Jibbitzing in the Prosperity Pool

by Don Boudreaux on August 27, 2007

in Everyday Life, Innovation, Taxes

Earlier this month, Karol and Thomas and I vacationed at our favorite vacation spot: Cape Cod.

While there, Thomas and I bought our first pairs of Crocs.  They’re wonderful shoes for casual wear.  The woman who sold them to us told us about something that we’d never before heard of: Jibbitz.  Jibbitz are little decorations that fit into any one of the many holes featured on each pair of Crocs.  These tiny items are mostly ornamental — allowing each Croc wearer to express his or her individuality — but they also are functional, for they can help to identify one pair of Crocs from another.

(Neither Thomas nor I wanted any Jibbitz, by the way.)

The fascinating thing about Jibbitz, though, is that the inventor turned this idea into a business that he and his wife sold for $20 million.  What a  wonderful outcome!

Note that this invention isn’t high-tech — it’s about as simple as simple can be.  Yet it is indeed something that enough consumers choose to buy at prices that make the product profitable to produce.

Jibbitz — another few drops of prosperity in our vast Prosperity Pool.

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{ 18 comments }

Katherine August 27, 2007 at 12:48 pm

"The fascinating thing about Jibbitz, though, is that the inventor turned this idea into a business that he and his wife sold for $20 million."

I offer one correction – the inventor was the woman, not the husband.

spencer August 27, 2007 at 12:52 pm

While you were there did you check on your prediction that replacing the rotary at the Sagamore Bridge would not reduce traffic delays?

T Sowell fan August 27, 2007 at 12:56 pm

A few questions about the sale of the Jibbitz biz:

1. Did a transnational company — one of the few big ones that apparently rule the world — force the owner(s) to sell?

2. Or, if it was a voluntary sale, why didn't they sell for a smaller amount? ie. Why were they so "greedy"?

3. Why would people pay for Jibbitz when they could simply make their own? You know, the way we should all be making our own clothes and growing our own food so as to return the world to the pure state it once was in before humans "ruined" it?

T Sowell fan August 27, 2007 at 1:32 pm

I started investigating the 500 largest companies in the world to determine which was most likely to have extorted the Jibbitz business from its original owners.

In the process, I noticed that both General Motors and Ford Motors are losing money. Does that mean they've "seen the light" and stopped being greedy? Does that mean that, altho they are the 5th and 12th largest respectively, they've forgotten how to force governments around the world to bend to their will?

triticale August 27, 2007 at 9:49 pm

Fortunately, not all Crocs have lots of holes in them. Thus my wee wifey is able to wear them on the job (nursing aide on the psyche ward) without having to worry about fluid spills.

SaulOhio August 28, 2007 at 9:18 am

Of course, this is also one of those things we wouldn't think of buying if not for that evil advertizing making us want things we don't need. :) Muirgeo, are you paying attention?

Triticale: TMI! (Storage compartments?)

I'm sorry. I'm just in a wierd mood right now. :D

muirgeo August 28, 2007 at 3:54 pm

Saul,

I think this is a GREAT example of the nmarket working. Good for them, they earned that $20 million fair and square.

I'm guessing they didn't lean on congressmen or use lobbyist to favor their business and to the disfavor of their competitors.

I suggest there would be MORE great stories like this if the powerful couldn't use their money to change the rules and by policy favors. That's all I'm ranting about.

Now the progressive tax and the estate tax they'll pay is harder for me to justify but I still believe in them because I don't think we could support our economy, our infra-structure and our military without them.

Further I don't think the progressive tax is unfair since we all start with the same understanding. Also I happen to believe that progresivity and good governence actually boost the economy to the benfit of everyone and to the countries benifit. Money being recirculated in civil projects like roads and infrastructure is more productive then money sitting in off shore accounts or re-invested overseas.

That being said my wife bought some Crocs and leaves them in the entry and I'm always tripping over the things, I think they are ugly and cause foot fungus and contact dermatitis….plus on the sheep principal alone I will not buy them much less a Jibbitz to decorate the things with.

Mr. Econotarian August 29, 2007 at 10:20 am

Crocs are a fashion abomination. Fortunately, the market provides us with other choices!

SaulOhio August 29, 2007 at 11:33 am

Again, muirgeo proposes more of the cause of a problem as the solution. It is the progressive tax system that motivates people to invest in those offshore accounts.

"Further I don't think the progressive tax is unfair since we all start with the same understanding."

Same understanding of what?

muirgeo August 29, 2007 at 2:29 pm

Saul it is the progressive tax system that allows us to get our bills paid. Even considering the lowly cheaters who do as you say. If some one breaks an agreed upon law that's a crime. Indeed David Cay Johnston has estimated that over $150 to $ 200 billion of taxes are evaded each year sometimes illegally using off-shore accounts. I agree fix the loop holes and jail the evaders…with a gun to their head.

Or convince your Corporate Overlords to get a flat tax with NO deductions. Won't happen they benefit most from the illusions of the tax system.

SaulOhio August 29, 2007 at 3:43 pm

…"with a gun to their head."

Thank you, for admitting that thats the means to your ends.

I did not agree to this tax rate. I did not agree to a progressive tax.

This tax system allows WHO to get their bills payed? I am now being assessed extra taxes because I supposedly made a mistake on my return. If I pay it, I will be unable to pay down my credit cards as much as I had planned. Of course I will pay it, because of that gun you mentioned.

muirgeo August 29, 2007 at 5:04 pm

Saul.

I suggest you lobby your congressman and senators if you can get their attention away from the guys with more free-speech…I mean more money then you. They are the ones who like the tax system the way it is. They are the ones paying the politicos to put the gun to your head.

SaulOhio August 29, 2007 at 6:16 pm

But you seemed to approve of the gun being used that way.

muirgeo August 29, 2007 at 7:08 pm

Saul,

I thought about it some more and you are right. If you don't want to pay your taxes you shouldn't have to and you shouldn't be arrested. But the very second you trespass on common public property. Say like a highway, a National Forest, or if you use our currency, or if you use a Federally insured bank, or an FCC licensed radio show ect…if you do any of those things after not paying your taxes THEN you should be arrested at gun point if necassary for trespassing on "public" property. You do believe in property rights don't you?…so do we….and we own a lot of property.

David P. Graf August 29, 2007 at 10:37 pm

Considering that the latest stats show another increase in the number of children not covered by health insurance, it's too bad that we can't spare a few drops from the "prosperity pool" to cover them.

muirgeo August 30, 2007 at 2:22 am

No , no David those children need to earn their health insurance. Likewise they should choose their parents better. Besides the $60 billion needed to run the program will be put to much better use by allowing the 4 people, Walton heirs, (good parent choosing there) to have their estate taxes repealed. What's 9 million kids health insurance compared to 4 super rich spoil kids needing another $60 billion to splurge with.

T Sowell fan August 31, 2007 at 12:26 pm

Ah, the logic, the rhetorical devices used to mask cognitive dissonance. Instead of questioning why a couple unable to pay the entire costs themselves would choose to have children before purchasing health insurance — both to cover the costs of their child's prenatal care, delivery and subsequent healthcare, the statists turn things arouond and plead with us not to blame the children for being born to those neglectful parents.

The statists behave as if everything that happens to people is utterly beyond their control — requiring cradle-to-grave oversight by the state. Stunning stuff.

Of course, the response is that every couple has a RIGHT to have children. Actually, every woman has the RIGHT to a child on demand, regardless of her ability to support the child or herself. Did the founding fathers' fellow citizens also have those rights? How did they forget to include them in the Constitution?

vidyohs August 31, 2007 at 6:29 pm

http://www.uhuh.com/taxstuff/gracecom.htm

This link is to excerpts from the Grace Commission Report, the first and only complete audit of the U.S. government; authorized by President Reagan and completed in 1984. Scroll down and you will see bolded in black exactly what happens to every penny of income tax that is actually collected.

To those of you who have never seen it before it means that not one penny of your volunteered income tax goes to pay for what you think of as services, operation of public facilities including roads, or to benefit you in any way. It goes straight to the Federal Reserve to pay interest on debt.

Here is what muirgeo said:
"Now the progressive tax and the estate tax they'll pay is harder for me to justify but I still believe in them because I don't think we could support our economy, our infra-structure and our military without them." He has no clue.

There will, of course, be some so foolish to say, "Oh, that was in 1984, surely it has changed by now." Well, no it actually hasn't. It's the same old same old.

Now regular readers of these threads know that muirgeo and his fellow travelers frequently write some really ignorant things, but muirgeo took the prize with this:
"Saul it is the progressive tax system that allows us to get our bills paid."

It takes a rare kind of twisted mind to come up with the idea that having a sizeable chunk of your wealth stolen means that you're better able to pay your bills! But, it is obvious that the Socialist Church is full of 'em (twisted minds that is).

From this same thread above, I especially love these:
Here's muirgeo providing his wisdom as gleaned from socialist catechism

"I suggest there would be MORE great stories like this if the powerful couldn't use their money to change the rules and by policy favors. That's all I'm ranting about."

Muirgeo has no clue that this type of story is such a common thing in the USA, this just happened to be one Don saw and used as a teaching tool. But let's look deeper into muirgeo's ignorance. He writes, "if the powerful couldn't use their money to change the rules and by(sic – buy) favors." How is it possible for an individual to be so blind and ignorant when the evidence he is wrong is just getting smeared all over his face? The rich and powerful do not try and run innovators our of opportunities, for God's sake, they depend on those innovators for the infusion of new ideas and products. Look what happened here. A novelty was created by an individual who then risked investment and built a very profitable business. A larger company was attracted to that and made an offer that the innovator obviously liked, which then concluded the sale. A win win for all concerned, particularly the little guy who had the original dream. The facts make a lie of what muirgeo attempts as a spin.

For more on what the socialist faithful, in the form of democrat voters, have in mind for innovators in the USA, Google the words "Precautionary Principle" and see what is in store for you when they regain control of the government. I guarantee you it isn't the rich and powerful you have to be afraid of.

Then we have this:
"Further I don't think the progressive tax is unfair since we all start with the same understanding."

This is another example of muirgeo attempting to be wise and really saying nothing. That, my fellow capitalists, is well-schooled babble and nothing more.

But, let's be generous and help him out: "since we all start with the same understanding." Does that sound even remotely reasonable since the majority of us have the understanding that the income tax is nothing more than leagalized theft, and muirgeo and his fellow travelers understand that it is the most just system they can conceive of since it is number one on the self published and promulgated socialist agenda. So the truth is that we DO NOT ALL start with the same understanding. To magnify the gulf between us we see the progressive income tax as even more evil than just an income tax because the progressive income tax says to us, work hard and we will steal, work even more productively and we will steal even more, and last work really really hard and we will steal da.n near all of it.

But, I don't see any evidence that muirgeo's mind can even take him to that understanding.

and next:
"Also I happen to believe that progresivity and good governence actually boost the economy to the benfit of everyone and to the countries benifit. Money being recirculated in civil projects like roads and infrastructure is more productive then money sitting in off shore accounts or re-invested overseas."
Posted by: muirgeo | Aug 28, 2007 3:54:43 PM

Poor muirgeo and his fellow travelors are just so invested in the socialist catechism of heavy taxation for confiscation of wealth to then be used by government to create new opportunities and build infrastructure that they absolutely refuse to see the evidence in this nation and that coming pouring in from other nations that light, or no taxation, will keep that wealth going off shore and keep it right in the country and private enterprise will create the opportunities and build the infrastructure plus those conditions attract more investment money from foreign investors. And, private enterprise will do it more cost effective than government ever could. One of the reasons this is guaranteed is that in the privatge sector if an enterprise begins but does not live up to its promise, private enterprise will shut it down and cease sinking money into it. With government, we get programs that become enormous sinkholes of wealth squandering and they never ever go away or are shut down.

There is nothing in the world more inefficient than government trying to run a business.

Again I say to the poster's, why play muirgeo's game. When you look at his words they all come up empty, the same dead end stuff that has been sucking this nation down to the level of third world socialist state status.

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