The Easy Way Out
Good morning from the still overcast city of Cebu.
It’s rainy season here in the Phils, with typhoons and tropical storms skirting our coasts daily.
So I shouldn’t be surprised. I’ll be happy when the sun breaks through, though…
Today, I share one of the most hilarious stories from my childhood. Whenever I think of the Fed painting itself in a corner, I think of my Dad and snow.
Gather around so you might hear about how John Ring couldn’t get in gear…
Snow in Joisey
One of my fondest memories growing up was when my father did something foolish and woke up the whole neighborhood to let them know about it.
First, a little background: Philosopher/Truck driver John Ring worked hard all day, and when he came home, he wanted to do nothing physical.
His recliner should be in the Smithsonian as the “quintessence of the American TV viewer’s chair.”
He is not a DIY man by any stretch of the imagination, which is probably why I’m not a DYI man.
One January in the early 80s, we knew that a big snowfall was coming, and I would be off from school the next day.
The house that I grew up in in New Jersey was a ranch-style house.
But, we had a declining driveway that went down into the garage, and my bedroom was right above it.
So I had a bird’s eye view of when anyone pulled in the driveway because the headlights would swing across my bedroom window.
That came in handy whenever I had a girl over, believe me.
One morning, I was sleeping, building snowmen in my dreams, when a barrage of expletives emanating from Philosopher/Truck driver John Ring’s mouth woke me up.
It was the funniest thing I had ever heard.
I remember laughing a laugh I had never laughed before in my entire life: a veritable Roget’s Thesaurus of cursing was etched forever onto my brain that day.
My mother stood by, horrified, as one by one, the neighbors’ house lights lit up wanting to see what happened.
Darren McGavin, of A Christmas Story fame, would have blushed. My Dad’s blue vocabulary far outweighed McGavin’s when his boiler broke.
So here’s what happened.
Because Pop was so averse to anything physical if he didn’t have to do it, and the snow wasn’t that thick when he woke up – maybe a quarter inch on the ground, barely a dusting – he thought he could get away with not shoveling it.
What Pop hadn’t anticipated, though, was that the ground was frozen beneath the dusting.
So the genius – Wile E. Coyote style, in this case – tried to back the car out of our ice-covered, steepling declining driveway.
By the time I got on the scene, thanks to the hilarious curse fest, the car was parked across the driveway because it had slid down the driveway… turned sideways!
It was a miracle the car wasn’t damaged at all.
It looked like a perfect Tetris fit.
Of course, it would be nigh on impossible to get the car out without shoveling.
So Pop wound up having to shovel anyway. (I was only about six, so I couldn’t help him out.)
Somehow, he finagled the car out of the driveway arriving at work about two hours late. As it was snowing, that wasn’t such a bad thing.
I tell you this story, one, because it’s one of my fondest childhood memories. Every time my mother and I are reminded of it, we giggle uncontrollably.
It’s the most excellent example of a truck driver’s vocabulary anyone could ever have heard.
But I thought of this story because my father reminds me of the Fed right now and the U.S. government.
They’re not trying to fix any problems here.
They’re just trying to dig themselves out the easiest possible way by not doing the hard work.
Bye, Bye Jay
This is one reason why Jay Powell is almost certainly on his way out the door.
Because he realizes what a disaster we’re in because we kept keeping rates on the floor for so long.
No one else in the USG wants to understand it, own it, and fix it.
They don’t want to take their medicine.
The USG wants to tell the populace, “We’re in Clown World, and we’re going to get out of this by making you spend your money faster. We’re going to make you consume funds you don’t have because you will get into debt to kickstart our economy. Then once the economy’s going, you’re going to make so much money you’ll be able to pay back all this debt.”
It’s utter nonsense.
What we’re going to see probably over the next few years are negative real rates in the United States. We’ve already got them in Europe and Japan.
What that means is you’re paying the bank to keep your money “safe.”
It’s almost like streaming cash, if you will. The Netflix of money. That is, use it or lose it.
The governments don’t want you to save because saving allegedly is terrible for the economy.
That’s what happens when you buy John Maynard Keynes’s “Paradox of Thrift.”
We are trying to consume before we make useful stuff, and it’s a damn shame.
So when you’re thinking of what the government is attempting to do and why they try to do it, think of my dad trying to back a car out of an icy, declining driveway.
It’s plain silly, and it doesn’t work, and ultimately, he had to shovel himself out anyway.
That’s what’s going to happen to the United States.
Eventually, the United States is going to shovel its way out of this.
When it will realize it must do this, I do not know. But hopefully sooner rather than later.
Have a great day today.
All the best,