With supply chain back-ups, worker shortages, record deficits, spiraling debt, once-in-a-generation inflation, the economy has its fair share of problems in need of solving. From where do these challenges originate? Who are we to turn to to solve these overt risks to our well-beings? Unfortunately, the answer to these questions has the same answer: Our government. Yes, America, we have foolishly hired the inmates to run the asylum.
To be sure, these problems have solutions. Expecting our “leaders” to employ these solutions is another matter. All too often, they take a tact of willful ignorance toward the needed solutions to obscure either their roll in creating the problem in the first place or to protect the interest of their political contributors. In effect, our financial stability takes a backseat to their own.
Let’s explore some of these challenges that face us:
Worker Shortages
Who hasn’t frequented a business in the last year sporting multiple help-wanted signs? Unable to find help, many businesses close on slower days, days on which they used to be open, offer less services, have huge backlogs of unfulfillable orders, all degrading community commerce. Even at hourly rates starting above what progressives were calling for as a decent rate only a couple years ago, millions of job positions remain unfilled. Why is this and what needs to change?
Unemployment was historically low before Covid-19 struck. We shut down to ‘slow the spread,’ but when we reopened, many did not return to their jobs. Early on, some were likely afraid of exposure to Covid, but we have vaccines now. Some people had to delay returning to the workforce because their children were locked out of schools and had to stay home. These constrains were caused by government shutdowns. In the face of overwhelming evidence that children were at little risk to this disease, politicians kowtowed to union demands and delayed school openings. It took us a year longer than countries like the United Kingdom, Denmark, Ireland, Germany, Netherlands, Poland, Switzerland, Finland, Norway, Iceland and Sweden to return our kids to schools, and they did it, OMG…unmasked! Many did not return to the workforce because they were taking (I won’t say making) more money not to. Unemployment benefits, in many cases, allowed people to collect more to stay home than to go back to work.
Firing government workers and contractors for not taking a novel vaccine decreed as mandatory by our Federal Executive branch only adds to job openings. Firing nurses, firefighters, and first-responders who ‘refuse the jab’, those in occupations we deemed heroic only a year ago, is the height of foolishness. We asked them to risk themselves before the vaccine. If they wish to continue that risk, allowing them to do it without risk of termination is the least we can do in return for their service.
Lastly, if we have all these job openings no one wants or that there are simply not enough workers to fill, then why do we deride those potential immigrants at the border as invaders, intent on taking all our jobs? They arrive at our shores searching for work opportunities absent in their own countries’ socialist and authoritarian hellholes. Congress needs to get off its rump, implement comprehensive immigration reform so that we can safely, efficiently and quickly process these people into productive members of our society.
Supply Chain Back-Ups
Who hasn’t seen a store with some empty shelves or auto dealerships with too much exposed blacktop? Who dreads the thought of one of their major kitchen appliances calling it quits in 2021? Factories can’t get their hands on materials. Cargo ships wait in long lines at ports. Shipping containers pile up because there are not enough truckers to move them. How? Why? Second verse, same as the first: government.
Our ports are the only ports in the modern world that do not operate 24 hours a day. Why? Port workers unions don’t like it and they contribute heavily to politicians to regulate such hours. In some rational circles, this is known as graft.
Our ports are also inefficient. Where other modern countries use automated cranes that move containers twice as fast as a man at the controls, American ports do not. The recently passed bipartisan Infrastructure Bill (oddly named considering only a minority fraction of spending goes to actual infrastructure) not only puts no funds toward automation, but strictly prohibits it. (Your tax dollars at work!) Unions protect their workers at the expense of shortages of goods and higher prices for the rest of us Americans. In some circles, this is known as stupidity. It would be like banning backhoes in favor of hand-shoveling, or better yet, we can ban shovels and make workers dig with spoons. Sure it would make everything in your life completely unaffordable, but think of all the union jobs that would create!
Truckers, vital to bringing supplies to stores, are quitting over OSHA vaccine mandates. Why do truckers, who spend the vast majority of their days alone, need to be removed from service? If you’re vaccinated and afraid of unvaccinated truckers, what does it say about your belief in the efficacy of vaccines you wish to be mandated?
Economically ignorant politicians, like Republican Josh Hawley from Montana, want to create a bill that would require all goods manufactured in this country to be made with at least 50% American-made components. If you think we have shortages now, wait until moronic America-First bills like this are pushed through Congress. I-phone components alone cross 600 international borders before landing in the convenience of your hand. Were legislation like this to pass, you’d likely be paying the same amount for a phone that you pay for a car, if you were even able to find a phone to buy in the first place. And then, you wouldn’t be able to read such sage blogs as you are now reading!
Supply chains are delicate, like an ecosystem, it was folly to think we could shut them down and just turn them back on again when we felt like it. The pandemic was real, but to those who oversold its fears to the weak-minded in an attempt to deliberately destroy capitalism to gain political power (I’m looking at you Marxists), I hope you end up reaping the fear you sow.
Our ancestors crossed oceans in little wooden ships, risking their lives for a better life for their families. They crossed dangerous deserts in prairie schooners, risking their lives for a better life for their descendants. Our weak generation folded like a house of cards before the intolerable risk of having our comorbidity-riddled grandparents die at age of 87 instead of age 87 1/2, and placing at risk all the economic advantages those grandparents had spent their lives fighting to build. Our ancestors are looking down from above and are shaking their heads at our hysterical cowardice.
Inflation
Gasoline costs up by 49%. Heating oil up by 59%. Beef up 20%. Fish and eggs 11%. Appliances, furniture, new cars, used cars, housing – you know it, all way up in cost! The Consumer Price Index is up 6.2% since this time last year. What causes price inflation?
Too many dollars chasing too few goods. The FED has been pumping dollars into the economy faster than the goods those dollars represent can be created. It does this to buy government debt, and boy, if that isn’t one of the few things we don’t have a shortage of these days! I don’t care what political party you support. No one likes losing purchasing power. Fear not! I’m sure Washington D.C. has a plan to help us.
We’ve been told by the current Presidential Administration this inflation is transitory. That has proven incorrect. As each company raises its prices to reflect their growing costs, the companies that use their goods must do the same, and the process continues to repeat itself onward and upward. Business planning becomes hard or postponed without a stable currency.
What’s part of their plan to combat inflation? Trade wars. Imposing tariffs was one of our former president’s more economically ignorant policies. But, if he was stupid for enacting them in good times, how dumb does our current president have to be to keep his predecessor’s foolish tariffs in place when prices are higher and goods scarcer? We need affordable goods from wherever we can get them.
Is it any wonder we have high energy prices? With a stoke of his pen, our new Chief Executive Officer banned new oil and natural gas exploration, capped new drilling and killed construction of the Keystone Pipeline. Cut supply, as demand rises, and you don’t have to be economist Ludwig Von Mises to know what will happen to prices. “But, but, the President did it to save the environment!,” you say. Oh, yeah? Then why is he begging OPEC to increase oil production? Who cares where the oil comes from if your concerned about the environment? Could our man be more concerned with power and politics, than the environment and affordable energy?
The Modern Monetary Theory (MMT) that so many of our politicians adhere to, I regard to be both wrongheaded and shortsighted. But, for arguments sake, lets say the arguments of MMT proponents that government spending, deficit and debt do not cause all manner of problems for our countries economic well-being (They do.) and has only one real bugaboo that it need be concerned about which is inflation. By MMT proponents own admission, the theoretical way to check inflation is to cut spending. Does the $1.2 trillion “Infrastructure” package seem like cutting spending? Does the $3.5 trillion dollar “Build Back Better” bill seem timely in a country that needs to see a restriction in money supply? Our rising inflation was largely caused by the $1.9 trillion spent last Spring in the “American Rescue Plan”. What will happen to prices and shortages if government succeeds in dumping such additional large sums of cash into an economy to compete for materials already in short supply? What will happen with worker shortages if government creates millions of new jobs? It leads one to wonder if our masters in Washington ever believed in MMT in the first place or if it was just political expedience that caused them to espouse such garbage economics.
Buckle the Straightjacket Back Better
Lawyers are not good economists or business men. Expecting them to be able to handle matters of economy should give rise to thoughts about our own sanity as an electorate.
We have sent people to represent us who think that taxing unrealized gains on billionaires is a sane idea. How can people in no less powerful positions than the Secretary of the Treasury think is a good idea? Who proposes taxing things that aren’t real? So much of billionaires wealth is in stock. Imagine them selling that stock to pay a tax bill, causing the stock to decline in price, removing the unrealized gains, while gutting the retirement portfolios and pension funds of average Americans in the process. Do they get to deduct unrealized losses? How about unrealized charitable contributions?
Crazy!
Another financial move they think will endear them to the electorate is to force banking and financial institutions to report on all bank accounts moving more than $600 per year (e.g. everyone) through their account to the IRS. Banks will pass the costs of this reporting on to us in the form of higher costs. Now, if you think no one who is not doing anything wrong has anything to worry about the IRS auditing their account, then you are, in effect, saying you should have nothing to worry about in your impending body-cavity search so long as you are not hiding any drugs. Maybe being bent over is your thing. Its not mine.
Lunacy!
Our President has said the $3.5 trillion price tag for the, “Build Back Better bill will cost zero dollars.”
Certifiable semantics!
Cutting out-of-control spending and raising interest rates to fight inflation can cause recessions. I know this is politically unpopular, but so are prices spiraling out of control. Do not feel sorry for the lose-lose predicament in which our politicians now find themselves. They have only their own greed and ignorance to blame. The real question is will we now hold them accountable. I say, lets get out the straight jackets!
You covered it all.
Beautifully written.