A Socialist by Necessity: Losing the Angry Man

There is no singular road-to-Damascus event that triggered a socialist conversion.  It cannot be measured in a few years, but instead by decades.  Many Republicans today bemoan that the party shifted to the right and left them where they were.  In my case, experiences and observation have progressively forced me to the left so that I am  now functionally socialist.

PracticalDad:  A Socialist by Necessity

…and a little child shall lead them.

Isaiah 11:6

Becoming a socialist didn’t happen overnight.  It came by degrees over the span of decades via divergent experiences that forced me to reassess not only my political beliefs, but also what would be necessary for my own children – and grandchildren – to have a semblance of an economically stable life.  The first step of that transition was simply an occurrence which in the moment made the home atmosphere a little lighter:  shutting down talk radio.  And as Isaiah noted, it was a little child – my then three-year old daughter, Eldest – who led me.

Like many conservatives, I listened to Rush Limbaugh.  I wasn’t there at the very beginning of his decades long run but I did start listening in 1991 when I began to share an office with a talkative and easy-going co-worker while working in North Carolina.  Nor was I a daily listener for the full three hours because part and parcel of the job was to spend considerable time walking the enormous medical center complex as a member of the Risk Management department.  But when we were both in the office, Rush was reliably in the background.  When I paid attention, I didn’t always agree but I did find him politically well-versed and frankly entertaining.  As his popularity grew over the next several years, I listened intermittently simply because my new job in DC didn’t allow radios in the offices.

That listener status changed in the latter half of 1994 however, with the birth of Eldest and our mutual decision that I should stay home with the baby.  While it is far more common for fathers to do so in 2020, it wasn’t the case in 1994.  Perhaps the most frustrating aspect to being the stay-at-home father was the isolation.  Mothers that I met at the playground were talkative and friendly but once they understood that I was the primary caregiver and not the engaged father with a day off, a switch was literally flipped.  So what’s his deal?  Is he unable to hold a job or is there something wrong here?  Wow, his poor wife…  Chat would peter out and any hope of setting up a play date for the toddler would wither like an elapsed time rose on the trellis.  Starved for adult conversation and any variety in the day, I began to flip on Limbaugh at noon when Eldest and I had lunch and it stayed on when I put her down for her nap.

This routine continued for three years.  It wasn’t as though I ignored Eldest and we ate in silence; children require conversation and interaction and as she grew, we would discuss the trip to the park or the change in seasons or even the squirrel who seemed to enjoy putting on a show retrieving plums from the tree outside the kitchen window.  But Limbaugh was also on low in the background and I would listen more intently after she was napping, keeping me company while I cleaned up the kitchen or any other number of household chores.  Until one day when was three years of age and she commented at the table about “the angry man”.  The conversation proceeded along the lines of :

Daddy, why is the man so angry all the time?

What man?  I don’t know who you are talking about.

Him, Daddy.  The man who is angry.

I don’t know who you are talking about, honey.

Him, Daddy.  The man who is talking now.  He’s always so angry.  Why?

It wasn’t until she mentioned that he was talking at that moment that I finally understood.

I made a point of relating that head-scratching conversation to my wife that evening after Eldest and Middle, the infant, were in bed.  It was treated as a curiosity item from the day but my wife, BH, didn’t leave the conversation there.  Maybe it’s more than just a remark by a little girl.  His tone is obviously something that has caught her attention and sufficiently enough to remark upon it.  And she’s saying that he’s always angry.  When I responded to the effect that he wasn’t always angry and that such was part and parcel of his persona, she retorted that a persona was beyond the comprehension of a three-year old child. Her final question was succinct:  Is this the kind of atmosphere that we want in the house through the day?  

Point taken.  With that, Limbaugh was off the air when Eldest was awake.  It wasn’t that the kids were running the household and we were beholden to them; it was simply that every household has a particular rhythm and vibe and we chose not to have this ever-present angst humming in the background.  By now, Eldest had been joined by Middle and the game of Dad, the Human Pinball was starting to get interesting and as the kids grew, there would be sufficient paternal crankiness without the talk-radio overlay nudging it along.  Seriously, as much as you love your children and would die for them, raising small children is sometimes like being continually pecked by ducks.

There were occasions that I continued to tune in when the opportunity arose, even if I increasingly disagreed with him.  But the final break occurred in the late 1990s when Congress was looking to repeal the Glass-Steagall Act of 1933, a mainstay of financial regulation.  Limbaugh continually argued with through that period that government regulation was as unnecessary in the financial sector as it was in the other sectors.  He remarked – presciently – that far more wealth would be generated if the government and the liberals would only step back and let Wall Street make money.  It was his use of the term liberal during one of these monologues that grabbed my attention one evening.  Seriously…liberal?  The principal Senate sponsor of the bill was  Democratic Senator Carter Glass of Virginia.  He was actively involved in laying out multiple pieces of key federal legislation regarding the national financial system, including the passage of the Federal Reserve Act of 1913.  He was also a highly conservative segregationist, certainly not one of this generation’s Democrats.  After multiple Congressional hearings about the collapse of the market in 1929, Glass was ready to move with FDR’s inauguration and sponsored the act that subsequently bore his name.  This bill was one of the few areas in which he agreed with FDR and he pushed for it because he saw that the collapse occurred due largely to the lack of any meaningful regulatory oversight of a laissez-faire financial sector that went far beyond the bounds of any semblance of rational behavior.

Glass-Steagall was not about ratcheting down and stifling innovation.  It was about creating and maintaining a set of boundaries on unethical and dangerous financial behaviors.  It was Limbaugh’s willful disregard that finally made me turn him off.

Through the subsequent years, talk radio expanded.  It expanded across media platforms to television and podcasts as well as the political spectrum so that even the most far-left and far-right proponents had their own shows.  That I didn’t listen was more about the function of time than dislike.  By now, Eldest and Middle were joined by Youngest and there were now three children across a span of three educational levels.  With constant activities and oversight, who had time?  I might still hear a little bit here and there and I was well aware enough that I knew who was now on the airwaves.

This dislike of broadcast punditry fully blossomed when Youngest was in elementary school and I began to share greater responsibility with my sibling for an aging parent.  Our father had died years before and as our mother aged and her horizons shrank, she increasingly spent her time watching Glenn Beck and all of the Fox evening programming.  Her natural conservatism sharpened with the ongoing stories of liberals and societal decline and her fear increased.  Over time, there were more phone calls seeking reassurance about that or that political issue, or why the Democrats would allow themselves to run a candidate who wasn’t actually an American citizen, let alone a Muslim.  What I noted when I visited her retirement community apartment was that all of the public area televisions, as well as in the apartments whose residents had left the doors open, were tuned to Fox News.  Her final four years were notable by an increasing level of paranoid dementia.  She wasn’t incompetent but obviously paranoid and this was only fed by the constant barrage of fear-mongering and criticisms from Beck, O’Reilly and Hannity.  The number of phone calls increased further and the tenor of our visits changed dramatically.

My mother’s television faced the front door to her apartment and when I entered, after a short hallway silent prayer and an unheard knock, I could tell what kind of day it would be.  If she sat in her swivel chair facing the television and Fox News was airing, I knew that she had watched at least some of Fox and Friends and with her anger stoked, some fresh new misery awaited me.  In those instances, she would hear me loudly call out a greeting, swivel her chair towards me like the turrets on a battleship and fire the first of what would be multiple angry salvos.

These instances, and the phone calls, increased in frequency and yes, they were also synced to her mental status decline.  By the time that Eldest was in college and gearing up for a semester abroad to Central America, the dam broke while having lunch with her in the community cafeteria.  This was also during the period that candidate Donald Trump was proclaiming Mexico as a land of rapists and drug dealers, his immigration comments trumpeted by the evening Fox commentators.  Confused about where Eldest was traveling, she began by loudly questioning my competence as a father by allowing my daughter to travel to such a place.  Heads swiveled across the entire cafeteria as she yelled.  She couldn’t identify the destination that so badly scared her, simply referring to it loudly as there.  Nor could she say who it was that scared her, only repeating the words them and those people.  It required some minutes of quiet conversation to talk her down and get her to understand that her granddaughter would be safe from them, those unknown people that she couldn’t name but who scared the living shit out of her because the Republican candidate and good folks of Fox News said that they were bad.

As the comment goes, no amount of therapy and bourbon will erase that.

It is now impossible to avoid the political punditry even if I keep the programs turned off.  The gas-bagging has taken over the actual news cycles and they are replete with reports about what nonsense has been uttered by Limbaugh or Carlson.  Even Maddow and Scarborough on MSNBC make news with their  commentary.  I will sometimes verify what I read or hear and it is usually correct in it’s ridiculousness.  I suppose that it would be exactly as the late Roger Ailes would have wanted with various commentators tossing out verbiage that itself becomes the news instead of the reality of what is actually occurring.  The death toll today was more than a thousand lives, but did you hear what Carlson said?  Roger Ailes would be proud.  He helped to create Rush Limbaugh in the late 1980s and under his later guidance, he led Fox News to top ratings and immense profitability.  It was, is and will be about the money and if you doubt that, I refer you to then-CBS President Les Moonves comment in 2016 about candidate Donald Trump:  It may not be good for America, but it’s damn good for CBS.

As I write this, Rush Limbaugh is still broadcasting despite stage IV lung cancer.  I haven’t listened in years apart from the rare verification under the heading of did he really say that?  My own father passed away of that illness almost twenty years ago and having been there with my sister at his death, I don’t wish poorly for Limbaugh because it’s not likely to be an easy death.  But I will absolutely not miss his presence.  What he and his ilk, on both sides of the  airwaves, have done in the pursuit of ratings and profit is multi-fold.  They have assisted in the fragmentation of a nation and encouraged the practice of reducing people to broad-stroke caricatures.  They dumbed down important topics and abetted the corporate class in selling and justifying a system of wholesale greed and theft.  They preyed upon and fed the fears of a multitude of elders, including my mother, frightened by the natural course of change.  They made the personal lives of so many adult children all that more difficult for their fear-mongering and dissembling.

More importantly for me however, it was the observation of a pre-schooler that forced me to re-evaluate my own involvement.  It freed me from the constant barrage of one-sided narrative and gave the latitude to pursue current events free of the profit-driven angst and come to my own conclusions about the state of American society.

That was frightening enough, without the assistance of any of the gas-bags.

A Socialist by Necessity

“April 29, 1938

To the Congress:

Unhappy events abroad have retaught us two simple truths about the liberty of a democratic people.

The first truth is that the liberty of a democracy is not safe if the people tolerate the growth of private power to a point where it becomes stronger than their democratic state itself.  That, in its essence, is Fascism – ownership of Government by an individual, by a group, or by any other controlling private power.

The second truth is that the liberty of a democracy is not safe if its business system does not provide employment and produce and distribute goods in such a way as to sustain an acceptable standard of living.”

Franklin Delano Roosevelt, Message to Congress on Curbing Monopolies

“Dad, I don’t think that people understand how liberal you are.”

Middle to PracticalDad, approximately 2015

The Facebook profile photo changed in April as Middle and I were driving home from an errand during the Pandemic.  We chatted and he commented that perhaps it was time to remove the outdated picture of Andrew Jackson, which I had placed there years before.  Perhaps I needed something more fitting with my political inclinations and I concurred.  There was a time, almost a decade ago, that we needed a Jackson-esque leader who would take on the monied interests and restore a sense of balance to the economy.  But instead, we got…well, you know who.  As I prepared to make an ironically appropriate left turn into the neighborhood, I said that the picture should be Karl Marx.  Trusting him with my password, he made the swap as I finished the drive home.

Arriving at the point of adopting a photo of Karl Marx has been a process.  I didn’t awaken that morning and decide to spontaneously declare to the essential grocery workers that you need to unite and take back the means of production for you have nothing to lose but your chains!  It has been decades since I read any of Das Kapital, a challenge because Marx wrote with the torpid grace and style of an artery accumulating plaque.  My real takeaway was the understanding that he wasn’t a fire-breathing demon but instead a corpulent intellectual repulsed by the grotesque economic inequities of his period in the mid-19th century.  That it seems strident is understandable given the initial publication in 1867, only two decades removed from the failed European-wide rebellion of 1848.  Rebellion?  Yeah, the rebellion that led to a Prussian repression which caused a huge influx of German immigrants to America in that same period.

I am now a Socialist neither by choice nor inclination, but by necessity.

I am a Socialist by necessity because the monied interests have used the power of the purse to capture the political system via massive amounts of dark money political contributions and lobbying.

I am a Socialist by necessity because that capture has fostered an economic system that benefits them to the harm of the rest of the citizenry.  The Middle Class was failing before this President, but the Pandemic exposed our economy for the Potemkin Village that it truly was.  Tens of millions have been thrown out of work and the national average of Americans facing eviction is at 40%, with some states above 50%.  Simultaneously, a handful of billionaires have seen their wealth during this Pandemic increase by $584 billion while the rest of America’s households lost more than $6 trillion in wealth.

I am a Socialist by necessity because so many of the programs and benefits that supported our great-grandparents and grandparents have been rolled back and carved away, placing those burdens upon the American family itself.  As of this writing, the President has commented that if he is re-elected, he will move to permanently end the payroll tax; this would effectively starve the Medicare and Social Security programs upon which so many of our elders depend.

I am a Socialist by necessity because a one-sided media complex has hijacked the airwaves with a malign gospel that those who require assistance in today’s America are somehow lazy or at fault, instead of asking how our nation reached a condition in which someone working a full-time job still cannot afford to survive.

I am a Socialist by necessity, having raised children into a rapacious, grotesque economic system devoid of the under-girding of the rule of law and a system of governance that would give a shuddering sensual thrill to Ayn Rand.  Reusing the word grotesque isn’t editorial laziness but instead an indication that America has reached a condition recognizable to Dickens.

I am a Socialist by necessity because it is going to take a massive and prolonged effort to reform and restore the rule of law, especially regarding the financial sector where much of this started.  It is going to take serious push-back against a conservative media that sells a mythic version of America and routinely describes any who disagree as them, and sometimes worse.  This will be an unpleasant process if the labor history of the late 19th and early 20th century is any guide.

This election, and the next several afterwards, are crucial.  Why?  Because this nation has continually abused its currency, which also serves as the global reserve currency.  For that, the world will be – is – looking to see what will replace the Dollar.  This election, and the next several afterwards, will help decide how we choose to subsequently allocate our national resources which will no longer enjoy the privilege bestowed upon the global reserve currency.  That coming date is unknown, but it will arrive sooner than later.

My upbringing wasn’t socialist and in some ways, I am still the product of a mid/late 20th century corporate family mindset.  I still believe in property and the idea that there are some things that are better handled by the private sector (not including the prison system).  Taxes can be too high and I am not in the least comfortable with the surveillance authority that we have given our government.  I believe that people should be allowed to prosper and succeed…within reason.  If you want to make three quarters of a million dollars and enjoy the fruits of that labor, have at it.

The problem is this:  despite decades of commentators spouting descriptions of America as a land of unlimited opportunity and endless potential, there are still a finite number of zeroes in a 2019 national GDP of $21,430,000,000,000.  Our national output is indeed immense, but it is still finite and the massive wealth disparity is clear evidence that all of this money is now going to only a small handful of people.  There is a point at which wealth accumulation becomes a zero sum game and a person’s accumulated gains indeed rob many of the sheer means of survival.  When a literal handful of billionaires make more than $584 billion in a period when the annualized GDP declines by almost 33% in a single quarter?  Well, this is long past zero sum.

This is economic cannibalism.

There is no singular road-to-Damascus event that triggered a socialist conversion.  It cannot be measured in a few years, but instead by decades.  Many Republicans today bemoan that the party shifted to the right and left them where they were.  In my case, experiences and observation have progressively forced me to the left so that I am  now functionally socialist.  Do I hate capitalism?  No.  I frankly think that it is a more efficient allocator of resources than socialism but it requires a degree of morality and above all else, a willingness to let failure occur.  With the failure to address real systemic issues after the Long Term Capital Management and the 2008 Financial crises, and obscene amounts of liquidity to buoy the markets, it was obvious that the fix was in and honest-to-God capitalism was dead.  If you ascribe to FDR’s 1938 description of fascism noted at the outset of the article – and I do – then we’ve been living in a charcoal gray, wing-tipped corporate fascism for the past two decades.  That our President has harnessed fear and division to create a racist neo-brown shirt movement is only a shift to a more recognizable variant that we witnessed in Nazi Germany.

But make no mistake that we were functionally fascist before this President.

There are different route steps on my arrival as a Socialist by necessity and most are framed within the context of children and family.  Each will be covered separately in the coming weeks.

First, I stopped all routine listening to any manner of broadcast political commentary on both sides of the spectrum because that is simply a business model of anger generation.

Second, I came to understand that capitalism was replaced by what some refer to as corporate socialism (where gains are privatized and losses are socialized), or simply fascism.

Third, I witnessed first hand the callousness and disregard of senior corporate management towards innocent employees.

Fourth, I literally stopped watching all television, varied my news sources and simply read.  A lot.

Fifth, I spent considerable time on the internet, backtracking information and learning which sites were trustworthy and which were trash.

Sixth, I learned that it is indeed possible to take these various social and economic statistics and see them in action in my daily life and in my community.

Finally?  I have tried to listen to the youngsters as they have grown and matured, opening myself to learning from them.  This includes understanding that my focus upon family and economics simply didn’t give anything close to sufficient acknowledgement to the effect of racial disadvantage in the spectrum of daily American life.

Yes.  Black Lives Matter.

 

 

 

 

 

Pandemic Food Price Index: 7/20

In order to ascertain the impact of the Covid-19 Pandemic and it’s dislocations on food pricing, I re-booted an old project to track the pricing on a market-basket of typical food items in three local grocery stores.  The original pricing for this new project was done in May, 2020 and the pricing for July was completed last week.  The  results of May 2020 are the base index level of 100.  Following are the results and some comments.

First, the Index rose slightly from June’s 100.66 ($89.09/basket) to 100.77 ($89.19/basket).  Although prices were relatively stable, increasing by about .1% over the previous month, there was considerable turbulence within the basket of foodstuffs.  Specifically:

  1. As with last month, there were 7 separate items of 111 priced (37 items in the basket at 3 stores) not available at all, for a missing rate of 6.3%.  Not only missing from the shelf, but with the shelf label either completely gone or else with a notice that the item is temporarily discontinued.  What was also notable about these missing items was that five of the seven were in the locally owned supermarket; the shelves at multiple points in that store also had temporarily discontinued labels on a number of other foodstuff items that were not considered since they were not in the sampled basket.  (Note:  The attached monthly pricing at the bottom has eight prices missing instead of seven; there hasn’t been a price for 80% ground beef for one store from the outset in May.  That store no longer carries 80% ground beef in any form and the missing prices thus exclude that item.)
  2. Because these items were missing, they were not priced and were thus removed from calculation for the monthly result.  It is impossible to say what the basket value would have been had they been on the shelves.
  3. The largest change however, was seen in the staples section, specifically for five pound bags of flour and four pound bags of sugar ($.09/lb and $.61/lb respectively).  Topping that off, the largest supermarket chain (internationally based) simply did not even carry their store brand sugar and were sparse on levels of the name brand sugar.

My wife, BH, linked an article from the NY Times to my phone.  Specifically, the writer noted that foodstuffs were reappearing again, most especially toilet paper and flour but that the breadth of product offerings was less.  In other words, I can get toilet paper and flour but not in the variety that was offered previously.  This would perhaps account for what I am seeing in the locally owned grocery as the store brand, offered via an independent grocer Group Purchasing Organization.  The food suppliers are shifting their production to the larger and more flush entities, crippling the offerings of the independent supermarkets.  With greater economies of scale among their stores, the larger entities will be at a greater advantage to the smaller independent stores moving forward.  So, yeah, Mick was right:  you can’t always get what you want, but you can get what you need.

Basket Results (7/2020)

 

The Consumer Economy Headshot

The truth is that the consumer-driven model is now functionally dead, an economic zombie shambling along and awaiting the merciful head shot that drops it, allowing it to be kicked into the gutter and out of the way.

PracticalDad, Post-Consumer Parenting (April 8, 2016)

The consumer-driven model that has powered this nation’s economy for three quarters of a century is now officially dead, the head shot delivered by…a virus.  Like any zombie, it was compelled to mindlessly consume yet was malnourished by an increasingly severe lack of purchasing power.  I would have been less surprised by the manner of death than to find that Bette White was cast as the new villain on The Walking Dead.

It starved for years, certainly longer than April 2016, when I wrote the above linked post.  Zombification occurred in stages over the course of decades.  One contributing factor was the effort by corporate employers to shift from pensions to 401k plans, citing the need to cut costs and allow for funding to compete against other companies.  Another was the claimed throttling cost of benefits, consequently cutting back on health care benefits in the face of rising costs.  Yet another was the drive to maximize shareholder value by decreasing labor costs, shipping jobs – even entire plants – overseas or increasing the drive to automate them.  Even with these ongoing hits, the process was accelerated by an economic demand that now mandated a college degree for entry into the fabled American Middle Class.

The condition however, became terminal with the Financial Crisis of 2008, from which it never recovered.

The symptoms have been there for years in any variety of news articles:

To quote Captain America:  I can do this all day.

Understanding the impact of this collapse is helped by understanding how the model came about in the first place and for that, you have to return to the period immediately prior to the Great Depression.  Economists were developing the Expenditures Theory of Gross Domestic Product:  C + I + G +(X – M) to help create a systemic framework for understanding the national economy .  Simply put, a nation’s GDP is a function of the aggregate spending of Consumers (C), Business (I), Governments (G) as well as the aggregate international balance of trade between exports (X) and imports (M).

We might recall the decade as the “Roaring Twenties” but the reality was different.  There was supreme confidence in the business community and many industrialists and financiers bought into the notion that the historic business cycle of boom-and-bust had been eliminated.  But there was an awareness among others that significant problems still existed.  The agricultural sector was mired in an economic depression as crop prices had collapsed years before the Wall Street collapse.  Some were aware of the inequitable distribution of wealth in society and others noted that the lion’s share of the economy’s productivity gains through the decade had accrued to the wealthiest class.  The average American worker saw significant wage gains but the top 5% of wage earners garnered 34% of the disposable income, up from 24% in 1920.  Then came the collapse of 1929.

President Herbert Hoover’s responses to the Great Depression were constrained by the philosophy – along with almost everyone else – that the Federal Government must annually balance it’s budget.  There was plenty of rah-rah jawboning and some effort to run a small deficit and create additional relief programs but in the end, he was bound by his personal belief that it was up to American individualism to find a way out instead of government action.  Relief programs were left to charity and local and state governments but the continued spiral downwards left everyone without money so that by 1932, destitution reigned; the economy was at the point of real collapse and Senators were warning of open revolt by the election of 1932.

Yet debate among economists continued during that period and it was in 1930 that John Maynard Keynes wrote A Treatise on Money, which became the basis for what we now know as Keynesian Economics.  Another economist caught the ear of nominee FDR in that period however, and his name was William Trufant Foster.

The heart of Foster’s concept was that the Depression was ultimately caused by under-consumption, that the average person simply didn’t have the financial wherewithal to support the purchasing power required for all of the economic output produced.  If there was to be renewed growth of output and through it, employment and wage growth, it had to come via increased consumption in any fashion, whether by the individual, the business sector or the government.  Keynes’ work provided the intellectual justification to allow government deficit spending to spur that aggregate demand in economic downturns.

I don’t know that we can now appreciate the level of political and economic chaos in the period between FDR’s election in November 1932 and his inauguration in March of 1933 (the inauguration date was later moved to January).  Farmers were banding together to actively deter farm foreclosures via threat and in some cases, actual violence.  The Soviet government actively supported a rising Communist party and through it all, hundreds of banks across the country were closing their doors, destroying the little savings that were left to the individual.  Two states independently declared bank holidays, temporarily closing all banks within the state for a one or two week period.  Why?  Fear.  The average American had so lost faith in the system and government that, anticipating his or her own bank to collapse, began pulling all their remaining money from banks.  By doing so, they themselves guaranteed a collapse.

Fear.

This was the backdrop for FDR’s now-famous First 100 Days.  It was the backdrop for the creation of new and untested programs to get people working and money once again flowing through the economy.  Fear was the enemy that FDR fought in that early period of his Administration and was the basis for his statement in his first inaugural address, The only thing we have to fear is fear itself.  FDR understood that money must be flow and consumption must be restored and in the short-term was willing to use the government budget to do it.  He also acknowledged the power of the budget and knew that in the longer term, the average citizen would have to step up and this could not happen until fear was lessened and purchasing power grown.

Why the introduction of bank deposit insurance via the FDIC?  To lessen the fear of bank collapse with the resulting loss of savings.

Why the introduction of Social Security?  To lessen the fear of poverty in old age.

Why the creation of multiple job and agricultural programs?  To lessen the fear of poverty, bankruptcy and ultimately, starvation.

And why the creation of multiple public authorities such as Rural Electrification and the Tennessee Valley Authority?  To spur the development of the physical infrastructure necessary for future growth and keep it out of the hands of the private sector, most particularly the financiers.

All of this was undertaken to rebuild the purchasing power of the American citizen and ultimately, to diminish fear because fear eroded faith in the system.

Remember that phrase:  purchasing power.

Government spending alone was insufficient however, and it was clear by the severe recession of 1937 that something new had to be tried.  This was interrupted by the Second World War and any other activity was shelved for the duration.  What happened through the post-war period however, was a series of measures that, by design or happenstance, assisted not only the economy and purchasing power of the American consumer but diminished the fear that kept it from being exercised.

  • The wide-spread availability of health insurance from employers meant that Americans were relieved of the fear of crippling medical bills.
  • Higher education was made more available to the large number of returning veterans via the GI Bill of 1944 and the quality of that education was increased with significantly higher public funding for facilities at state universities.
  • The existence of Social Security and the availability of company sponsored pension plans meant that Americans were, to a considerable extent, relieved of the fear of poverty in their old age.

This is where we find ourselves today.  The Consumer-driven economic model was predicated not just upon the wealth and incomes to support reasonable purchasing power, but also the assurance that there was a sufficient safety net to protect the constituent consumers.  The high cost of healthcare via premiums, deductibles and co-pays has shifted to the family with a subsequent loss of purchasing power.  The high cost of the college degree that is now a prerequisite to a job that at least promises stability has shifted first to the family, and then to the youth, with a subsequent loss of purchasing power.  The decrease of pension plans and the rise of self-funded retirement has shifted that to the family as well, with a subsequent loss of purchasing power.  Couple these with the disproportionate rise in the actual costs for healthcare and higher education?  Disaster.

There is a terminal lack of purchasing power.  That the average American had nothing upon which to rely when social distancing shutdowns occurred with no economic support forthcoming while the financial system and corporations were backstopped fed a smoldering anger.  That small business was forced to shutter while certain large retailers were declared essential spiked that anger.  People can talk all that they want about the pandemic measures impinging upon their rights, the underlying fear is that they face economic ruin unless they can return to their jobs.  Regardless of where you are on the political spectrum, it is ultimately an anger built upon the practical implications of economic inequality that we have allowed to take root.

Perhaps the only remote silver lining to this freakishly misbegotten shit show is that it is occurring in an election year.  What we have known as an economy is functionally dead.  The national savings rate has spiked to 33% in April 2020 and the economic establishment states that we are hoarding cash.  Do you know what I say?

Good.

Why should we now spend for anything other than necessities?  Why should we spend when government and corporate policies make it clear that our families will receive no meaningful support?  Why should we upgrade and consume when the products, although ostensibly American, are built overseas and profits are disseminated only to shareholders and senior executives?

There is now a debate brewing in Washington as to whether the temporary additional weekly unemployment benefits of $600 should be extended past their July 31, 2020 expiration.  This is occurring because research finds that fully 68% of American workers now have UI benefits greater than their weekly wage.  Conservative legislators fear – understandably – that there is no longer an incentive to work and that such benefits constitute a moral hazard.  Yet they oppose an increase in the minimum wage.  They oppose any public sector financing for healthcare.  They oppose any increase in public funding for higher education and some even support decreasing funding for elementary and secondary education.  And they support a President whose 2020 budget proposal called for Medicare and Medicaid cuts to address a trillion dollar deficit.

And they do not answer the underlying question:  How have we come to this juncture that the wages are so disproportionate to what is required to survive in America today?

This is why the election year timing matters now.  There must be clear and progressive – even radical – policy choices made to help create a new model driving economic growth, one that is not piled upon the back of an American citizen again bereft of purchasing power and crippled by fear.

And yes, one that actively encompasses a real core of social justice.

Pandemic Food Price Index (6/2020): You Can’t Always Get What You Want…

May of 2020 saw the inaugural edition of the Pandemic Food Price Index, a 37 item market basket of foodstuffs to measure the impact of the Pandemic on grocery store food prices.  Here are the results and observations for June, 2020.

  • The nominal cost of the 37 item basket, shown at the bottom, was $89.09 in June.  This was an increase of $.58 from the May 2020 baseline cost of $88.51.  The Pandemic FPI is now at 100.66:

(((89.09-88.51)/88.51)*100) + 100 = 100.66

  • An increase of .66% seems minor, but this is monthly and extrapolates to an annualized rate of 7.92%.
  • A basket of 37 items priced at three stores is a total item count of 111 individual items.  Of these 111 items, there were seven of the 111 not in stock at the time for an out-of-stock rate of 6.3%.  Note that in each of the seven items, there were still labels on the shelves so the items were still for sale but just not in stock at that moment.  This is in comparison to the three items out-of-stock in May, 2020 (rate of 2.7%).
  • Five of the seven out-of-stocks were at the largest, internationally owned grocer and involved three of the four Staple category items (Canola Oil, Sugar, Flour generics) and two of the three cereals (Frosted Flakes, Rice Chex generics).  In each of the cases however, there were other alternatives for sale so it really is a case of you can’t always get what you want…
  • The anomaly was a case of stealth inflation.  The local grocer was no longer offering the 32 ounce jar of generic grape jelly and had replaced it with an 18 ounce package at a lower price.  I recalculated the per ounce price at the 18 ounce package level to an equivalent price at the original 32 ounce and this recalculated amount was used in the Index.  The nominal impact is a price decrease of 36% for the lesser amount but the real impact, had the original package been used, would have been a 14% increase.
  • The meat stocks were plentiful and what was notable in June versus May was the presence of the three pound “chub” of ground beef.  These packages first appeared in my local markets in approximately 2014 and were produced from factory-style meat processing plants; I suspect that the grocers were introducing them in response to the declining purchasing power of their customers.  These items were absent when I did the initial pricing on May 2 and their absence was due to the issues with Covid exposures at the factory-style meat processing plants.

Comments

As I noted, an increase of .66% doesn’t seem like much but annualized to almost 8% in a nation in which the family income has been smashed and the Q1 GDP has dropped by 5%, it is highly problematic.  Fortunately, enhanced SNAP benefits are in place for the remainder of FY 2020 and WIC benefits are likewise enhanced through the end of September, 2021.  Where it is an immediate problem is for senior citizens relying upon their Social Security benefits.  Why?  Because the cost of food is not included in the calculations for determining the COLA increases that occur in the latter half of each year.  If the prices continue to rise, the effective purchasing power of the senior citizen will actually lessen as the COLA amounts for the past five years have averaged 1.34%.

The grocery shelves are not bare and in each of the cases that I noted, there were other options available.  Even toilet paper is back in each store, albeit in smaller package sizing.  Rice was there but typically in larger sized bags and even in April and May, there was rice available but it was in brands sold to the Hispanic community and hence in a separate aisle.  The generic brand staples (canola oil, sugar, flour) were missing in the one store and although the stocks were minimal in the other two as well, there were reasonable amounts of name brand items available.  And no, I’m not going to count the damned bags of flour.  The indication is thus that people are doing what they can to stretch their dollar as they hunker down.

The renewed presence of the lowest price per pound “chub” had a significant impact here.  Had I used even last month’s lowest per pound price for ground beef, the FPI would have had a June Index level of 101.52 versus the actual 100.66.  Extrapolating to an annualized rate, the impact would be a hypothetical 18.24% rise versus the present annualized rate of 7.92%.  But I have severe qualms about that since I know that those plants are operating under the aegis of the invoked Defense Production Act, despite increased infection rates for those in the meat packing plants because of work conditions.

And I wonder whether or not, were we asked as part of a communal sacrifice for the common good, we would be willing and able to forego so much meat as part of our diet.  It was what our great-great-grandparents did for the common good on the home front of the Second World War, sacrificing something for those on the front lines.  But in times of Pandemic, the front lines are here.

Pandemic FPI (6/2020)

 

Addict America

What we are witnessing are the visceral images of a nation in the throes of an addiction.  It is an addiction to a message of Constitutional narcissism.  It is an addiction that has been knowingly fed by its dealers – Limbaugh, Hannity and their ilk – within the self-proclaimed Conservative Media for more than three decades.

Our nation is the same as any other well-heeled addict from prosperous circumstances.  We think we convey a sense of normalcy as the addiction grows, unaware that to the outside world, our property has grown seedier and our household more disorganized.  Most importantly, our children and most vulnerable are neglected and left as prey to the hard mercies of others.  The addiction stresses our ability to cope until something happens which collapses the facade and exposes our reality in its awful ugliness.  It is an addiction whose propagation now willingly courts death, a literal siren song luring the body politic to a mass fatal encounter as senseless as the American Civil War.

This something is obviously the Pandemic.  As I write this, the national daily death toll is such that the entire population of my hometown would be dead within a week and the numbers continue to rise, at least outside New York.  Yet many localities are again re-opening despite metrics that don’t even come close to those laid down by the Trump Administration and armed protesters stand on the steps of state capitol buildings proclaiming opposition to measures which purportedly infringe their Constitutionally mandated civil rights.  This opposition, fomented by the Conservative Media and the President – the guy whose folks put out the re-opening metrics less than a few days before, remember? – is predicated upon a wholesale misleading characterization of the Constitution.

How?

There is an inherent tension within the construct of the Constitution and that is the tension between the Me and the We.  The Me is encased within the Bill of Rights and has been the focus of the Conservative Media since the arrival of Rush Limbaugh after the repeal of the Fairness Doctrine in 1987.  Who doesn’t love our Bill of Rights?  It was the first written attempt in human history to enumerate and guarantee what were considered the essential rights of the individual in a society.  It is the most identifiable aspect of the Constitution.  The great majority of Americans can’t define the 17th Amendment let alone even tell you how many Amendments even exist.  But you can be damned sure that people know about their First Amendment right to freedom of speech and their Second Amendment right to bear arms.

Except that the Bill of Rights is only one part of the Constitution.  The other part of the Constitution is about the We.  The obvious and accelerating failure of the original Articles of Confederation prompted the calling of the meeting that became the Constitutional Convention of 1787.  It was the We that concerned Madison, Hamilton and the rest of the attendees.  Multiple states with different personalities based upon unique founding charters and culture, let alone geographic and economic differences, were too diverse to ensure continued political coherence.  The national structure was collapsing and the success of the Revolution would be rendered meaningless.

The Convention’s intent was not the Me, the Bill of Rights.  The Me wasn’t the first, second or third thing in the mind of either Madison or Hamilton.  It wasn’t on any agenda, as little as there was of one.  The Bill of Rights was an outgrowth of the debates as the Anti-Federalists pushed back against Madison.  In their minds, what was the point of the Revolution if it allowed the creation of a new government which could trample the individual as badly as the recent English king?  The resulting compromise created this Bill of Rights to assure that an individual’s rights were protected.  This compromise created an astounding document of political duality that attempted to balance the We Yin and the Me Yang.  There is supposed to be a balance.

These were the questions that most concerned the Constitution’s framers:  How can We maintain a civil society that can peaceably abide together under the principle that all are created equal under the law?  How can We allow for a civil society to change and adapt to the world around it within the framework of the first question?  How can We control power and allow the peaceable transfer of power?  Most importantly, how can We as a civil society protect ourselves from falling prey to predators such as demagogues, despots and zealots?

When viewed from this aspect, much of our history has been made in the effort to expand the We in the face of resistance from individual groups fearful of a loss of their own powers and wealth.  Expanding it to who?  Securing the rights of blacks and other minorities , including that key right to vote, expands the We.  Securing the rights of women, including that key right to vote, expands the We.  Why?  Because it’s through the securing of their own individual rights and enfranchisement that these groups – one of which actually comprises more than half of the population – can find a voice that entitles them to a place at the economic table sharing in the common wealth of the nation.  Not only sharing in the common wealth, but expanding it by dint of their own talents and efforts.

Commonweal.  It’s an archaic word used by my wife in a recent conversation as we discussed the multiple acronymic lifelines already thrown to the business community and capital markets but not extended in any meaningful measure to the average person.  It forms the basis of the word commonwealth and in its simplest terms is the common good.  It is the idea that while the members of a community can expect their rights to be respected by the community, they have a like obligation to the well-being of that  community, politically and economically.  Is it important to distance ourselves for a period to not overwhelm our medical system as well as protect our most vulnerable?  Then it’s what we do for the community and in turn, we expect the community to support us through this period.  Commonweal.

Except that that hasn’t happened.  The community has responded with full support to the wealthiest and only one-time payments to the general citizenry with the understanding that they would still be responsible for the upkeep of their bills.  In the meantime, the unemployment rate has skyrocketed.  The public has been left to bear the losses from a communal disaster without certainty of income for an unknown period.  In a society that embraced the commonwealth philosophy, the community would be certain to provide sufficient support to support its members while they were asked to participate social distancing to protect the community.

Not only do we ignore the concept of the common good, we have a Chief Executive who ignores the Constitution, exemplifying the fatal flaws of the original Articles of Confederation by abdicating responsibility for a national crisis to the individual states.

There should be balance.  We haven’t had that for decades.

Why?

The cultural birth of the Me preexisted it’s maturation in the 1980s.  The Boomer Generation were a cultural phenomenon and their quirks led to their titling as the Me Generation by the writer Tom Wolfe in 1976.  That generation – mine – turned society on its head in search of self-fulfillment and it persisted as they aged and entered the economic and political mainstream.

Their entry into the mainstream set the stage for the economic and political rise of the Me in the 1980s.  Rush Limbaugh, the first of the Conservative Media, arose on the back of a resurgent conservative response to Ronald Reagan’s famous comment:  Government isn’t the solution, it’s the problem.  Limbaugh expanded upon that with the message that I earned that money and I should be allowed to keep it.  Soon, other commentators entered the field and proceeded to help fracture the We by separating the nation into Good Americans versus Liberals and Republicans versus Democrats in the search for listeners and market share.  Understand this:  Conservative Media is not only a message of anger but a business model of anger as well.  Anger and fear are profitable and this profitability has caused an even harder push.

Uncertain about this?  Consider Les Moonves’ – then CEO of Columbia Broadcasting – comment about Donald Trump in 2016:  “It may not be good for America, but it’s damn good for CBS”.

It’s the same for the other side of the media spectrum as increased competition extends the boundaries and coarsens the dialogue to gain listeners.

But why do Conservative Commentators have the advantage in ratings?  Where do they find the materials to gin up rage, secure listeners and earn profits?  The materials are ensconced right there within the Bill of Rights.  Some of the ten amendments are outdated and not suited for the propagation of rage.  Quartering troops in houses?  Archaic.  Unreasonable search and seizure?  Right to a jury trial and reasonable bail?  Perhaps, but if you obey the law – like any of our salt of the earth listeners – then it isn’t pertinent, is it?  State’s rights?  Not since 186…never mind.  Just go to the first two amendments right up front:  religious freedoms in the First Amendment and gun rights in the Second Amendment.  The rancor of the past two decades has built within these two amendments but it has been stirred, spiced and served on a scalding hot plate in our laps by our Chef Executive.

We are near the culmination of the Conservative drive for power and money.  The Conservative Media has relentlessly pushed fear and anger and the President has mastered it, wielding it venomously in a strategy of Divide and Conquer.  To secure his election in 2016, he divided us from the world and in the aftermath of the inauguration, proceeded to remove or threaten to remove us from multiple international treaties.  When he viewed the push back demonstrated by the Women’s March after his inauguration, he narrowed the Divide and Conquer Strategy to focus on the nation itself and found his ammunition in the first two amendments of the Bill of Rights.  He has openly stoked his followers with fears of religious persecution and the threat of a repeal of the Second Amendment.  A call to “Liberate Michigan!” via Twitter led to his supporters bringing semi-automatic weapons to a rally at the state Capitol.

Civic insanity.

Our nation has had two other encounters with governance according to the Me.  The first was the original Articles of Confederation ratified at the end of the Revolution, which created a Federal government that was only a weak shell and ceded almost all power to thirteen states.  It went so well that six years later, the Articles were replaced by our Constitution.  The second was the Confederacy.  Nominally a nation of sovereign states that heavily espoused states rights.  By the latter half of the war, the Confederacy suffered crippling problems as different states opted to withhold money, supplies and men from the central government in order to support their own needs.

Some of our greatest national moments occurred during the Commonweal moments of the We.  We eliminated slavery through a Civil War which incurred more death and national destruction than any other war in our history.  We beat totalitarianism and did it twice in a quarter century, almost just to prove a point.  We expanded our educational structure during these conflicts through a series of Commonweal political acts – The Morrill Land-Grant Act of 1862 and The Servicemen’s Readjustment Act of 1944 during two of these conflicts.  We put a man on the moon and expanded the frontier of space because as a society, We willed it so.

We have now lost more than 90,000 of our citizens as I write this and an untold number of thousands of those deaths could have been prevented.  Our Chief Executive minimized the notice, hampered preparation and then abdicated all responsibility to the individual states, who have been left to fend on their own domestically and internationally.  Don’t like social distancing and lockdowns?  Look to Washington, DC and ask if things might have been different had 50 individual governors not had this dumped in their laps.

Once again, the Me has failed.  It’s time for the We.

 

 

Re-Boot: The Pandemic Food Price Index (FPI)

What is happening to the price of a market-basket of food due to the economic effects of the Covid-19 Pandemic upon:  (1) the upheaval in the supply chain; (2) the collapse in aggregate family income?

This two-pronged question is the reason for the resumption of the PracticalDad Price Index after an almost four year hiatus.  We know from the US Department of Labor’s report for April 2020 that food prices rose by the highest monthly amount in 46 years due to the supply chain upheaval.  It’s bad, but it only gives for general food groups (meats, vegetables, etc) and doesn’t go into further depth than that.  This kind of information will also miss the impact of the supply chain’s efforts to mitigate the cost increases and attempt to keep foods affordable for the shopper.

The modified index (for the original Index introduction, see here) will focus solely upon the original 37 foodstuff items from the original index, broken into categories of Meat, Dairy, Bread, Staples, Cereal, Produce and Grocery items.  The pricing will occur within the first five days of each month at the same three groceries, each unrelated to one another.  The groceries represent three separate tiers of size:  local, Mid-Atlantic regional chain, international chain.  The prices for the items from the three stores will be averaged and the the mean prices added to find the total cost for the composite basket.  The total for the composite basket as of the pricing for May, 2020 will serve as the index baseline of 100.  The total for the month composite baskets moving forward will be likewise totaled and their results shown as a comparison to the initial index level of 100.

Caveats:

  1.  This is not meant to be representative of national trends.  This is three store survey in a single county and is meant to be a data point in a larger picture.
  2. I will discontinue the Index if I believe that the supply chain is so kinked that I cannot present an accurate picture in good faith.
  3. I cannot objectively verify inventory quantity within the stores but I can provide anecdotal commentary about what I am seeing and that can serve as anecdotal evidence.
  4. Within the past month, I have noted that products that are simply gone from the supply chain have not only disappeared from the shelves , but the shelf labels themselves have been removed or covered over with blank labels.  If the item is not on the shelves but the label is present, I will treat that item as temporarily out of stock and report the price as listed on the shelf label.
  5. The items priced are almost all store- or off-brand, which would be purchased by a shopper attempting to extend a fixed food budget.  There are rare instances in the Index in which a name-brand product is used and that same product will be priced moving forward to assure consistency.
  6. Pricing will occur, whenever possible, in the morning.
  7. If new alternatives are offered for an item, as happened continuously in the old Index, that alternative will be used then and afterwards to assure consistency.  The same will happen with package sizing.

The May 2020 FPI results are shown in the linked pdf below.  Note that a few items are not listed in two columns; these items were part of the original survey and they were not available in those stores, even searching for shelf labels.

The Total Cost of the May 2020 FPI is $88.51 and that amount will serve as the Index level of 100.

FPI Base Results – 5/20

 

 

 

Life in a Time of Corona: Accommodations on “Re-Opening”

Mr. Murdoch, what are your orders?

Full ahead and no course change, Mr. Hichens.  Let’s see if Titanic lives up to her press!

It’s abundantly clear that the social distancing effort will be abandoned and the process of “re-opening” will move ahead, damn the cost.  The question now is this:  what accommodations should we make to live in a society which demands that life returns to pre-pandemic patterns despite the ongoing presence of the virus that disrupted those patterns in the first place?

My family’s personal adjustments will be driven by what we decide because there is no longer any meaningful public health guidance from the government.  The incompetency is glaring and stunning, all the money that we have invested over decades in a federal public health infrastructure to help manage such events completely pissed away.  After ignoring and downplaying the virus so that the impact was worsened, the President finally issued a framework for managing a return of societal functions over a two week period of virus metric declines.  Only a day later, he undermined it with a series of tweets to “Liberate” three separate states from social distancing and lockdown measures.  That none of these three states even came close to meeting the new guidelines was irrelevant.

The majority of states are now moving ahead with “re-opening” despite any lack of control of the virus that even meets the President’s own metrics.  Neither is there any meaningful testing to ascertain the spread of the virus until it shows up to burn through through a locality’s hospitals.  Indeed, the President has effectively removed any public health aspect from this process by shelving the guidelines set out by the CDC.  The guidance for a public health pandemic is now managed solely by political and economic criteria.

What is happening is, in a sense, a darkly hilarious irony.  A verbose and gun-toting minority – in their fear of any potential abridgment of their preferred freedoms under the Bill of Rights – embraces and lifts up a Chief Executive who has actively transferred all responsibility for management and action for a national crisis to the states, resurrecting a style of government which existed last under the post-revolutionary Articles of Confederation.

You remember that one?  Yeah, that one.

The one without a Bill of Rights.

Because things can’t get any more local than the molecular level of the family, what might we consider?  The important point to remember is that we must somehow lessen our risk and decrease our exposure to the virus if we cannot socially distance or isolate ourselves.

First, consider how to manage with elderly parents and other relatives.  What are the contact and exposure rules if you have to visit or take them to appointments?  What is the status of their paperwork and executors?  What is the default plan in the event of your own illness?

Second, make sure that the personal affairs are in order.  Take to heart the philosophy of The Next Man Up.  Assure that the wills and various powers of attorney are in order should they have to be utilized.  This also means considering the inclusion of secondary executors and decision-makers.  Note the critical passwords and pass that information to your executor.  While the virus most impacts the elderly and immune-compromised,  there are all age levels in the ICU and even children are being affected with their own issues.

Third, make a re-usable mask part of the daily routine.  The notion of a truly disposable mask is dead as even healthcare providers are having to extend their usage for lack of availability.  I don’t know enough about the availability of gloves but anticipate that I will save those for high traffic public areas such as grocery stores.

Fourth, assure that there is hand sanitizer in every vehicle and use it after each venture out of the vehicle.  That also means finding an alternative source for hand sanitizer and re-using the existing bottles if the replacement sanitizer comes in large quantity containers.

Fifth, consider the use of a small notebook in the glove compartment to note where I’ve been on different days in the event that I contract Covid-19 and contact tracing efforts are made.

Sixth, broaden the family’s food supply chain so that there’s not a complete dependence on the grocery store.  If possible, plant a garden or join a CSA to provide a wider access to a dependable source of food.  Even within the grocery store, consider widening your preferential supply chain by purchasing food items not being purchased by everyone else.

Seventh, what is the process for returning home from work or another outside exposure?  This is a real thing for healthcare workers in hard-hit areas because they don’t want to expose their own families.  What processes should you adopt within the household?  It might range from disrobing in the garage and leaving clothing in the laundry room prior to a shower, to a simple hand-washing upon returning home.

Eighth, decide whether the trip or errand is worth the exposure.  Do a more thorough job of planning so that only one trip is required instead of multiple return trips.  If it isn’t necessary, is it sufficiently important enough to justify the exposure?  Visiting a movie theater might not be worth the risk, but traveling out of state to take a kid to college for the first time?  That would likely be worth the risk with proper precautions.  Assuming that it happens, of course.

Ninth, reconsider the shopping habits.  In this environment, ignore the economic establishment thinking that the public is hoarding cash and ratchet down the discretionary spending to what is necessary.  If you do have money available for discretionary spending, then give serious thought to directing it to the food banks that are now serving a significant portion of our citizenry.  Consider another charity or simply rebuild your own finances to your comfort level.  If you shop online to avoid exposure in a bricks-and-mortar store, decide if Amazon is the go-to site or if it’s possible to spread that cash to other online stores instead of further enriching Jeff Bezos.

This is meant to be a point-of-departure for the planning moving forward instead of an exhaustive and comprehensive list.  Consider your own circumstances and risk tolerances.  But do it now so that you are ready for when the re-opening takes place.

Resurrecting the Price Index: Rationale

We are again in Terra Incognita and our only guides are a few accumulated studies of a hundred year-old predecessor pandemic.  This is like trying to find the most efficient route from New York to Salt Lake City using a 1932 Rand McNally map.  The fear is palpable and not least of which is the concern about the national food supply, especially since John Tyson of Tyson Foods took out full page ads warning that the food supply chain was breaking.  While this piece was going national, there were also warnings about the virus having an inflationary impact on food prices.  Are there serious problems?  Absolutely.  Are they as terrible and fear-inducing as it appears?  Not necessarily.

Societal shocks happen and they are always followed by fear, if not outright panic.  Our history is that we have had problems with food prices and supply before, most notably during the Second World War, and we managed to survive.  What is different is that Franklin Roosevelt’s government had sufficiently advanced notice that there would be another war and had begun thinking ahead.  Today?  Well…that depends to whom you are talking.  The simple reality is that there are no easily ascertainable data points to assess developments at the retail grocery level and the lack of data feeds uncertainty and fear.

This is why I am resurrecting the original PracticalDad Price Index – which I calculated monthly from November 2010 to September 2016 – and modifying it to follow activity within the grocery stores.  The original index was created as a kitchen table project to ascertain the impact of the Federal Reserve’s novel Quantitative Easing programs upon food prices in my vicinity.  It was calculated both to satisfy my own curiosity and to serve as a small data point for a larger online community.  It’s one thing to read wonkery, but another to actually see it in concrete terms.

The modified market basket, methodology and results will be covered at length in the next article.  For now, let’s go from pondering questions of inflation at the molecular level of three local grocery stores to a more global perspective on prices and inflation.

Understand that inflation is simply the decrease in a currency’s value, as measured by it’s purchasing power for goods and services.  There are three principal reasons for this.

First, there is demand, such that people are willing to spend more for that item with the supply of that item being relatively constant.  The stunning rise of a single Bitcoin is an example of that but that glorious moment in our history when Americans believed that a house was an ever-increasing investment works as well.  Our realization that a house wasn’t so is a good example of the inverse, deflation.

Second, an inflationary or deflationary effect can arise out of a good’s supply.

The oil supply shock of the 1973 OPEC oil embargo caused prices to spike simply because there was an immediate halt to the flow of oil to the US with no corresponding decrease in demand to offset it.  In economics parlance, this was a simple shift in the supply curve to the left with demand being equal.  The shift from Intersection A to Intersection B resulted in a rise from a price of P1 to a price of P2.  Real life, unfortunately, was quite a bit messier.

Finally, the purchasing power of a currency can be affected simply by the sheer amount of money available within the system.  What most have forgotten is that inflation for food – particularly meats – was already an issue prior to the 1973 Embargo.

There were calls by housewives for “Meatless Meals” as a push-back against grocers and protests broke out across the country.  Housewives blamed grocers and the grocers pointed their fingers at farmers, who kicked the can of blame to the feed producers.  Where did the final responsibility rest amidst this idiot firing squad?  Actually, it was a result of the persistent and signficant increase in the amount of money within the economy starting in the 1960s.  The Federal Reserve itself terms that era as The Great Inflation and notes that the period began in 1965 and ended in 1982.  Why those years?  Because 1965 saw the beginning of LBJ’s Vietnam build-up as well as the inception of his Great Society programs.  And 1982?  That’s when then-Fed Chairman Paul Volcker turned off the tap and ratcheted interest rates to nosebleed levels to rein in the resultant inflation.

There is nobody – absolutely nobody – who can tell how this plays out in the grocery aisles.  There are competing articles about incipient inflation and incipient deflation, which is really where the mass of Americans have been stuck since 2009.  So take a side and argue away because each argument has merit and honestly, the act of arguing serves nothing better than to satisfy a primal intellectual urge, a form of mental masturbation.

What this C-19 Pandemic has managed to do however, is create a situation in which all three factors are now simultaneously in play amidst the real economy.  In the short term, the supply of specific food groups is curtailed and all things being equal, there should be a spike in the prices for those groups.  But all things are not equal here because while there’s the supply question, the American people have suffered a cataclysmic – and that’s an appropriate word for these circumstances – demand shock in loss of income, strained as it already was for the past decade.  Refer back to the Supply/Demand chart shown above.  The family income supported Demand curve hasn’t so much been shifted left as it’s been tossed into the bottom corner like a broken corpse.

Our present drama is playing out amidst these first two factors of compromised Food Supply and cratered Family Income, contesting one another like fighters in the late rounds of a championship bout.

But the third factor, the Money Supply, is waiting quietly outside of the ring and that is what literally awakens me on the occasional night.  In the wake of the 2008 Financial Crisis, the Fed’s three QE programs created trillions of dollars and in the process extended the Fed’s balance sheet to amounts previously unimagined.

Growth in M1 (1975 – 2015)

That it didn’t tear Joe Six-Pack a new one is a testament only to the fact that the economic, legislative and electoral policies since the repeal of Glass-Steagall literally created two stand-alone economies:  one awash in wealth for the uber-wealthy and another that diminishes the American Middle Class a little bit more each day.

My wife once asked me, if the goal was to create inflation, where is it?  The inflation is there.  It is encased in the equity markets and the prices for exclusive properties in places like New York, San Francisco, the Hamptons and Potomac, Maryland.  It is encrusted in the wealth accrued to billionaires and near-billionaires and their purchases of art, excess consumption and doom shelters in New Zealand.  It is wrapped up in projects such as Jeff Bezos’ effort to create a ten thousand year clock as a monument to long-term thinking, the vicious irony being that it’s financed by a predatory reliance on short-term quarterly results.  And the inflation is locked away in the purchases of items of alternate value such as cryptocurrencies and precious metals, which are now physically almost unobtainable despite having a stable paper price.  Go figure that one out.

As global economies pursued this race to the bottom with their respective currency values, the Fed acknowledged that it had to begin raising interest rates to something remotely approaching historic normalcy.  It’s not surprising that the stock market became cranky during this period because it’s flow of cheap credit was threatened.  There’s a reason that President Trump demanded zero and negative rates from the Fed, regardless of the damage that these rates do to real activity.  But in the immediate aftermath of the Pandemic’s onset, the response was to salvage the economy by again dropping rates and extending lifelines to a wide variety of corporate and financial entities.  The result of these lifelines from the government and the Fed?  $6 Trillion in the course of the two month period ending April 15, 2020.  That money is now coursing through the bond and equity markets, which have stabilized since the roll-out of the various programs.

Yet the average American gets a one-time check of $1200 with an additional $500 per child.

At the end of the day however, our economy is built upon the premise that Americans must spend for any recovery to happen.  That’s why the Administration pushes to get the economy re-opened and money flowing, even though the infection and fatality numbers in many areas still fail the President’s own criteria for re-opening.  That is why we hear establishment commentary conflating legitimate saving with ridiculous terms like “hoarding cash”.  Sure dude, I can’t cover a $400 car repair but yeah, I’m good for a beach week to help the economy.  Ultimately, the average American will not be able to consume unless the Federal Government renders real and meaningful assistance and the two bifurcated economies are rejoined in even the loosest fashion.  Whether it is debt relief, guaranteed income or any number of other programs that remove the noose from the neck of the 99% and/or ratchet down upon the 1%, the economies must be rejoined and a re-balancing must take place.

That’s when the trillions of dollars set loose since 2009 are liable to return.  If it happens, that money will begin flowing through the real economy and we will be set up for a replay of The Great Inflation, except that the Americans of this generation won’t have the financial health of their great-grandparents to survive.  The resultant inflation will ignite and what we witness in the next year will be child’s play in comparison.

It is possible that these fears won’t be realized.  But make no mistake that the American economy – and the political body – is seriously ill.  One of the criticisms of the repeated actions of the Fed’s QE programs is that it’s akin to treating cancer with copious amounts of painkillers.  The patient feels better but the cancer continues unabated.  At some point, the treatment must occur in all of its unpleasantness.  As a survivor of cancer and any number of other medical issues, I attest to the value of a painkiller in the moment; I also understood in the moment that my survival was predicated upon a simple submission to the treatment and all of the side-effects.

Apart from the sheer ability to draw breath for yet another day, there’s an upside to survival.  It is the understanding that despite the worst fears in the moment, they are at that time, only fears and not guaranteed realities.  You learn to acknowledge the fears and set them aside, managing your life one step at a time and taking each step as it comes.  The fears are there.  They are real.  But until they actually occur, they can be managed one step at a time.

So it will go in the grocery store.  We will manage as best that we can because that is ultimately all that we can do:  our best.  In the meantime, I will work to put a recognizable face to the abstract notion of the cost of food and the reality of the supply chain.  That will be the next article:  The new Market-basket.

 

After High School: Helping Find the Path

I wish that I had known that I had the option to go to trade school…

It was a simple comment uttered by Eldest as were driving together, her toddler daughter buckled in behind us.  It was also one of those remarks that grabs you by the scruff of your cerebellum and shakes loose an unheard huh?  She was quick to note that that she was thankful for her education – a Bachelor’s degree – but increasingly she had found that she enjoyed the process and reward of working with her hands.  I took – take – no offense despite the mental response but it’s a comment that has raised a larger question in the past several months:  How do we, as parents, help our kids ascertain their educational path after high school?

The question is especially germane today.  It’s now clear that some form of further education is necessary for most to avoid a lifetime of minimum wage jobs, but the pathway for such a crucial life decision is booby-trapped for many.  The tripwire is that higher education – Big Ed, as an acquaintance referred to it – is a business that requires a steady stream of bodies to fill the seats of the lecture halls.  The Claymore mine is the realization that there’s a clear discrepancy between the living-wage jobs available and the education required for hiring.  We’ve turned out a plethora of liberal arts degrees but there are few of those graduates with the skill set necessary to run a CNC machine.  The Punji stick is that the decline of the middle-class family has shifted the responsibility for educational financing back to the student herself; the likely accumulation of debt will eliminate the opportunity to repeat the process again.  Don’t hold your breath if you’re waiting for any college to say we’d love to have you here but we’re gonna give you a pass because honestly, it’s too much debt for you to handle.  That depressing commentary will have to come from you.

Full disclosure:  We have delivered this message to all three of our children and doing so sucks.  Hard.

I’ve thought about Eldest’s comment repeatedly in the ensuing months.  My second immediate thought was a defensive yes, you could always have opted for trade school but that’s really not the truth.  It’s not the truth because the trades weren’t a pathway made clear to her as an option through the myriad conversations across the tween and teen years.  My mantra from her middle school years starting in 2007 was we have to get you educated with as little debt as humanly possible; I was looking at the trends and numbers and recognized that student debt could be a serious impediment to a decent adulthood.  I could follow the economic news and extrapolate that back to my family at the molecular level of the economy.  I could even see that the living wage jobs were swinging back to a STEM orientation and skilled manufacturing.  But the simple reality was that the skill set that I knew, with which both my wife and I were raised, was rooted within the route of college and the liberal arts and that was the consequent focus with our kids.  My own upbringing was in a corporate mid-management level household and in my teen years, the parental conversation was to push for a degree that enabled me to make a living for myself.  It was what my parents knew.  My father was a product of the mid-20th century corporate environment and from his viewpoint, and my mother’s by extension, there were always going to be corporations that would afford a reliable income and retirement to dependable, smart employees.  My final college decision was based upon a school with both strong journalism and business programs.

Many of our life choices are informed by what we learned in our upbringing.  Working with my hands was not a significant part of my early life.  I helped my father remodel the family basement and learned to perform essential maintenance upon my car but that was stuff that my parents considered what any functioning adult should know.  There were other opportunities afforded to me by my father but I didn’t find them of interest and he didn’t push me to learn.  When I did talk to him about following him into computers during my teens, his literal response was Hell, no.  I can teach a goddamned monkey to write programming but I can’t teach one to write a proper paragraph or speak in public.  So it was the liberal arts for me, which was good because I found in college that I was, in some respects, dumber than a goddamned monkey.

So, what if I’m raising a child amidst a time of tremendous change?  What if my skill sets are not applicable to an economy in flux?  Like any other part of parenthood, there are few exact answers but I will offer the following.

First, remember that there’s a goal to parenthood:  you are raising your child to to walk out the door and support herself.  It’s the goal from the first delivery room cry and one that threads throughout her years with you.  What it means is that you don’t wait until her junior year in high school to attend a college financing night and then ask her so, whaddayawannado?  I’m not saying that it’s the credo that you tell yourself every morning when you look in the mirror but it is something that remains within the back of your mind, especially as she ages and moves further along to more diverse options within the educational system.

You must become intentional in your parenting.

Second, you have to pay greater attention to the culture and politics around you.  Foremost, understand the difference between news and news commentary and act accordingly.  It’s telling that during the past week of this Covid-19 pandemic, the most watched news programming is now ABC Evening News and not the news networks.  Pay attention to different sources of information and check for veracity.  It’s time-consuming but the good news is that we now an insane amount of information available instantaneously within our phone’s grasp.  Or you take to heart what my father said to me routinely:  pull your head out of your ass and look around.

Third, you’re going to have to be almost countercultural with your child in terms of screen and electronic media consumption.  The hours spent in front of a screen have obviously increased and there is little to indicate that the trend will reverse anytime soon and it will simply have to be part of your routine to monitor platforms and hours and listen to her kvetch around boredom (despite the simple fact that there can be value in children contending with boredom).  But it’s crucial that she learn to pay attention to the world around her and she won’t do that immersed in a screen.

Fourth, try to provide a wider variety of opportunities for her.  If you know hunting and gardening, then do those things with her.  But don’t be shy about crossing things up and taking her to an art exhibition either.  A large part of parenting is moving outside of your comfort zone.  An inveterate reader?  Great.  Read to her and then go hiking with her.  It not only provides a wider perspective of the world but also an opportunity to appreciate her budding personality.  One of the eccentricities of the past several decades is the proliferation of expensive advanced-instruction youth sport leagues.  The catastrophic loss of jobs and income from this pandemic is going to put a crimp in that business model and the opportunities will most likely devolve back to the parent coached/run Little League model.  It’s going to be incumbent upon you as a parent to make those opportunities happen, even if you have no experience with that.  Honestly, some of the best coaching that any of my kids had were parents with no previous experience.  Thank you, Rob, Jeff and Scott, wherever you are.

Fifth, figure out how you want to handle praise and criticism.  The first is critical for toddlers and small children but how are you going to begin balancing the two as she grows?  Boundless praise is meaningless and boundless criticism is fatal.  Ascertain the development norms for age levels and move from there.  Think about your style of delivering each and what you and your partner provide.  My kids learned that if they really wanted to parse performance for constructive criticism, the go-to person was my wife.  I, on the other hand, actually gave at least one of my kids a rousing comment of Don’t Suck before games.

Sixth, pay attention to the guidance and course suggestions that she will receive from school, especially as she ages.  Parents and teachers are natural allies but systems are built to serve the large majority of students and there are liable to be instances in which she is not part of that majority and will not be served by the recommendations.  Pay attention to what she brings home and listen to what she’s saying, then don’t be shy about calling to verify what you’re hearing.  Kids commonly mangle what they’ve been told but there can be circumstances in which they are absolutely correct.  This will come into play with course selections and loads when she’s older.  Fortunately, our experiences have been positive and the administration has been willing to work with us on multiple occasions.

But it wouldn’t have if we had missed the occasions.

Seventh, let her fail and hold her accountable for failure.  Be clear about your expectations and then do your best to hold her accountable.  It’s an immensely tricky and subjective topic:  Are my expectations reasonable?  Are the repercussions reasonable?  Are there legitimate mitigating circumstances?  How do you respond if you mishandle it (and believe me, I have done that)?  The corollary is that you should be willing to share some of your own screw-ups.  There is plenty of commentary about developing resiliency in kids but I think that the most critical element is learning that mistakes need not be terminal and that they can be overcome.

Finally, just because you believe that you are deficient in something doesn’t mean that she will be.  Part of the joy – the adventure – of being a parent is watching your child develop into the adult that she becomes.  If she comes to you with the wish to do something with which you are aren’t familiar, or just dislike, don’t automatically dismiss it.  If possible, find an opportunity to let her experience that thing with someone who is both capable and trustworthy.

I’m sure that you’ll come up with other points after reading this, since this is truly only a point of departure.  But remember the takeaway:  you, more than anyone else, have the critical role in helping her ascertain her future path.  The capacity to fund it, fully or even partially, is irrelevant.  What matters is that through the next eighteen years of her life, you and your partner will be the ones to raise and guide her, who know the fullest extent of her capabilities and have her true best interests at heart.  And the best interest is this:  allowing her to enter adulthood as a productive and moral adult with the capacity to move ahead in her life.

After that, the rest is on her.