Boots & Sabers

The blogging will continue until morale improves...

Category: Economy

Average Gas Prices Top $4 for First Time in a Decade

Hmmm… who was the president in 2011? There might be policy choices driving this. Might…

As of Sunday afternoon, the national average of a regular gallon of gas is $4.009, according to the American Automobile Association. That’s up 8 cents from Saturday and up 40 cents from last week. The national average also comes a day earlier than what analysts expected.

[…]

The average cost is also the highest since May 2011, when the average was $4.96, according to the U.S. Energy Information Administration.

Wisconsin Sees Rapid Decline In Union Membership

When given a choice, the majority of people chose to not join a union.

New data from the U.S. Bureau of Labor Statistics show nearly all states have seen a decline in the concentration of their workforce that is unionized over the last 20 years, but none more so than Wisconsin.

 

In 2000, 17.8% of all employed Wisconsinites were members of a union – the 10th-highest concentration in the country. By 2021, that number fell to just 7.9%, putting Wisconsin at 28th among states and below the national average of 10.3%. The 9.9 percentage point drop since 2000 for Wisconsin was the largest nationwide by nearly three percentage points, and substantially more than the national drop of 3.1 percentage points (see Figure 1).

 

The 55.6% decline in the rate of union membership in Wisconsin over the same time period ranked second-highest in the country, behind only South Carolina

Inflation Continues to Rage

This is economy killing. If it goes on long enough, it is nation killing.

Consumer prices surged more than expected over the past 12 months, indicating a worsening outlook for inflation and cementing the likelihood of substantial interest rate hikes this year.

 

The consumer price index for January, which measures the costs of dozens of everyday consumer goods, rose 7.5% compared with a year ago, the Labor Department reported Thursday.

That compared with Dow Jones estimates of 7.2% for the closely watched inflation gauge. It was the highest reading since February 1982.

America the beautiful

Here is my full column that ran in the Washington County Daily News earlier this week.

“Twenty years from now you will be more disappointed by the things you didn’t do than the ones you did. So throw off the bowlines. Sail away from safe harbor.” That quote is often attributed to Mark Twain, who did not say it, but they are wise words, nonetheless.

 

This week marks six months since my wife and I threw off our boat’s bowlines as we spend a year circumnavigating the eastern half of the nation on the Great Loop. As I sit in the Keys at the southernmost point on our journey having sailed almost 2,800 miles from our beautiful home port of Port Washington, I’ve learned a few things about our country. Perhaps it is more accurate to say that I relearned them.

 

America’s waterways are truly bursting with crosscurrents of people. Rich people in palatial homes, vagabond river rats, heavy industry workers, agricultural workers, fishermen, pleasure boaters, restaurateurs, hoteliers, vacationers, farmers, retirees, immigrants, middle-class folks, and just about every other kind of person finds their way to the water to intermingle.

 

By and large, Americans are nice. They are helpful, generous, welcoming, and kind. They are open with advice and love to share their experiences. Perhaps these wonderful attributes get lost in the news or in the fires of social media exchanges, but they are as real and true as ever. Americans are a good people. Americans are extremely reasonable and full of common sense. On the COVID pandemic, for example, the vast majority of the people we met were taking a sensible approach. If they were in a high-risk group, they were more cautious. Most people were content to let people make their own choices without judgment or concern. We met one couple who were fellow digital nomads who said, “We heard about the pandemic, but chose not to participate.” To each their own. That “live and let live” attitude is prevalent throughout America.

 

Americans are incredibly hardworking and entrepreneurial. We met one man in Mississippi who used to work in corporate America. After finding out that he had severe hypertension in his mid-40s, he quit and started his own business delivering food to marinas. Through word of mouth, he has expended to a wide list of concierge services. He was working 80 hours a week, but healthy, happy, and hiring. America is still the land of opportunity and new beginnings.

 

Americans are proud, and rightfully so. In almost every town from Chicago to Apalachicola, Fla., people are proud of their communities. Visiting the local history museums, seeing the murals, and speaking to locals opens up the full story of America. From rugged pioneers hacking out a home in the wilderness to industrialists creating an industry to the generations of people toiling to make their community better for the next generation, every town has a rich history and a proud heritage. Sure, I love spending time in New York and Chicago too, but give me a Paducah or Everglades City any day.

 

It is also clear that America’s politicians are completely out of touch with actual Americans. In speaking with hundreds of Americans from all walks of life in dozens of towns of all sizes, people are not talking about the same things as the politicians. People are not talking about racial strife. Most Americans get along just fine with their neighbors irrespective of race or ethnicity. People are not talking about Ukraine. They are talking about COVID a bit but have mostly moved on. Nobody cares about global warming, but they care about keeping their environment clean.

 

What Americans do care about are the things that they have always cared about — the things that are impacting their daily lives. The most common concern on people’s mind were rising prices. One couple we met watched as the price of diesel went up between the time they started pumping and when they finished. They had to pay the higher price. The prices for groceries, fuel, cars, and food are on everyone’s minds.

 

Americans are talking about their kids in schools and how hard the lockdowns, virtual learning, and masking has been on their children and their families. They are talking about crime, but mostly in the cities. Small-town Americans still respect and support their police. Americans are talking about government waste and fraud. They know about Washington spending trillions of dollars to help, but very little of it has actually made a difference in their lives.

 

Americans are worried that their culture is being taken away from them. They are joking about wokeism because it is so foreign to their experience, but worried that the cultural elites will force it on them. Americans are fiercely proud of being Americans, but anxious that they aren’t allowed to be proud anymore.

 

When Donald Trump ran for office with his “Make America Great Again” slogan, I didn’t get it then. I get it now even if I don’t support him running again. He was tuned into something that the rest of our politicians were not. Americans feel like their political representatives are too far removed from the real issues that impact Americans and they are absolutely sick and tired of it. Unless our elected representatives figure out how to reconnect with the people they serve, we will continue to whipsaw between extremes as Americans cry out for someone to listen to them.

High inflation lights fuse of government taxing and spending time bomb

Here is my full column that ran earlier in the week in the Washington County Daily News 

The U.S. Consumer Price Index, the key measurement for inflation, jumped to 7% in December marking the highest inflation rate we have seen since “Star Trek II: The Wrath of Khan” was released in theaters. It is only going to get worse. There is no sign of inflation abating any time soon and it has lit a fuse that will ignite massive increase in taxes and spending.

 

The CPI measures a basket of goods that is designed to be representative of an average American’s expenses. While overall expenses have gone up 7%, the distribution is even more troubling. According to the Bureau of Labor Statistics, the big drivers are protein foods (12.5%), gasoline (49.6%), fuel oil (41%), natural gas (24.1%), used cars and trucks (37.3%), and new vehicles (11.8%). The extreme price increases in the energy sector are drastically increasing transportation costs and will further ripple through the economy as businesses try to get goods to consumers.

 

Even worse, the Producer Price Index, which measures the change in prices from the perspective of the sellers, rose faster than CPI at 9.7% in 2021. That is the largest calendar year increase since this metric was first calculated in 2010. With the PPI higher than the CPI, it indicates that businesses are absorbing some of the inflation and not passing all of it along to consumers… yet. As businesses realign their consumer prices with their costs, we can expect to see the CPI continue to rise.

 

All of this has a direct impact on every Wisconsinite as the costs of groceries, fuel, home-heating, and other essentials continue to increase. Buckle up, because it is going to get worse as those inflation numbers hit government budgets.

 

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 only way to snuff out the fuse is to elect people who are willing to say “no” to increasing spending even in the face of inflation. Wisconsin’s private-sector workers are suffering from President Biden’s inflation. Government employees should not be immunized from inflation at the expense of their private- sector neighbors. It starts right now with the primaries for local government elections and the general election in April. It continues through the November elections. The people we elect in these next two general elections will be the ones making budget decisions at the end of the year.

 

Choose wisely.

Intel Chooses Ohio Instead of Wisconsin for Chip Plant

That’s a shame.

MOUNT PLEASANT — What is billed as the largest microchip factory in the world almost came to Racine County. As with a Foxconn electric-vehicle factory before it, it’s going to Ohio instead.

Intel confirmed Friday plans to spend $20 billion to build two factories northeast of Columbus, that state’s capital, that is to employ 3,000 and to create at least 10,000 auxiliary jobs.

“Ultimately, we hope to establish the largest semiconductor manufacturing site on the planet,” Intel CEO Pat Gelsinger and Senior Vice President Keyvan Esfarjani wrote in a December letter, reviewed by USA Today, to Republican Ohio Gov. Mike DeWine.

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

Ouch

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

Yikes.

 

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.

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