economics

More inflationary signs

In yet another sign that inflation is climbing, the latest numbers from the Producer Price Index (PPI) show that the cost of production has increased 6.2% from last year.

The Bureau of Labor Statistics’ Produce Price Index is a measure of what it costs to produce products. It is a measure of what it costs a business to create something, as opposed to the CPI, which is a measure of what it costs to consume something.

Of course, it is more a measure of the value of the dollar than it is a measure of cost. The dollar is worth 6.2% less than it was last year. This means that the dollar will lose half of its purchasing power each 11 years.

By Divemedic, ago

Wait for the appeal

The courts have finally put a stop to the government forcing landlords to absorb the cost of their unconstitutional lockdowns.

That is good, because the Consumer Financial Protection Bureau was also getting involved, claiming that collecting the debt from tenants who shafted their landlord was also illegal.

According to the CFPB’s analysis and other data:

Millions of families are at risk of being evicted: In December 2020 about 18 percent of renter households were behind on their rent, which means nearly 9 million households at risk of eviction. In a typical year, there are about 900,000 evictions nationwide. Over 27 percent of households with annual income under $25,000 were behind on their rent.
Stopping evictions saves lives: Research shows that COVID-19 infection rates and mortality rates were higher when eviction moratoria were removed. The CFPB’s rule will help ensure that more renters are able to take advantage of their protections and avoid eviction.
Evictions increase racial inequality: Black and Hispanic households are more than twice as likely to be tenants than white households, and they are also twice as likely to be behind on rental payments as of December 2020, according to a March CFPB report . Evictions impose substantial costs on individuals, families, and children, and having an eviction on your record can make it much harder to find a new rental property. Even an eviction filing can make it impossible for a family to locate new housing.

You see what the real reason is? Blacks are refusing to pay rent at a higher rate than whites, so evictions are racist.

The appeal will come in 3…2…1…

By Divemedic, ago

Killing the rental market

There is a nationwide eviction moratorium. There is a push to eliminate security deposits. It sounds great, but now the landlord has to file a claim for any damages done to the property by the tenant. This increases costs and risk to the landlord.

Now the newest thing is laws that prohibit credit checks, using a prospective tenant’s rental and credit history in making application decisions, and makes the risks of being a landlord too great for most small businesses.

I know that my wife and I have decided that if this sort of thing comes to pass, the amount that we would have to increase rent to compensate for the added risk would price our rental out of the market. This means that we would no longer be making enough money to make up for the higher risk that this would entail. For that reason, we would likely not renew tenants’ leases, clean the properties up, and then sell them. I don’t think that we would be alone in that.

It’s like the left is deliberately destroying the country.

By Divemedic, ago

CDC’s job is to destroy businesses

The cruise industry has been stuck in limbo for the past year. They have been waiting for CDC guidance on exactly how, and with what procedures, cruise operators will be permitted to sail again. All they have gotten for months is a constant stream of changing rules, empty promises, and conflicting regulations.

If you can’t beat them, move elsewhere.

Cruise lines all over the world are finding ways to begin sailing again. The biggest way is for ships to either “cruise to nowhere,” in other words leave, sail around, and then return to the same port, or they set sail from a port, hit several ports within the same nation, then return.

Already, cruises have popped up in Singapore and will begin in May in Israel, countries where virus rates are low and vaccine rates are high. The UK recently determined ocean voyages for domestic passengers could resume in May, leading lines such as P&O, Cunard, Fred. Olsen, MSC, Princess and Viking to announce domestic, “round Britain” cruises exclusively for UK residents.

The United States cannot allow this, because of a pair of little known laws that were passed over a century ago in order to guarantee the profits of the robber barons and their railroad empires: The Passenger vehicle Service Act and the Jones Act.

The Passenger Vehicle Service Act states that passengers traveling between U.S. ports must do so on ships that were built in the U.S., are owned by U.S. companies (ensuring that they pay US taxes), and that adhere to the strict U.S. Coast Guard regulations to be registered (flagged) in the United States. The Jones Act prohibits the transport of goods between two U.S. ports by ships that are not owned, built and flagged in the U.S.

What this means is that ships can’t cruise from one port to the other within the US, and the CDC is no longer allowing ships to go from any US port to another country, because COVID.

Since they cannot cruise out of ports in the US, cruise lines are taking their show on the road. Crystal Cruises is sailing out of the Bahamas, Celebrity is sailing at least one ship out of St Maarten, and Royal Caribbean will soon be sailing out of the Bahamas. Plans are already in the works to homeport more than one cruise line out of Cozumel.

The longer the CDC delays on its industry guidance, the more this trend will continue. As long as cruising remains on-pause within the United States due to the CDC’s long-standing No-Sail order, it is clear that more and more lines will go abroad to restart operations. And that will hurt U.S. homeports and American workers.

The United States is increasingly making themselves irrelevant in the cruise industry. Since 9/11, the primary focus for the cruise industry has been American cruise ports that do not require domestic flights for a majority of passengers. These homeports and their related itineraries haven’t measurably changed in two decades.

All of that is changing because of Government action, or rather, inaction. Until the CDC begins working more proactively with the industry, providing technical guidance on restart that still has yet to be delivered to cruise lines nearly five months after they were promised, things will not improve.

The lines are continuing to seek dialogue with the government, to no avail. Cruise lines are also subject to extensive regulations from the CDC that do not apply to other businesses or forms of travel, including hotel, resort or airline industries. Many of the protocols put in place by the cruise lines, like a vaccination mandate for both guests and workers, as well as robust and mandatory PCR testing, are not required for other forms of travel or high risk industries.

By Divemedic, ago

My opinion on digital currency

When you own a digital currency, what do you own? You own a digital certificate, no different than a piece of paper. There is nothing preventing there from being more made. Yes, I know that the largest of the digital currencies- Bitcoin- has a limit of 21 million units.

With that being said, here are the reasons why digital currency is a bad idea:

  • It has no intrinsic value. You can’t eat it, wear it, or heat your house with it. Unlike gold — which at least feels nice and looks shiny on your spouse’s ring finger — you can’t even see Bitcoin.
  • It is not a productive asset. It’s not a factory that produces an item. It’s not a field that produces cucumbers. It’s not a firm that offers a service. It contributes nothing to society.
  • It has zero underlying value. None. It’s not backed by land or commodities or — as with national currencies like USD or GBP — the threat of violence
  • It has minimal utility. Because the price fluctuates so wildly (what healthy currency doubles in a month?), it’s virtually ineffective as a safe representation of value or means of trade.
  • Its value is solely derived from the trust that the price will continue to rise indefinitely. That there will always be new investors to buy out the old ones.

This makes it no better than owning paper gold. It’s mathematically impossible for Bitcoin to grow forever, this can only have one final outcome: A Black Swan event causes its demise as an investment. Perhaps a superior cryptocurrency makes Bitcoin as irrelevant as the Model T versus a Tesla. Perhaps nations or groups of nations make a concerted effort to destroy Bitcoin, or more likely, Bitcoin owners. Or maybe Bitcoin simply levels out when it reaches max coinage, shedding its identity as an investment and becoming a stable trust-based currency. In doing so, it will drive away all the exuberant speculators who are currently propping up its inflated price. No matter how it happens, at some point, millions of Bitcoin investors are going to lose billions of dollars.

By Divemedic, ago

The real minimum wage is zero.

The picture below is of the new self-service checkout registers at my local Publix supermarket. They went online yesterday. There are six of these registers, staffed by one employee. For those of you unfamiliar with Publix, this is huge. Publix is known for service. Its employees are not permitted to accept tips. This is obviously intended to cut costs at the expense of reduced customer service.

This is what happens when the voters approve a near doubling of the minimum wage. At some point, it becomes cheaper to buy automation than it does to pay for more labor. The real minimum wage is zero. How many jobs will this eliminate? How many employee hours were eliminated?

Congratulations, you just voted yourself out of a job.

By Divemedic, ago

Let the games begin

My tax records have all been sent to the accountant. Let me say that I am against the stimulus checks. With that being said, no one is listening, so my goal is to maximize my chances of receiving whatever they are going to hand out. So that is the instruction that my accountant has been given:

Find a way for us to legally get as much of that money as we can while limiting our tax exposure. If that means that I have to claim all of the income from our business ventures and investments, and then we file separately so at least one of us gets the money, then so be it.

So the accountant tells me that she will run different scenarios to see which way and what deductions will result in the best financial situation. That is why we pay her, after all.

By Divemedic, ago

You get what you pay for

Democrats’ latest tax borrow print and spend idea is to pay people to have children. They are going to send out checks to the parents of every child (as long as the parent makes below a certain amount of money) in the amount of $3600 a year PER KID.

Let’s use my home state as an example: Florida’s minimum wage is $8.65 an hour. That means that a person making minimum wage earns $17,992 a year. SNAP is limited to those who earn no more than 130% of the Federal poverty line. That means that a family of three is considered to be SNAP eligible if they are earning about $26,000 a year or less.

Let’s use that as our example: A single mother of two, ages 10 and 6, who is earning minimum wage. She would receive $500 a month in SNAP benefits. That same woman would get $6,600 a year in Earned Income Credit. There are other aid programs out there that will get her more benefits, but let’s concentrate just on this for now.

Adding up all of her benefits, a woman making minimum wage has an annual income of nearly $45,000 a year, and the only taxes she pays is Social Security and Medicare at $1,350 for the year. Her effective income when adjusting for the taxes not being paid on her handouts? She is making the equivalent of $65,000 a year.

The most lucrative job to have is making more ‘poor’ people, who will grow up and vote for more handouts.

By Divemedic, ago