Sunday, September 18, 2011

Making lemons out of lemonade

She was so busy counting her money that she wasn't listening as her father tried to explain how IT worked.

The IT that was making him turn blue in the face was profit margin.

"Remember how you went to the store and bought all of the supplies?" he said slowly.

"Yes, I remember," she sung in response, pretending his stern look was a part of a game that started yesterday in the grocery store. "Mommy wanted canned and I wanted real lemonade. She won."

"Do you remember who paid for the inventory?"

"What's inventory?"

"The lemonade you sold today."

"Mom paid. We're not shoplifters!"

"No, no you're not shoplifters. But because mom paid for the supplies fair and square, it means she's an investor, and, as a shareholder, some of that money you made selling the lemonade she bought goes back to her."

"What does that mean?"

"You owe mom the cost of the lemonade out of your profits."

"What does THAT mean?"

"Basically, it means half."

She stopped counting her money. Her face clouded and tears filled her eyes.

I'm not sure if he recognized in her expression that telling her a percent more than the initial investment was supposed to come from her earnings, too, would send her over the edge.

He told her anyway, and off the cliff they went.

"This is MY money. I earned it."

"No. Technically, part of it is OUR money and we deserve to be repaid."

In essence, what followed devolved into each of them shouting "mine, mine, mine" at each other like a flock of seagulls at a clam bake.

She was too young for this lesson, I thought as I listened to my husband become more and more adamant about return on investment, and our daughter become more focused on the dollars in her grimy, this-is-why-we-chose-cans hands.

Poor little business girl knew she wasn't going to win this one. She forked over the cash her father had demanded and stormed to her room.

"What was I supposed to do?" he asked me guiltily, as if I had a clue.

Economic principles shouldn't be this hard to explain, I think to myself. You have a business. You buy supplies. The profit comes after you sell the product AND pay back your loans.

But it's never that easy.

I couldn't stop thinking about a story I'd read in the New York Times about how video gaming is the most heavily subsidized industry in the United States because it fits all the criteria for technological research and development, which the government will pay for to bolster the greater good.

Changing the criteria seems almost impossible because no one wants to kill tax breaks or jeopardize jobs, which are both substantial. According to the article, the industry's median job pays $80,000 and the amount it writes off completely is in the neighborhood of $123 billion.

No wonder why education is so screwed up.

Teachers, schmeechers. X-Box is more important than algebra anyway. Even the IRS thinks so.

The more I think about it the closer my shoulders align with my ears. How can I relax when I think the only hope for the future is if the gaming industry hires the teachers we fire so they can educate the next generation of video game makers? But then it strikes me that self-investment is the only viable answer to our own sour lemonade stand-off.

Next time she wants to set up shop, she'll just have to stake her own business. With all the loot she's been hoarding from from birthdays and tooth fairy visits, she's certainly got enough cash to keep from making lemons out of lemonade.

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