The Price Hike Dog and Pony Show

Will our next election change that channel?

How to catch a wild pig - The parable

A chemistry professor at a large college had some exchange students in the class. One day while the class was in the lab the Professor noticed one young man (exchange student) who kept rubbing his back, and stretching as if his back hurt. The professor asked the young man what was the matter. The student told him he had a bullet lodged in his back. He had been shot while fighting communists in his native country who were trying to overthrow his country’s government and install a new communist government.

In the midst of his story he looked at the professor and asked a strange question. He asked, ‘Do you know how to catch wild pigs?’ The professor thought it was a joke and asked for the punch line. The young man said this was no joke. ‘You catch wild pigs by finding a suitable place in the woods and putting corn on the ground. The pigs find it and begin to come every day to eat the free corn. When they are used to coming every day, you put a fence down one side of the place where they are used to coming. When they get used to the fence, they begin to eat the corn again and you put up another side of the fence. They get used to that and start to eat again.

You continue until you have all four sides of the fence up with a gate in the last side. The pigs, who are used to the free corn, start to come through the gate to eat; you slam the gate on them and catch the whole herd. Suddenly the wild pigs have lost their freedom. They run around and around inside the fence, but they are caught.

Covid was the worst thing that could have happened to business, but not for the obvious reasons that come to mind. Covid decimated (in the true sense of that term) small businesses by simply forcing them to close. Businesses with poor cash management principles and unwilling leadership vanished overnight, as the well-funded and directed mega corporations seized the day. The local hardware store suffered while the retail box giants raked in those abandoned sales. If a company was big, Covid did for them what they could not do for themselves - Covid erased their smaller, and more service-oriented competitors, not by offering a better product and a fairer price, but by simply being too “essential” to fail.

Big companies also had corporate resources to invest in Covid related windfalls. As Congress rushed through stopgap legislation to "buy their way" out of Draconian shutdowns, companies that had the wherewithal to understand and apply for government apologies known as Payroll Protection Plan (PPP), Earned Retention Credit (ERC) and, a wild program just for restaurants called the Restaurant Revitalization Fund (RRF), thrived while lesser operators slipped quietly into that goodnight. To use a Canadian medical analogy, those companies that accepted the dire CDC and NIH nihilistic diagnosis chose euthanasia rather than live free to fight another day.

But, as I alluded to earlier, the shut down and sales revenue redistribution was not the worst thing to happen to businesses coming out of Covid. Covid created a new, and previously unknown to businesses, revenue source. There were the obvious before mentioned corporate welfare programs of PPP, ERC and RRF that infused cash into the businesses that were well healed enough to afford the CPA and legal fees required for access. But the most damaging phenomenon to hit businesses was the disruption of supply chains that caused inflation. Businesses flush with government sponsored welfare that placed them in the sweet spot for survival, then got the added revenue advantage of scarcity to further boost their sales. Businesses, obviously affected by inflation, inflated their products and the economy became its very own inflation inducing self-licking ice-cream cone.

As the economy reemerged from its Faucian induced cocoon in 2021, inflation, at first due to supply chain disruption, pushed product wait times further out and costs for those consumables necessarily higher. Instead of evaluating current operations and re-aligning their businesses for efficiency in the post-Covid world, companies simply kept their old models humming along and solved their profit woes by following economic suit by raising prices on their products.

Now, in a normal free market economy, inflated consumer prices should have ushered in cost effective competition and would have forced price stabilization. Big, bloated businesses should have felt the sting of their inefficiencies and redirected their financial models to compete with nimble and innovative upstarts entering their markets and siphoning off sales. But that didn't happen and won't happen anytime soon. Because the government dictated policies that caused the business collapse paired with government funded solutions to that collapse did in mere months what would have taken multiple election cycles to complete. Governments found that sweet spot in the forest and placed their free corn. As all eyes were on recovery, vaccine mandates and inflation, governments quietly and patiently erected the four sides of the fence. Businesses conditioned to the free corn, ignored the fences being built around them. Perhaps it was the colorful and inspiring DEI propaganda posters plastered about the walls that hid their captors' true intentions, but none the less, businesses are now trapped. They are now enslaved in an economy with debilitating supply chains, growth inhibiting interest rates, and rampant inflation. And like the wild pigs in the opening parable, businesses run about the pen squealing (demanding) not to be released but that more corn be placed in their trough. A service their government captors most surely will provide. Afterall, they didn't go through all the effort to capture businesses into public/private partnerships for nothing.

What business leaders failed to see was this entire process was constructed to place government as their primary customer. As consumers, we are all feeling that shift of affiliation. We feel it when we wait 10 months for a car to be delivered to our dealership. We feel it as we contemplate downsizing our homes and realize that moving from our larger family supporting homes to a condo or townhouse would double our monthly expenses due to housing shortages and high interest rates. We feel it in purchasing products that were once plentiful and available at our favorite home improvement store but now have to be special ordered. We feel it when we shop for groceries and the $100 that just four years ago, filled two or more shopping bags no longer fills one. We feel it when we now wait weeks for a prescription refill and often much longer for a doctor’s appointment. We are all feeling This shift in customer priority because as consumers we are no longer businesses' top concern. Their public partner commands that spot. Be a fly in the wall of any C-suite conference room and you would not hear the leadership discussing strategies for providing better products, customer service or competitive pricing. No, the brain power is spent on compliance, not for any intrinsic worth or value, but to position the company to be first in line at the government trough.

But I have heard it said, the upcoming elections will usher in more Republicans, and they will fix this mess. On that front, I have sad news. In the old days (think way way back to 2016) when the republican modus operandi election grifts boiler plate was; pat the pro-life contingency on the head and promise to appoint conservative judges to the Supreme Court, promise to lower taxes and deregulate, and promise to promote internal energy production. It was an easy formula and any candidate for President that truly desired a robust economy simply needed to follow that formula. Reagan did it in the 1980’s, Bush sr. failed to do it in 1988 and it relegated him to one term. Bush jr. was squishy on the whole economy building scheme in the early 2000’s and he ultimately had to “abandon free market principles to save the free market.” Trump resurrected the economic formula in 2016 and the economy once again sored. Someone forgot to tell Trump that appointing conservative judges was just supposed to be lip-service to the pro-lifers, but that is a story for another day.

The theory is that sending Trump back to the White House will fix the economy. But the Overton Window has shifted. Businesses ensnared by government welfare and DEI incentive traps do not want the free markets that old republican model produced. They are, in fact, pleased with inflation and clogged supply lines. Scarcity, after all, is very good for business. The old system of providing customer service to whiny and demanding patrons is passé and too exhausting. Much better, for post-Covid businesses, to focus on their one large and whiny customer. Their government customer is, after all, also their public partner. And in businesses, all spoils are distributed to partners. A truth cleverly obscured by DEI propaganda and “stakeholder” lip-service.

Donald Trump will not return our economy to pre-Covid successes because big businesses are happy in their captivity. They are now fully conditioned to the “free” government corn and all their squealing into the ears of presumptive republican majority legislators and president will not be to ask for a return to free markets and deregulation. No, the demand will be for the continued status quo. Free markets with easy accesses to entry creates competition and competition creates price stabilization by increasing supply. Increased supply creates innovation as products must compete in both the arenas of price and value. Donald Trump is indeed a people pleaser, and he will charm voters into electing him. But he also is a businessman and once elected, he will desire to give them what they want as well. In 2016, that was low taxes, deregulation and energy independence. In 2024, businesses reject those tired free market ideals.

The World Economic Forum (WEF) and their media and corporate surrogates have played their roles well. For world economies are now ensnared and fully dependent upon their public partners and not their customers for continued success. Regardless of what party wins in November, get used to the current economic conditions. Because like the feeble and ineffective governments themselves (at least ineffective at promoting freedom,) real change will not come from the institutions inside the pen, it must come from the outside. But all efforts of public/private partnerships are design to ensure that those still roaming free outside the paddock not only do not have agency in the political system, but if they attempt to petition for open markets, they will be publicly denigrated as unenlightened haters for even suggesting that markets should be once again free. So, to answer my opening question; yes, the current economic dog and pony show will continue. Not only will it continue after this November’s election, but it has also been signed for multiple season renewals!