Category Archives: Business

How inflation taxes cash

“If you take cash, on the other hand, and you think about it from a purchasing power standpoint, if you own cash in the world today, you know your central bank has an avowed goal of depreciating its value 2% per year,” Jones said in May. “So you have, in essence, a wasting asset in your hands.”

Source: The ballooning money supply may be the key to unlocking inflation in the U.S.

Conversely, inflation rewards those who hold debt – because debts will be paid off in future devalued dollars.

Of course, there is a lot of hand waving going on that “this time its different”. Seems like we’ve heard that phrase before … the current theory is that if no one spends much money, then there is little demand to drive inflation.

That may be true in the short term – there are some items I am interested in buying but they remain in short supply due to supply chain disruptions, so I’m am not buying. Also, this was the year I had planned on  – at long last – learning to travel. But all trips were canceled for the year and travel does not look to be fun or convenient for at least another 6-9 months. When supply chains restart and refill and activities like travel and going to restaurants become possible again, will that demand suddenly ramp up?

No: Should workers engage in political activism on the job?

There are news stories, at least in my state, of workers protesting or striking against their employer for not being permitted to wear political advocacy buttons or t-shirts or hats on the job. This applies to both customer facing and non-customer facing workers, all though most such workers are in customer facing positions.

At first glance, these activities seem innocuous. But there are numerous problems when companies begin staking out political positions.

First, and most obvious, is that many customers may disagree with the political positions – even to the point of being offended and taking their business elsewhere.

Second, not all employees may agree with the political positions – and the advocacy of politics in the work place may lead to not merely uncomfortable positions for those who may hold a minority position but may lead to a hostile work environment.

Third, is appropriate to use the brand name of your employer to promote your own political advocacy? How does this influence the buyer’s perception of the company’s brand? Note – some companies actively engage in “cause marketing” – think of outdoor equipment companies that promote environmental initiatives. Their goal is to specifically associate their brand with environmentalism. This is a managed process intended to deliver benefits to the brand. But consider if the employees decided, while on the job, to promote an initiative to develop a vacant plot of land – because it would increase the value of the employee’s homes in that neighborhood. This create a peculiar association with a brand associated with environmental stewardship and may damage the value of the brand.

Fourth, where do we draw a line? Is some politics okay but other politics is not okay? Does the employer get to decide which politics are “approved” and which are not – thereby effectively giving an “in kind” donation to one political party or advocacy group?

Is politics okay by upper management who have the ability to influence the future work opportunities of employees who may agree or disagree?

Here is an example of an extreme situation. But it is a real situation that occurred at a business I once worked at: the general manager of our division and his wife were co-owners of a major league sports team.

The team wanted the government to build them a 90+% publicly funded sports palace, otherwise known as a luxury stadium. An initiative to increase taxes to pay for this stadium, whose primary beneficiary was the team owners (which were granted monopoly on the sport in the metro area), was on the ballot.

It was not a secret that the general manager – who ultimately had hiring, firing, promotion and pay authority over everyone in the group – co-owned the sports team. Everyone knew that.

The problem was the email messages the day before the election reminding us to vote on the important ballot initiative the next day, and including something to the effect of “you will know how to vote!”

Gee, any pressure on how we were supposed to vote? (HR got involved after the election and said this was wrong but besides being too late, it is unclear that there were any consequences for the general manager.)

The question then becomes – if we allow some politicking on the job, where and how do we draw a line?

Is it okay for some employees to engage in politicking on the job but not others?

Is it okay for some employees provided their political message is politically correct or politically popular or approved by some other authority? Who gets to decide?

The best course of action is that politics stays out of the work place. Pursue political activities on your own time.

Today’s fake news headline

Looks like nearly all news outlets went with this fake headline. Some even said the U.S. economy contracted 32 or 33% in Q2.

It did not.

They took the quarterly rate and pretended this would continue for 4 quarters – thus, the annualized loss would be 33% (rounded) if it continued but we already know it did not continue.

The quarterly drop was 9.5% (the NY Times got the story correct).

Some fake news reports compared the 33% annualized rate to a quarterly loss of 8.4% that occurred in late 2008, making the 33% look even worse. Right there the reporters should have realized their reporting error – but they did not.

The brain dead Oregonian made this completely untrue statement on the main page of their web site – it was a 9.5% drop, not a 33% drop in the quarter. The media doesn’t give a damn about accuracy.

Part of the problem is the NBER report and press release these news “stories” are mostly copied from did not make the Q2 quarterly number clear – and emphasized the annualized rate.

The annualized drop was slightly less than what had been forecast – and that would be good news, so shut up.

The result, of course, is excessive gloom and doom fake news headlines that did not accurately capture what just happened and what is happening now.

Some of the reports, such as the NY Times, did note that the massive drop was entirely self inflicted by public health policies.

Unlike past recessions, this one was a result of a conscious decision to suspend economic activity to slow the spread of the virus.

NPR, by comparison, completely mangled the story into nonsense:

Germany’s sharp drop in output [10.1% in the quarter] pales in comparison, however, to the  32.9% plunge [4 quarter analyzed rate]  in U.S. gross domestic product for the same period — the steepest quarterly downturn ever recorded for the American economy.

That interpretation by NPR is 100% pure idiocy on steroids. That is incredibly stupid reporting.

The good news – the -9.5% quarterly down turn is expected to be followed by a +13% increase in Q3. But shhh … don’t let anyone know that, okay? Wouldn’t want people to be hopeful – want them to be anxiety ridden and having panic attacks!

Interestingly, the lock downs, apparently, did not work – see the massive spread of viral outbreaks occurring in July. But at least they put 40 million out of work, closed schools, harmed student education, created significant mental health problems – and destroyed the economy, so there’s that. Guess we call it a success then?

Check the track record for those giving economic advice

Nobel economist Paul Krugman, Election night, 2016, writing in the NY Times:

Nobel economist Paul Krugman, July 28, 2020:

As Talib has observed, most economics prognosticators do okay for some number of years – mostly due to luck – and then reality hits. I used to enjoy reading Krugman’s columns but he increasingly went off the rails into politicized nutty land.

I agree with concerns over today’s stock market valuations, however a size-able part of this is the expectation of future inflation due to governments’ mammoth money printing required to accommodate their pandemic policies’ economic destruction.

My guess, though, as good or bad as any other, is that we are already seeing asset-price inflation due to the future devaluation of money caused by money printing. That’s why the stock market is up (and gold too). Owning assets that maintain their inherent value might be a good idea. Similarly, debt that will be paid off in future deflated dollars is a traditional good idea.

There are arguments that it is “different this time” – and the demand side might not be there to support inflation’s effects on prices. We will see!

CBS flags its own marketing material on Youtube as a copyright violation – heh!

When Youtube originally announced they would auto-detect music copyright violations, I noted that they could not tell the difference between a licensed use and an unlicensed use. CBS just managed to issue a take down notice on its own stars – hilarious – and shut down a much watched live stream run put on by CBS marketing.

A bot can’t tell when playback is approved or infringing if nobody tells it.

Source: CBS’s overzealous copyright bots hit Star Trek virtual Comic-Con panel | Ars Technica

One of my videos was flagged on Youtube for a music copyright violation that illustrate that Youtube’s much vaunted AI is a joke.

I put together an edited video of a U.S. Civil War era historical camp and battle re-enactment. I added a recording of Taps, performed by a US Army trumpet player, and posted on an official US Army web page, with unambiguous wording that the recording was in the public domain and could be used for any purpose.

And then two different recording companies, Sony being one of them, flagged my video has copyright infringement!

First, how could both of them claim copyright simultaneously? That right there illustrated their fraudulent claims.

Second, the music was written by a Civil War private and a General during the Civil War and before the enactment of copyright laws. The music itself is not copyrighted.

Third, the music was performed by the US Army and released in a public recording which they said was not copyrighted.

I had to file a complaint to Youtube and my video was eventually released.

It sure illustrated the absurdity of automated copyright strike systems.

Why does a GM web page feature a Tesla charging port?

Why does a GM web site page feature a Tesla and Tesla charging cable?

GM’s all-new modular platform and Ultium battery system will be the heartbeat of its all-electric future – making an electric vehicle available to everyone.

Source: National Engineers Week | General Motors

Here’s a screen shot from part of that General Motors page:

https://www.gm.com/masthead-story/engineers-electric-future.html

Here’s a shrunk image of a Tesla Model 3 charging port, from Motortrend and seen from the same angle.

http://st.motortrend.com/uploads/sites/5/2017/07/Tesla-Model-3-charge-port.jpg
Photo from Motortrend.com

Does this imply GM will be adopting the Tesla charge port on future EVs?

Not really: It’s a complete mystery why retail is dying

Well before the pandemic, I found myself visiting local stores only to find they are out of stock or do not actually carry the item I am looking for. I’ve been into big box retailers whose online web sites say they have the item in stock – only to find they did not really have the item in stock.

Ran in to that situation again today with a big box retailer. Web site said they have several different products relevant to what I was looking for – but no, not really. They did not have any of them in the store.

At this point, along with the hassles of shopping with some silly pandemic rules, I will be doing most of my shopping via online/mail order and mostly giving up on local retail.

Sorry local retailers. I really tried to support you – but this has happened on perhaps the majority of my store visits the past several months. With the pandemic rules in place now, it is not fun to waste my time this way. Hence, it’s online orders now.

There is no mystery why retail is dying.

You become passionate about what you do well

Public school programs have long advised students to pursue their passion. Mike Rowe – and others before him – have noted this is probably not good advice. Instead, pursue success. People tend to become passionate about what they are able to do successfully.

The key is to identify and opportunity and solve a problem that people need solving:

And finding opportunity in the job market is key, according to Rowe. He says many people he featured on “Dirty Jobs” were actually multimillionaires who achieved success by fulfilling a gap in the market rather doing what they were personally interested in.“

The truth is, [for] most passionate people on [‘Dirty Jobs’] anyway, [they] weren’t passionate about what they were doing when they started doing it,” Rowe says.“They simply…learned a skill that was in demand. Then they got hired applying that skill. Then they figured out how to get really, really good at it. And then they figured out how to love it.”

Source: Dirty Jobs’ Mike Rowe’s career advice: Follow opportunity, not passion