Ross Rants. Lingering Taste. Thoughtful Taste. Clever Taste.

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Ross Rants:

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Inflation continues to climb. It is likely now running at a month over month of 12%. The pronouncements from the Fed of 50 BP hikes is still too little too late. They need to be raising by 75 for two or three months in a row to really break the cycle, or this will end badly. We are now in the classic wage price spiral where workers are going backwards and demand more, and prices then follow, bringing more wage demands and more unionization of Starbucks. With 11 million unfilled jobs,, workers have the upper hand. As I drive around the Hamptons, every business along the main road here has a help wanted sign, no matter what business they are in. I have no idea how the restaurants will find help nor the landscapers and pool people. There is no affordable housing here, so some employers buy a house to give staff a place to live. Now China has continuing shutdowns, and that will further impact supply. All of this just portends much more inflation.

Here is a quick summary of how we got here. The White House, supported by models from Moody's Analytics that Biden liked to refer to, decided on a policy of jobs maximization at the expense of all else. The Moody models showed that by pumping huge amounts of cash into the economy, combined with a historical loose Fed policy and zero rates, then the economy would get boosted because zero rates would invigorate investment, and that would then grow demand, which would grow jobs. That was the official policy underpinning which was provided to me privately by Moody's. They were right, but they decided to ignore the rest of the Moody model which showed that by mid-2022, inflation would increase and possibly lead to a later economic slowdown. I do not have the model, but I do have the background from the creator of the models. Powell was up for renomination, so the White House diddled him for months to get him to go along, and to repeat after me-inflation is transitory. You may have noted that two days after Powell was finally renominated he said, let's put the word transitory to bed. So the Fed kept rates at zero far too long, and the Dems passed the Rescue Act for $1.9 trillion in March 2021. The combination was disastrous for the economy, and for lower and middle income workers and for retirees. The jobs would have come back regardless, and much faster if they had all followed Florida's and Sweden's lead, stay open for business, keep the schools open. Instead the teachers unions forced school closures keeping millions of women from returning to work, and destroying the lives of millions of kids. Congress then made it easy to stay home with all the free cash and excess unemployment, food stamps, rent subsidies, no eviction, no student loan payments, etc. The Dems and Moody never seemed to realize if you pay people to stay home and close the schools, there will be a massive worker shortage. If you have zero rates and you pump the stock and other assets markets with excess low cost capital, and vast liquidity, you get historic moves up in asset values ( one of their key goals), but this leads to workers feeling they have all this free cash and subsidies, and a new wealth effect from asset values, so they do not have to work.

Result, we had historic high savings rates, historic levels of available credit, initially low prices, and lots of free time due to shut downs. So lots of people renovated their homes or, went out and bought a new house away from cities. They needed a place to put all those savings so they invested in the stock market that now had zero commissions and lots of hype on the internet with Gamestop and AMC. It was game on. Huge paper increases in net worth made more amateur investors think they were geniuses. Lots of free cash to pay off credit cards and debt, and historic cheap mortgages, and nothing to do during shutdowns other than play the market, or buy things online. I kept telling the head of Moody, this can't continue or we will have rampant inflation, but his response was, but we need to get the jobs back quickly, and we need to help workers on layoff, and we need to deal with climate change, so we need all this spending. When I said, but it will blow up in another year, he said, but we need this today. They thought they could pump the economy and jobs into the midterms. It made no difference what I said, Moody and the White House were committed to this policy, and damn the torpedoes. To further their policy they passed the $1.9 trillion Rescue Plan and off went inflation. So we had a massive shrinkage of supply due to shutdowns, and massive increase in demand due to all the free money. There was no way to not have massive increases in inflation.

And in the face of all this, the Dems wanted to push through another $5.5 Trillion of wasteful spending called BBB, and they are trying to shut down oil, and gas production. Now Biden just had the administration put a new set of heavy environmental regs in place for all projects including any new pipelines, or even for windmills. Guess what that will do to adding costs and delays on top of requiring all new projects have to be union and made with US produced products. Costs will rise 20% or more. Forget the benefits of the infrastructure bill. It will take years, and there will be fewer as money runs out. If it had not been for Manchin, the US would now be in a truly historic inflation cycle that would have been far worse than what we are now experiencing. There could not have been a worse set of policy guidelines if they tried. Now Moody's is privately forecasting that there is a possibility of a recession in late 2022, or in 23. Reality is the jobs would have returned if they had done very little as the pandemic subsided. The demand would have been much less, and the reactivation of supply lines would have been far more orderly, with much less demand comes much less shortage of labor. The stock market would not have risen as much, nor would house prices, but as we now see, what goes up in excess, comes down eventually, and usually very badly, and all of a sudden. Home prices will come down a little, and stock prices will decline another 10%-15%, before this cycle is over. Keep in mind what I said recently. Even when Lehman crashed, AIG and Fannie and Freddie collapsed all at once, the stock market did not seem to understand what was happening, and stayed up until Congress turned down TARP. Then it crashed by 40%. Don't get lulled into passivity just because the stock and home price markets are still excessive. The worst is yet to come. Stay risk off for now. The market is likely to drop to somewhere between 3750-4000 this next period. It will be volatile. Musk will succeed on Twitter.

I do not know anyone in FL who is against the education bill, nor what DeSantis did to Disney . Truth is, the special district has been an issue for years, and only Disney had it. Neither Universal, across the road, nor Sea World, had it. They will figure out how to cover the shifted costs and the bonds. For Disney and other corporations to demand the FL legislature go against the voters wishes, is arrogance of the ultimate. Corporate CEO's do not run FL, the voters do. For Disney to sue, with no standing that I can figure out, is shear idiocy. Disney could find itself losing patrons and losing other customers of their other products. Their stock has tanked worse than almost any other, yet they continue to dig the hole. They may get several shareholder suits soon. Of course, there is Jeff Sonnenfeld, the associate dean at Yale, sending me emails trying to attack DeSantis and justifying corporations sounding off on whatever social issue he thinks they should. Jeff is the one behind a lot of this corporate wokeness. He pushes CEO's to speak out on all of these left issues he wants pushed. It's Yale, so what do you expect. As DeSantis does more to win the support of voters, expect the MSM to step up attacks on him as they try to destroy him being a potential presidential candidate.

It is unclear right now how the next three weeks of the war will unfold, but the Russians still can't take the steel plant with their elite troops, so it suggests they will not do well in other places. Putin may say he is going to take over all of southern Ukraine, but my guess is he loses another 20-30,000 dead and another 60,000 wounded or captured, and over time the Ukrainians drive them out. It all depends on if Biden will send the heavy weapons to sustain an all out offensive by Ukraine. How the west can stand by and watch Russia commit genocide, and not send in NATO troops to at least cover western Ukraine with anti-air and defenders on the ground is beyond me. It shows the total lack of morality to allow a repeat of WWII genocide. We have troops defend Afghanistan and Iraq, but not Europe??? Biden needs to just send everything now and not piecemeal. The German chancellor is just encouraging Putin with his refusal to send weapons. How much of the world has refused to take a stand against Russia is just going to encourage Xi to attack Taiwan. India is a disgrace as is Brazil and several other countries. There is no morality. We are watching now the same scenario that allowed Hitler to rise to power, and the world never learned, especially the Germans.

Taking Back America is already underway-it will take a while.

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Obama not only left a bad taste as he ran for president, the aftertaste continues to linger:

Barack Obama’s Disinformation Campaign

To adapt the adage of media maven Marshall McLuhan: This is the wrong message and the wrong messenger.

Can a campaign against disinformation itself be disinformation? That is the metaphysical question raised by President Obama’s latest crusade. Mr. Obama has been making the campus rounds, appearing at the University of Chicago two  weeks ago and at Stanford today to tell a tale of woe about the spread of fake news. To adapt the adage of media maven Marshall McLuhan: This is the wrong message and the wrong messenger.

Mr. Obama was brought back to the South Side of Chicago as keynote speaker at a conference organized by The Atlantic called, “Disinformation and the Erosion of Democracy.” There, Mr. Obama opined: “It’s very difficult to get out of the reality that is constructed for us.” He should know. It’s an apt description of what Mr. Obama and the Democratic press have built. Forget the metaverse. This is an alternative reality.

Let’s start with the essay penned by the onetime media columnist for the New York Times, Jim Rutenberg, in 2016, when he mused that the Gray Lady should shy from objectivity — never mind that it was more honored in the breach — and toward what he called an “oppositional stance.” As Mr. Rutenberg put it, “balance has been on vacation” since Donald Trump declared his presidential candidacy. 

Remarkably, this notion of balance going on holiday when it came to Mr. Trump was seconded by Mr. Rutenberg’s boss, executive editor Dean Baquet. In an interview, Mr. Baquet opined that Mr. Rutenberg “nailed” the paper’s thinking on the subject of Mr. Trump. Mr. Banquet went on to note that in respect of playing it down the middle, “Trump has ended that struggle.” 

Who can forget the sturm und drang of Russiagate, the false claim that Mr. Trump’s campaign colluded with President Putin’s Russia, a story garlanded by nothing less than a 2018 Pulitzer Prize, shared by the Gray Lady and the Washington Post? This is all of a piece with Twitter shutting down the story of Hunter Biden’s laptop and banning the New York Post from its servers. A year later, that story is still not fake.

It is not just the ink-stained wretches who have made their peace with disinformation when it obscures what they view as the wrong things and highlights the right ones. Hillary Clinton’s campaign is now under scrutiny by Special Counsel John Durham for its role in generating the “Steele dossier” and spurring the Federal Bureau of Investigation’s surveillance of President Trump’s political operation. 

The notion that disinformation is a virus that threatens the health of the Republic appears to be overblown. A new study out of the Massachusetts Institute of Technology’s Sloan School of Management found that “very few people believe fake news” and that “the average citizen is well informed about big stories.” This hardly sounds like a natural crisis, and looks awfully like a manufactured one.    

At Stanford, Mr. Obama called himself “pretty close to a free speech absolutist.” We applaud the voicing of that commitment, but his concern that we are “losing the ability to distinguish between fact, opinion, and wholesale fiction” is a little bit rich. If that ability is atrophying, the blame belongs not to the bogeyman of “disinformation,” but to a press and politics that has said goodbye to the old standards.                        

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Should be a no brainer:

The Consequences Of Government Picking Winners And Losers With Taxpayers Dollars 

By Salena Zito

ALTOONA, Pa. — When you pull up to Reighard’s Gas and Oil station at 3205 Sixth Avenue in this Blair County city, you are immediately greeted by attendants who don’t just pump your gas for you, but also cheerfully wash your front and back windows.

Leave them a tip for their service and the reaction you get is part surprise, part gratitude; spend some time watching people come and go, and it is clear everyone who works here has a deep sense of pride in their efforts.

Welcome to the oldest gasoline filling station in continuous operation in the United States.

“We have been providing gasoline to customers since 1909,” says Russell “Rusty” Brown, 60, the station’s general manager. “We may not have been the first — there are a couple of stations that could claim that, but they are no longer in business.”

 

“We still are here,” Mr. Brown said with a broad smile.

Made of cinder blocks — a byproduct of the steam engine era — and located along a rail line, there is nothing remarkable about the building; however, the history and longevity of this small business, off the beaten path of any major highway, is rich in significance.

Mr. Brown — who has worked at Reighard’s for over 27 years — explained that the station originally “was a blacksmith shop run by a man named George Hinkle who also sold kerosene, lamp oil, things of that nature.” By 1909 Hinkle started seeing more and more horseless carriages clattering down the pike and, being an enterprising fellow, he started selling gasoline.

 

In the early days of the American filling station, drivers bought their gas from blacksmiths like Hinkle, first in open containers, then with free standing pumps. “He bought his petroleum products from a guy named Sam Reighard, and eventually Hinkle sold out to Sam’s son George. It remained in the family in this same spot until 1978, when Martin Oil Company purchased us,” Mr. Brown said.

Often attached to a hardware store, pharmacy or even a diner, the first American gas stations grew and changed and flourished because of the free market — not because the government subsidized and incentivized them.

Which is exactly what the current administration did in the bipartisan infrastructure bill, which allots $7.5 billion to build out a nationwide network of 500,000 electric vehicle chargers.

As one long-time congressional staffer said, “The government wants to do whatever it can to get the consumer to get an electric vehicle and have you stop using fossil fuels; that includes pushing the building of EV charging networks.”

 

It’s something all of us are footing the bill for in our taxes.

Mr. Brown says as far has he knows the government didn’t have taxpayers pay for the first filling stations that sprouted up across the country, as innovators continued to make newer, faster and better cars: “No one gave those small businessmen and women money to build these places — that came out of their own hard work and their own pocketbook.”

Today, government is in the business of picking sides; it is clear they are rooting for the demise of gas stations and want everyone to use EVs.

“I mean if the government wants to buy me one, and my wife, sure — I’ll drive an EV,” Mr. Brown said, “but who has $80,000 in this economy to buy a new car, let alone two?”

He thinks it is wrong-headed to make the taxpayers pay for the EV charging stations: “Let the market decide, let people decide on their own, but goodness, don’t make us pay for it out of our pockets,” he said of the plan to accelerate deployment of a national electric vehicle charging network with tax dollars.

For its part, Martin Oil Company, which sells heating oil as well as gasoline at 11 general stores across central Pennsylvania, said that it has formed a committee to research adding EV charging stations at their properties, so they can “respond to all of the transportation energy needs of our customers.”

It is clear that Mr. Brown loves his job — most customers seem to know him or the other attendants by first name. After all, they don’t just pump gas and clean your windows here at Reighard’s, but also fill tires and check the engine fluids, including the oil, and change them if needed.

They also accommodate a rather large number of tourists eager to visit the longest continuously operating filing station in the country.

“We have a lot of tourists come through here, from as far away Beijing, Germany, Switzerland and France; they come here and want to take pictures, but also talk to us about the place, the town and what it is like working here,” Mr. Brown said.

“They always come in and leave amazed that we are still doing what we were doing for well over 100 years. Remember, the American road trip is legendary — not just for those of us who live here, but in other countries — and they see us as a connection to that,” he said.

One hundred years ago there were around 200,000 gas stations; that number dropped to 111,100 by 2016.

Mr. Brown said he sees daily the impact out-of-control gas prices and inflation are having on his regular customers: “Traditionally they fill up once a week; now they are topping off a couple of times a week, I think it just feels less painful for them to do it incrementally rather than seeing that big price tag at the end of the week.”

While the pain at the pump here is real, Mr. Brown said his customers try to take it in stride: “What are you going to do? People here in Altoona are good people; they try to find a way to make it not hurt so bad.”

Click here for the full story.

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From my thoughtful friend and fellow memo reader:

It’s 2050.  What Will You Tell Your Grandchildren About Ukraine

By Sherwin Pomerantz

 

In September 1946, Ernst Janning, one of the German defendants in the post-World War II Nuremburg trials, requested permission to address the court.  The final days of the hearings were almost at an end and Chief Judge Dan Haywood gave Janning permission to address the court.

His testimony is worthy of review as the world sits by watching the continued raping and pillaging of some of the cities of the sovereign nation of Ukraine under the direction of the Monster of Moscow. 

Jannng said: “I am aware. I am aware! My counsel would have you believe we were not aware of the concentration camps. Not aware. Where were we? Where were we when Hitler began shrieking his hate in Reichstag? Where were we when our neighbors were being dragged out in the middle of the night to Dachau? Where were we when every village in Germany has a railroad terminal where cattle cars were filled with children being carried off to their extermination? Where were we when they cried out in the night to us? Were we deaf? Dumb?! Blind?”

These are questions that we in the free world need to consider today, lest they be asked of us as well by our grandchildren 30 years from now.  They will read how a powerful despot intent on restoring his warped sense of the glory that was Russia, decided to invade a neighbor which had not provoked him.  They will read how this lunatic levelled city after city, destroying everything in the path of his military, and killing tens of thousands of innocent civilians while forcing more than four million others to become refugees.  In addition, they will ask us, “What did you do to stop this from happening?  Did you simply feel bad about it all or did you act?”    

Janning continued:  “My counsel says we were not aware of the extermination of the millions. He would give you the excuse: We were only aware of the extermination of the hundreds. Does that make us any the less guilty? Maybe we didn't know the details. But if we didn't know, it was because we didn't want to know.”

This time we will not be able to see we did not know the details.  Because this time it is 2022, and we are watching the war in real time on our smart phones.  We are watching civilians shot dead in front of their homes as they walk to the super market to buy milk.  We are watching buildings used as shelters with the word “CHILDREN” printed in big Cyrillic letters in the parking lot, bombed and levelled, killing so many who took refuge inside.  Maybe we do not know all the details but if we do not know, it is because we do not want to know.

Then Janning concluded saying he was “worse than any of them because he knew what they were, and he went along with them. Ernst Janning: Who made his life excrement, because he walked with them.”

So, you think, we will be excused because, unlike Janning, we were not part of it.  We did not participate, we were not there, we are guiltless.  Do we really believe that?  Do we really believe that what is happening “over there” does not affect us and that there is nothing we can do about it?  Have we completely forgotten the promise of “never again?”

How do we, who made that promise, force ourselves to act, to do something meaningful, to take the promise seriously?

At a minimum, every thinking citizen should undertake the following actions:

 

·         As citizens living in a democratic society we have an obligation to urge our respective governments to take an active position condemning the unwarranted invasion of Ukraine by Russia regardless of the political consequences that may come to our countries as a result. There is no excuse not to do so.  History has taught us, of all people, that keeping a low profile does not protect us.

·         As members of the human race who believe in the fundamental right of every human being to live in peace and tranquility we, individually, should do whatever we can financially, morally and personally as volunteers to assist both those Ukrainians living under threat as well as those who have fled for their own safety.

Finally, we need to internalize the fact that this is not Russia’s first seizure of territory (remember Crimea in 2014), nor will it be their last…and that time is not on our side.  Putin asserted then that he believes Russia has a right and an obligation to defend Russian speakers in any country where they might be threatened (without defining what “threatened” means).

In an article in The Atlantic in March, 2014 Marko Mihkelson, who was then chair of the Estonian parliament's foreign policy committee, tweeted, "If (the) West does not wake up to Russian aggressive foreign policy, tomorrow will be too late."  Sadly, that may already be the case.  We are now paying for our lack of attention to the signs and signals sent out loudly eight years ago.

 

This time let us not be embarrassed by the questions our descendants will ask us 30 years from now.  Rather let us hope that the leadership of the western world, weak as it seems to be, will make it possible for us to answer them with pride and not with shame.  After all, this time we will not be able to say we did not know.

Sherwin Pomerantz has lived in Israel for 38 years, is CEO of Atid EDI Ltd., a Jerusalem-based international business development consultancy, former National President of the Association of Americans & Canadians in Israel, Immediate Past Chair of the Pardes Institute of Jewish Studies and President, of Beit Knesset Ohel Nechama in Jerusalem.

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CLEVER:

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