First off, let me say a quick thank you to Michelle Malkin, someone whom I have never met or conversed with, for having the insight and intelligence to start her Twitchy site. This site is pure genius. yesterday, it allowed America to get an immediate glimpse of the past, present, and future all at the same time, from one event that a decade ago would have occurred almost completely in relative obscurity.  That event of course was Papa John's CEO, John Schnatter, discussing with Papa John's shareholders, the current state of their business and what changes will be likely in the future in order to both maintain and enhance shareholder value.  A decade ago, we lived in a nation where we ranked near the top of the list in terms of economic freedom.  We ranked fourth in the world, and by no small coincidence, our per capita  income also ranked fourth in the world.  A decade ago, this phone call and its content would have been considered beyond boring for anyone who was not a Papa John's shareholder or possibly a competitor. Today of course is a different matter. The political left now feels entitled to some explanation and say so when discussing the once private affairs of American businesses. With our level of economic freedom now placing us squarely out of the top ten nations in that category, not coincidentally, our per capita income has also declined relative to the remainder of the world. Consider it a hard lesson of cause and effect.

Bear in mind also that the entire kerfuffle is over an honest answer to a question posed by one of the firm's owners who is justifiably concerned with the state of their equity position of Papa John's.  The owner wants to know what the top managerial employee, John Schnatter is going to do in order to mitigate the upcoming regulatory gargantuan increase in the chain's expenses, due to hit January 1, 2013.  Schnatter's answer was simple, and it would have been considered boring just a decade ago.  He said this, "we are going to attempt to shallow out the effects to the shareholder's by passing along those costs to our customers.  We estimate those costs to be between 14 and 20 cents per pie sold."  I do need to interject some of my own explanation here, since it has become painfully obvious to me that many do not understand this.  If Papa John's has the same operational margins as the restaurant industry as a whole, further assuming that by shallowing out the effects on shareholders, Schnatter really meant passing along 100% of the effects of Obamacare to his customers, this will translate to the price for a small pizza to increase by $1.40 and the price for a large increasing $2.00.  This explanation will be important later on.

In answering this rather mundane, albeit important question from a shareholder who shockingly wishes to know what is happening with his or her investment, Schnatter set off a firestorm of reaction from everyone on the political left, who quite frankly do not have a stake in this game.  He also highlighted perfectly, some of the central problems with Socialism, and further illustrated why it never works.  The major problem highlighted here is the failure of the Socialists to consider the likelihood that human beings will change their behavior once presented with economic punishment for their successes, and economic reward for their failures.  John Schnatter has a duty to perform for the people who hired him.  His responsibility is to maintain or improve on the value to the shareholders of Papa John's.  So, when the government slaps them with an extra expense, that company can either just accept the economic loss, or find a way to adjust for it, so as to mitigate the effects.  If John Schnatter were to announce that he intended to just accept the loss, I guarantee the shareholders would waste no time in finding a suitable replacement for him.

You may be wondering what the stink is, so click here to find out. What we have is the hypocrisy of the political left in full bloom. Those very same people who were preaching to the high heavens that they would be willing to pay the increased economic costs of everything so that we might turn every single commodity in the nation into a basic human right, are now threatening to boycott the very first company to speak honestly about the very real consequences of this asinine folly. So once again we learn that when it is somebody else's money at stake, such funds are no object when considering the costs of achieving their appropriation of public largess. When it is their money on the line however, well, that's a horse of a different color.

The other thing that I learned from Twitchy is that not a single person on the left exhibits the barest knowledge of how operating margins affect the prices of goods and services brought to market. There are literally dozens of tweets proclaiming that they consider it no big deal to pay an extra dime for their pizza. When we all pointed out four years ago that Barack Obama had never run so much as a lemonade stand prior to his run for the Presidency, we were all labeled as being racists for having noticed that. What I did not know, is that the 50% plus of Americans who voted for him had also grown to voting age without this all important lesson in basic economics and business.

Tina Dupuy@TinaDupuy
All that's stood in the way of Papa Johns workers having health care is 14 cents per pizza!? Papa John is a model deadbeat dad.
9 Aug 12 ReplyRetweetFavorite
Rachel Caine@rachelcaine
You know what, @PapaJohns ... I'd LOVE to pay 20 cents more for pizza so that someone else could get decent health insurance.
9 Aug 12 ReplyRetweetFavorite
BrooklynWeGoHard@PureSimpleDair
I will pay 11 to 14 cents more a pizza if everyone gets health care. Food chains need to stop with the politics. I'm looking @ U #PapaJohns
9 Aug 12 ReplyRetweetFavorite
INGERIVERSEN@KRIS10INGER
@PapaJohns thanks 4 letting us know how CHEAP you are. 10 cents?! REALLY! Officially on my DO NOT BUY LIST even if you don't up the price.

The reason why a 20 cent increase in cost will translate to a $2.00 increase in price is easy to understand for anyone who has ever actually held a job. In order to make up for that 20 cents of gratuitous expense, Papa John's will have to increase its sales, which also costs Papa John's money. Every penny of expense comes straight off of the bottom line, and to make it up, they must increase that number. Selling more pizza means using more dough, sauce, cheese, electricity, people to make it all, people to count it all, and will not be made up from simply tacking this added cost to the back end of the process. This is not only true for Papa John's pizza, but for any business anywhere. So, it's not only Papa John's, but probably every other pizza chain, auto manufacturer, clothing manufacturer, cell phone manufacturer, computer manufacturer, and any body else doing business in America will be forced to identify and quantify the impacts of this upon their bottom line, and then react to those impacts accordingly.

It is telling of course that the same fine people who were so willing to have the rest of us accept all of this in order to inflict their will upon us, are the very first people to cry like banshees when the inevitable becomes reality.

BadChad @badchad360
Guess I can add #papajohns to the list w/ #chikfila #notgettinmybiz
9 Aug 12 ReplyRetweetFavorite
atlgsuboy02@atlgsuboy02
No mo #papa johns #pizza for me I support #aca #obama2012
9 Aug 12 ReplyRetweetFavorite
mikell young@mikellyoung
Used to love me some @PapaJohns too bad they are now boycotted.
9 Aug 12 ReplyRetweetFavorite
Will Regla@willregla
I wouldn't have minded 14¢ to ensure your employees had health coverage, but I don't want my pies coming from a GOP mouthpiece. #papajohns
9 Aug 12 ReplyRetweetFavorite
Queen INDY ♍@IndiaAlmighty
Papa johns is against Obama? They jut lost a customer.

Welcome to the new America that Barack Obama envisioned. His post modern Presidency seeks to heal the wounds of division simply by ostracizing any who disagree with the collective. The intolerant tolerance of the left would be hilarious if it weren't so scary. Political correctness is a bizarre and sick joke being inflicted upon those of us with functioning grey matter not destroyed by years of substance abuse. In a world where the people tasked with our national security are legally prohibited from using the phrases Islamic Terror, jihad, Muslim Extremists, and so on, while at the same time Homeland Security Chief Janet Napolitano has stated that the Tea Party officially represents the top threat to our country's well being, a small thing like Papa John's chief being stripped of his First Amendment rights should be considered no big deal. It is of course huge. Political Tolerance will only be extended to those who agree completely with the Liberals in charge, and that's a scary thought indeed.

We can not afford Four more years of this nonsense. November 6, 2012, our very future depends on taking this opportunity to oust this current group of dolts, not just from the White House, but from every single elective position from Dog Catcher on up. We can never again allow these people to gain another iota of authority anywhere. Liberalism must be roundly defeated, each and every time it raises its destructive head.

Cross Posted from Musings of a Mad Conservative.