Aid to states will have conditions.

FOCUS TO BE ON COVID-19 COSTS NOT PAST MISMANAGEMENT

PROTECTION FROM VIRUS RELATED LIABILITY A MUST

States are lining up with long lists of demands for aid from the Federal government. The President has expressed an interest in helping states with Virus related expenses. This same resentment has been voiced by Senate leader Mitch McConnell. It is also obvious that there are going to be limits and conditions on aid to states and Municipalities.

Topping the list of conditions is laws being passed at the state levels to protect business from liability lawsuits from employee's and customers who contact the virus. Without such protection it would be impossible to have any return to a normal economy. There would immediately be a an avalanche of lawsuits, that would tie up most business's in endless litigation. It would almost be impossible to prove guilt or innocence and would result in many making a settlement to get back to work. It could then become a never ending series of suits that would likely put many out of business. Senate leader McConnell has stated that this is a red line for any aid to states.

President Trump has also voiced his opinion that any aid to cities would be conditional on their stance as sanctuary cities. Concerned that these policies cost their cities in both expanded costs and  possibly lost revenue.

Another concern is that many states and municipalities were in poor financial condition, due to their irresponsible fiscal policies, before there was a Virus issue. Many states have a chronic pension plan problem, due to overgenerous government worker pension plans and benefits. High taxes and poor policies which have driven business and citizens out of their states and municipalities. These issues will unlikely become a part of any aid at this time. 

The best course may be to negotiate with each state on an individual basis, rather than a one size fits all avalanche of money from the federal government.

In the Recession bailout, money was handed to the states to stimulate business with infrastructure spending etc. Most of the money went to government employees and their pensions. This should be a  lesson learned. We actually see states still not distributing the unemployment money that was funneled to them by the Federal government. Are they conspiring to use that money for other purposes?

The present attempts to stimulate the economy has been focused properly in giving money directly to people, rather than to the states to use at their discretion. It should all be about the best interests of all the people.

Reopening Restaurants face most challenges

RESTAURANTS CAN USE INNOVATION TO BE SUCCESSFUL

MAY ACTUALLY FIND SOME POSITIVES IN THIS SITUATION

It looks the opening of the economy is underway. It will take some time for many to adjust to the guidelines and still engage in business. We have seen restaurants offer order and pick-up. We have seen some stores offer curbside pick-up and operating from the door or window. Many food retailers will gather your order and place it in your trunk. 

Manufacturing plants and other retailers should be able adjust to distancing and guidelines and carry on their business. The lone exception is the Restaurant business, which definitely will be facing the most challenges. With some innovation it can be made possible, and may even be able to find some positive results.

1. It would be best to go to reservation only, this way you will not have waiting lines, which will be a big negative for business and the customers. Consider using online reservations.  Some say they can only seat 25 or 30% of their capacity, but the better method would be 6' distancing. If they have booths, using every other booth would work. Also use screens or dividers to give each table a little more privacy. This will make customers feel much more comfortable.

2. Use a abbreviated menu, only the most sought after items. Use daily printed out single use menus. Salad bars are out for now.

3. Enhanced cleaning of all tables and chairs after each use.

4. Manage traffic, so that people are not walking directly by tables, this could again be done with the use of dividers.

5. Enhance service, with a steady predictable traffic flow, it is an opportunity to not be slammed with all customers coming  within a short time spam.

6. Adjust hours, eliminate sit down breakfast, but consider opening a drive through for coffee, donuts, and breakfast sandwiches. Possibly serve dinner for a longer time maybe 4 to 10. This will allow time for more customers. There are some who will take a late reservation, it actually may be fun.

Talking to the younger set, they will go to these restaurants as soon as it is available. It will likely take longer for the elderly and compromised to return. But from what I see many of the younger customers buy more and spend more. A possible plus for the restaurateur.

In the long run, excellent service and good food served promptly will be more important than ever. It will be imperative to be efficient and turn as many tables as possible. If your customers have a positive experience, they will tell their friends, the best advertisement anyone can have.

This is only some of the possibilities, I am sure that restaurant people are innovative enough to find many more solutions to make their business again profitable and a positive experience for everyone.

Potential disaster building in Africa

WAR, FAMINE  NOW COVID-19

WILL DEVELOPED WORLD BE ABLE TO HELP?

The chances of a disaster of biblical magnitude is developing on the African Continent.  There have been ongoing low level conflicts going on for several years. The Congo, Libya, Burundi, Central African Republic and Nigeria are all embroiled in conflicts that restrain any organized efforts to suppress a virus outbreak. There is also instability and unrest in many more of the 54 African countries.

At the same time, East Africa has had the worst Locust infestation in 25 years, it has placed most of East Africa in a low food supply situation. This locust problem is centered in Kenya, Somalia and Ethiopia. There are also crisis food shortages in Yemen, Democratic Republic of Congo, Sudan, and South Sudan. Much of Africa has a localizes food distribution system that is unable to supply needs from other areas. It is a very much a on time delivery system with small local growers. Any disruption and it will quickly becomes a crisis.

The Covid-19 Virus is at present a limited outbreak in Africa. There is a hope that the climate will not be enabling to this virus, but that is yet to be determined. At present there are around 20,000 cases reported. While this is a small number, as we have seen in the Northern Hemisphere that may just be the beginning of the tidal wave to come. There have been lock-downs in some countries and an effort to educate the population as to what measures to take. With an already fragile and stressed system, lock-downs will create instant shortages of everything. Lock downs in Africa can beget a crisis in themselves.

There is testing going on in many of the populated areas, likely none in the rural parts. Africa likely has less than 10% of the medical capabilities of Europe and the United States.

The biggest hope is that virus will not be as aggressive due to the warm humid climate. This is a real possibility and will become more clear in the next 60 days. If it does not, even if the virus is less virulent, any adding of instability can become a widespread disaster.

In the past, crisis in Africa have been minimized by large scale efforts from the developed world. While some help will be available, it is doubtful that there will be the capabilities of the past, due to the developed world's own crisis management.

Virus statistics U.S. compared to Europe

MORTALITY NUMBERS FOR 5 LARGEST EUROPEAN COUNTRIES

The combined deaths for the 5 largest European countries is 99,522. These five countries have a combined population of around 325 million, comparable to the United States. These countries are Germany, UK, Italy, France and Spain.

The total numbers for the United States as of today is 55,415. The numbers in both areas are still growing and can probably be expected to rise for at least the next 30 days.

Germany has done the best at controlling this outbreak with a rate of 71 deaths per million. 

The United states has 167 deaths per million.

The remaining countries range from 305 in UK to 496 per million in Spain.

Sweden which has not done a lock down or closed schools has 2194 deaths and a rate of 217 per million. They have engaged in distancing.

Hopefully environmental conditions will diminish the cases beginning in June. Then things may be slower until the fall when it is likely to become a problem again. If distancing is practiced and testing and tracing ramped up, we will likely be able to manage things much better.

Hopefully a vaccine will be available by early 2021, until then we will have to adjust to live with the virus as a continued threat.

China, new candidate for containment policy.

CHINA IS MUCH GREATER THREAT THAN RUSSIA

TARIFFS ARE JUST THE BEGINNING OF PRESSURE ON CHINA

Much is being made of the Trump administrations's new attempt to re-negotiate trade policy. Trade negotiations have been successfully accomplished with South Korea, Mexico, Canada and European Union. Negotiations with Japan are presently underway. A deal with  the United Kingdom will be easy after they are done with Brexit. China is going to be the most difficult to accomplish.

The negotiations with much of the world have dealt with removing barriers and unequal tariffs on U.S. products. This is all in an attempt to improve the competitiveness of United States farmers and Manufacturers. So far it seems to be a successful endeavor that will benefit all Americans and also some in the third world. China on the other hand, is another matter. China is still a communist country. While it has allowed certain areas of the country to engage in a capitalist economy in an effort to become a world power it has not really become a equal partner in the world community.

China has engaged in practices to steal intellectual and copyrighted information to enhance and accelerate its economic expansion. It has engaged in sophisticated industrial espionage activities at American companies and universities. Some believe it has flooded the world with steel and aluminum products that if left unchecked will eliminate competition and threaten national security. Much of this steel and aluminum is shipped to intermediate countries where it is reshaped and then listed as a product of our allies. It has also shipped other products to intermediaries that have favorable trading with the United States. It has required those that manufacture in China to turn over all intellectual property associated with products manufactured there.

After Nixon's trip to China in the late 1960's China was given favorable trade agreements with the hope that they would eventually become trusted members of the world community. It has become wealthy by manufacturing products without any environmental, safety, union power or legal restraints. International and American business has also become wealthy by importing low priced goods from China and selling them in advanced economies restrained by regulations of all types. This is a very unfair advantage for all western workers. 

China has not only worked hard to become an economic power but has engaged in a program to become a military super-power. Much of this has been accomplished by the theft of intellectual property and espionage. They are attempting to project power worldwide, not just in Asia. They have become more than just an economic competitor but an economic and military threat.

Much of this has been made possible by the willful acquiescence of western governments and companies, who are often cooperative in maximizing profits. Corporate lobbying to keep the status quo is intense. Movements to insure guaranteed incomes and benefits for displaced worker, while enhancing the ability of providing buyers for products made in low cost countries is also allowing China to become a world power.

The United States policy of containment that was implemented against Russia, who when implemented was not a threat to the United States, would be much more appropriate as a policy for China. The problem is that many, both in government and business, are being made wealthy by our trade with China while Russia was never a source of great profits.

We seem to be living in an age when national self interest is overwhelmed by a desire to enhance the economic well being of those who profit from this present policy at the expense of American workers and national security.


Originally published 11/13/2018

Trumps financial facilitator, Steven Mnuchin

LOW KEY, ALL BUSINESS, COMPETENT

THE MAN WHO MAKES TRUMP'S ECONOMIC IDEAS REALITY

Steven Terner Mnuchin was born in New York on Dec. 21, 1962. He is the son of a Goldman Sachs executive, graduated from Yale and worked at Goldman Sachs for 17 years. He then went out on his own and headed several Hedge funds and other enterprises including an executive producer of many Hollywood film productions.

He is the  grandson of a Russian Jewish diamond merchant who emigrated to the United States in 1919.

While not considered a political activist, he has contributed to many Democratic candidates.

He reportedly has known Trump for around 15 years. Trump asked him if he would serve as his National Finance chairman in 2016.  He gained the confidence of the candidate with his efficient and competent work.

He became the 77th Secretary of the Treasury on February 13, 2017. 

He has been very successful in helping to fashion the 2017 Tax reform Act. Instrumental in advocating for regulation reform. If it has to do with financial matters, he is likely to be very involved in developing those policies.

It seems he and Trump are very complimentary. He has the financial know how and understanding of the global financial world to make Trump's vision a reality.

He has helped with implementing tariff's to bring about better trade agreements. He has competently forged sanctions for maximum effect against our adversaries.

He has recently fashioned the financial legislation to deal with the corvid-19 crisis.

At first glace he appears a little understated, possibly nerdy, not concerned about personal appearance or extravagant life-style. He has been married 3 times and has 2 children. I suspect when it comes to his work, he is all business. His personal life is not well known.

Recent marriage proceeded over by Mike Pence

We have never heard of disagreements with Trump, he seems to often be on the same page and willing to get it done. Having said all that, he is no push-over, or timid when confronted by the media or others who question the Trump policies. He is articulate and sharp as a tack.

Bailouts for states next.

WILL MCCONNEL AND TRUMP PLAY GOOD COP BAD COP?

UNLIKELY FEDERAL GOVERNMENT CAN MAKE ALL STATES 100%

Yesterday Senate leader Mitch McConnel remarked that the states should declare bankruptcy rather than be bailed out by the federal government. President Trump has stated they he was in favor of some help for state governments. Is this their true positions?, or are they just beginning a negotiation with the states.

Many states are going to have a large budget deficit, due to a reduction in their state tax revenues. Many of these states have not made any attempt to counter these anticipated lessening of revenues by cutting costs and laying off government workers. Many states have guaranteed government workers full wages and benefits indefinitely.

It is unlikely that the federal government will be able to subsidize the state, local and city governments for all their lost revenue. They will need to start planning on how they are going to address this very severe problem.

McConnel's statement may seem harsh, but many government's are hamstrung to make any real cuts or decreases due to union contracts and other legal agreements.  Declaring bankruptcy often allows them to renegotiate their contracts. In any case, they are going to have a lot of very hard decisions to make.

The facts remain that the federal government will not be able to make everyone whole. The states and other governments will need to make many hard decisions. Many will just go to the taxpayers with tax increases, which will create other problems. Many taxpayers are already in financial straits.  States that dramatically raise taxes will lower their competitiveness with other states and diminish their economic recovery.

It is likely that the federal government will be in favor for some help for states, particularly for testing and coronavirus costs, but it is also very unlikely they will receive as much as they would like.

CDC and others predict fall virus rebound

WHAT ARE THE OPTIONS FOR THE FALL VIRUS SEASON?

COMPLETE SHUTDOWN OR WORK WHILE DISTANCING?

The talking points today are that we will likely  have a worse virus situation in the fall, particularly if we open up the economy. While it is likely that both the Flu and Covid-19 can reemerge in the fall season, can we continue to shut down the economy for the next 18 months like some suggest?

We must reopen commerce and business. There is no question that is what must happen. Those who talk about 18 month shutdowns are being naive as to the consequences. The government cannot support the economy for 18 months. All those retired and possibly government workers can expect to see their 401K,s and pensions collapse. We can expect to see massive lay-offs including government workers. We can expect to see food shortages and serious civil unrest. It would bring on a world economic collapse worse than any experienced in history.

I hear environmentalists who claim this is an opportunity to end the use of fossil fuels and switch to renewable energy. Quietly they also can foresee such a move to eliminate half the worlds population. If that is their agenda, then why conceal it, lets have a vote.  If people are willing to return to the economic conditions of the 1850's let them propose that agenda. At this time, without a viable replacement, the elimination of fossil fuels we will set back our economic condition 100 years.

The other option is what we are most likely to do, which is to steadily move to resuming economic activity, continue with the distancing guidelines, possibly for the next 6 or 8 months. By then we will have developed a vaccine, found effective ways of treating this new virus and will be far more prepared for something like this in the future. While it will entail some health risks. This is the only realistic option. 

If we risk a complete economic collapse, there will be no distancing, likely there will not be a system left to deal scientifically with the virus. We could descend into tribal warfare and survival of the fittest. 

One thing we should all realize is that we live in a fragile, codependent, economic system that supports us all. If we want to play Russian roulette with out economy, it would likely end in far more death and damage that any virus could produce. It would also take decades to recover, rather than months.

Governors need to listen, rather than label protesters political

PROTESTS TODAY,  CIVIL DISOBEDIENCE NEXT

MANY NEED TO GO BACK TO WORK NOW

Governors are dismissing protests concerning lifting stay at home orders as political operatives. Much of this has to do with protesters carrying American flags and some wearing Trump apparel. Anyone carrying a American flag must be a right wing radical and anyone who supports Trump must be protesting as part of the Trump campaign. 

What they fail to realize is most of these people are self employed, many work all by themselves. they cannot get unemployment, they cannot get help from the small business program. They need to work. They can do it and adhere to the distancing guidelines. We have state governments who are ignoring their concerns. They really don't give a damn about the self employed or small businesses. 

Many of these people, up to now have willingly conformed to the rules set down. They are now increasingly desperate. I talked yesterday to friend who does excavating. He works alone. He works outdoors. The governor says he cannot work under penalty of the law. It may be time for such people to just go to work and take their chances. Someone may need to challenge these rules in court. 

I know another who applied for a waiver, he was refused. Counterfeit waiver letters could become an alternative business for some enterprising entrepreneur.

The point is, if this was the teachers union or the government employee union protesting, the governors would be kissing their ass in public. They would listen. Of course they have nothing to protest about, they are all being paid in full at the taxpayers expense. The governors will be protesting in Washington for a bailout to help pay for all the paid, nonworking government employees. 

These self-employed and small business people do not want a handout, they are not demanding money for not working. They just want to do their business, while adhering to the guidelines, to insure their families economic survival.

Governors can dismiss and ignore them today, we will see how they handle things when people will not longer obey these draconian edicts.

Pa. house to consider property tax freeze for 2020-2021

STRONG LOBBYING BY SCHOOLS IN OPPOSITION UNDERWAY

MANY SCHOOL DISTRICTS ALREADY CONSIDERING LARGE TAX INCREASES

There is an amendment filed to House bill 974, that would freeze property tax increases for the 2020-2021 year. The House is in session today and tomorrow to consider some of these issues.

Many School districts are claiming that they are losing revenue due to the shutdown. They believe that it will be an opportunity to raise property taxes. Their wages and benefits always take priority over the taxpayers who are not able to just raise someone else's taxes to make them whole.

While it is true that schools may be losing revenue, they also had an opportunity to cut their costs. Much of the school system is shut down and they could have made some management decisions to reduce their expenditures. Sadly, that is seldom how this system works. There is little consideration for efficient operation, but much consideration for increasing revenue and expanding facilities and raising taxes.

It seems they intentionally paint themselves into a box by borrowing money, building extravagant sports facilities, refusing to cut staff, even when enrollment declines, and then cry for increased taxes as soon as there is a downturn.

It is time to consider a reorganization of the whole school board management approach, which is  nothing more than a group of yes individuals elected by the activist educational establishment.  

Many of the states school districts are already being funded by the state to a large degree, it is time to scrape the property tax and school board system and replace it with a state tax system controlled by elected representatives who may have more of an incentive to represent all the people, not just the Education Industry.

Some governors think blanket shutdowns are the politically safe course.

CRISIS NEEDS MANAGEMENT, NOT LOCK DOWNS

POOR MANAGERS FEAR MAKING DECISIONS

Several states have already extended their state shutdown for another 30 days. This is just an escape from making decisions and choices to manage this crisis in a rational and objective way. It is easier to just proclaim the shut down of all business until there is no risk of anyone getting sick. This an unrealistic approach and is really an abdication of their responsibilities to all the residents of their states.

If they cannot make these kind of decisions they should resign and let someone else take over. There is no reason why outdoor construction work cannot resume while adhering to the distancing guidelines. There is no reason that highway maintenance and construction cannot be going on, while keeping the guidelines. This could be done everywhere.

Also the concentration of cases is primarily in the urban areas. Western and northern New York could have a different approach than New York city and Northern New Jersey.  Parts of Pennsylvania do not need the same approach as eastern Pa. that has been infected from New Jersey and New York. 

Possibly restrictions could be increased in the worst areas and relaxed and monitored in those areas that have very minimal cases. This could be done State by State and county by county. Possibly restrict travel from heavily infected areas. 

This requires management, this requires real governance. This requires thinking. 

If they really think that they are going to shut down their states until this 0 risk or until there is a vaccine, they are unrealistic. Protect and quarantine vulnerable populations. Let the young and healthy go back to work. This is not that hard, unless you fear making objective decisions.

So, these same governors next move will be to demand that the Federal government bail them out, because of their huge budget deficits. All the while they are shutting down private business, they are guaranteeing full wages and benefits for government workers. All because these workers are their constituents, their voting base. Many are getting paid to not work indefinitely.

They may believe that their friends in the media and their party leaders will protect them. We will see if they can.  It is all about managing in a crisis, we will see who is capable and who is not.