I was reading an article this week written by Vanessa Wong and Jilian Berman in MarketWatch about how a $114,000 salary today makes you feel poorer than your parents. It is a very insightful article about how Americans today are poorer in purchasing power, in lifestyle, and in the ratio of money that they have to spend on necessities. I have included the link if you want the full read, but I stopped reading and got all fired up about one paragraph in particular. “The Harvard-based research group Opportunity Insights found in 2016 that while more than 90% of children born in the 1940s grew up to earn more than their parents, only half of children born in the 1980s could say the same, despite millennials being the most educated generation in history. “
Ladies, we are more educated at what, social sciences, spending money on tuition with a bad ROI, paper pushing? It is true that many more people are attending college because the government has allowed easy access to loans for education. Now the current administration is trying to forgive that debt, the Supreme Court said no, and the executive branch led by Forgive as you go Joe. We actually used to have the most educated students in the world in the 1950s and 1960s. The GI bill allowed soldiers coming back from the war who had the discipline to attend college and learn a lifelong useful skill to support their families. Nowadays, kids find themselves at college. They might attend college, but I’d argue they are less educated than ever coming out. It isn’t just college. Our student test scores used to be at the top of the nation’s listings and now we are 25th barely beating out France. We make the assumption that we are so educated, and we simply are not. WE are trending in the wrong direction, which is bad, but trending in the wrong direction and thinking that you are leading is even worse. Beware of false assumptions as they are worse than simply being ignorant.
Another example of false assumption is that there is one person I really enjoy listening to about finance and he says that QE didn’t cause inflation. We assume that inflation isn’t running hot because the government tells us that it isn’t. A house used to cost 2 times the annual income of a citizen and now it is over 4 times. Higher education used to cost you a pinkie and now it costs an arm and a leg. The government has a vested interest in telling you that inflation is contained. Actually, they wish we had more inflation to reach their 2% goal, which is a stupid goal as the goal should be 0. If I am outside and it is cloudy, I hear thunder, and my hair gets wet, but the government tells me it isn’t raining, well I can quickly determine the truth. When I look at ShadowStats.com I see that inflation was running close to 5% after the great financial crisis and then it went up to 7-12% until Covid. If we are looking at the wrong things, then nothing we see makes sense. The government gave you those stats, they don’t want you to see inflation. Wake up folks! They are lying, they are manipulating, and they are working the system against you. Speaking of lying, manipulating, and working the system against you, I bring you Don Trump.
This week Donald Trump was convicted of 34 felonies. He falsified financial records to hide a hush money payment to a porn star that he had sex with. Do I think he did it, of course I do. Do I think he did it on purpose, of course I do. Do I think this is a moral outrage, all I hear is crickets. No one seems to be talking about this….What I didn’t know was that it was a felony to do so, but I didn’t watch the trial or overly have an interest in the details either. What he did was wrong and the outrage from conservatives is cute. Their biggest item of outrage seems to be that he was prosecuted for such a petty crime. I agree, but if a law is one the books who gets to determine the ones to follow versus the ones we shouldn’t follow or enforce. I have said for a long time that if I did was Bill Clinton did, I would be in jail, If I did what Hillary Clinton did I would be in jail, if I did what Nancy Pelosi or Mitch McConnell did I would be in jail. Aren’t we supposed to celebrate that these people aren’t above the law like Trump?
The answer is probably yes and no. Trump, despite his many faults and there are a lot of them, wasn’t a career politician like the ones I just mentioned, and he is the one getting convicted which is basically the politician establishment playing the power game that he promised to overturn. I have no interest in talking about whether he deserved it or not or whether he was railroaded, which he probably was. No, I am interested in discussing assumptions today and in particular false assumptions.
Trump vastly underestimated the power of the machine. He walked in from the Apprentice where his sham of a business career and name recognition allowed him some sense of gravitas. He berated and acted like a spoiled child on Twitter. He positioned himself as the antidote to a career politician, and that by itself is a great place to run a campaign from. C Thomas Printer Cooperative approved. However, acting like a jerk has consequences. He assumed he could get away with it. He assumed that he was above the law. Trump didn’t know his history. They didn’t get Capone on murder, racketeering, or bootlegging. They got him on tax evasion. Trump needed to have a squeaky clean past if he wanted to pick a knife fight with someone better. The man whose campaign didn’t fall apart when the audio was released with him saying you should just walk up and grab women by the pussy, now he has pussy problems. He just had to pay $400 million to one gal and now another gal has gotten him 34 felony convictions. He shouldn’t have grabbed them by the pussy he should have grabbed a cab and headed home to his model wife.
All his life Trust fund Trump has gotten away with immorality. He has used bankruptcy to protect his businesses from failure while screwing over vendors and contractors. He is a serial cheater on his spouses. He is incredibly disrespectful to others. In short, he doesn’t treat others how he would like to be treated. Now he is. His lawyers, which have always shielded him from harm, have now failed him. He is being treated poorly, unfairly, and I think he is, and he doesn’t like it. The irony is rich. Trump is losing hundreds of millions of dollars and possibly his freedom because of karma, chickens coming home to roost, a lifetime of work. It isn’t because of some obscure campaign finance law. He picked a fight with someone better at playing dirty and he is losing. He made a false assumption; we will call it false assumption number 1 today. He assumed he could get away with the spoiled child routine forever. He was wrong.
I can’t believe I am about to write this next section, but here it goes. I think the Democrats think that if he is convicted Trump would be weakened in the upcoming election and I think they just made Trump the biggest underdog story in American political history. Now if he is sentenced to jail time, that could change things. Can he even run, I guess so? If he wins, could he pardon himself, well I guess not in this case since it is in New York state court but possibly on the other federal cases if convicted? That is so wild. Assuming he can run, Trumps’s website crashed the evening after the verdict was announced. Top Republican donors like Miriam Adelson came out of the woodwork and supported him, even Bill Ackman said he was supporting Trump.
If there is one thing I know about America, it is that America loves to tear someone down and watch them make a comeback. America loves underdogs. Seabiscuit, Muhammad Ali, Robert Downey Jr., the list goes on and on of people that America seemed to cheer for just because they were underdogs, or they are fighting the system or fighting to recover. We eat this stuff up. America’s favorite teams are the 1980 hockey team that overcame all odds to beat the Soviets in Lake Placid, New York, the Willis Reed Knicks who limped out of the tunnel and beat the Lakers to win the NBA title, and Joe Namath’s New York football Jets that won the Super Bowl as the largest underdog after Broadway Joe guaranteed it. They are all near the center of media, New York and that is where Trump is from, and they will eat this story up.
This is a chance for him to not be the rich affluent jerk, but the downtrodden and literally prosecuted man from Queens trying to fight the system. What a juxtaposition! I think the American people will see the current administration as corrupt especially when Biden was just deemed to have committed crimes but was too dumb to know what he was doing. That was actually a legal recommendation regarding the Hunter Biden case. Americans are feeling the pinch of economic catastrophe coming and they are unhappy. Trump is polling very well with minorities who believe that Biden has sold them out. The republican party is getting the minority vote now, what bizzarro world am I living in? It’s true, the Democrats have become the rich party and the conservatives have become the working man’s party. There are a lot more people feeling poor and when they go to the voting booths in November they are going to vote with their empty wallets. The Dems might have created a martyr in their haste to take Trump down. I think the Democrats just made a false assumption, this is false assumption number 2.
False assumption number 3 is that Trump shouldn’t be wanting to become president again. The policies that he and Biden kicked off with massive money printing are going to wreck this economy and whoever is president next is going to get this whole rodeo hung around their neck. Our economy fundamentally changed in 2008. The debt burden went from problematic to downright collision course with an iceberg. Instead of having a financial crisis and dealing with that, which we deserved, we covered it up with printed dollars. Bernanke said it will be temporary as the Fed began this disastrous policy that will break America. The debt was around $10 trillion. We are at $35 trillion now, 15 years later. Albert Einstein once said, “Compounding interest is the most powerful force in the universe.” I bet he didn’t mean that in a bad way, which is the position our government has put us. It is actively working against us now. Look out the window, that building across the street debt soaked, look at your neighbor and his new car, debt soaked. Look at homeowners, huge payments and lastly look at non-homeowners, they simply can’t run fast enough to get on the inflation treadmill without getting bucked off.
One of Trump’s supposed accomplishments was his tax cut package in his term as president. What possible fault can you find with that C Thomas? What good conservative doesn’t like tax cuts? It turns out that in a debt soaked economy such as ours that if you cut taxes you cut tax revenues so you better cut spending to offset that and Trump did not, he spent more. Do you know who else tried that, poor Liz Truss. They ran her out on a rail weeks after trying that. Why? The UK isn’t the world’s reserve currency, and their bond market was flashing red in a couple of weeks. Now our bond market is flashing orange because even if we are the big dog on the block, we aren’t immune to compound interest. Trump added almost $7 trillion to the debt and Biden is actually on pace to beat that despite Covid being largely over when he took office. 20% of all dollars in circulation were created under Trump. As soon as he left office inflation spiked, now I hope dear listeners that you don’t assume that inflation magically appeared when Biden took office. These things act with a lag and Trump is very responsible for a lot of that inflation, but he got lucky and lost that election or he would be blamed for it just as Biden is getting the heat now. I don’t think it matters very much who would have won, as the inflation was coming. Now we have have a bond market that is being financed at the short end of the curve. Why? Well as Willie Sutton once said about why he robs banks, that’s where the money is. There is not enough money or trust to sell a normal amount of long term bonds so Janet Yellen has been forced to sell short term T-bills. Which one has a higher interest rate? The short-term t-bills. If she unleashed a normal amount of bonds into the market the long term interest rate would spike and she saw a glimpse of it last October and she and Jerome Powell want no part of that.
In 1932 the economy was so bad that FDR came to power and just usurped the rights of Americans, and they didn’t care. President Hoover was the scapegoat as the stock market fell on his watch, the economy tanked, and homeless lived in Hoovervilles much like we see in our cities today. It is already happening, only the drug of choice has shifted from booze to fentanyl. Roosevelt created many of the handouts that are still in place today because a desperate population can’t say no. A government that has a desperate population is in a powerful position. He was so powerful that he won 4 straight presidential elections and term limits had to be created after he died. His popularity led the Democrats to enjoy decades of strength and the socialist programs that are financial anchors today were passed and implemented on a clueless populace. The limited government of our founding fathers had the limited part just crossed out because of one terrible presidency, Herbert Hoover followed by another in FDR.
I see that as the future for the next president. If underdog Don wins the office and people are cheering for him as he fights the establishment all the way into the big chair again, and then they watch him sit on the throne while people lose their homes, jobs, and country’s position as financial numero uno, they will not forget. We could have decades of Democrats issuing in universal basic income, central bank digital currencies, government overwatch and surveillance measures and other big government ideas I haven’t even thought of yet. Trump’s last false assumption is that he needs to win this election, he needs to not win it. As counterintuitive as that sounds, the winner will be the loser in November, and I think that is leaning red over blue at the moment so America will be singing the blues for decades if that happens… The worst part about November is that Americans lose either way. That die has been cast.
Sincerely Yours,
C Thomas Printer
On this date in history… 20 years ago to be exact, Ronald Reagan died at 93.
Also born on this date … two giants in the field of economics: the Father of Economics, Adam Smith and the destroyer of Economics John Maynard Keynes, actually his policies of government spending and monetary expansion are abused but attributed to him. He did say to use spending as an antidote but then remove that excess during times of prosperity, and government always ignore that part.
Thank you for listening today and you can find all of our articles and more on our website cthomasprinter.com.