Month: June 2020

Tesla Posts Abysmal Score In J.D. Power’s Initial Quality Study For 2020

Tesla Posts Abysmal Score In J.D. Power’s Initial Quality Study For 2020

Tyler Durden

Thu, 06/25/2020 – 14:49

Aside from a new NHTSA investigation into its Model S touchscreens, a litany of Model Y quality issues and a report out yesterday that Tesla may have knowingly allowed Model S vehicles to roll off its production line with a flaw that could cause them to go up in flames, it’s been an otherwise tame week for Tesla.

Oh, wait. There is just one other thing: J.D. Power finally included Tesla in its Initial Quality Survey for 2020 and the brand scored an abysmal 250, placing it below literally dozens of other manufacturers, including names like Land Rover and Audi, in terms of reliability.

The survey has been put out annually for the last 34 years and works by asking buyers of new cars of the current model year what problems they have had within the first 90 days of owning a vehicle. The score is based on the number of problems experienced within those 90 days per 100 vehicles. 

One feather in the cap for Tesla is that they can’t technically be ranked last out of all brands because it won’t allow J.D. Power to survey its customers in 15 states where OEM permission is required, according to ARS Technica. 

But that didn’t stop J.D. Power from going on record about how accurate they thought their findings were. Doug Betts, president of the automotive division at J.D. Power, said:  “However, we were able to collect a large enough sample of surveys from owners in the other 35 states and, from that base, we calculated Tesla’s score.”

The survey asks 223 questions that are split into nine categories, including “infotainment, features, controls and displays, exterior, interior, powertrain, seats, driving experience, climate, and even driving assistance.”

Infotainment was the worst scoring category on the survey this year, as people experienced issues with their voice recognition, Bluetooth, GPS and Android/iOS pairing capabilities. Recall, just yesterday, the NHTSA launched a preliminary evaluation into Tesla’s touchscreens on its Model S vehicles. 

via ZeroHedge News https://ift.tt/2BGyKTA Tyler Durden

Pew Analysis Shows Only 1 In 6 BLM Protesters Are Black

Pew Analysis Shows Only 1 In 6 BLM Protesters Are Black

Tyler Durden

Thu, 06/25/2020 – 14:33

Authored by Steve Watson via Summit News,

Analysis carried out by the Pew Research Center has revealed that just one in six protesters turning out at BLM demonstrations in the US are actually black.

The research notes that the plurality of those present at the gatherings have been white people.

The full breakdown reveals that just 17 percent of protesters were black, while 46 percent were white.

A further 22 percent were Hispanic, with eight percent being Asian, the analysis highlights.


Perhaps even more telling is the demographic breakdown in terms of political affiliation.

Almost four out of every five “protesters” identified as Democrats or Democrat-leaning, with fewer than 17 percent identifying as Republicans.

The findings dovetail with comments made by BET Founder Robert Johnson yesterday, who noted that most black Americans “laugh” at white people attempting to bring down monuments and cancel everything they deem to be “racist”.

Johnson said that white people “have the mistaken assumption that black people are sitting around cheering for them saying ‘Oh, my God, look at these white people. They’re doing something so important to us. They’re taking down the statue of a Civil War general who fought for the South.”

“You know, black people, in my opinion, black people laugh at white people who do this the same way we laugh at white people who say we got to take off the TV shows.” Johnson said in an interview with Fox News.

“Look, the people who are basically tearing down statues, trying to make a statement are basically borderline anarchists, the way I look at it,” he continued, adding “They really have no agenda other than the idea we’re going to topple a statue.”

“It’s not going to give a kid whose parents can’t afford college money to go to college. It’s not going to close the labor gap between what white workers are paid and what black workers are paid. And it’s not going to take people off welfare or food stamps.” Johnson urged.

“It’s “tantamount to rearranging the deck chairs on a racial titanic. It absolutely means nothing.” Johnson asserted.

via ZeroHedge News https://ift.tt/3hZXgzT Tyler Durden

The Federal ‘Anti-Lynching’ Bill Sacrifices Justice for Symbolism

BHAZ-graffiti-Twitter

A few days ago, someone spray-painted “BHAZ” (for “Black House Autonomous Zone”) on the pillars of St. John’s Episcopal Church, the site of President Donald Trump’s notorious June 1 photo op during protests against police brutality in Washington, D.C. Under the D.C. Code, that act of vandalism, assuming the damage costs less than $1,000, is a misdemeanor punishable by a maximum fine of $1,000 and up to six months in jail. But under an “anti-lynching” bill that is part of the police reform packages backed by House Democrats and Senate Republicans, the same act could qualify as a felony punishable by up to 10 years in prison.

Sen. Rand Paul (R–Ky.) uses that example to illustrate the potential unintended consequences of the Justice for Victims of Lynching Act, a.k.a. the Emmett Till Antilynching Act, which covers any conspiracy to violate various federal civil rights laws. If more than one person was involved in the church graffiti—if one bought the spray paint and another wrote the letters, for example—that would amount to a conspiracy. And Paul notes that the church had earlier been targeted by arsonists who spray-painted “Matthew 19:24” and “God is still watching” on the building. That context, he argues, suggests that the church was targeted because of its religious character, which violates 18 USC 247, one of the provisions cited in the anti-lynching bill.

“Had the Emmett Till Antilynching Act been federal law, those who conspired to deface St. John’s Church could be prosecuted for lynching and potentially lose their liberty for up to a decade,” Paul wrote in a letter to his Senate colleagues yesterday. “Those who argue that the government will not prosecute such acts as a lynching are willfully blind to the flaws within our criminal justice system….We cannot fight injustice by passing laws that will create more injustice by equating vandalism with lynching.”

If you think it is implausible that federal prosecutors would charge black protesters with lynching in a case like this, I have two words for you: Tiffany Harris. She is the black woman accused of slapping three Jewish women in the Crown Heights neighborhood of Brooklyn last December, a series of assaults that the Justice Department charged as federal hate crimes under 18 USC 249, another provision mentioned in the anti-lynching bill. The decision to pile federal charges on top of the state charges that Harris already faced dramatically increased the maximum penalty and made it possible to punish her twice for the same conduct. That intervention was U.S. Attorney Richard Donoghue’s attempt to make a statement about anti-Semitic attacks at a time when reports of such crimes were rising in New York City.

The constitutional rationale for the law under which Harris was charged, which applies to assaults committed “because of” the victim’s “actual or perceived race, color, religion, or national origin,” is that it serves to eliminate “the badges, incidents, and relics of slavery,” a congressional power inferred from the 13th Amendment. In other words, Donoghue thinks prosecuting a black woman for slapping Jews in 2020 is authorized by the amendment that abolished slavery in 1865. Given such precedents, it is not hard to believe that, depending on the political incentives, a black vandal could be prosecuted for lynching under a law named after a black Mississippi teenager who was gruesomely murdered for purportedly flirting with a white woman in 1955.

Federal hate crime laws invite capricious, politically motivated prosecutions that have little to do with the facts of the case or justice for the offender. The anti-lynching bill, as currently written, would magnify that problem. Paul’s solution is an amendment limiting the definition of lynching to cases involving “serious bodily injury,” which fits the general understanding and historical meaning of the term and would prevent prosecutors from applying it to minor crimes such as vandalism.

Given that lynching, assault, and murder are already illegal under state and federal law, you may wonder, why is this bill necessary in the first place? The “findings” section offers no real explanation, except to say that the legislation “recognizes the history of lynching in the United States.” I asked Paul whether that seems like a satisfactory justification for a new criminal law.

“Most criminal law should be adjudicated at the state level,” Paul replied by email.  “Crimes that involve conspiracies can and have been abused, so care should be taken in crafting new conspiracy laws. If the national conscience requires a federal law to express its symbolic support for laws that already outlaw lynching, I will not stand in the way as long as the new law of conspiracy clearly defines lynching as murder or attempted murder or at the very least serious bodily harm or an attempt at serious bodily harm. I do not want anyone—black, white, or brown—to be given ten years in prison for slapping someone or painting graffiti on a church.”

That seems like a reasonable position, especially if you agree with Paul that the criminal justice system is excessively and arbitrarily punitive—a problem of special concern to African Americans. Yet Paul has been pilloried for opposing the current version of the anti-lynching bill, which sacrifices the rights of criminal defendants for the sake of symbolism. “Does America need a win today on racial justice?” Sen. Cory Booker (D–N.J.) said in response to Paul’s proposed amendment earlier this month. “Does the anguished cries of people in the streets? It may not cure the ills so many are protesting about, but God, it could be a sign of hope.”

Far from a sign of hope, this bill is cause for despair about the legislative process. When Congress uses its power to create new criminal penalties, threatening people with longer prison sentences than would otherwise apply, it has a duty to exercise more thought and care than this legislation reflects.

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This Republican Senator Calls Three Black Men Peacefully Carrying Long Guns ‘Mob Rule’

Foxguns_1161x653

This week Sen. Kelly Loeffler (R–Ga.) described a handful of protesters carrying guns in public as “mob rule.”

Is Loeffler the rare conservative politician with a history of calling for expanded gun controls? That doesn’t appear the case. Here’s a tweet from her from January expressing appreciation for National Rifle Association President Carolyn Meadows:

What could possibly make a pro-gun-rights senator suddenly take such a dim view of citizens’ rights to bear arms? Watch this Wednesday segment from the Fox show America’s Newsroom, and the answer becomes apparent pretty quickly:

As you can see, Fox interviewed Loeffler amid a montage of young, armed black people protesting police abuse in Atlanta, where a cop recently shot and killed Rayshard Brooks. Another Fox host, Sean Hannity, reported on Tuesday that there were “at least three men brandishing long guns” near the Wendy’s where the incident happened.

Hannity, Fox, and Loeffler all represented this as evidence of the dangers of defunding police. Indeed, one young man with a gun (who seemed perfectly polite and respectful) told Fox he was carrying a 12-gauge shotgun because he didn’t believe police officers would protect him, adding that cops were not going to be “allowed” in this space. Asked what he’d do if police rolled up and ordered him to drop his weapon, the man insisted he had the legal right under the Second Amendment of the Constitution to bear arms: “And at no point will I allow my right to be disturbed.” Good for him!

Carrying long guns in public is legal in Georgia, by the way (with exceptions for a few places like courts and schools). Fox does not actually accuse any of these men of breaking any laws. But they clearly intend viewers to see these men as a threat—and not just because they have put up barricades and hope to shut out the police, but because they’re bearing arms. By contrast, when a predominantly white group of protesters showed up at Michigan’s capitol in April to protest the state’s COVID-19 rules, Fox’s coverage was reasonably neutral and factual, giving voice to critics but pointing out that guns were legally allowed in the state Capitol building.

Loeffler isn’t just a hypocrite about gun rights. She’s trying to undermine another value conservatives are supposed to believe in: federalism. The senator is introducing legislation that would reduce federal transportation funding from states and municipalities that cut funding to law enforcement, unless they can show a “clear budgetary need.” The idea that the states and cities should have to get permission from the U.S. government to make a budget decision is, of course, absolutely anathema to local rule. It’s up to a community’s citizens to determine how much money their police department should receive—not the U.S. Senate or the Department of Transportation.

Bonus video: ReasonTV on the importance of defending open carry rights in black communities to defend civil rights:

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The Feds Sent More than 1 Million Coronavirus Stimulus Payments to Dead People, GAO Says

ipurestockxthree839679

More than 1 million stimulus payments totaling nearly $1.4 billion were sent to deceased Americans during the federal government’s unprecedented emergency spending in response to the COVID-19 pandemic.

That’s just one of the major findings in a new Government Accountability Office (GAO) report reviewing the Coronavirus Aid, Relief, and Economic Security (CARES) Act, the $2.3 trillion stimulus package passed by Congress in late March. In addition to mailing checks to some dead people, the GAO found that federal agencies—like the Small Business Administration, which was tasked with processing more than $600 billion in payments to businesses forced to close by the pandemic—struggled to handle the massive surge in spending. That’s caused confusion and left government auditors unable to do important oversight work.

“Consistent with the urgency of responding to serious and widespread health issues and economic disruptions, agencies have given priority to moving swiftly where possible to distribute funds and implement new programs,” the GAO concluded. “As tradeoffs were made, however, agencies have made only limited progress so far in achieving transparency and accountability goals.”

A major element of the CARES Act was the direct payments of up to $1,200 sent to every American. As of May 31, the Treasury Department had issued more than 160 million payments worth $269.3 billion via paper checks, prepaid debit cards, and direct deposits to bank accounts.

To distribute the money, the Treasury Department used 2019 tax return records, but it did not use “third-party data, such as the death records maintained by the Social Security Administration (SSA), to detect and prevent erroneous and fraudulent tax refund claims,” the GAO found. As a result, individuals who may have died since filing their 2019 tax returns received direct payments through the CARES Act.

Mostly, that’s because of the complexities of the federal bureaucracy. The GAO report states that the IRS has full legal access to the Social Security death list, but the Treasury Department’s Bureau of Fiscal Service (BFS), which handled the distribution of the CARES Act payments, does not. Congress should allow the BFS to have access to that data if another round of stimulus payments are sent, the GAO suggests.

Officials from the IRS told the GAO that they raised that potential problem to Congress even before the CARES Act was passed. After the bill was passed, IRS attorneys determined that the agency did not have the legal authority to withhold payments from deceased individuals.

Officially, the IRS says that any payment made to a dead person must be returned, but the GAO notes that “the IRS does not currently plan to take additional steps to notify ineligible recipients on how to return payments.”

The small business loans distributed as part of the CARES Act stimulus are another situation where the government’s rush to get money out the door may have led to mistakes. The Paycheck Protection Program backed more than 4.6 million loans totaling over $500 billion, but the GAO found that many borrowers were not given proper guidance on how the loans would operate, including what rules would make a business eligible for loan forgiveness once the pandemic had passed.

“Because of the number of loans approved, the speed with which they were processed, and the limited safeguards, there is a significant risk that some fraudulent or inflated applications were approved,” the GAO concludes.

The Treasury Department is refusing to disclose vital information about loan recipients, which will only make accountability measures more difficult to implement.

Fast-tracking the direct payments and other aspects of the coronavirus response  might have caused money to be wasted, but other reports indicate that the stimulus package accomplished its goal. Stuffing billions of dollars into the economy caused the poverty rate to fall even as millions of Americans were kept out of work by COVID-19 outbreaks, according to a report from the University of Chicago. Meanwhile, Commerce Department data shows that personal income rose by about 10 percent during April.

Still, the full cost of the CARES Act stimulus will be felt for years to come. That one-time infusion of cash has caused the expected budget deficit for 2020 to quadruple from about $1 trillion to nearly $4 trillion.

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The Federal ‘Anti-Lynching’ Bill Sacrifices Justice for Symbolism

BHAZ-graffiti-Twitter

A few days ago, someone spray-painted “BHAZ” (for “Black House Autonomous Zone”) on the pillars of St. John’s Episcopal Church, the site of President Donald Trump’s notorious June 1 photo op during protests against police brutality in Washington, D.C. Under the D.C. Code, that act of vandalism, assuming the damage costs less than $1,000, is a misdemeanor punishable by a maximum fine of $1,000 and up to six months in jail. But under an “anti-lynching” bill that is part of the police reform packages backed by House Democrats and Senate Republicans, the same act could qualify as a felony punishable by up to 10 years in prison.

Sen. Rand Paul (R–Ky.) uses that example to illustrate the potential unintended consequences of the Justice for Victims of Lynching Act, a.k.a. the Emmett Till Antilynching Act, which covers any conspiracy to violate various federal civil rights laws. If more than one person was involved in the church graffiti—if one bought the spray paint and another wrote the letters, for example—that would amount to a conspiracy. And Paul notes that the church had earlier been targeted by arsonists who spray-painted “Matthew 19:24” and “God is still watching” on the building. That context, he argues, arguably suggests that the church was targeted because of its religious character, which violates 18 USC 247, one of the provisions cited in the anti-lynching bill.

“Had the Emmett Till Antilynching Act been federal law, those who conspired to deface St. John’s Church could be prosecuted for lynching and potentially lose their liberty for up to a decade,” Paul wrote in a letter to his Senate colleagues yesterday. “Those who argue that the government will not prosecute such acts as a lynching are willfully blind to the flaws within our criminal justice system….We cannot fight injustice by passing laws that will create more injustice by equating vandalism with lynching.”

If you think it is implausible that federal prosecutors would charge black protesters with lynching in a case like this, I have two words for you: Tiffany Harris. She is the black woman accused of slapping three Jewish women in the Crown Heights neighborhood of Brooklyn last December, a series of assaults that the Justice Department charged as federal hate crimes under 18 USC 249, another provision mentioned in the anti-lynching bill. The decision to pile federal charges on top of the state charges that Harris already faced dramatically increased the maximum penalty and made it possible to punish her twice for the same conduct. That intervention was U.S. Attorney Richard Donoghue’s attempt to make a statement about anti-Semitic attacks at a time when reports of such crimes were rising in New York City.

The constitutional rationale for the law under which Harris was charged, which applies to assaults committed “because of” the victim’s “actual or perceived race, color, religion, or national origin,” is that it serves to eliminate “the badges, incidents, and relics of slavery,” a congressional power inferred from the 13th Amendment. In other words, Donoghue thinks prosecuting a black woman for slapping Jews in 2020 is authorized by the amendment that abolished slavery in 1865. Given such precedents, it is not hard to believe that, depending on the political incentives, a black vandal could be prosecuted for lynching under a law named after a black Mississippi teenager who was gruesomely murdered for flirting with a white woman in 1955.

Federal hate crime laws invite capricious, politically motivated prosecutions that have little to do with the facts of the case or justice for the offender. The anti-lynching bill, as currently written, would magnify that problem. Paul’s solution is an amendment limiting the definition of lynching to cases involving “serious bodily injury,” which fits the general understanding and historical meaning of the term and would prevent prosecutors from applying it to minor crimes such as vandalism.

Given that lynching, assault, and murder are already illegal under state and federal law, you may wonder, why is this bill necessary in the first place? The “findings” section offers no real explanation, except to say that the legislation “recognizes the history of lynching in the United States.” I asked Paul whether that seems like a satisfactory justification for a new criminal law.

“Most criminal law should be adjudicated at the state level,” Paul replied by email.  “Crimes that involve conspiracies can and have been abused, so care should be taken in crafting new conspiracy laws. If the national conscience requires a federal law to express its symbolic support for laws that already outlaw lynching, I will not stand in the way as long as the new law of conspiracy clearly defines lynching as murder or attempted murder or at the very least serious bodily harm or an attempt at serious bodily harm. I do not want anyone—black, white, or brown—to be given ten years in prison for slapping someone or painting graffiti on a church.”

That seems like a reasonable position, especially if you agree with Paul that the criminal justice system is excessively and arbitrarily punitive—a problem of special concern to African Americans. Yet Paul has been pilloried for opposing the current version of the anti-lynching bill, which sacrifices the rights of criminal defendants for the sake of symbolism. “Does America need a win today on racial justice?” Sen. Cory Booker (D–N.J.) said in response to Paul’s proposed amendment earlier this month. “[Do] the anguished cries of people in the streets? It may not cure the ills so many are protesting about, but God, it could be a sign of hope.”

Far from a sign of hope, this bill is cause for despair about the legislative process. When Congress uses its power to create new criminal penalties, threatening people with longer prison sentences than would otherwise apply, it has a duty to exercise more thought and care than this legislation reflects.

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This Republican Senator Calls Three Black Men Peacefully Carrying Long Guns ‘Mob Rule’

Foxguns_1161x653

This week Sen. Kelly Loeffler (R–Ga.) described a handful of protesters carrying guns in public as “mob rule.”

Is Loeffler the rare conservative politician with a history of calling for expanded gun controls? That doesn’t appear the case. Here’s a tweet from her from January expressing appreciation for National Rifle Association President Carolyn Meadows:

What could possibly make a pro-gun-rights senator suddenly take such a dim view of citizens’ rights to bear arms? Watch this Wednesday segment from the Fox show America’s Newsroom, and the answer becomes apparent pretty quickly:

As you can see, Fox interviewed Loeffler amid a montage of young, armed black people protesting police abuse in Atlanta, where a cop recently shot and killed Rayshard Brooks. Another Fox host, Sean Hannity, reported on Tuesday that there were “at least three men brandishing long guns” near the Wendy’s where the incident happened.

Hannity, Fox, and Loeffler all represented this as evidence of the dangers of defunding police. Indeed, one young man with a gun (who seemed perfectly polite and respectful) told Fox he was carrying a 12-gauge shotgun because he didn’t believe police officers would protect him, adding that cops were not going to be “allowed” in this space. Asked what he’d do if police rolled up and ordered him to drop his weapon, the man insisted he had the legal right under the Second Amendment of the Constitution to bear arms: “And at no point will I allow my right to be disturbed.” Good for him!

Carrying long guns in public is legal in Georgia, by the way (with exceptions for a few places like courts and schools). Fox does not actually accuse any of these men of breaking any laws. But they clearly intend viewers to see these men as a threat—and not just because they have put up barricades and hope to shut out the police, but because they’re bearing arms. By contrast, when a predominantly white group of protesters showed up at Michigan’s capitol in April to protest the state’s COVID-19 rules, Fox’s coverage was reasonably neutral and factual, giving voice to critics but pointing out that guns were legally allowed in the state Capitol building.

Loeffler isn’t just a hypocrite about gun rights. She’s trying to undermine another value conservatives are supposed to believe in: federalism. The senator is introducing legislation that would reduce federal transportation funding from states and municipalities that cut funding to law enforcement, unless they can show a “clear budgetary need.” The idea that the states and cities should have to get permission from the U.S. government to make a budget decision is, of course, absolutely anathema to local rule. It’s up to a community’s citizens to determine how much money their police department should receive—not the U.S. Senate or the Department of Transportation.

Bonus video: ReasonTV on the importance of defending open carry rights in black communities to defend civil rights:

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The Feds Sent More than 1 Million Coronavirus Stimulus Payments to Dead People, GAO Says

ipurestockxthree839679

More than 1 million stimulus payments totaling nearly $1.4 billion were sent to deceased Americans during the federal government’s unprecedented emergency spending in response to the COVID-19 pandemic.

That’s just one of the major findings in a new Government Accountability Office (GAO) report reviewing the Coronavirus Aid, Relief, and Economic Security (CARES) Act, the $2.3 trillion stimulus package passed by Congress in late March. In addition to mailing checks to some dead people, the GAO found that federal agencies—like the Small Business Administration, which was tasked with processing more than $600 billion in payments to businesses forced to close by the pandemic—struggled to handle the massive surge in spending. That’s caused confusion and left government auditors unable to do important oversight work.

“Consistent with the urgency of responding to serious and widespread health issues and economic disruptions, agencies have given priority to moving swiftly where possible to distribute funds and implement new programs,” the GAO concluded. “As tradeoffs were made, however, agencies have made only limited progress so far in achieving transparency and accountability goals.”

A major element of the CARES Act was the direct payments of up to $1,200 sent to every American. As of May 31, the Treasury Department had issued more than 160 million payments worth $269.3 billion via paper checks, prepaid debit cards, and direct deposits to bank accounts.

To distribute the money, the Treasury Department used 2019 tax return records, but it did not use “third-party data, such as the death records maintained by the Social Security Administration (SSA), to detect and prevent erroneous and fraudulent tax refund claims,” the GAO found. As a result, individuals who may have died since filing their 2019 tax returns received direct payments through the CARES Act.

Mostly, that’s because of the complexities of the federal bureaucracy. The GAO report states that the IRS has full legal access to the Social Security death list, but the Treasury Department’s Bureau of Fiscal Service (BFS), which handled the distribution of the CARES Act payments, does not. Congress should allow the BFS to have access to that data if another round of stimulus payments are sent, the GAO suggests.

Officials from the IRS told the GAO that they raised that potential problem to Congress even before the CARES Act was passed. After the bill was passed, IRS attorneys determined that the agency did not have the legal authority to withhold payments from deceased individuals.

Officially, the IRS says that any payment made to a dead person must be returned, but the GAO notes that “the IRS does not currently plan to take additional steps to notify ineligible recipients on how to return payments.”

The small business loans distributed as part of the CARES Act stimulus are another situation where the government’s rush to get money out the door may have led to mistakes. The Paycheck Protection Program backed more than 4.6 million loans totaling over $500 billion, but the GAO found that many borrowers were not given proper guidance on how the loans would operate, including what rules would make a business eligible for loan forgiveness once the pandemic had passed.

“Because of the number of loans approved, the speed with which they were processed, and the limited safeguards, there is a significant risk that some fraudulent or inflated applications were approved,” the GAO concludes.

The Treasury Department is refusing to disclose vital information about loan recipients, which will only make accountability measures more difficult to implement.

Fast-tracking the direct payments and other aspects of the coronavirus response  might have caused money to be wasted, but other reports indicate that the stimulus package accomplished its goal. Stuffing billions of dollars into the economy caused the poverty rate to fall even as millions of Americans were kept out of work by COVID-19 outbreaks, according to a report from the University of Chicago. Meanwhile, Commerce Department data shows that personal income rose by about 10 percent during April.

Still, the full cost of the CARES Act stimulus will be felt for years to come. That one-time infusion of cash has caused the expected budget deficit for 2020 to quadruple from about $1 trillion to nearly $4 trillion.

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“Depression-Like Crisis” Unfolding With No V-Shaped Recovery Until 2023, UCLA Anderson Warns

“Depression-Like Crisis” Unfolding With No V-Shaped Recovery Until 2023, UCLA Anderson Warns

Tyler Durden

Thu, 06/25/2020 – 14:10

At a time when the Trump administration continually promotes a V-shaped economic recovery from the coronavirus pandemic, a new UCLA Anderson Forecast has revised its economic forecast down, with no recovery this year or next. 

UCLA Anderson Forecast senior economist David Shulman writes in its second quarterly forecast of 2020, that the virus pandemic has “morphed into a Depression-like crisis” with no V-shaped recovery until 2023. 

“To call this crisis a recession is a misnomer. We are forecasting a 42% annual rate of decline in real GDP for the current quarter, followed by a ‘Nike swoosh’ recovery that won’t return the level of output to the prior fourth quarter of 2019 peak until early 2023,” Shulman writes in a report titled “The Post-COVID Economy.”

“On a fourth-quarter-to-fourth-quarter basis, real GDP will decline by 8.6% in 2020 and then increase by 5.3% and 4.9% in 2021 and 2022, respectively,” he notes.

Shulman says the labor market might not recover until “well past 2022,” and the unemployment rate will stay stubbornly high, well over 10% through the fourth quarter of 2020. A labor recovery might not be seen for several years. 

“For too many workers, the recession will linger on well past the official end date,” he warns. 

He says the economy is in desperate need of more stimulus via the Federal Reserve and the federal government to support ailing corporate bond markets and a severely damaged consumer. 

“Simply put, despite the Paycheck Protection Program, too many small businesses will fail and millions of jobs in restaurants and personal service firms will disappear in the short run. We believe that even with the availability of a vaccine, it will take time for consumers to return to normal,” Shulman writes. 

The report says the economy has hit bottom, that doesn’t necessarily mean GDP and employment levels will immediately surge back to fourth-quarter 2019 levels, as heavily indebted companies and weak consumers will lead to sluggish economic activity. 

For more color on the recovery so far, Fathom Consulting offers a glimpse into a less than stellar rebound: 

US retail sales for restaurants have yet to bounce significantly. 

Industrial production remains at lows.  

An explosion in government debt to prop up the crashed economy.

Tens of millions of people out of work. 

High unemployment suggests a “biblical” wave of bankruptcies is about to flood the US economy.

Meanwhile, the stock market’s disconnect from reality is setting up for the next possible stock market correction. 

Corporate profits are sliding, stocks are rising. Alligator jaws… 

 

UCLA Anderson Forecast’s new downward revision of the recovery suggests the worst has yet to be seen – several more years of pain are likely ahead. 

via ZeroHedge News https://ift.tt/2NvD37e Tyler Durden

The Importance Of Where And What Consumers Buy

The Importance Of Where And What Consumers Buy

Tyler Durden

Thu, 06/25/2020 – 13:55

Authored by Bruce Wilds via Advancing Time blog,

How people spend their money has more impact on the economy than most people realize. What consumers buy matters a great deal. When looking at the policies flowing out of Washington it is clear many politicians seem to have no idea that all consumer spending and purchases are not created equal. Certain purchases result in money bouncing around a community sparking future economic growth which enriches everyone. Other purchases simply give the money wings allowing it to exit not only the community but often the country.

Many economists point to the consumer as being the lynch-pin to our economy.  Given that retail sales make up roughly 40% of personal consumption expenditures which in turn comprise roughly 70% of our GDP, their impact on the economy is important. These numbers, however, only tell a small part of the story. Sadly, because of economic laziness or ignorance, this is where the link between how and where money is spent gets lost in the noise. Ironically while President Trump decries our trade deficit he seems unable to put one and one together and understand it is shortsighted consumers driving the deficit.

A detailed breakdown of how people receiving a stimulus check would provide a great deal of information about the finances of individual Americans. It would also be very interesting to randomly delve deep into the finances of a few hundred Americans and learn the truth about where we stand. By deep, I mean looking at where they get their income, debt, total obligations, savings, retirement plans, net worth, the whole caboodle. This kind of deep economic discovery has never been done to my knowledge but instead, we tend to garner our information from superficial polls.

An article by Lance Roberts that appeared on Real Investment Advice took a shot at explaining the bounce we just saw in retail sales at a time many consumers are tapped out. Robert wrote you should “never count the consumer out,” as they always find a way to go further into debt because psychologically, consumers are “trained” to “shop till they drop.” He claims that as long as individuals have a paycheck; they will spend it. Give them a tax refund; they will spend it. Issue them a credit card; they will max it out. Give them a government stimulus check; they will spend it as well. Don’t believe me, then why is consumer debt at record levels?

The fact is, consumers should take a long look at how their purchases will impact the economy over time. Robert makes the point that most consumers will spend if they have or can borrow the money. Taking this to the next level, few people realize what is registered as growth does not necessarily transfer into economic strength. This point is something that has been covered time and time again on this blog in articles such as, Healthcare Spending Wrongly Feeds Our GDP, and Economic Growth Does Not Equal Economic Strength.

The following examples highlight this matter. Just for fun imagine the money allowing for these purchases is flowing from the recent 2.3 trillion dollar CARES Act.

  • Consumer one decides to put a new roof put on his home. This includes tear off and re-shingling. This labor-intense job pays a lot of local workers from those delivering and hauling away the old roof to those selling the shingles, those installing them, and even some folks at the local landfill. As a bonus, the shingles are made here in America. Putting even more ceiling on the cake is that it improves not only his property but raises values in his neighborhood enriching those living nearby.

  • Consumer two uses their money as a down payment on a new Hyundai. The Hyundai Motor Company is a South Korean multinational automotive manufacturer headquartered in Seoul. Hyundai builds the vast majority of its vehicles at its plant in Ulsan, South Korea. It also operates plants all over the world with one in Mexico and a plant in Alabama. When I tried to research how likely the car was to be made here I hit a wall. One thing for certain is that it is packed full of South Korean parts and with each sale a bunch of dollars heads overseas.

  • In the final example consumer three slaps, small businesses, brick and mortar retailers, and the 30 million-plus Americans recently unemployed in the face. His online purchase from Amazon of products made in China and shipped from a facility located in another state. Just like in the case of consumer two a bunch of the money heads overseas but real disaster for the community is absolutely none of the money stays there. This sets the area up for a new wave of store closings, prolonged unemployment, and declining real estate prices.

And It’s Gone!

Many of our economic problems stem from the many consumers out there making poor decisions. This includes things such as paying too much for a car they cannot afford or maintain. These automobiles generally do not last long and often get put on a hook. The least responsible consumers tend not to fulfill obligations due but to take on new debt and squander every penny they can lay their hands on. Online shopping and companies such as Amazon are like heroin to an addict when it comes to promoting spending that destroys real economic strength.

Those people that have choose to skip paying the essentials such as home mortgages and rent will most likely come to regret it as they are hit with penalties and their actions come back to haunt them. The elephant in the room when it comes to growing the economy is how “the broken window theory” is spun and interpreted. The gist of this theory is that if a hooligan breaks the window of a bakery, the subsequent repair expenditures by the baker will have no net benefits for the economy. Interestingly, it is not uncommon to see destruction touted as a good thing because it promotes spending. The idea destruction is good based on this reasoning discounts several facts.

One has to do with where the money is coming from but whether it is from an insurance company or the baker it still means the money is diverted from being used on another purchase. Repairing a broken window is maintenance spending which doesn’t improve growth because it doesn’t improve productivity; it would have occurred anyway. The only thing a broken window does is it makes the maintenance spending occur earlier, lowering the use life of the window. While maintenance spending may keep the economy going it doesn’t provide a boost. Instead, it is better to invest the money in something which creates wealth by increasing productivity.

Many people and even economists have real misconceptions as to how the economy works. Where money flows and who it enriches is a key component of economics, the failure to consider this is a blind spot many people have. After years of being told everything revolves around spending, this diminishes the important role savings plays in the scheme of a balanced economy. Fans of Keynesian economics that encourage government spending to stabilize the economy during a downturn tend to discount the importance that where and how money is spent matters a great deal.

via ZeroHedge News https://ift.tt/2VgtCgc Tyler Durden