Oh, and on the more local front, our "business friendly" governor, Jennifer Granholm, is busy pressing for a windfall profits tax on the oil industry. Hmm, I guess the message is something like, "We want you to come do business in Michigan. Be careful that you don't do too well, though, or we'll come take your profits." Sounds like a winning message, doesn't it?
Of course, everyone knows that the windfall profits tax back in the Carter years
That's exactly the problem, it will work exactly as it did then.
Imagine this scenario.
Staples buys paper from the manufacturer at $75 per whatever, then marks it up to $100. Every time they sell one of those units, they make $25 - or, 25% of the sale is their margin.
Suddenly, there's a shortage, or a labor cost increase, or whatever, and the cost to Staples goes up to $112.50. Staples then marks that unit up to $150.
Now each time they sell one of those units, they make $37.50, a windfall of 50%!
Oh, wait a minute - they're still only making a margin of 25% of the sale. Maybe there's no windfall at all.
Why can't everything be this simple and clear? Perhaps because we don't want to think, we just want to blame.