Something A Little Different
Today, I decided to do something a tad different. I am going to write two separate pieces, one of business and one on politics. Sometimes my columns tend to meld together so I am going to try to approach things differently.
WHEN IS A SOFT LANDING NOT A LANDING AT ALL
A “Soft Landing” for media purposes and I guess the general public is when Federal monetary policy tightens to help control inflation and does not cause a recession. Thats what is acceptable but the term “Soft Landing” just grates on me. Like “(whatever stupidity) of the ages” grates on me. When can these talking heads stop with creating the impression that whatever event happened has never happened before and is so stupendous that it has to be categorized as the
”__ of the ages” or “___ for the ages” It’s stupid and I would tell any journalist or reporter that it is overused and really makes little sense.
Anyway, back to “Soft Landing”. I suppose if you want to be literal about it, we are probably going to see only the second true “Soft Landing” in the last 50 years but I just detest the term.
A landing is simply a gradual descent of something that reaches the ground with little or no turbulence. If we are about to have a “Soft Landing” where are we landing from? An era of high inflation to a period of low inflation? Possibly, but look at the economy since the pandemic. It literally has been going full steam ahead. Inflation has been high and the increases have slowed but we still are paying 23% more on average for goods than we did in March 2021 so we haven’t “landed” yet and regardless of what the Fed thinks, our glide path to that 2% inflation rate they are shooting for may never be achieved and if it’s not, what happens then? Does the Fed admit that they have done all they could to bring inflation down and we will just have to settle with inflation in the 3- 3.25% range. Or does the Fed continue raising rates in an election year and force a “Hard Landing”?
Not to minimize the damage the pandemic created, looking at the economy and the market on a macro basis, as time goes on it will be a dark spot that fade with time. Economists will write Nobel winning theories about the economic ramifications but at the end of the day, the US economy is in better shape for the most part than it was prior to the pandemic. Yes, the resultant legislation has had and will continue to have profound effects on the economy and the market as well. The Federal government opened up their checkbook and wrote some of the biggest checks in history and that my friends, like it or not, is the reason you will not see any “landing” of any sort, hard or soft.
What you will be seeing is a continued problem with inflation. Not like 2021 and 2022 but it will be present for a long time to come. This continued inflationary pressure will come from the more traditional culprit, wage pressure. The JOBS report this Friday may not give that sign yet but wage growth is catching up to inflation and that is going to be a continued problem.
Considering that the labor market is under pressure now (more jobs than people willing to fill them) and because or elected leaders have taken upon themselves to throw more money into the economy with this push for increased manufacturing capacity. Look, I think it’s great to want to bring manufacturing back to the US, but my issue is more about getting the people to work in these manufacturing jobs.
This no longer is a country that wants to get their hands dirty. Every parent wants to get their kids into a college because college graduates traditionally have higher earnings potential and much of the generation (Boomers, I guess) now has some sort of college degree. Why would parents who have had the college experience want their child to learn a trade or go work in a factory somewhere? Our generation has created what our parents created, we want our kids to do better than we did. That’s definitely a worthy ambition but what it does is create a shortage of skilled labor.
Intel wants to spend 20 billion dollars building silicon chip manufacturing plants in Arizona and Ohio. Micron is building a huge plant in Upstate New York. Manufacturers are willing and able to spend tremendous sums of money putting this infrastructure in place but who is going to work there? Some manufacturing jobs require a minimum amount of training and can be filled because they are fairly high paying union jobs and that will attract people but a lot of these high end manufacturing jobs will require a different skillset. The skillsets required are barely taught in high schools or vocational schools. We want to take back manufacturing but we haven’t bothered building the human skills to do it.
Since this country has pushed and pushed for higher education it has drawn a lot of the talent pool away from manufacturing and this is going to be the number one issue in the coming years.
Circling back to inflation, the demand for talent will cost and those costs will never be born by the manufacturer, they will always be the consumers responsibility which in turn makes what is manufactured in this country more expensive. Causing continued inflation and making the products manufactured here less competitive and once again China, Vietnam or India will produce what we produce at a lower cost per unit. Hello 1983 all over again.
Obviously, I do not have an answer for this but I think recognizing what will probably happen early may help mitigate some of the issues before we fall flat on our faces again.
SOME COMMON SENSE PLEASE
So President Trump has a new set of indictments to deal with and accusations are being thrown around about political retribution and so on. It is getting a little tedious and I just wish that some common sense would prevail here.
You have a former president under indictment in so many places I have lost count. You have a current president that could possibly be as equally as corrupt as the former president and there seems to be no end in sight.
We must look like some banana republic. Something out of an old Woody Allen movie. It is a damn shame and I think it really needs to end. Now.
Let’s start with former President Trump. As you know by now I do not like the man and I never have but, and this is a huge but, I think up until the last 10 months of his presidency he helped create an economic environment that was the envy of the World. Unemployment at all stratas was historic and corporate profits were surging. We focused on military needs and making sure the World knew we were not going to take second place to China or anyone else. Did he mess up? Absolutely. Just like every president since George Washington. You can dig down to what kind of an he was (and still is) and wretch but in the bigger picture, taking his abhorrent personality out of it, he did a better than decent job. Until the pandemic and that is a whole new can of beans but I would give him a B-.
Now onto to President Biden. I wanted to give him the benefit of the doubt. I thought he could bring this country together and get the country back on track. I thought a lot of positives because he just seemed like he was an American first and a Democrat second. Man was I wrong and I will admit it.
He came in under muddy circumstances but let’s face it, he won the election by over 8 million votes. He won. Do I think there was some shenanigans in certain districts? Absolutely. Enough to change the final outcome. Not even close. Again, lets be honest here, the Republicans are no choir boys and anything the Democratic party bosses did in their districts I am sure the Republicans did the same and the President Trump still lost. Does it suck for the Democratic process? Yes it does, but until their is some sort of National bipartisan legislation to take the question mark out of election results, we will be dealing with this.
President Biden Biden also came into office while this country was dealing with it’s worse crisis since World War II and I think he did a decent job navigating the stuff President Trump had started and he was a much more compassionate leader than Trump for sure but then he started listening to the voices in his head and thats where things went awry. The economy was on the verge of collapse and yes the Federal government had to step in. Everyone agreed we needed to pump money into the system. That should have been it. Not these Democrats, they needed to spend, spend and spend some more. Their was a BS infrastructure bill, there was this poorly named inflation reduction act and throw 3 trillion dollars into an economy that just had 1.4 trillion pumped into it, would do you expect? Inflation and mayhem. Thanks Joe.
It has taken and will continue to take years to work through the cash in the system and while we have never had some an infusion in such a short time, it doesn’t take a genius to figure out what will happen. Not President Biden. He is hailing it as “environment”. Ugh.
How can he hail himself as a hero to the working man when he has basically pushed this country to the limit as far as it’s debt? This is not going to be a single generations problem, this is multi-generational and President Biden and his progressive environment have no answer. They don’t even acknowledge that this is going to be a major, major problem. Forget about raising interest rates to fight inflation and slow growth, try raising taxes on everyone and see what happens. To confront this problem is a start but this administration once again keeps blaming Trump or climate change or whatever else they blame their mistakes on.
The political climate in this country is teetering. President Trump is the frontrunner and continues to gain momentum and yet he could possibly be a convicted felon if he gets elected. President Biden is a parody of some bumbling clown you see on Instagram. He hears the cry of the Progressive wing of his party and follows their lead, yet Democrats for the most part think the progressive are dangerous and with any willpower and a stronger showing at the polls they should be able to dump these lunatics.
This leaves us with what to do.
It won’t happen but Donald Trump should bow out of any race. He can make any number of excuses and he should do it soon so the other candidates can build some sort of momentum and we can listen to the issues.
President Biden should quit the race as well. The Democrats believe that they have some strong candidates and if Biden bows out now, those candidates will have a clear path to showing what they all about. Like the Republicans, none of the Democratic candidates (potential or otherwise) are without faults but who doesn’t have faults?
What both players lack is the idea of what is best for this country at this point in time. Trump lacks it because his ego is just so big he won’t think of anything but himself. Biden lacks it because he is not mentally capable of understanding that he is not an effective leader now and with his advancing age he will become less so.
Time for both of them to do what is best for the country and not themselves.