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Confounding and Confusing Events 10/11/21

A truly intriguing article in the Wall Street Journal led with the caption “Mob Suffers Management Troubles”. The story attempts to depict the mob as a business organization that has classic issues with its succession planning, recruitment, and work ethic. It was hard to tell if this was a sarcastic spoof, or serious reporting. Nonetheless, worth the read.

Various price indexes are signaling that inflation is running ahead of the feds 2% target, even as pandemic pressures are easing, there are broader sources of higher inflation replacing them. Bret Meyer, an economist with the Federal Reserve Bank of Atlanta, is being quoted as saying, “All of these measures (meaning the indexes) have moved from signaling price stability to signaling sharp accelerations in underlying inflation.” Some economists believe this is returning the economy to levels of inflation consistent with a healthy economy, as prior to the pandemic, they were too low. There continue to be some obvious causes of inflation, including supply chain issues particularly moving product into the United States from China, oil demand exceeding supply because of manipulation by OPEC, and continued strong demand from consumers as they come out of COVID. All of these contribute to what I would identify as core inflation elements.

Continuing with inflation, the world economy is threatened by component shortages surging prices for raw materials and the ongoing transportation bottlenecks. The source of these issues is of course the pandemic and the inconsistent, if not herky-jerky, recovery. Asia can’t produce and transport product.

Fed Chairman, Jerome Powell is taking a pounding from Senator Warren, who does not like many of the policies which he has instituted. It strikes me that Mr. Powell has steered a balance of conservative and yet aggressive (progressive) courses of action which have truly helped the economy over the last year and a half. He called for more stimulus packages which is generally not a conservative view point, and provided for great liquidity in the economy. These are things Senator Warren should be thankful for, and it is my suspicion that he has become a target because she lacks any particular platform at this juncture from which to receive substantial media coverage.

Byron York, a conservative columnist who appears regularly in the Press Republican had an interesting article last Thursday. He compared the actions of Senator Sinema with those of Senator McCain, as well as the reaction from both the media and the members of their own parties. I think this is an apt comparison, and his attempt to treat Senator Sinema with the same level of honor as was Mr. McCain by the left, is wholly appropriate. The comparisons are striking, the actions on each side of the aisle equally striking. It is always difficult to determine if a political position is a principal stand or just opportunism – each of us will have to decide.

Last week the initial claims for state unemployment benefits decreased to 326,000, economists had predicted 348,000, however layoffs increased from a 24 year low in September, most likely due to hospital firings unvaccinated staff, and the closure of some medical facilities due to a worker shortage. At the same time, new hires hit 194,000 not the 500,000 economists were predicting. Not a sign of a recovery economy.

Now, a bit of COVID humor from Canada. Did you know that Canada is thinking about changing mascots from the beaver to the racoon? Why? Because they always wear a mask. Silly humor is just what we all need. Laugh at yourself and figure out how to stay safe and keep others safe.

Bill Owens is a former member of Congress representing the New York 21st, a partner in Stafford, Owens, Piller, Murnane, Kelleher and Trombley in Plattsburgh, NY and a Strategic Advisor at Dentons to Washington, DC.

The views expressed by commentators are solely those of the authors. They do not necessarily reflect the views of this station or its management.

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