Repetition is the key to memorization, so let’s repeat that headline: “Gifts to Children are…
One of the greatest actions you can take to educate yourself about markets and economies is to avoid listening to general media. Let’s define general media as the sound bite type of media, like CNN, Fox, or CBS. When a journalist is speaking, they are merely reading from a prompt and many times the sound bites they produce are not designed to educate, but instead to provoke emotion. The better course of action is to find true experts that you believe have a good handle on how markets and economies work. Note the plural word, “experts.” Never assume one person knows the truth; listen to numerous experts you respect, pull their thoughts together, and develop your own prognosis. This way, you leave the world of exaggerated journalism and political trash for a sounder foundation. It appears that journalists and political parties are often orchestrated together and cannot be trusted to help you find truth. The two political parties of our country have an oligopoly, and each is trying to gain a monopoly. With U.S. media and politicians being so intertwined, it is challenging to find independent news and truth.
Let’s illustrate the impact of political rhetoric on the general public’s view of the state of the economy with the inflation and tigers and bears scenario. Currently, you can hear political rhetoric in the inflation story told on various news outlets. There are clearly threads of truth in some of the rhetoric about President Biden and his administration’s policies, but these are hyper amplified by politicians and their journalists. Republicans are working hard to amp up this story and hope some forms of inflation are visible in November 2022. Yes, President Biden has some policies in force that are hurting the inflation scenario such as fossil fuel and vaccine mandates, but they are minute compared to headwinds from the shutdown of the economy last year and the lasting impact of COVID-19. I expect free markets and innovation to take inflation back down, but not until you get a period of wage and supply pressures pushing prices higher. The average American worker in low to mid-level jobs has not seen much wage growth in the last 10 years. COVID-19 is giving these workers the muscle to ask for more or move on to other opportunities paying more. Innovation is still a freight train that will require workers to be highly skilled and efficient. California had the most restrictive and longest lasting COVID-19 policies of any state in the country. This has caused a massive backup of supplies coming into the California ports. Free markets are allowing companies to develop alternative plans to deal with supply issues. For example, Baltimore’s port has no such backup and is picking up shipping business to fill the void. Free markets also have fossil fuels with a bullseye on them. Free markets are not doing this because of climate change, but merely because it is logical. Why would I want to pay for gasoline if I can plug my car in at home and drive away? Why would I want to pay for electricity if the sunlight and wind on and around my home can create all I need for a lump sum investment? The smaller the lump sum becomes, the more homeowners will invest. Innovation is going to bring the cost of solar and wind down until it is a no-thought decision. Couple that with new battery storage technology for calm grey days, and it is highly possible that most homes in developed countries will produce and store their own electric needs by 2035. There will still be electric power companies to supply when needed, but they will be very efficient and cheap. Inflation and lions and tigers and bears, sure, but this inflation lion is like the Wizard of Oz’s lion that had no courage except for a short period of time.
To be fair to both parties, Democrats certainly utilize the same tactics in bringing political rhetoric into the media. In summary, if you hear yourself repeating the phrases from journalists and their political correspondents on any topic, it may be wise to contemplate whether you have been misled.
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