I read through a couple of articles and they were addressing
one point and how it affected the economy. One mentioned that tax refunds were
down significantly this year and was worried about how that might affect the
economy. The other mentioned that retail sales were down 9% for the holiday
season. Both articles by themselves or in a vacuum may sound bad for the economy,
yet neither commented on situations that may have another affect.
And I do not know if my comparisons effected the points
being made in the original articles, yet I think we need to look at them. Maybe
for the direct effect, but also the overall weigh stories about the economy
need to be addressed.
First the tax refund article. One analyst from an investment
company had noted how much the average refund was down this year and how much
it would weigh on first quarter growth. And there is a good chance it might. The
comparative analysis that needed to be done to see if it affects the economy as
a whole is how much did the weekly paychecks increase the economy throughout
last year. We know now that the withholding tables were adjusted incorrectly
after Trump’s tax bill and not enough was withheld for many people that
normally rely on large refund checks for their budget. If it effected the
economy, then spending would have been down for 2018. If spending had small
increases throughout the year or other alternatives such as increased savings
or reduced debt, then the first quarter loss is mitigated since the money was
already back in the economy.
And then the second article about holiday retail sales being
down can be countered were online sales up significantly. If that is the case,
then we have a shift in behavior not an impact on sales. The problem of course
is increase in online sales means less jobs down the road, so this will have an
impact on the economy, yet for now people are confident in their situation so
it is not the economy but behavior.
Yet if sales were down even though paychecks were up, and
online sales only had modest increases or not enough to counter the loss in
retail sales then that is not a good sign. The article by itself is misleading
but taken into context with a broader picture tells a truer story. Either way
though, the eventual loss of jobs will be bad for our economic outlook.
The same goes for the refunds. If people didn’t or aren’t
spending extra or saving extra on a weekly basis then the smaller refund checks
could have an impact on first quarter spending or debt reduction. I would add
savings for the refund check, however historic behavior is to pay down debt or buy
large ticket items such as appliances or furniture for example. This could have
an impact down the road also as businesses scale back production or inventory
for the summer based on lost sales in the first quarter carried into the second
quarter as all the refund checks hit consumers pocket books.
Some have suggested the withholding tables were
intentionally distorted to give people larger paychecks to make them feel
better about the news around the tax breaks. If so, then it might backfire exponentially
as less money is spent throughout the year and then less spent into tax refund
season. This loss then translates into less production, in turn less jobs and
the cycle gets worse year over year. Yet, the billionaires still get theirs. Hmmmmmmmm
Anyway, the two articles on the surface sound bad for the
economy, but to truly tell if bad you need to look if what is reported bad was accounted
for somewhere else or not. I do not know either way, but it did bother me the
articles had a tunnel vision problem. The tone of the articles was not good and
I fear they really reflect a potential slow down in the economy, but we need
fuller pictures before we make that call. Thoughts?
And to follow up to some of the last post, I have been
slowly working on categorizing all my posts. I started from the beginning and
am working forward. I am almost to the point where I wrote a very verbose set
of posts on a platform for a fictious new party or rehash of an old party with
a platform I still believe in. My last post touched on some themes I had
written before and a couple were ideas I added over time. It may seem my
perspective is all over the map, yet if you really understand it, there is
consistency in the whole. I will update you when I arrive at these posts as we watch
the madness about to unfold for 2020. And update again when I reach some of the
one off posts I wrote on other issues that I have strong feelings. 2020 should
be far away, unfortunately no and we will have to listen to clueless democrats
and wait to see if any republicans have any you know what to challenge commander
in incompetence.
One of the anchors for the local news is retiring. They are
running some human interest stories on the person they have hired to replace
him since he is from out of town. I saw one today that caught my attention and
not in a good way. I have many children and many are daughters. The new anchor
was talking about his children and said the oldest is _____years old and then
said the boy is ___ years old and the other is _____ almost ___. It was subtle, but he identified the male
child, however did not identify he had daughters directly. To most this may not
seem a big deal, yet people identify their children. I have x boys and y girls
etc. I do not know why, but I caught the
way he presented the info on his children and it bothered me. Sometimes it is the
little things that say much.
I do not know how
many of you watch a show called “Young Sheldon” which is a spin off from the “Big
Bang Theory”. In tonight’s episode mixed in with the over hyped make fun of Texas
attitude, which I am not appreciative of, was a statement about corporate quality.
Sheldon notices that his bread does not taste the same and learns it is because
a company has taken over the brand of bread he is normally eats and now makes
it quicker and oops I cannot remember, anyway the point is the brand is now a
subsidiary of a larger corporation and is not as well made. Sheldon ends up
having to accept the lessor quality bread to appease an over hyped version of
an anti-communist community. As regular
readers know I am a big advocate of not succumbing to corporate driven profits
over quality attitude. I get on my soap box about how we should not let
corporations tell us how to behave as customers and they should make effort to
win our business. Too bad the show glossed over the more powerful point to
laugh at Texas. So, does the show fall into the same corporate category where
poking fun at Texas hoping to appease one audience takes away the more quality
driven point it could have made. Hmmmmm again
Cheers
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