Tag Archives: markets

Build Back Better is Good

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Jason Furman, ex-Chairman of ex-President Barack Obama’s (D) White House Council of Economic Advisers and currently a Harvard Professor of something styled “Practice,” is all about the Biden-Harris reconciliation collection of policies known as Build Back Better.

He even wrote this in all seriousness in his piece in Tuesday’s Wall Street Journal:

Build Back Better would have a minuscule impact on inflation over the medium and long term.

Even were that true, though, in the short term where most of us live, especially the lower middle class and poor among us who live especially short-term—paycheck to paycheck—we’re facing not just inflation, which is a rate, but actual steady-state higher prices; higher prices which will last into Furman’s medium and long terms, and beyond.

Meanwhile, wages won’t rise fast enough to reduce those higher prices to the status quo ante‘s buying power any time soon, leaving our lower middle class and poor worse off in Furman’s medium and longer term, and beyond.

That wage rise, further, will be held back by Biden-Harris’ and Progressive-Democrats’ penchant for regulation, which will hinder the rise in productivity that’s necessary to facilitate wages’ rise.

Furman knows this full well; he’s one of the Smart Ones of the Left.

Weakness

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Russia is continuing to withhold a free flow of natural gas to the EU, holding the flow down in order to elevate prices inflicted on the EU’s citizenry and to restrain Europe’s industrial capacity.

Gas prices have soared in Europe in recent months due to low inventories and a recovery in demand as the economy rebounds from the pandemic. The price surge has taken a toll on energy-intensive industrial activity while consumers face a steep rise in energy bills as the winter heating season begins.

Those prices are five times the level of just a year ago—before Biden surrendered to Putin on the Russia-sponsored hacker shutdown of Colonial Pipeline by unblocking the finishing of Russia’s Nordstream 2, which unblock also was in furtherance of Merkel’s demand for Russian natural gas via that cross-Baltic Sea pipeline.

Officials and analysts say that Moscow is using Europe’s energy crunch to gain geopolitical leverage.

Well, of course Putin is. He’s not an idiot.

And

In another sign that Russia isn’t about to significantly boost supplies to Europe, Ukraine’s gas transmission system said Sunday that it hasn’t received any additional requests from Gazprom and the gas transit remained below capacity.

This is the outcome of outgoing German Chancellor Angela Merkel’s and newly arrived American President Joe Biden’s (D) enthusiastically pursued energy policies coupled with Biden’s overt timidity in front of Putin. First, demonstrate Europe’s weakness. Only after that, exploit that weakness.

It stretches credulity beyond breaking to believe two such heavily intelligent people didn’t anticipate this.

Government Controls

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Here’s the latest version of the Biden-Harris administration’s attempt to expand government control over our economy, this time using Medicare drug pricing as their venue. This example also is the latest inclusion in the Progressive-Democratic Party’s reconciliation bill.

The Health and Human Services Secretary will “negotiate” 10 to 20 of the drugs that Medicare spends most on, starting in 2025. Drug makers will get socked with a 95% excise tax on gross sales if they don’t agree to the government’s price.

This is a textbook example of the fascism version of socialism. Companies are free to produce and sell whatever they want, so long as it fits within Government requirements directing what is produced, the volume of production, and the prices to be charged.

Yet, Biden can’t make the trucks run on time.

A Risk and a Solution

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Japan’s Softbank Group has reported a significant loss driven by the technology company crackdown the People’s Republic of China government has inflicted on PRC tech-oriented companies and Softbank’s heavy investments in those companies.

Masayoshi Son, Softbank’s CEO, now is saying

Our China risk is not so huge. It is within our control[.]

And

It is a time of severe trials for China’s high-tech stocks. We are right in the middle of a storm.

And, as paraphrased by The Wall Street Journal,

[T]here is only so much more damage turmoil in China can do.

Here’s a thought: Softbank could eliminate the risk altogether and prevent any further damage by divesting itself of all PRC-oriented holdings and no longer investing at all in PRC companies, whether tech or ditch digging or anything in between.

All Those Rich Fat Cats

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Easy come, easy go. Especially for those ill-sympathized-with rich fat cats. The rest of us….

All that money we saved on our Independence Day celebrations—every one of those 16 cents (and what did we get? Another day older)—is gone, and we’re deeper in debt.

We’re also going to pay a whole lot more for our Thanksgiving Day celebrations.

Nearly every component of the traditional American Thanksgiving dinner, from the disposable aluminum turkey roasting pan to the coffee and pie, will cost more this year, according to agricultural economists, farmers and grocery executives.

Meat and poultry are up over 10% since last year. Raw aluminum is up 80% over the last 16 months; guess how much that roasting pay, made of processed aluminum, is going to cost us.

It’s OK, though. ‘Least all those rich fat cats who made their 16 cents with their superiorly astute purchasing skills for their Independence Day celebrations gonna pay their fair share for the upcoming most expensive Thanksgiving Day celebration inflation can produce.

However, no worries; it’s all good. I have it on good authority that we just need to lower our expectations and quit whining.