benefits cost their employer, that the public will clamor for steps to lower that amount, because they believe that they’ll see that cash.

    By and large, they won’t. Health benefits are a cost of competitive labor that has developed outside of wage structures. Wage structures are based on the high end by the value add/productivity of the position, and on the low end by competitive forces. Reducing benefit costs will increase the potential high-end of the wages, however outside of an aggressive full employment effort, it’s a waste of time for most people as we’ll never see aggressive full employment again.

  35. 35
    E.D. Kain says:

    And on a serious note, it still amazes me that companies do not include the amount they pay in benefits (especially health insurance) on their pay slips to employees. You want to change the cost of health care- start mandating that be put on every employee’s paystub.

    This is an excellent idea. Also I thought Mike Konzcal’s idea of a line for the portion of tax dollars going to defense on your check stub would be excellent for similar reasons.

  36. 36
    Brachiator says:

    In a related vein:

    The GOP and others are still rehashing fantasies about evil Fannie and Freddie and poor people using Mortgage Fu to force lenders to give them loans that they could not afford. Now, courtesy of the NY Times comes a story about a financial institution going off the books to hide what they clearly knew were risky and expensive lending practices (Merrill’s Risk Disclosure Dodges Are Unearthed)

    Publicly, banks vastly underestimated their exposure to the dangerous mortgage investments they were creating. Privately, trading executives often knew far more about the perils than they let on. Only after the housing bubble began to deflate did Merrill and other banks begin to clearly divulge the many billions of dollars of troubled securities that were linked to them, often through opaque vehicles like Pyxis.
    __
    In the third quarter of 2007, for instance, Merrill reported that its potential exposure to certain subprime investments was $15.2 billion. Three months later, it said that exposure was actually $46 billion.
    __
    At the time, Merrill said it had initially excluded the difference because it thought it had protected itself with various hedges. But many of those hedges later failed, and Merrill, the brokerage giant that brought Wall Street to Main Street, soon collapsed into the arms of Bank of America.

    So, let’s see. Rather than reduce their exposure to bad loans, instead these institutions doubled down and then cooked the books to hide the increased exposure. And then suckered other institutions into buying them. And then suckered the government into rescuing them.

    And then blamed poor people for forcing them to do bad things.

    And then paid themselves bonuses. And then asked for tax cuts.

  37. 37
    Yutsano says:

    @Brachiator: You forgot the “AMERICA! FUCK YEAH!!”

  38. 38
    superfly says:

    @Karmakin:

    Thanks

  39. 39
    DrDave says:

    And on a serious note, it still amazes me that companies do not include the amount they pay in benefits (especially health insurance) on their pay slips to employees. You want to change the cost of health care- start mandating that be put on every employee’s paystub.

    I pay 50 – 100% of the health care premiums for 5 of my 9 full time employees at a cost (to the business) of $225 – 450 per employee per month. And this is for good, but not great, HMO insurance with Keystone (a subsidiary of Philadelphia’s Independence Blue Cross).

  40. 40
    Erik Vanderhoff says:

    You want to change the cost of health care- start mandating that be put on every employee’s paystub.

    As of January 1, 2011, it will be on your W-2s from your employer. That was part of ACA.

  41. 41
    J says:

    If taxes are not an issue to new business or creating business, would someone care to explain why communities(states, counties, and cities) offer tax incentives for a company to build a new plant in their community?

  42. 42
    Brachiator says:

    @Erik Vanderhoff:

    RE: You want to change the cost of health care- start mandating that be put on every employee’s paystub.

    As of January 1, 2011, it will be on your W-2s from your employer. That was part of ACA.

    Bullshit. Urban Fucking Legend.

    2011 W2 Forms and HR 3590.

  43. 43
    Paris says:

    That is one giant vat of whine. There should be a rule that to be a business owner
    you should also have to have a maturity level greater than a thirteen year old. Stuff costs
    money. Who knew?

  44. 44
    Tax Analyst says:

    @Brachiator:

    As of January 1, 2011, it will be on your W-2s from your employer. That was part of ACA.

    Bullshit. Urban Fucking Legend.

    2011 W2 Forms and HR 3590.

    Beat me to the punch, Brachiator…not surprising, however, since I got this information from you in the first place.

  45. 45
    replicnt6 says:

    @Brachiator:

    Bullshit. Urban Fucking Legend.

    I don’t think anyone here has suggested that your employer-sponsored health care cost will be included in your gross income, which is what Snopes debunks. They are merely saying that there will be a line on your W-2, not included in your income, that informs you of the cost of your health care, which is what John was asking for originally.

    So I call bullshit on your bullshit. (And raise you bullshit).

  46. 46
    John says:

    Exactly! Same as my conclusion. Here’s my comment on the WSJ website for the article:

    Mr. Fleisher is disingenuous. The reason his company isn’t hiring is that their financial performance under his leadership has been terrible. Since 2000, revenue has shrunk from $66M to $44M in 2009 (how come the gigantic tax cuts didn’t help?) The number of employees shrunk accordingly, 285 to 160. Meanwhile competitor Polycom grew revenue by 300 percent over the same period and increased their employee count by almost the same amount. According to their website, they are hiring.

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