Category Archives: Economics

Demand Side Economics

We hear a lot these days about the effects of inflation on average Americans (whoever they are).  And we see a lot of finger pointing when it comes to the causes.  Greedy corporations.  Supply chain disruptions resulting from the lingering effects of the pandemic.  Federal Reserve policies.  The growing federal debt.  You know what we do not hear.  Anything about the responsibility of consumers to fight inflation.

Despite the fact the current inflation rate remains almost twice the Federal Reserve target of two percent, consumer spending continues to rise.  Which suggests, every consumer could help by following what I call the Dr. ESP “Fight Inflation Now” shopping principles.  Making discretionary purchases only when they are on sale or looking for a less expensive brand substitute or generic alternative.  Let me give you an example based on my most recent purchases at Publix.

  • Every Thursday, Publix publishes a list of BOGO (buy one, get one free) items for the next seven days.
  • Make a list of products you normally buy that are on the list.  Last Friday this included a favorite brand of cereal, Thomas’ bagels, Philadelphia cream cheese, side dishes such as Betty Crocker mashed potatoes and macaroni and cheese, pulled pork BBQ, buns for the BBQ and frozen pizzas.  For perishables, one is consumed immediately while the other is frozen for later use.
  • Next look for sale items, even if the sale price is at or slightly more than you used to pay “in the good old days.”
  • Finally, get the staples (e.g., milk) you need that may not be on sale.

Did it make a difference?  The receipt showed that even though I purchased milk and toilet paper at the retail price, the total bill was $58.67 after a savings of $38.13.  There has been one other side benefit from this system.  By substituting brand names, we have discovered new favorites which have permanently replaced old standards.

Why does the system work?  Instead of supply chain disruptions, consumers create demand chain disruption.  Consider the following.  If consumers follow the Dr. ESP “Fight Inflation Now” principles, prices decline as consumer behavior works its way through the demand chain as follows.

  • Sale items lower the retailers’ revenue, squeezing their already narrow profit margins (especially for grocery stores).
  • Stores will then order less from brokers or produce account representatives whose commissions will suffer.
  • These middle agents will then do one of two things.  Independent brokers will devote their time and energy to higher volume products.  Manufacturers’ product representatives will report decreased sales to the home office.
  • In either case, manufacturers, facing potential loss of market share, will likely reduce prices or offer more promotions.

Can it make a real difference?  I will let Arlo Guthrie answer that question.

You know, if one person, just one person does it they may think he’s really sick and they’ll ignore him. And if two people, two people do it, in harmony, they may think they’re crazy.  And three people do it, three, can you imagine, three people walking into Publix, only buying products on sale and walking out. They may think it’s an organization. And can you, can you imagine fifty people a day, I said fifty people a day walking into Publix, only buying sale items and walking out. And friends they may think it’s a movement. And that’s what it is, the demand side inflation massacre movement.  And all you got to do is follow the Dr. ESP “Fight Inflation Now” process the next time you go into Publix or any other retail store.
For what it’s worth.

The Dog Days of Reaganomics

“The Dog Days of Summer” is an expression that one hears often in baseball. The phrase comes from the very challenging days of playing baseball in the heat of the summer. Not only are players contending with the heat, but they are also contending with the length of the baseball season. The excitement of the beginning of the season has certainly waned, and the end of the season with championships on the line is too far away to make a difference. Added to this is the sad reality that some teams recognize that their championship hopes have all but been shattered. Championships are won or lost in these “dog days of summer.”


Sometimes you find the best definitions for a word or phrase in the most unlikely places.  In this case, Dr. Horn used baseball as a metaphor for life.  For Christians, he compares it to the time between the excitement of rebirth and the ultimate reward of eternal life in heaven.  I may not share his belief in salvation, but from his perspective, the metaphor is valid. 

When friends and family tell me they no longer pay attention to the news, what I believe they are saying is, “These are the dog days of political discourse.”  I understand completely.   The excitement of Joe Biden’s victory in 2020 has waned.  And the 2024 election is still too far in the distance.

I too find the heat and humidity of this warmest of all summers draining.  I prefer the comfort of air conditioning, and rather than watching the evening talk shows, I now make a nightly habit of following the Baltimore Orioles’ hold on the top spot in the American League East. (NOTE: I became an Orioles’ fan during my time as a graduate student at John Hopkins University (1971-73), when Memorial Stadium was a 10-minute walk from my apartment and bleacher seats were 85 cents.)

This morning, as I glanced at the AL East standings, I observed what can only be called “a metaphor within a metaphor.”  Despite a blown save last night, Baltimore is still in first place, two games ahead of the Tampa Bay Rays.  Meanwhile the New York Yankees continue to go back and forth with the Boston Red Sox for last place in the division, 11.5 games back of the Orioles.

It is no stretch to think of the Yankees as the latest incarnation of Reaganomics which depended on two theories of growth:  supply side economics, and by increasing the wealth of the rich, benefits would “trickle down” to the poorest workers. Owner Hal Steinbrenner and general manager Brian Cashman have spared no expense ($187 million this year) when it comes to supplying the team with talent. In one more example of failed “trickle down” impact, more than half of that investment ($108 million) goes toward the salaries of just three of the team’s 26 active players: Aaron Judge, Gerrit Cole, Giancarlo Stanton.  And yet, the Yankees remain a half-game out of the AL East cellar.

In contrast, the Orioles’ active roster has a combined payroll of $65 million.  Instead of buying talent, the Orioles have developed a cadre of exciting young players through what baseball writers credit as the best farm system in baseball.  And the team’s success is not likely to end any time soon.  Eight of the top 100 2023 draft choices are future Orioles, waiting in the wings, playing in the minor leagues for the Triple-A Norfolk Tides and Double-A Bowie Baysox.

Think of infrastructure, sustainable energy, workforce heath care and investment in critical  industries  as the farm team of the American economy.  Americans are better served by investments in these building blocks which can be the foundation of sustainable growth.  Massive tax cuts to a few rich people and multinational corporations may give the economy a short-term shot in the arm, but as we saw at the end of the last three GOP administrations, the benefits are short-lived ending in economic recession, higher unemployment and/or stagnant wage growth. 

The Republican Party has given this Orioles-like approach to economic policy what they thought was a derogatory name:  Bidenomics.  Their error is evident every time the president retweets one of his detractors blaming him for the bi-partisan infrastructure legislation, CHIPS Act and the Inflation Reduction Act with the tag line, “I approve this message.”  In my July 6 post, “Shoot the Messenger,” I chastised Biden’s communications team for failing to make the connection between Biden economic policies and America’s leading global standing.  Even I could not imagine Marjorie Taylor Greene and other MAGA mouthpieces would fill the gap.

For what it’s worth.

Random Thoughts 9 June 2023

If you expected a diatribe about the indictment of Donald Trump, I’m afraid you will be disappointed. Unlike a majority of GOP representatives and Senators and non-Trump contenders for the party’s nomination for president, I am keeping my powder dry until I have a chance to read the actual indictment.  So, today I want to return to my other obsession, the corrupt deal between the PGA Tour and the Saudi Public Investment Fund (PIF).


Much is being said about the $11 billion investment by the PIF being “blood money.”  Critics point to the Saudi government’s financial support of terrorism and the killing and dismemberment of Washington Post journalist Jamal Khashoggi. Yet little, if any, of the discussion focuses on the source of the money.  Yesterday, the BBC described the PIF as “a big pot of money – £514 billions to be exact.”  They went on to say:

The reason there’s so much cash in it is because of the massive amounts of money Saudi Arabia has made through selling oil.

Yes, the PIF is investing in golf, but they are investing with your money.  According to The Guardian:

Saudi Aramco has reported a record $161bn (£134bn) profit for 2022, the largest annual profit ever recorded by an oil and gas company, fueled by soaring energy prices and rising global demand.

The soaring prices are a direct result of Mohammed bin Salma’s decision to cut Aramco production contrary to recommendations by other OPEC oil ministers.  Producing an average barrel of crude oil costs Aramco $4.50 which is then sold to American customers today for $72.00/barrel.  In March 2023 alone, based on reported sales to the U.S. of 427,000 barrels, the PIF coffers increased by $28.8 million.  Which suggests the Saudi investment in global golf involves more than just “blood money.”  It is also extortion money.  Yesterday, the Washington Post reported:

In private, Crown Prince Mohammed bin Salman threatened to fundamentally alter the decades-old U.S.-Saudi relationship and impose significant economic costs on the United States if it retaliated against the oil cuts, according to a classified document obtained by The Washington Post.

As if you needed another reason to boycott the PGA Tour, just think about how much of the next increase in gas prices is going into the pockets of hypocritical PGA Tour golfers, commissioner Jay Monahan and the board of directors of the still unnamed global golf governing body.


After one day, I’m still on the wagon.  I did not watch a second of TV coverage of the Canadian Open broadcast.  However, I did plan to tune into the LPGA Shoprite Classic being played in Galloway, New Jersey.  I increasingly find the women’s tour more entertaining.  The pace of play is much faster.  The ladies, so far, do not feel a need to straddle every inch between one’s ball and the hole to read a putt.  And success depends on the ability to master the full range of clubs in one’s bag rather than relying solely on a titanium driver and three wedges.

However, I am having a change of heart after reading the statement on the PGA Tour/PIF merger issued by LPGA Commissioner Mollie Marcoux Samaan.

As we have consistently said, a fractured ecosystem is not good for the game and we look forward to learning what today’s announcement means for the growth and impact of global golf. We remain focused on growing the LPGA, continuing to work with the top partners in the world to provide the best opportunity for our membership and to make sure that everything we do continues to allow us to inspire, elevate and advance opportunities for girls and women, on and off the golf course.

What message does the PIF buyout send to young girls about opportunity?  There are joint PGA/LPGA events.  Will these also fall under the umbrella of the PIF?  Does Ms. Samaan realize LPGA affiliation with the Saudi venture represents more than greed?  Is she ignoring Saudi allegiance to Sharia law and its suppression of women’s right and criminalization of homosexuality?  It is a slap in the face to female golfers and particularly openly gay LPGA professionals such as Ryan O’Toole and Georgia Hall whose story is featured during Pride Month on the tour’s website.

Hopefully, members of the women’s tour have more cajones than their male counterparts, if and when, the PIF proposes bringing the LPGA into their gold-embroidered tent.


Kurt Streeter, golf analyst for the New York Times, summarized the PGA Tour/LIV merger this way.

The PGA Tour presented itself as the guy who calls a penalty on himself if he accidentally moves his ball a quarter-inch. Turns out it was the guy who makes a double-bogey and marks it down as a par.

For what it’s worth.




A Fool and Your Money

Every year, about this time, we are treated to images of three wise men on camels following a star to Bethlehem. This year is no different. However, this December there is a different triad of not so wise men, and the only star they are pursuing is their own. Instead of Magi, I prefer to call them “The Unholy Trinity.” Or “The Axis of Weasel.” Or “The Three Jackasses of the Apocalypse.” You may know them better by their real names: Elon Musk, Sam Bankman-Fried and, of course, Donald J. Trump.

The stimulus for today’s blog was an encounter with an elderly man leaving “Kendall’s Bagels and More” in Palm Coast, Florida. He appeared somewhat disgruntled so I asked him, “How are you?” He replied, “Fair to middling, but the day is still young.” Not wanting to assume what he meant, I continued, “Young in a good sense or bad sense?” His cryptic answer, “I read the newspaper this morning.”

Sadly, many of today’s headlines are not likely to be the harbinger of good feelings. What might he be referring to? I thought I would share my reasons for being less than forlorn. “You know, any day you do not hold Tesla stock or invest in cryptocurrency is a good day.” He chuckled and we departed, still not knowing whether he shared my relief at not having spent $800 for a share of Tesla stock or $64,000 for one Bitcoin. Or whether he rued having made the same mistake so many others have in search of a quick return on investment.

Which brings me to the three perpetrators. Compared to Bankman-Fried, Bernie Madoff was a piker. Madoff’s mere $64.8 billion in fraudulent transactions on behalf of 4,800 clients is sofa change when stacked up against the 1.2 million registered users of Bankman-Fried’s cryptocurrency exchange. Two participants, Silicon Valley venture capital fund Sequoia and Singapore based investment company Temasek, stand to lose more than $200 million each following FTX’s bankruptcy filing. To promote his Ponzi scheme, Bankman-Fried recruited celebrities including “Seinfeld” co-creator Larry David and sports figures Tom Brady (is he now an actual goat in lower-case letters), Steph Curry, Shaquille O’Neal and Naomi Osaka.

Talk about karma, when Joseph Bankman and Barbara Fried gave birth to a son in 1992 who chose to take both his parents’ surnames, the die was cast. I anxiously await the banner headline in the Wall Street Journal upon this scammer’s conviction on 1.2 million counts of financial fraud. “BANKMAN FRIED!”

On the other hand, Elon Musk would do well to heed the advice of Major Charles Emerson Winchester III, the M*A*S*H character portrayed by the late David Ogden Stiers. When asked to hurry up with a patient to assist with another, Winchester replies, “I do one thing at a time. I do it well. Then I move on.” We now know TWO things at a time (Tesla and SpaceX) were Musk’s limit. Forays into social media, cryptocurrency and high-speed transportation (the Hyperloop) took his attention away from the enterprises that were paying the bills.

Musk, Tesla owners and Tesla stockholders have all suffered. Tesla recalls have increased ten-fold in the past two years. And brand loyalty has suffered from more competition in the EV car market as well as Musk’s success in offending demographics who were the most likely purchasers of his pro-environmental poster child. Note to Musk’s secret Santa: Give him a copy of King Midas and the Golden Touch.

I have saved the Donald for last for one simple reason. Adding the NFT Trump Superhero trading cards to all the other grifts associated with the Mar-a-Lago Prosperity Church is clearly one more act of a desperate, modern-day P. T. Barnum. I would not be surprised if the plaque on his desk reads, “A sucker is born every minute.” And while sane people may consider Trumpism an on-going threat to democracy, Trump loyalists’ more pressing concern should be Barnumism, a clear and present danger to their wallets.

There is one more thing these three incorrigibles have in common, an affinity for using the internet and social media as an instrument to promote their various hustles. Musk now has Twitter and StarLink. Trump created Truth Social. And before his arrest, Bankman-Fried talked about partnering with Solana Breakpoint, the blockchain provider for FTX, to extend use of the same technology to gaming and other on-line activities.

Maybe they could pool their declining resources and establish a single website where gullible investors could be recruited. Except for the fact it is already registered to a major sporting goods retailer, the obvious domain name for their site would DICKS.COM. NOTE: Dick’s Sporting Goods purchased the domain from its original owner (you don’t want to know), and it immediately redirects the user to

For what it’s worth and Happy Holidays,

The Next Gig

These companies are making profits and revenue and I’m not (going to) begrudge anyone for that because that’s what we are about in America. But we also want to make sure that success trickles down to the worker.

Labor Secretary Marty Walsh, April 21, 2021

Walsh’s comments accompanied a recommendation gig workers, especially those who represent the front line for companies like Uber or GrubHub, should be treated more like employees. A recommendation about which I find myself conflicted.

Based on traditional standards for differenting between employees and independent contractors, I understand why corporations which rely on gig workers oppose Walsh’s position. After all, those business do not set working hours. If Uber drivers want to take a week off, they do not need anyone’s permission. Their workplace is their own choice. GrubHub does not set specifications for delivery vehicles. If I want to use my bike, moped, Harley or 1964 Mustang, that is my choice. And if I don’t like the compensation, I simply stop providing the company’s service. No notice required. No exit interview. No NDA.

The gig economy is sometimes glorified as a low-investment entrance into entrepreneurship. Theoretically, if you want to make more money you choose to work longer hours. And you can innovate. Uber drivers can increase demand for their services by offering a bottle of water or granola bar to a customer. Or decorate their car so potential riders choose the guy/gal with the VW Beetle that looks like a tortoise.

But many gig workers are not subject to the risk/reward equation which is central to entrepreneurship. They do not have to worry about collecting revenue. They are not concerned with merchant accounts or being stiffed by a customer. Uber drivers’ shares of rider fees are deposited weekly in their bank accounts. If they decide to shut down their business they are unlikely saddled with sunk costs or outstanding business loans. And they spend little, if anything, on customer acquistion.

Of course, there are down sides. No health benefits. No company contribution toward retirement. No paid holidays or sick leave. But those are the same issues every start-up entrepreneur faces. That is the cost of being independent and having personal control over your life and work.

My sympathy for corporate America is tempered by the history of companies blurring the lines between employees and independent contractors to save costs. Substituting independent contractors for salaried workers eliminates employers’ share of Social Security and Medicare contributions, health benefits, unemployment insurance, retirement contributions and paid time off. Furthermore, it can reduce liability exposure.

Corporate reliance on independent contractors has increased in inverse proportion to a decline in union membership. In 2021, only 10.3 percent of U.S. workers belonged to unions compared to 20.1 percent in 1983. Some scholars argue that decline began with President Ronald Reagan’s appointment of John Van de Water as chair of the National Labor Relations Board. At an October 1984 labor law conference in Columbus, Ohio, Van de Water offered the following as the legacy for his time in office.

I would like to think that my term as Chairman will be perceived as the beginning of the period in which the Board changed from being viewed as pro-labor to a time of being strictly nonpartisan, as indeed it was meant to be.

I do not know whether the relationship between Van de Water’s being at the helm of the NLRB and union decline is causal or merely correlative. Either way, lack of protection for union workers contributed to the utilization of independent contractors in several major industries.

This is not a one size fits all situation. I foresee a time when gig-worker dependent industries respond to an employees’ market and begin treating some like salaried labor in return for mandated hours and schedules. Others may want to retain their independent status. We know it already varies depending on the job description. An executive at InstaCart is compensated differently than the person who delivers your groceries.

In the future, it may also differ by industry. Let me give you an example of one industry which represented the worse abuse of “independent contracts.” I know this because I was subject to that abuse. While in middle school, I delivered the Richmond News-Leader, the afternooon newspaper, to houses in my neighborhood. Consider the following.

  • My work hours were mandated by the company. Pick up the papers after school and deliver them by dinner time.
  • I was assigned a specific route which I could not expand without corporate approval.
  • If I wanted to take time off, I had to find someone to take my route.
  • In bad weather, the papers had to be placed in plastic bags which often were not provided by the company.
  • I was responsible for collecting the subscription fees, often having to return to a house multiple times to find someone home.
  • I was also expected to do the marketing, personally reaching out to non-subscribers.

For all intents and purpose, I was an employee of the News Leader, told when, where and how to do my job. Still I was considered what we now call a gig worker. Compensation in the mid-1960s averaged around $10/week for 10 to 12 hours worked (approximaely $95 in 2022 dollars).

What bothers me the most about the approach by both Walsh and Van de Water is the either/or nature of their respective positions. Instead, policymakers need a more flexible roadmap based on a reexamination of what constitutes employment and what qualifies for legitimate contracting. It should also include policies which encourage independence for those who seek it.

One example is the requirement that independent contractors pay both the employee and employer share of Social Security and Medicare. That assumes the business’ contribution and employee’s come from two different revenue sources. Sales revenue for the company, income in the form of wages for the employee. For many independent contractors, sales revenue is their income. Gig workers may need to pay a premium but it should not be twice that of a salaried employer.

Nicholas Negroponte, founder of the MIT Media Lab, once said, “Technology should not be used simply to automate business, it should be an opportunity to rethink business.” Maybe, the same philosophy should apply to the gig economy.

For what it’s worth.