Despite Trump’s supposed diplomatic skills, the US Energy sector is imploding. Short sellers cornered the market to a point where oil producers would literally have to pay almost $40 a barrel for delivery! This is part a technical phenomenon (conspiratorially, it is the Russians and the Saudi’s) but is indicative to the disjointedness of the oil market due to the incredible shifting of the demand curve. Supply, to date, has not shifted nearly enough so storage capacity has hit a hard constraint. Oil would be better off staying in the ground at this point. Water is literally worth more. The domino effects of this on the economy could be very meaningful. If it costs $30 to $90 to produce a barrel of oil, how long can financing last for an oil company? When do banks walk away and debt holders demand payment? The Fed to the rescue? Perhaps the taxpayer? Our vote is to have cheap gas for a bit, let the market find its bottom, the markets clear, and move on!
The “New” PPP Deal and its Ramifications
More waste and drivel. $484 Billion (that is 1011). Handouts and total inefficiencies run amok. It is stupefying to read the details of this insanity. Most of this thing seems to have nothing to do with small businesses at all. And even that portion that is relevant to small businesses has been dedicated to publicly traded entities. They should not even qualify. For us independently owned small business we cannot simply tap the markets to raise capital. My understanding is that is what this thing was supposed to do. It does not. It is so perverted how politicians have mucked this thing up so badly.
Banks have become the gatekeepers and so only distribute to their large clients. Meanwhile, the rest of us, who have been forcibly shutdown by decisions we have no control over, are left to try and bridge the gap. Even in the consulting world everything is shut down and our expenses keep rolling on. We will never get help and will be left desperately trying to finance ourselves using our personal savings. When will this change? It will be several months until companies even consider hiring outside consultants. They are rightly in preservation mode and not interested in using outside expertise. Like other independently owned small businesses we are left hanging with no way to cut expenses without violating contractual obligations. The longer this goes on more and more smaller independent businesses will die. With no foreseeable help coming from the source that shut us down to begin with, our government, we face a very uncertain future. It is madness and the long-term ramifications will be felt for decades. Both economical and behaviorally.
Japan and the EU
We have written about this before. Keynesianism simply does not work. Like socialism, the empirical evidence is not kind to its practice. Governments just cannot borrow their way to growth. Japan since the late 1980’s is perhaps the best example of this phenomenon. The European Union another, albeit slightly more complicated given the untenable structure of the union itself. The US is now following the same failed game plan. The complete lack of regard for our future is stunning. Legislators are literally the lowest form of life in our society. It is almost like they were spawned yesterday with no memory of history or any kind of ability to synapse. They just throw water whenever they hear someone yell fire without looking to see if there is actually a fire! It is pathetic. Capitalism as we know it is dying more quickly than many realize. Zero growth, heavy indebtedness, and a scorched earth for small business is what remains. By reacting to the cacophony of the left crazed media, Trump and his appointed decision makers have accelerated the death of our economy. It started with Bush, quickened meaningfully through Obama, and has gone parabolic under Trump. The establishment wins again. God Bless America.
Schools and Taxes
The disruption to primary, secondary, and higher education is wreaking havoc on the day to day family dynamic. For the third of the country that can work from home having kids running around and effectively being home schooled is sub optimal. More importantly, the technological challenges of ensuring that all ages can appropriately access web-based materials is nontrivial, and costly. So, in addition to the aforementioned struggles our elected leaders have further burdened the small business community with added responsibilities. As families we have taken all the burdens of the idiot policies being implemented. Where is the fairness in that? No legislation can right this wrong and we will not forget.
Our school district here in Albemarle county is so woefully unprepared it really makes me wonder where all the resources have gone. It took almost five weeks for them to even present a plan. And the plan they eventually created is laughably inadequate. How could a school superintendent and elected board members knowingly shut schools with literally no plan? It is disgraceful. We are a stone’s throw from the University of Virginia, so it is not as if we are living in some backwoods community with no running water. These are self-proclaimed first-class educators that have spent huge resources on political correctness with no forethought whatsoever toward distant learning initiatives. It is inexcusable that they had no contingencies in place. It speaks to the complete profligacy of our local school district. Now they have the temerity to already warn us that severe budget cuts are coming due to “the economics as a result of the pandemic.” Are they kidding? They spend like drunken sailors on shore leave for a decade on completely useless initiatives (like classes on what it is like to be gender confused, or sexually bewildered, creating gender-less bathrooms, and misinforming students on the evils of carbon fuels among others), can’t deliver the most basic distant learning needs, and now whine about budgets?
How do they even know what the budget is going to look like? Our idiot governor here in Virginia has closed the state through June 10th. How can these local educators have any freaking idea what is coming? They even quantified it! $6 Million. Are they clairvoyant? Unlikely. This is all about managing expectations toward raising property taxes. It is coming. They will use this in an effort to increase the revenue base forever. It is the classic municipal response to fiscal irresponsibility, and they package it as an urgent need for the betterment of our children. “For the children” is their proverbial dog whistle. Meanwhile they have failed (as in “F”) by every metric to deliver on their end. Propagandizing seems to be the only thing they care about as our children fall further and further behind what are standard intellectual development measures. I pray they are held accountable for their irresponsible and short-sighted political correctness. Our children deserve better than this. They should be ashamed.
It is for these reasons we feel forced to leave the area. The county schools have forgotten the primary mission of schools and extracurricular activities. It truly is a tragedy and I am confident it is happening in other enlightened areas. They are destroying an entire of generation as a result. As parents my wife and I feel we have no alternative but to move to a community that values character development, competitiveness, accountability, and real education. We leave next week. We know with certainty that our younger boys cannot become the men we want them to be here. No dreams can be pursued in such a septic environment. Difficult times may lie ahead but we are at peace knowing we are fulfilling our parental responsibilities. Our children define us and represent our legacy as a society. Leaders up and down the demographic chain of command are failing miserably. Gadsden had it right, “Don’t Tread on Me.”