Week Ending May 7th, 2021
The Emperor has no clothes… Spend until it hurts. The Fed and current administration seem to be out of touch.
What does it mean – Either the administration does not believe in their fiscal policies (tax and spending policy) or they do not understand what is going on. Here is what is really happening in most of America – Businesses are opening up; small, medium and large companies are looking for employees. The government is competing with the private sector for employees by paying more in unemployment benefits than employers can afford. The reality is our government is paying people to stay home and telling us we need sources of cheap labor.
Tom Taylor, owner of Sammy Malone’s bar and restaurant near Syracuse said, “The government is making it easy for people to stay home and get paid, “You can’t really blame them much. But it means we have hours to fill and no one who wants to work.” According to the Washington Times, Biden‘s generous payouts are the reason why several hundred thousand Americans file for unemployment benefits every week, while small businesses are desperate to hire.
Job openings vs. government justification… We now have more job openings than before COVID-19, the Wuhan virus.
What does it mean – Hey ladies, where is the women’s voice? Many women are being disenfranchised and forced out of the work force by schools that will not open. If schools do not open who takes care of young children? Mom, and in some cases, dad. This is not a jobs problem it is a government policy problem. This is just another by-product of bad government policy and it directly attacks women and the family.
The economy is booming in states that have opened fully and the kids are back to school full time. Yet only 16% of kids in California are back in school full-time (mostly private schools). Per the first paragraph, the current poor jobs numbers will only perpetuate and justify a move by the current administration for more needless spending, more debt, and more government programs. Under these policies, you might as well say goodbye to the middle class – and welcome to a world on welfare. When will it end?
Inflation… Is it here? Does it really matter?
What does it mean – Gas prices up, food prices up, timber prices up, metals are all up. Supply chains are still working through the disruption from COVID-19. Bottom line, expect commodity prices to continue to move higher and if the government continues to compete for labor, expect labor prices to increase. I just heard from a dear friend and client that Chumash Indian Casino in Ojai is offering a $1,000 signing bonus to come back to work. Ask yourself, “is that inflationary?”
Maybe the worst economic decision in American History… President Biden wants to remove the Patent Protection that protects our vaccine development for COVID and give our vaccine technology to the Chinese for free.
What does it mean – Next to price controls implemented by Nixon in the 70’s, this may go down in history as the worst economic decision for American taxpayers, American citizens, the American pharmaceutical industry, and the world.
You just can’t keep making this stuff up. Our President wants to throw billions of taxpayer dollars out the door and give China our research to develop vaccines for COVID. This technology is owned by private companies and the U.S. taxpayers. Our government is spending billions on the vaccine with little to no hope of getting that money back. And the one way companies could do it, our President wants to give it away to arguably our worst enemy and the very country that provided and did the research for COVID to jump from animals to people. Look up Peter Daszek and Ecohealth Alliance. Excellent papers on exactly how this happened. Keep an open mind. You may not like what you read.
A better solution that would protect Americans and allow us as taxpayers and our companies the ability to recoup their investment would be to let Johnson and Johnson, Pfizer, Moderna, and all others manufacture and produce the vaccine, protect their investments and intellectual property and charge China for it. Remember when the world needed it, they charged the U.S. and much of the world top dollar for PPE and other equipment when the pandemic started. Let us not forget who China is and what they value.
Always at your service,
Doug De Groote, CFP®, MBA, CTC Managing Director