A Perspective of the Continuing Recession

| May 20, 2020

The House has voted for another $1200 stimulus check, among other things listed in the article below.

https://www.forbes.com/sites/terinaallen/2020/05/15/house-votes-today-another-1200-stimulus-check-200-billion-for-hazard-pay-extended-unemployment/#2c78dca19bea

It’s unlikely that the Senate will agree to it, but you never know. The most recent unemployment numbers have risen, and will likely continue to rise, and some of those jobs and small businesses are unlikely to return. In addition, there are people who may decide to not return to work because unemployment compensation pays better. That’s kind of naive, because at some point, unless there is no alternative, it cuts off.

The other “offers” are for a $2,000/month payment to people, with or without additional sums included for those with children, with time frames varying from 6 months to 12 months.

This assumes that the lockdown endings and business restarts will be delayed and/or never take place. So what are Pelosi and her best buddies going to do about that? The response from most financial reports is that in order to fill that $2K++/month offer, the Treasury will have to mint two platinum coins worth – wait for it – $1,000,000,000 ($1 billion) each.  Haven’t heard a word from the Treasury Department just yet, and my response to the offer is “What about the long term, you boneheads?”

We really don’t want to get into the grinding losses that occurred during the Great Depression. I do sometimes wonder what my own parents would have to say about this, considering that it might be deja-vu all over again for them. But since this recession is an artificial one, and the trickle-down effect is likely to be more of the same but not forced, it will take more time to get things back to normal than the Politic Worms running WDC can conceive of.

To put things in a real-world perspective, the current recession was forced on us. Not quibbling about the need for precautions, because they were necessary, but the response to the CV19 disease’s ability to be a silent killer didn’t seem to sink in at first.  As you may know, there are several vaccines under review, but testing for effectiveness will take time.

So this recession may continue or end – remains to be seen – but the long and short of it is that it’s entirely likely that another recession will occur in 2021-2022, and possibly continue into 2023, per reports from several financial analysts. A few weeks ago, only two FAs were saying that. Now, that group has grown and more are indicating that it will happen.  It is a “wait and see” kind of thing. And we had all best be prepared for it, when it happens.

Recessions usually mean job losses and business closures, which is what we’ve already been through, and as I said, some workers may decide to not return to work until they have to, and some businesses may never reopen.  There are many, many factors involved in restarting an economy, and one of them is how the weather behaves itself. Unlike the Dust Bowl, which was caused by a loss of the annual monsoonal rain from the Gulf of Mexico and a very long drought in the 1930s, it’s more likely we’ll have a Theater of Cold and Late/Early Snows, in addition to flooding rains which drown planted seeds, reducing crop production.  Both the drought of the 1930s and the current loss of warm air have an effect on crop production. What I see on the news is flooded fields and a slow start to the growing season. And that affects not only the commodities markets, but also the food supply at the grocery stores.

Think it’s new? It isn’t. Early start to the snow season has been going on for several years now, as well as late endings (e.g.,  snow on Halloween and April 30 snow).  And yes, I’m still running my furnace in mid-May. The late end of the snow/cold season delays crop growth and that has a future effect on the price of the food you buy, because the link between livestock/field grain crops/produce and the grocery stores is the commodities markets. The cost of bread and flour is impacted by the cost of wheat and other grains, and the price for grain is determined by the commodities markets.

I won’t pontificate on what should/should not be done, but while the offer of free money from Ms. Nancy and the House of Reps seems like a lifesaver of some sort, it is just one way of throwing coins to the crowds when the Imperial Whatevers ride through the mobs.

At some point, those coins will simply run out.

Category: "The Floggings Will Continue Until Morale Improves", "Your Tax Dollars At Work", DC Government

Comments (23)

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  1. Commissar says:

    More than 80% of these stimulus efforts are going to the highest income brackets.

    We need to stop bailing out corporations (and banks) and bailout Americans and actual small businesses.

    This bailout, like the financial crisis bailouts, will be remembered and reviled as further proof of a corrupt oligarchic kleptocracy.

    • SFC D says:

      Take that up with Pelosi. Her favorites get first turn at the trough.

    • Ex-PH2 says:

      Please provide proof of your statement, Lars.

      The financial limits are clearly stated everywhere the stimulus plan is referred to. I can dredge up a dozen articles with those references. Inflation just in the past 10 years is as responsible for income levels rising as anything else.

      You’ve provided nothing to back up what you said, so put up or shut up.

    • penguinman000 says:

      According to this Forbes article (https://www.forbes.com/sites/stephaniedenning/2020/04/08/why-the-2-trillion-stimulus-package-is-putting-dollars-in-the-wrong-place/#244a78006777) the spending went as follows:

      30%-families
      25%-big business (with airlines getting the lions share)
      19%-small business
      17%-state and local governments
      9%-public services

      Where does 80% come from?

    • NHSparky says:

      Really?

      Where’s my money, bitch?

    • Penguinman000 says:

      Found the reference. It appears he’s referring to tax breaks bundled into the legislation. https://www.google.com/amp/s/amp.theguardian.com/world/2020/apr/15/tax-change-coronavirus-stimulus-act-millionaires-billionaires

      My take, FWIW, is the folks running businesses are going to need all the liquidity they can muster to compensate for the beating the economy is taking. No companies with employees=people starve.

      Someone needs to create jobs for those who lost them. That isn’t the government. The private sector funds the government. All the people who lost their jobs can’t get government jobs and still keep the ledger in the black. The private sector is going to have to make up for those lost jobs.

      And that means rich guys will get tax breaks. No other way to do it.

      And yes, some of them will game the system. Like planned parenthood games the system.

      • Ex-PH2 says:

        If things continue to go downhill, and that includes job losses in all states, then yes, businesses large and small will need just as much as the rest of us do to get a kick start going and keep people working.

        I’ve said this before: several financial analysts are saying a real recession will follow this forced one, and may last for several years. Doesn’t mean we won’t climb out of it, however.

  2. OWB says:

    It is a literal shame that the dems took up the challenge set forth by their ChiCom counterparts to use this pandemic to ruin the US economy. Of course, it wouldn’t be as bad as is forecast without a degree of cooperation by the reps in DC, and some rep govs.

    Still, the dems are going far beyond what the ChiComs did to us with their little experiment. Too bad that the ChiComs are getting even more than they anticipated for their efforts.

    Our survival will be because of the dogged independence and determination of enough Americans who refuse to become victims of either the ChiComs or the American political elite to allow a continuing economy that although wounded by this mess it WILL thrive again.

    The model for that prediction is the tried and true one that has driven this county for around 300 years now. It only takes about 1/3 of the population to make something happen even when 1/3 of the population is against it. The creators of this dempanic feel like they have sufficient support for them to succeed, but that is just wishful thinking.

    At least 1/3 of the population honestly wants to work to support themselves. Something approximating half the population wants them to go to work to also support them so they don’t have to go to work. How many truly want everyone dependent upon others for their support? Not that many, really. Those folks just want the power to say who does and doesn’t while most of us just want to be left to our own devises.

    Thank you all you power hungry elitists for finally showing the entire country just how indefensible your plethora of rules, regulations, and permissions to engage in commerce truly are.

  3. I imagine that all the liberal Trump haters are not going to accept their 2nd checks just like their first check on principle. Do you think so, like those that said that they would move to Canada if Mr. trump got in office. I guess the moving business is so busy that these peeps are still waiting for a moving van to show up. A three year wait? I have to get stocks in the moving van companies.

  4. Ex;
    I see those 8 birds on the snow bank are still standing there from your previous post so maybe they can wear LLBean down vests or miniature Filson Mackinaw cruiser jackets.

    • Ex-PH2 says:

      Sure, why not?

      I kind of see them as those poor souls in the soup lines during the Great Depression.

      And I have to ask, how long is it before Recession gets the label ‘economic depression’? Will I still be able to buy bird food, never mind Ex-PH2 food?

  5. The Other Whitey says:

    Don’t get wrong, I’m always happy when somebody wants to give me money. However, simply printing more money at a time like this causes inflation, which is bad because it causes the money we get (and the money we have saved) to be worth a lot less (or be worthless, in extreme cases). Printing more money is fine when the economy is growing, but that’s not happening right now. They’re printing more money to cover less value. If this continues, the inflation becomes runaway inflation, as was seen in Weimar Germany or more recently in Venezuela, where people have been known to wipe their ass with 100-Bolivar bills because they’re worth less than toilet paper.

    Devaluing our currency is not going to help anybody, and so far the only saving grace has been that everybody else’s currency is devaluing too. That will bite us hard in the ass if we are not the first ones to pull out of the downward spiral.

    • Ex-PH2 says:

      I’ll give you a bit of perspective. My mother worked in Chicago during the Depression. She said you could get a big plate of corned beef, potatoes and cabbage for $0.25 (a quarter). The drink (coffee) was $0.10.

      The same dish now is $13.00, coffee/drink included.

      It never got as bad in the 1930s here as it has become in Venezuela, and the entire blame for Venezuela’s drowning economy is on Maduro’s shoulders. He’s shut down the oil production entirely and is buying oil from Iran. The blame for that is Maduro’s utter incompetence.

      I do not think that it will get that bad here, no matter how hard the Democrats try to make it happen. The Fed does have a hand in this, too, and the reserve holdings to back up the dollar. It’s logical to guess that should the Dems decide to “gut” the Fed’s holding, they’ll get slapped down faster than it takes to talk about it.

  6. Comm Center Rat says:

    This pandemic induced recession (or depression) is turning out to be the single great wealth building opportunity in my lifetime. My personal net worth today is higher than at the end of 2019. Although retired from laboring, I’m a full time investor and manage my own brokerage accounts buying individual stocks and mutual funds.

    When I get my second stimulus payment it will immediately be used to buy more individual stocks. I will never, ever bet against the American economy or capitalism.

    As Judas Priest sang, “out there is a fortune waiting to be had, if you’d think I’d let it go you’re mad. You’ve Got Another Thing Comin'”

  7. Berliner says:

    I’ve seen one case of fraud reported in the Paycheck Protection Program this past week:

    Love & Hip Hop Atlanta star Mo Fayne, was arrested on Federal bank fraud charges. He applied for $3 million and received $2 million for his trucking company named “Flame Trucking” claiming he had 107 employees and a monthly payroll of $1,490,200 a month (averages out to $13,927.10 each). (I googled Flame Trucking and the only one listed in Georgia according to the DOT shows 2 trucks and 2 drivers)

    What did he do with the money? $85k went to purchase jewelry including a Rolex watch and more went to pay off debts, including $40k in back child support. He also got a Rolls Royce Wraith. When they arrested him, he had $70k in a bag and $9,400 in his pockets. They also seized $503k from 3 bank accounts controlled by Mo Fayne.

    His attorney claimed confusion about the PPP guidlines and whether the “owner could pay themselves a salary”.

    https://www.tmz.com/2020/05/13/love-and-hip-hop-star-mo-fayne-charged-bank-fraud-ppp-loan-jewelry-bling-child-support/
    https://www.dailymail.co.uk/tvshowbiz/article-8337665/Love-Hip-Hop-Atlanta-star-Maurice-Fayne-pictured-home-following-arrest.html

  8. 5th/77th FA says:

    More giveaways, more scams, more debt saddled onto our grandchildren. How much more wasted pork that we will never know about is buried in this giveaway? Just another chapter in the ongoing scamdemic.

    Did we ever find a complete breakdown on where all the FIRST coupla trillion went to? In GA, if you are offered your job back and you do not take it, the employer is required to notify the state that you refused to come back to work, and the state will stop your benefits. Saw a news blurb on evening last where a hospital received 120K $ for virus related expenses and another 2.3 million $ for payroll protection money. The hospital has been closed for over a year.

    • 5th/77th FA says:

      Forget to make mention. Anybody else notice the 75 billion USD earmarked for testing, TRACKING and ISOLATION? Wonder where the isolation gulags err concentration camps I mean sanatoriums will be located? Will the transport be by way of cattle cars on rails or will they use the multitudes of idled school buses?

    • Ex-PH2 says:

      Do you have a link to that, 5h/77th? If it’s real, I want to know what it is and who came up with it, and when. Thanks.