Vernon is a deboner on the poultry line I own outside Tupelo, Mississippi. He is 34. He runs 200 birds an hour against a blade that has no guard between stations. The guard is a $340 retrofit. I run 14 stations. The retrofit is unbudgeted. The cut-resistant glove the general duty clause would require costs $14.75. I’ve kept the blade bare and the glove off the purchase order. The chicken tenders your daughter had on the way home from basketball came off Vernon’s line at a margin that required both omissions. God counts the hairs. I count the carcasses.
Let me put the numbers where you can see them. The guard retrofit across 14 stations: $4,760. The gloves, 47 men times 2 shifts: $693.25. The ventilation filter change I’d scheduled for Q3: $426.75. Total refused: $5,880. $0.00055 per bird. That was the guard. I am not cruel. Cruelty would have required me to think about what the $5,880 cost. I did the arithmetic. The arithmetic did not include Vernon.
Vernon lost the top of his left ring finger on a Tuesday in March. The blade caught him between bird 176 and bird 177. The 2:00 PM run. The medic I contract at $11 an hour, no benefits, signed what I provide. She wrote “laceration” on the incident report. The hand surgeon in Tupelo, whom I didn’t send Vernon to, told him afterward that a $340 guard would have deflected the blade. Vernon was back on the line in 9 days. The surgeon wanted 6 weeks of therapy. The 9 days cost me the modified-duty line. The 6 weeks would have cost me a man. The man was cheaper. I don’t pay for therapy the man doesn’t attend. Vernon’s hand still doesn’t close all the way.
Vernon’s station earns me, annualized, roughly $3.6 million in attributed margin. 11 years of his productivity at 200 birds an hour, held on my books at full face value. The $5,880 I kept is my coupon. The guard I didn’t install is my buyback. The 5.19% yield Bessent wants on the 30-year is the same yield I want on Vernon: the lowest the market will bear without his quitting.
I’m spelling out the year. April: 410 bodies on my morning shift, $5,880 not spent. May: 410 bodies, $5,880 not spent. June: the same. July: the same. August is not yet done, and the savings accrue. The dull principle lasts through the fiscal year.
His wife’s hours were cut at the packaging plant in March. He has $310 in his savings account. He has an 11-year-old he is helping with school lunches. The cushion between Vernon and the door is the cushion I keep thin, on purpose, by the blade and by the wage.
The editors at National Review write this week that Treasury Secretary Bessent has been “playing games” with the bond market — buying back long bonds at scale to nudge the 30-year yield from 5.33% to 5.19%. They mean it as a charge. I read it as an inventory of my savings. My expansion loan floats off the long end. His buyback cleared 14 basis points of my cost of capital. On $4.2 million in principal, that’s $5,880 a year that stayed in my ledger instead of flowing to the bondholder. I want to show you what $5,880 does on a floor you’ve never seen.
I am the Bessent of Tupelo.
Now watch the structure of the trade. The Treasury’s argument for its buyback was liquidity management. My argument for the bare blade is line continuity. Both arguments are technically defensible. Both arguments are the same argument, made smaller. Bessent is managing the price of a long obligation. I am managing the price of a short one. The arithmetic is the arithmetic.
What Bessent calls liquidity management I call Tuesday. What Druckenmiller calls price management I call the blade. What the editors at National Review call the deficit hawk I call the dull edge.
$40 trillion in Treasuries is what the world holds as dollars. The supply IS the debt. 15% of federal spending services the principal. Every basis point that flows to my loan is a basis point that didn’t flow to enforcement. OSHA covers nearly 1 inspector per 85,000 workers in my county. I employ 410. The inspector drives past my gate on a highway she doesn’t turn down. The debt paid for that. The editors know this. They write that “the debt, starting with the deficit, has to be tamed.” They’re right. What they don’t say is that the debt is also a shield. The debt is the architecture. The buyback is the maintenance.
I was taught to read it this way. 30 years at Warden University, grading men into the calculus of substitution: the blade for the guard, the margin for the glove, the yield for the inspection. My graduates sit in the offices that set poultry-line speed across the Southeast. One of them priced Vernon’s station. The best of them would’ve kept the blade bare faster than I did, and I say that with professional pride. I’m not unusual. I’m a curriculum.
“Behold, the hire of your labourers, who have reaped down your fields, which is of you kept back by fraud, crieth; and the cry of them hath entered the ears of the Lord of Sabaoth.” James 5:4.
The Lord hears Vernon. The Lord doesn’t inspect my line. The 15% that services your debt has made sure of that. Not you, specifically. But the system you inherited. The verse is older than Bessent’s Treasury. The verse is older than the Federal Reserve. The verse is older than the 30-year bond. The arithmetic is the arithmetic.
I have no complaint with the architecture. The quarterly statement arrives Friday. I expect it will be fine.
You have my thanks, Secretary. I’ve enclosed nothing with this letter. I rarely have to.
Vernon’s shift starts at 5.
The dull blade is on the calendar.
The 30-year trades Friday.
God willing, the line keeps moving.
Sterling A. Varice Dean of Instruction, Warden University College of Business and Economics Richmond, Virginia
Sterling A. Varice holds the Hayek-Friedman Chair and serves as Dean of Instruction at Warden University’s College of Business and Economics in Richmond, Virginia. He is the author of three textbooks: Divine Mandates for Labor Utilization, Social Obligations for Profit Maximization, and Calibrated Deprivation: A Manager’s Guide to Employee Motivation.