Mandeville, LA – Exclusive Transcript – It is a woeful situation, ladies and gentlemen, that is being exacerbated by the actions of the Federal Reserve in this thing called quantitative easing, which is happening right now as I speak. When I said that inflation was happening right now, you know it and I know it because we know that the Bernanke printing press continues unabated, that the dollars continue to flow into the market, continue to float out there, and are driving the cost of everything up. It may be slow. It’s not hyperinflation, but it most certainly is inflation. There is not a corresponding wage inflation that goes along with it. At the end of the day, you have less in your pocket and haven’t done anything wrong other than to question mightily enough the actions of the government, both state and federal. Check out the rest in today’s transcript…
Begin Mike Church Show Transcript
Mike: What really caused the spike in the other bean was inflation. That’s what caused the price spike. In order to make up of the difference and to try to continue to serve a product to market that people would buy without raising the price, in other words without letting inflation out of the bag, they found another way to do it. Industry and business have been doing this for almost four years solid now, minimizing costs, cutting down on packaging, streamlining operations, anything they can do to avoid having to raise their prices. We have more on this front. We go to Mish Shedlock’s blog, Mish’s Global Economic Trend Analysis.
We find evidence that not only is there inflation in consumer prices, which is destructive to the people who make the least amount of money, meaning everyone is getting a tax increase, but the ones that are least likely to be able to pay for it or to endure it are those that make the least amount because they cannot substantially increase their income. Someone that is living in the upper five percent of incomes is not affected by a one-dollar-per-bag increase in the price of coffee the way someone that is in the lower fifty percent of income. The guy or gal in the top five percent, it won’t matter to pay an extra buck for every two-week supply of coffee. The person that’s out there shopping for goods like eggs and milk and bread that has to deal with this inflation bug, they cannot adjust their incomes. They’re not going to get raises out of this. They have to make due with less. This is what inflation does. It is a tax on everyone but it’s a regressive tax. It hits the poor and middle class the hardest. Mish writes this — I was really shocked to see this. I haven’t been keeping up on this. I used to follow this particular statistic religiously and stopped following it the last three or four months of the year because of the election.
A Gallup random poll of 607 small businesses conducted November 12-16 asked the question, “Over the next 12 months, do you expect the overall number of job positions at your company to increase a lot, increase a little, stay the same, decrease a little, or decrease a lot?” The net survey results show small-business owners’ hiring intentions plunge.
U.S. small-business owners expect to add fewer net new jobs over the next 12 months than at any time since the depths of the 2008-2009 recession, according to this November’s Wells Fargo/Gallup Small Business Index survey. Small-business owners’ net hiring intentions for the next 12 months plunged to -4 in November, down from +10 in July and matching the previous record low recorded by the Wells Fargo/Small Business Index of -4 in November 2008.
Historically, net hiring intentions have tended to be very positive, with small-business owners expected to grow and hire more new employees than they will let go over the next 12 months. In good economic years, net hiring intentions have been in the double-digits. This has not been the case since the recession and financial crisis in 2008-2009 with net hiring intentions reaching a lot of -4 in November 2008.
In November, 21 percent of owners say they expect to decrease jobs at their companies over the next 12 months, the most recorded on this measure since the inception of the Wells Fargo/Gallup Small Business Index in August 2003. At the same time, 17 percent of small-business owners say they expect to increase the number of jobs or positions at their companies, down from 20 percent in July of his year and the lowest level measured since November 2011.
It is difficult to blame this on the fiscal cliff, and even more difficult to pint his on Sandy. More than likely, the poor net result is primarily the result of a clear slowdown in the economy (lack of customers). I believe the US is back in recession and so does the ECRI. On top of deteriorating economic conditions, also factor in the election and Obamacare.
Mike: There’s an awful lot of stuff coming down the proverbial pike that is going to adversely affect business and business creation. If you’re a student of the Austrian-style school of economics and you’re not a student either of Milton Friedman’s monetarist school or Paul Krugman’s Keynesian school, you can clearly identify and you know why business demand is down. In the aggregate, all things considered, the larger the government gets and the more that it runs up in the name of debt, deficit and general government spending, the less available capital is there for the free market. Capital today and in the future is being siphoned away and confiscated to run the programs of the government. It’s as simple as that. And yes, that includes the vast military-industrial complex. We know that federal spending is on a freight train to hell. It hasn’t gone down. It continues to increase. They haven’t even factored in Obamacare yet. Thus, you know what the result of this is. There is less and less capital.
As a matter of fact, I can tell you from running two small businesses here, when the radio microphones aren’t rolling or I’m not videotaping This Day In Founding Fathers History or one of my commentaries for ABC News locally or doing a Founders TV presentation, I can tell you that it gets tougher and tougher, rougher and rougher and more difficult. This is because the slow but inexorable path has been set, and that path is in the wrong direction if you are in the lower income stream. We’re not getting raises out here across the amber waves of fuel, folks. Those of us living hand to mouth, paycheck to paycheck, which most of us are, are not getting pay raises. It’s just not happening. As a matter of fact, we’re being told directly by our company, “There’s no pay raise this year.” Small-business owners are being squeezed. As Harry Reid once famously said, [mocking] “The middle class is being squeezed, squeezed!” We’re being squeezed by those forces that are set in motion by the general government in Washington, DC. We’re not getting much relief from our states, although there are states that are doing better than others. Those are the ones that are choosing to not take the bait, or not take as much of the bait of “just take the borrowed money from us, the block grants, spend it.”
It is a woeful situation, ladies and gentlemen, that is being exacerbated by the actions of the Federal Reserve in this thing called quantitative easing, which is happening right now as I speak. When I said that inflation was happening right now, you know it and I know it because we know that the Bernanke printing press continues unabated, that the dollars continue to flow into the market, continue to float out there, and are driving the cost of everything up. It may be slow. It’s not hyperinflation, but it most certainly is inflation. There is not a corresponding wage inflation that goes along with it. At the end of the day, you have less in your pocket and haven’t done anything wrong other than to question mightily enough the actions of the government, both state and federal.
End Mike Church Show Transcript