Boots & Sabers

The blogging will continue until morale improves...

Category: Economy

Bezos Supports Higher Barriers to Entry for Competitors

Heh

Amazon boss Jeff Bezos has said he supports raising taxes on US companies.

The comments by the world’s richest man come as US President Joe Biden is pushing to raise the corporate rate from 21% to 28%.

In case it was unclear, let me help explain this. Bezos and Amazon are very rich and operate on a global scale. They have legions of lawyers and accountants to shift money around the globe to minimize their tax burden. Emerging competitors do not have that scale or capacity. Higher taxes eat into an emerging competitor’s profit and ability to grow, innovate, and acquire. Bezos supports higher taxes because he knows that he won’t pay them, but many of his competitors will.

Wisconsin Overpaid Unemployment by $102 Million (so far)

Yikes. The screw ups keep coming. Meanwhile, sit back and just ponder how much of our grandkids’ money our government is wasting.

Federal data show Wisconsin overpaid $102 million through October. Wisconsin is one of 11 states labeled red on a national map for unacceptably high improper payment rates. A researcher with the National Unemployment Law Project said the long backups to get people paid contributed to the problem.

 

[…]

 

The Department of Workforce Development did not return our call Monday.

 

[…]

 

The Labor Department Inspector General estimated $89 billion of CARES Act unemployment money went to people it shouldn’t have.

Wisconsin’s GDP Dropped 4.5% in 2020

Ouch. But sure, let’s raise taxes.

No states saw their real gross domestic product increase in 2020, but with a 4.5% drop, Wisconsin ranked 37th in the country for GDP growth in the past year, according to data released Friday by the U.S. Bureau of Economic Analysis. 

 

The decline is the largest single-year drop in the state’s GDP in data going back to 1963. In 2008, Wisconsin’s GDP declined 1.3% and dropped another 2.8% in 2009. Measured in dollars, 2020’s decline sets the state economy back to about its 2017 level.

 

Wisconsin also had some of the slowest person income growth in the country, according additional data released earlier this week by the BEA.

Wisconsin Personal Income Growth is One of Worst in the Nation

Yuck

Wisconsin residents saw some of the slowest personal income growth of any state in the country in 2020, according to data released Wednesday by the U.S. Bureau of Economic Analysis.

 

State personal income increased 4.4% from 2019 in Wisconsin, which ranks 46th in the country. On a per capita basis, Wisconsin personal income increased 4.3%, which ranks 42nd in the country.

 

Nationally, personal income was up 6.1% and 5.8% on a per capita basis.

The Next Agricultural Revolution

Wisconsin’s farmers are in the vanguard!

Three big developments have rung in the start of the agricultural digital revolution. First, the development of sensor technology that is both astonishingly small and, crucially, cheap. Secondly, the communications technologies required to move data between the field and the computational cloud, and third, the technology to process mind-boggling volumes of information with artificial intelligence (AI) and machine learning.

 

“This may help a farmer know there is something brewing in the herd or the orchard that needs attention,” says Susan McCouch, director of the Cornell Institute for Digital Agriculture. McCouch predicts that sensors in irrigation systems could be designed to receive signals broadcast from satellites to make decisions about whether to water crops – but only if both the land is dry and no rain is forecast.

 

“This is how you marry the Internet of Things with the Internet of Living Things, and that needs massive data interpretation capabilities,” she says. “For example, we are currently working with dairy cows, placing nanosensors in the rumen of the cow so that when it is not ruminating in a healthy way, the farmer and the vet can identify which animals are having problems before there are symptoms.”

 

Up until now most advances in the industry have fallen under what is loosely termed “precision agriculture”, where the advent of GPS and advances in farm machinery have allowed farmers to more accurately sow, treat, and harvest crops, though the focus has typically been on large-scale commodity arable crops such as wheat, soy, and canola (also known as rapeseed). This technology has now been coupled with satellite and drone imagery to monitor weed levels and canopy coverage, soil analysis, weather patterns and historic crop yield data from specific fields which are then fed into data crunching systems which use AI and machine learning to guide on-farm decision making.

 

This layering of vast amounts of data and subsequent modelling is allowing farmers to make decisions that are far more likely to lead to farming success. The more information they have, the more accurately they can predict the outcomes of farming decisions. Should they plant that crop in that field? If they spray that crop this week rather than next what might the outcome be given the weather forecast? Does this plant variety respond better with a soil of this type? Knowledge brings powerful predictability into farming and a raft of businesses are out there harvesting the data to help bring in the gold-rush.

Wisconsin Unemployment Rate is 3.8%

There are still 28,500 fewer people in the labor force than a year ago, but at 3.8% unemployment, the state is at full employment. Why do we need a massive stimulus again?

MADISON – The Department of Workforce Development (DWD) today released the U.S. Bureau of Labor Statistics (BLS) preliminary employment estimates for the month of January 2021. The data shows that Wisconsin added 11,100 total non-farm and 7,000 private-sector jobs in the month of January. Wisconsin’s unemployment rate in January was 3.8 percent, down from 4.0 percent in December 2020.

 

• Place of Residence Data: Wisconsin’s labor force participation rate in January was 65.5, 4.1 percent higher than the national rate of 61.4 percent. Wisconsin’s unemployment rate in January was 3.8 percent, while the national unemployment rate was 6.3 percent in the same month.

 

• Place of Work Data: Wisconsin added 7,000 private-sector and 11,100 total non-farm jobs from December 2020 to January 2021. Both non-farm and private sector jobs were lower in January 2021 than they were in January 2020.

Government Policy Impedes Recovery

This is how government elongates and worsens economic downturns. Instead of letting this naturally correct by allowing landlords to continue to evict deadbeats and replace them with paying tenants, government tries to freeze everyone in place. We are back to full employment in Wisconsin. People need to pay their rent to move to a place they can afford. By trying to protect tenants, the government is going to put landlords out of business, force a wave of foreclosures, force a consolidation of property ownership, and depress property prices. Any potential bailout money for either landlords or tenants is just money taken from someone else and spreads the pain to people who aren’t directly involved.

There is no free lunch. We have to let our economy react or it will not recover.

That money, however, has yet to be disbursed. While people wait, tenants are falling further behind in rent payments, and some property managers haven’t seen a rent check in nearly a year.

 

“Our owners aren’t getting paid and that means we’re not getting paid,” said Joe Hoffman, who owns Porchlight Property Management. “In some cases, tenants are as much as six months behind.”

 

Hoffman oversees 650 different units and about 100 landlords in Milwaukee, Washington, Waukesha, and Ozaukee counties. He runs the business with his wife and four daughters. He’s also a small-scale landlord and adds most of the property owners he manages are just like him.

 

“These are small, mom-and-pop businesses,” he said. “We have retired farmers, school teachers, city workers, people who are retired and this is their retirement plan.”

 

Hoffman says his delinquency rate when it comes to rent payments has jumped to 15%, compared to just 3% before the pandemic. His revenue dropped as much as 30% in some instances last year, from quarter to quarter.

[…]

The CDC eviction moratorium has been extended twice since its inception this past September. There is also discussion of extending it into the fall of 2021. Pettit and Hoffman worry if this happens, and rental assistance lags, the problem will be too great to solve.

[…]

Eviction filings in Milwaukee County dropped significantly in 2020. Data from Wisconsin Circuit Court records shows last year, the county had 7,918 pending cases. In 2019, that number held at 12,164. In 2018, it was 12,244.

 

Pettit said this in part due to judges looking at every eviction case more closely due to the pandemic. This includes filings for behavioral issues and other problems not covered under the moratorium.

 

“Nobody wants to evict anyone right now,” he said. “So, they’re scrutinizing even those evictions more carefully to make sure it’s not being used as a pretext for failure to pay rent.”

Working Out Trading After Brexit

It’s a process.

More than a month after the UK’s post-Brexit trade deal with the EU came into force, complaints from British importers and exporters continue to mount.

Rules of origin for products that are imported into the UK, then exported to the EU are causing difficulty for some firms.

 

Others are caught up in the complexity of VAT issues, while the time and trouble taken to get merchandise through customs remains a hassle.

 

Small wonder, then, that according to a survey by the Road Haulage Association, Brexit-related problems caused the volume of exports passing through British ports to the EU to fall very sharply last month compared with a year ago.

 

A government spokesperson admitted that some businesses are “facing challenges with specific aspects of our new trading relationship” and promised to provide them with the necessary support “to trade effectively with Europe”.

“That’s why we are operating export helplines, running webinars with experts and offering businesses support via our network of 300 international trade advisers,” the spokesperson said.

Biden Kills 2,000 Union Jobs in Wisconsin

From the Milwaukee Business Journal.

The January presidential executive order canceling permits for TC Energy Corp.’s Keystone XL Pipeline could eliminate job opportunities for an estimated 2,000 construction workers who live in Wisconsin.

 

Two Wisconsin contractors, Michels Corp. of Brownsville and Precision Pipeline of Eau Claire, were among six that TC Energy hired in October to build about 800 miles of the Keystone pipeline across three states this year. The project starting in Hardisty, Alberta, in Canada would run through Montana, South Dakota and Nebraska.

 

[…]

 

Although the actual construction would’ve happened outside of Wisconsin, Michels and Precision Pipeline would have hired Wisconsin union tradespeople for the projects, said Terrance McGowan, president and business manager of the International Union of Operating Engineers Local 139, located in Pewaukee.

CBO Predicts Jobless Recovery

Greeeaaaat

The U.S. economy is projected to grow at a robust 4.6% annual rate this year, but employment isn’t expected to return to pre-pandemic levels until 2024, the Congressional Budget Office said Monday.

 

The 10-year outlook said the economic recovery from the coronavirus got a boost from an unprecedented wave of government spending to combat the outbreak, such that growth could pass its maximum sustainable level in early 2025 before returning to a long-run average of 1.7%. Based on the CBO’s projections, economic growth would be the strongest since 1999.

 

While the growth estimates suggest a quick snapback in gross domestic product, the CBO projection shows that hiring will occur at a lag as consumer spending returns and employers become more comfortable with adding workers. CBO projected an average of 521,000 jobs will be added monthly this year, a pace that would fall to 145,000 in 2022.

DOJ Investigates SpaceX for Hiring Too Many Americans

Ridiculous.

The U.S. Department of Justice is investigating SpaceX over whether the company discriminates against non-U.S. citizens in its hiring practices and said Elon Musk’s company is stonewalling a subpoena for information, court documents revealed Thursday.

 

The DOJ’s Immigrant and Employee Rights Section received a complaint of employment discrimination from a non-U.S. citizen claiming that the company discriminated against him based on his citizenship status.

 

“The charge alleges that on or about March 10, 2020, during the Charging Party’s interview for the position of Technology Strategy Associate, SpaceX made inquiries about his citizenship status and ultimately failed to hire him for the position because he is not a U.S. citizen or lawful permanent resident,” DOJ attorney Lisa Sandoval wrote in a complaint filed Thursday.

Even if the allegation is true, citizenship (or not) is not a protected class. Discriminating on the basis of citizenship is not illegal. Why is the DOJ even investigating? And didn’t the President just photo copy and reissue a Buy American executive order? I thought we liked discriminating on behalf of America.

Class Warfare on Wall Street

What an interesting story… and rather scary.

Amateur investors are responding with outrage after trading platforms curbed buying of shares in the US games firm GameStop and other companies.

The moves by Robinhood and Interactive Brokers follow days of frenzied trading that led to massive gains for some stocks.

Shares in GameStop dived by as much as 55% after the restrictions.

It is the latest twist in a battle that has pitted amateur investors against Wall Street giants.

Major hedge funds had bet billions of dollars that GameStop’s shares would fall.

But they have faced major losses after amateurs, swapping tips on social media sites such as Reddit, drove up the share price by more than 700% in a week.

What we have is a bunch of basement day traders who are telling each other to buy a stock to drive up the value and then try to get out before it crashes. It’s risky, but as far as I can tell, there’s nothing illegal about it.

In the mean time, you have some large investment firms and hedge funds who are losing their shorts because they shorted the same stocks. Again, it’s risky, but nothing illegal about it.

But since those large investment firms and hedge funds are run by powerful people, they have managed to freeze trading, silence the boards, and intimidate them with threats of investigations and whatnot. We have the powerful people and insiders are manipulating the legal and market systems because the little guys found a way to make a few bucks.

Scary stuff.

My Pillow CEO Removed From Twitter

Heh.

Trump-supporting MyPillow CEO Mike Lindell has become the latest to be banned from Twitter.

 

Lindell, who fervently supported the Stop the Steal campaign over apparent election fraud, was banned by the social media giant for ‘spreading misinformation’.

 

His account is now ‘permanently suspended’.

One wonders about the long term business sense of moves like this. The value proposition of a platform like Twitter from the public view is that it is a place to read and share views from all different perspectives about any number of things. One of those things is politics. From a business standpoint, people give Twitter money to get access to that user base and to get data about that user base. As Twitter limits the user base to just those of a particular political persuasion, the value of that user base decreases.

Take it out of the realm of politics. People use Twitter to comment about sports. What if Twitter decided that hockey sucks and people who express support for hockey are suspended because it is “misleading” and “false” to say that hockey is a superior sport than football. By making that editorial decision and curating the user base in such a fashion, Twitter is limiting the number of businesses that will pay them money for user data. The companies that sell hockey equipment or rent ice rinks will look elsewhere to reach their potential customers.

Not that I care if Twitter thrives or not, but it just seems like a stupid business decision. I’d be wary of their future if I were a significant shareholder.

Vaccine Requirements

We’re going to see a lot of this.

JANESVILLE, Wis. – A requirement forcing staff to choose between the COVID-19 vaccination and their job has forced nearly a dozen employees out of Rock Haven nursing home, according to staff member Michelle Lynch.

 

The nursing home, run by Rock County, is one of the only in South-Central Wisconsin mandating employees to get the shot or lose their jobs.

 

“If it would have been voluntarily at first, I think a lot of people would have received the vaccine,” Lynch said. “I think because it’s told it’s mandatory, a lot of people are fighting back. They don’t want to be told they have to take a vaccine that’s not FDA approved.”

First off, I do think it is the business’ prerogative to require this if the workers are in a shared space like this. It is also the employee’s prerogative to refuse and quit. Both have to act in the best interests of themselves.

I know plenty of people who are healthy, young adults who have decided to wait a while. While the vaccine is welcome, it has also not been tested long term. It is perfectly rational for a healthy 28-year-old person to make the personal risk calculation that the risk of immediate or future side effects of the vaccine is greater than their minute risk of severe harm from the virus.

Human bodies and human circumstances are infinitely complex. Healthcare is personal.

China’s Economy Expands in 2020

It’s almost as if they bounced back while their global agitators pushed to keep Western economies closed.

BEIJING (AP) — China eked out 2.3% economic growth in 2020, likely becoming the only major economy to expand as shops and factories reopened relatively early from a shutdown to fight the coronavirus while the United States, Japan and Europe struggled with rising infections.

 

Growth in the three months ending in December rose to 6.5% over a year earlier as consumers returned to shopping malls, restaurants and cinemas, official data showed Monday. That was up from the previous quarter’s 4.9% and stronger than many forecasters expected.

 

In early 2020, activity contracted by 6.8% in the first quarter as the ruling Communist Party took the then-unprecedented step of shutting down most of its economy to fight the virus. The following quarter, China became the first major country to grow again with a 3.2% expansion after the party declared victory over the virus in March and allowed factories, shops and offices to reopen.

Biden Unveils Another Covid Relief Package as Economy Soars

The economy is rebounding. The only thing retarding it is Democratic governors who keep their states locked down. So if the economy is doing OK, why another relief package? Oh yeah, it’s another slush fund to transfer wealth from our grandchildren to Democrat constituencies – just like the “stimulus” package that Obama passed when he came into office. This spending is insane.

Biden unveiled the broad strokes of a rescue plan that includes items that will likely have some bipartisan support – like an additional $1,400 for Americans – boosting the total to the $2,000 per adult President Donald Trump demanded in December.

 

‘$600 is simply not enough if you still have to choose between paying rent and putting food on the table,’ Biden observed.

 

But it also outlines loftier goals, like implementing a national $15 per hour minimum wage, a campaign promise the Democrat made.

 

[…]

 

$130 billion is specifically allocated to go toward schools.

 

[…]

Biden wants to see the approved $300-a-week federal unemployment benefit increased to $400.

Update on Ammo Shortage

FYI

Hornady says that ammunition sales first spiked in March, when the company saw an 86% increase over March of 2019. That, in essence, wiped out the company’s inventory, and they’ve been making and shipping as fast as they can ever since.

“The stuff that goes out today was literally put in a box yesterday,” he explains. “We’ve made one-third more ammunition than we did last year. Unfortunately we don’t have an extra factory laying around or anything else. We’ve got ‘X’ number of people, and we’re certainly trying to add as much capacity as we can.”

 

Hornady also addresses some of the rumors around the ammunition shortage; assuring customers that there isn’t a government conspiracy to buy up ammo and keep it off the civilian market. Apparently some folks have even suggested that Hornady could be making more ammunition if they weren’t busy making t-shirts, but Jason Hornady patiently explains that the company actually buys their shirts, so there’s no production time being lost by focusing on fashion.

 

“We understand it’s frustrating. It’s frustrating for us too,” Hornady says in conclusion. “Keep shooting, because we’re going to keep making more, we promise.”

 

[…]

 

Vanderbrink had to specifically say that the companies are not storing ammunition in “secret warehouses,” and that ammunition is being made and shipped every day in their factories. He noted that if the estimated 7-million new gun owners each purchased two boxes of ammunition, that would amount to an extra 700,000 rounds that would need to be produced. Factor in the ammo hoarding that’s been taking place for most of the year, and you can understand why the supply simply can’t keep up with demand.

Archives

Categories

Pin It on Pinterest