Boots & Sabers

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Category: Economy

High inflation lights fuse of government taxing and spending time bomb

My column for the Washington County Daily News is online and in print. Thanks to a loyal reader for the topic idea. The inflation bomb dropped by Trump and Biden is going to cause shockwaves for years to come.

Wisconsin has always been a high-tax state, but over the years, Republicans have put a few safeguards in place by capping increases to the rate of inflation. That was sensible when we had inflation of 2% or 3%. As inflation moves to 7% or possible above 10%, the ability of Wisconsinites to afford their government will be severely strained.


For example, in 2011, the Republicans implemented Act 10, which did a number of things including restricting public employee unions to being able to only negotiate wages up to the rate of inflation. In practice, that meant that most public employees have been receiving wage increases at the rate of inflation every year. With employee costs representing 70% or more of most government budgets, that means that 2022 will see significant spending increases for no additional value.


Also, Wisconsin caps government school district spending increases to changes in enrollment and inflation. Higher inflation means a much higher spending increase limit for school districts to pay for those increases in employee wages. This will drive a steep increase in property taxes at the same time that the housing prices upon which property taxes are based have gone up 9.5% according to the Wisconsin Realtors Association.


While spending and tax increases of 7% or more are looming, the ability for Wisconsinites to afford those increases is not keeping up. According to the BLS, Wisconsin’s wage growth ranks 37th in the nation for the third quarter of 2021, the most recent data available. Wisconsin’s average hourly wage in the private sector increased at a rate of 3.9% — a little more than half the rate of inflation. As inflation is squeezing Wisconsinites’ expenses, government is about to take a bigger slice. For those who are retired or on a fixed income, the bite of government will be even more severe.


To make it even worse — sorry, there is no good news here — recall that inflation measurements are a lagging indicator. Government budgets this year will be set based on inflation incurred last year. When inflation does eventually abate or a period of deflation possibly sets in, there is no mechanism to rein in the inflationary spending of government. Those spending increases will be baked into the pie forevermore unless elected leaders are willing to actually cut spending — something that neither Republicans nor Democrats have been willing to do in Wisconsin in my lifetime.



The Sachet Economy

Coming to America

The appearance of the sanitary pads in these small packs was “mind-boggling”, according to women’s health activist Dr Chioma Nwakanma.

They do not represent convenience but rather a more difficult choice as some women are no longer able to afford to cover their whole period.

“Even when it was an eight-pack it was sometimes not enough, so now people buy the sachet and start picking what day to use it,” Dr Nwakanma told the BBC.



With annual inflation peaking at 18% in March last year, and food inflation reaching 23%, this rise in the cost of living has created what is being termed by some as a “sachet economy”


In addition to sanitary pads, everything from baby food to cooking oil to breakfast cereal can now be bought in smaller portions, which are more affordable as the dramatic price increases have outstripped wage rises.

Empty Shelves in Grocery Stores Becoming Normal

Marxist policies have the same results every time they are implemented.

U.S. retailers are now facing roughly 12% out of stock levels on food, beverages, household cleaning and personal hygiene products compared to 7-10% in regular times.


The problem is more acute with food products where out of stock levels are running at 15%, the Consumer Brands Association said.


SpartanNash, a U.S. grocery distributor, last week said it has become harder to get supplies from food manufacturers, especially processed items like cereal and soup.


Consumers have continued to stock up on groceries as they hunker down at home to curb the spread of the Omicron-variant. Denis said demand over the last five months has been as high or higher than it had been in March 2020 at the beginning of the pandemic. Similar issues are being seen in other parts of the world.

Inflation Surges to 7% and is Accelerating

Holy crap.

The US consumer price inflation index rose 7% over the past year, the steepest climb in prices since June 1982, the Bureau of Labor Statistics reported Wednesday.
It was also a faster rate of increase than November’s 6.8%, and higher than economists had predicted.
Stripping out food and energy costs, which tend to be more volatile even in non-pandemic times, inflation rose to 5.5% between December 2020 and December 2021 — the biggest annual jump since February 1991. That was a much faster pace than in November, when core inflation stood at 4.9%.


Robot Servers

The labor shortage and increasing cost of available labor is going to drive more and more of this. It’s not necessarily a bad thing – unless you are that 16-year-old kid looking for your first job.

Elliana chose Shanghai Bistro in Eau Claire in part because she loves its sushi, but mostly because she adores the Asian restaurant’s new “employee”: Jonny 5.

The 3½-foot-tall robot server, named after a fictional robot in the 1980s “Short Circuit” films, has been delivering plates of sushi, fried rice and pad Thai to diners since the end of October.

Jonny 5 has been a valuable addition to the staff and helped Shanghai Bistro navigate a labor shortage that has hit restaurants particularly hard, said owner Henry Chan.

“It’s definitely proven itself,” Chan said. “It’s working out really well.”

Chan’s goal in leasing the robot is to improve efficiency by having Jonny 5 do a healthy portion of the running back and forth between the kitchen and the tables, so servers can focus on offering personal service, filling drink orders faster and chatting with customers.

“It’s a huge benefit to us. Our efficiency just shot through the roof because of how fast food goes out,” Chan said, noting that the robot already has helped things go smoothly on days when the restaurant was short-staffed or someone called in sick.

Biden’s Communist Nominee Also Steals Shoes

If we can’t reject her for being an avowed communist, can we disqualify her for being a petty thief?

Omarova reportedly placed the hodgepodge of stolen items, including  four pairs of shoes, two bottles of cologne and socks worth $214, into a large purse and hid them by covering the bag with other clothing items.


A security agent from TJ Maxx who was on-duty and saw Omarova steal told Fox News that she also paid for multiple items at the jewelry counter but ‘made no attempt to pay for the items concealed in her purse’.




According to the latest report, Omarova was arrested in Madison, Wisconsin, on a ‘retail theft’ charge.


The incident occurred on June 2, 1995, a Wisconsin Department of Justice criminal background check obtained by Fox shows.


She had a ‘deferred prosecution’ for the charge early the following year, according to the report, which also states that the charge was dropped under Wisconsin’s first offender program.


When asked about the newly-surfaced charge on Wednesday, the White House defended Omarova as an ’eminently qualified’ candidate and described the case as a ‘misunderstanding and confusing situation.’




Omarova’s previous statements on banking and Marxism have landed her in hot water with some of the same senators expected to grill her tomorrow.


She’s advocated for moving Americans’ financial accounts from private banks to the Federal Reserve and for forcing banks to lose leverage on federal subsidies by becoming ‘non-depository lenders.’


It would diminish the stature of the institutions she’s supposed to regulate.


‘By separating their lending function from their monetary function, the proposed reform will effectively “end banking,” as we know it,’ Omarova wrote in a paper updated in February of this year titled ‘The People’s Ledger.’


She summed it up more concisely in a 2019 documentary film titled ‘A**holes: A Theory.’ Omarova called Wall Street’s hedge fund-dominated culture a ‘quintessential a**hole industry.’

Bidenflation’s Impact is Uneven


Data from the Consumer Price Index released on Wednesday shows that, out of the more than one dozen metropolitan areas the Bureau of Labor Statistics monitored over the past year, residents in the Atlanta metro area faced the worst inflation increases, with the cost of goods costing 7.9 percent more than they were last year.


The sharpest increase for Atlanta-area residents came in the cost of transportation, as they paid 21 percent more for fuel and vehicles than they were a year ago, according to Bloomberg.


Those living in the San Francisco Bay Area, though, only saw their prices rise 3.8 percent, and in the New York metropolitan area prices only went up 4.3 percent.


The figures represent a change in demographics during the COVID pandemic, as people moved out of the larger liberal cities and into cities in more conservative states.


Cities in Arizona also saw large increases in the price of goods over the past year – at 7.1 percent – and in St. Louis, Missouri, prices of everyday goods rose 7.5 percent.


Each of those metropolitan areas – in more conservative states – faced worse inflation than the national average – at 6.2 percent, the highest it has been in over 30 years.

Inflation Soars Even Higher in Brandon’s America

Brandon’s America is getting really expensive.

Inflation across a broad swath of products that consumers buy every day was even worse than expected in October, hitting its highest point in more than 30 years, the Labor Department reported Wednesday.


The consumer price index, which is a basket of products ranging from gasoline and health care to groceries and rents, rose 6.2% from a year ago. That compared to the 5.9% Dow Jones estimate.

On a monthly basis, the CPI increased 0.9% against the 0.6% estimate.


Stripping out volatile food and energy prices, so-called core CPI was up 0.6% against the estimate of 0.4%. Annual core inflation ran at a 6.2% pace, compared to the 4% expectation and the highest since November 1990.


Fuel oil prices soared 12.3% for the month, part of a 59.1% increase over the past year. Energy prices overall rose 4.8% in October and are up 30% for the 12-month period.

5% Inflation Expected in UK



The Bank of England’s new chief economist has warned that UK inflation is likely to hit or surpass 5% by early next year.

Huw Pill told the Financial Times that the Bank would have a “live” decision to make at its next interest rate-setting meeting on 4 November.


It follows recent comments from Bank of England governor Andrew Bailey who said it “will have to act” on inflation.


The UK interest rate has been at a historic low of 0.1% since March 2020.


Recent data showed that inflation growth slowed to 3.1% in the year to September. However, it is expected to increase because of rising energy costs, higher wages to fill record vacancy numbers and supply chain disruption.


Mr Pill, who succeeded the Bank of England’s former chief economist Andy Haldane last month, said he would “not be shocked” to see inflation reach 5% or above in the coming months.

He told the Financial Times: “That’s a very uncomfortable place for a central bank with an inflation target of 2% to be.”

The Great Resignation

Interesting. My observation in the labor market is that companies are desperate for people and are offering incredible incentives. A lot of people are quitting crappy jobs for good jobs or good jobs for great jobs.

The number of Americans quitting their jobs has hit record highs over the past several months in a phenomenon economists have been calling the “Great Resignation.” In August, 4.3 million U.S. workers — almost 3 percent of the entire American workforce — voluntarily left their positions, the highest number since the Bureau of Labor Statistics began tracking “quits” in 2020.


Workers are quitting at high rates in every industry, but the trend has been especially pronounced for frontline businesses like restaurants, hotels, retail stores and health care providers. Recent quit rates are a stark contrast to early in the coronavirus pandemic, when the number of quits plummeted to the lowest levels in a decade, as COVID-related business closures put millions of Americans out of work.




Rather than offering one reason so many Americans are quitting their jobs, experts mostly believe the Great Resignation is the result of a variety of forces coming together. Something not on that list is employer vaccine mandates, which don’t appear to have caused a significant number of people to quit.


One of the most common explanations is that workers are simply burned-out. The high quit rates in customer-facing jobs and health care suggest that people in these fields have become exhausted after 18 months of extra hours, confrontations over COVID mitigation rules and fear of catching the virus. Many white-collar workers, on the other hand, may be eager to maintain some of the elements of pandemic-era work that benefitted them — like remote work and flexible hours — and willing to move on as their employers transition back to the office.


Others see the Great Resignation as the sign of a major shift in the power dynamic between workers and their employers. Labor Bureau data doesn’t track whether people quitting are finding another position, but record levels of job openings mean prospects for quitters have never been higher. While many have struggled financially during the pandemic, a large share of Americans have actually increased their savings — meaning they have more of a cushion to absorb a job transition. These factors mean workers have greater freedom to leave unsatisfying jobs to pursue something that suits them better.

Empty Shelves in America

Bare shelves in the land of plenty? Biden’s America.

Stores across America have empty shelves thanks to a series in supply chain problems that are prolonging inflation and could stretch into the new year, with some retailers like Costco and Walmart limiting the amount of toilet paper people in fear that they may soon run out.


More than 60 cargo ships are waiting to dock in California, carrying hundreds of thousands of containers, and may be stuck for months in a traffic jam after arriving from China and Asia.  Millions of dollars of American goods are still sitting in warehouses in China, awaiting shipment.


There are similar problems with homegrown goods that can’t be transported quickly enough by truckers or on freight trains.

International Shipping Infrastructure in Crisis

Our overreaction to COVID is causing far more devastation than the virus itself.

A coalition of unions that represent shipping workers around the world has warned of an imminent ‘global transport systems collapse’ due to lingering impacts from the COVID-19 pandemic.


In an open letter on Wednesday, the workers groups warned that fragmented and inconsistent pandemic restrictions around the world have thrown global shipping into chaos.


The warning comes as supply-chain backlogs leave scores of cargo ships idling outside US ports, exacerbating shortages caused by a national truck driver shortage that threatens to derail the Christmas shopping season.


‘We are witnessing unprecedented disruptions and global delays and shortages on essential goods including electronics, food, fuel and medical supplies,’ the shipping workers warned.

Rents Soar in Biden’s America

Once again, Democratic policies hammer the middle and working classes.

Rent data for the past two months show no sign yet of the usual seasonal dip at this time of year, following peaks early in the summer, when many lease renewals come due.

Home Heating Costs Soar

Carter’s -er- Biden’s America.

New York (CNN Business)Americans should brace for sticker shock on home heating costs as temperatures drop this fall and winter.

Prices for natural gas, the most common way to heat homes and a leading fuel source for generating electricity, have surged more than 180% over the past 12 months to $5.90 per million British thermal units. Natural gas hasn’t been this expensive since February 2014.
The risk is that an early winter or extremely cold fall temperatures will force households to crank up the heat. That would further shrink the nation’s below-average stockpiles of natural gas and could lift prices even higher.

Some Health Insurers Stop covering 100% of COVID Treatment

Good. COVID is a virus that will be with us forevermore. It is time to treat it like we would any other malady.

In 2020, as the pandemic took hold, U.S. health insurance companies declared they would cover 100% of the costs for covid treatment, waiving co-pays and expensive deductibles for hospital stays that frequently range into the hundreds of thousands of dollars.


But this year, most insurers have reinstated co-pays and deductibles for covid patients, in many cases even before vaccines became widely available. The companies imposed the costs as industry profits remained strong or grew in 2020, with insurers paying out less to cover elective procedures that hospitals suspended during the crisis.

Remember that whenever insurance covers anything 100%, all that means is that all premium payers are picking up the full bill.

Tesla Opens Dealership on Tribal Land to Avoid Law

Coming to Wisconsin.

Electric car manufacturer Tesla opened up its first sales and service center in New Mexico this week thanks to a first-of-its-kind partnership with a tribal nation.


New Mexico has laws on the books that prohibit car makers from selling directly to customers without going through third-party dealerships. The law has prevented Tesla from establishing an official presence in the state over the years.


But now Tesla has found a way around that. The electric car maker partnered with the first nation of Nambé Pueblo to open its first facility inside a defunct casino on tribal land north of Santa Fe, where the state law does not apply.


The facility opened Thursday with tribal leaders and state lawmakers in attendance who praised the deal.

Wisconsin Manufacturers Worry about Mandate During Labor Shortage

Maybe this is a boon for small employers struggling for workers. It’s still a blatantly unconstitutional power grab by a tyrannical executive, but there are always silver linings.

Erik Eisenmann, a labor attorney in Husch Blackwell’s Milwaukee law office, has been hearing from employers who have been hesitant to mandate the vaccine because they don’t want workers to quit during a tight labor market.


“I have a lot of clients, especially in the manufacturing space, who tell me as much as 10 percent of the workforce might leave and go down the street and work for another company that doesn’t have a requirement,” Eisenmann said.


Torben Christensen, president and CEO of Wiscon Products Inc., a manufacturing parts supplier in Racine, said a mandate would be impossible for employers to monitor.


“Our job isn’t to be confrontational with our employees, we can’t even police them for time and attendance right now because there is such a labor shortage,” Christensen said. “How on earth am I going to start policing guys if they decide they don’t want to wear a mask or get the vaccine?”


Christensen’s company wouldn’t fall under Biden’s mandate — his company has about 45 employees. At its peak, he had around 65 people working for him.


Christensen said finding workers is the hardest part of his job, but he thinks vaccine mandates at larger companies in the area may encourage people to work for him instead.


“I feel it’s the guys and gals that are in manufacturing, the blue collar, that are nervous about the vaccine and don’t want to be told what to do by the government,” Christensen said. “I think it will open up opportunities for companies like mine and certainly the service industries that are struggling to find help.”

What I expect is that employers make is so easy to fraud that it isn’t much of a burden for employees at all.

GM Pauses Production Due to Chip Shortage


New York (CNN Business)General Motors will shut production at most of its North American plants for a week or two starting next week as the worsening chip shortage takes another bite out of its plans.


GM and other automakers had hoped the chip shortage would be mostly behind them by now. But the surge in Covid cases, especially in Southeast Asia where many of the chip manufacturers are based, has actually created a worsening problem for automakers.

Only a small handful of GM’s plants will remain in operation during the pause. Those plants make full-size SUVs and pickups, as well as some of its sports cars, such as the Camaro and Corvette. That’s because GM is prioritizing the chips it does have on hand for its most popular and profitable vehicles.

Hospitality Industry Decimated by Government Shutdowns

Notice how many liberal groups are using the pandemic to angle for their agendas – agendas that they had long before the pandemic? Never let an opportunity go to waste… it’s clear that America’s Left is using the pandemic and the fear of a resurgence to push America closer to full socialism.

A recent survey of Wisconsin businesses by Wisconsin Manufacturers & Commerce, the state’s largest business lobby, found that 72% of employers said the workforce shortage is the biggest public policy issue facing the state.

Nearly 80% of employers surveyed by WMC said they plan to increase the number of employees in the next six months, and will raise wages to do so. More than 25% of businesses said they plan to raise wages by more than 4% in 2021, and 70% said they plan to raise wages by at least 3%.

The COWS report argues that workers — particularly those in low-wage service jobs — need better wages, more predictable schedules and stronger benefits.

“Since the collapse, the question has been ‘when will we get back to normal?’” said COWS associate director Laura Dresser in a statement. “But ‘normal’ for low-wage workers has long been unsustainable, leaving too many families struggling to get by. Adding jobs is important, but ensuring strong job quality and supports for low-wage workers is equally important.”

The hospitality industry also took the largest hit at the national level, but Wisconsin outpaced the national rate. Hospitality employment decreased by 18.7% in Wisconsin from February 2020 to June 2021, compared to 12.9% nationally.

Other sectors that saw significant losses in Wisconsin include government, with a 6.9% decline, and natural resources and mining, with a loss of 7.7%. Industries that saw the smallest declines included information; professional and business services; trade, transportation and utilities; and manufacturing — all with declines of 1% or less.



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