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Remember When Everyday People Had Too Much Money?
Remember when everyday Americans had too much money?
No? Me neither. And I can explain our shared amnesia.
We can't remember the halcyon days when most households were financially secure because those days never existed. Not during the pandemic fiscal splurge and not at any other point in the nation's (short) history either.
America is (easily) the richest nation the world has ever known. Despite that, average people don't have much. In fact, if you have anything at all, you're in the minorit
Cheer up folks! Think of the rising incomes for lawn service workers in the Hamptons or on Marco who are charging ever higher prices for “prime cut” scheduling! Private jet businesses! Jet copters! All rolling in money as those excess savings get run down!
“We’re Happy as Clams, by a sewer pipe!”
The NBER recently released a report on the PPP program titled: “The $800 Billion Paycheck Protection Program: Where Did the Money Go and Why Did it Go There?
This is the main takeaway from the abstract: “The Paycheck Protection Program (PPP) provided small businesses with roughly $800 billion dollars in uncollateralized, low-interest loans during the pandemic, almost all of which will be forgiven. With 93 percent of small businesses ultimately receiving one or more loans, the PPP nearly saturated its market in just two months. We estimate that the program cumulatively preserved between 2 and 3 million job-years of employment over 14 months at a cost of $170K to $257K per job-year retained. These estimates imply that only 23 to 34 percent of PPP dollars went directly to workers who would otherwise have lost jobs; the balance flowed to business owners and shareholders, including creditors and suppliers of PPP-receiving firms. Program incidence was highly regressive, with about three-quarters of PPP funds accruing to the top quintile of households.”
Yup. It was entirely predictable.
https://osam.com/Commentary/upside-down-markets
Self-righteous bureaucrats and politicians have been forcing single mothers to use chipped debit cards for sometime now to enforce strict control over how, where, and on what they can spend public largesse on for their children. But, the PPP by definition will be going to millions single white males. So better just deposit money directly into their bank accounts with zero strings attached and forget about accountability. Put the money one mouse click away from buying bitcoin, SPACs, video game trinkets, …, or what-the-f*ck ever!
The whole thing is so pathetic, for so many reasons, it isn’t worth going into. We are ‘led’ by idiots, by “captains not courageous”, by time-servers, by rent-seekers, by revolving-door regulators, ….
As I continuously post on this site, why in the world would anyone think this economy could stand 5-7 hikes in 2022? The supply chain situation is going to resolve itself- the resolution is going to prove especially painful to the bottom 70% of households. And it is not going to require nearly as many hikes or balance sheet run down as the street thinks. Look just my point of view, but lots of demand for goods have been pulled forward. And the market basket for consumption has shifted- but the market basket is likely to adjust back at least part way towards services and demand growth for durable goods is likely to diminish at some point in the near future. The FOMC and the Biden administration needs to be mindful of the tiger they are riding….. things can change rapidly
Secondly- the emergence of energy is a top performing sector typically indicates that the economy is late cycle- just saying- investors be careful out there…..no recession yet but the signs are starting to pop up……
All my homies hate Joe Manchin.
Joe M reps one of the poorest states, his daughter is loaded and his wife has a cushy job. I can’t see how he gets re-elected.
Look on the bright side: Joe Manchin is sitting on a pile of excess cash.
H-Man, nice job of confirming the American consumer may be going on a sabbatical and it may be a rather long sabbatical since there hasn’t been a shot fired yet by the Fed in the war on inflation. When the bullets start flying, i imagine consumers will be running to the bunkers which are filling up fast.