Stay Far Away From Yellen’s Propaganda

|August 19, 2021

We saw a bumper sticker last night.

It was on a construction truck.

“Make welfare as hard to get as a building permit.”

Ha.

We honked at the poor fellow and went on our way. He’s fighting a hell of a fight.

As President Biden increases the value of food stamps by another 25%, the government is once again giving more to the unemployed and the underemployed, making hiring tough. At the same time, it’s fueling up its funny-money helicopter to zoom overhead and pour trillions in “infrastructure” cash from the sky.

The cash won’t come easy. To work for the government… you first have to work the government.

The Bad Fix

The free market is a mess.

For investors, there’s a lot to ponder.

We start with the latest musings from our old money honey… Janet Yellen.

She penned an op-ed this week. We read it and gagged.

“Biden’s infrastructure plan is a down payment on the economy America can – and should – have,” the piece was titled.

Her essay lists all that is wrong with today’s economy…

We haven’t spent enough on infrastructure.

Childcare is too expensive.

Housing is unaffordable.

And being born the wrong race puts a person behind for life.

She then cites the simple way to fix it all… print more money.

Free college for all. Half a million new affordable homes and a million new rental units (presumably all built and owned by Uncle Sam or his colleagues). Free childcare.

But how will we pay for it all? And is the price tag too much?

How dare we ask, says the lady in charge of the nation’s purse string.

“Indeed, the crucial question isn’t, ‘What if we make these big investments?'” Yellen writes. “It is: ‘What if we don’t?‘”

It seems like an odd thing for a Treasury secretary to say. After all, it’s Yellen who just said that not raising the debt ceiling would be an economic calamity that would “cause irreparable harm to the U.S. economy and the livelihoods of all Americans.”

Shouldn’t the person in charge of our bank account look to balance it… and not poke Congress to spend even more cash we don’t have?

We don’t need to tell you we have a spending problem in this country.

But we may need to remind you of what comes next.

Trouble

The poor sap in that construction truck knows.

He knows what it’s like to have to bid for a government job. He knows he’ll have to pay wages two times the national average while getting half as much work done. He knows he’ll have to hire one man to file the paperwork, another to monitor the permits and a third just to work with the unions.

He knows the process favors his bigger, richer competitors. (That’s why publicly traded infrastructure stocks are red-hot.)

And he knows that most of what he’ll end up doing is waste that’s meant not to “build back better”… but to simply pay back voters.

It’s like the stop sign a good friend told us about last week. It took three different men three different days to put up one stop sign.

When asked if they’d put one on the other side of the street, the answer was what we’d expect.

“I just put the posts in.”

We Did This Before

Yellen wrapped up her plea with hyperbole.

We are now engaged in the most important economic project in recent history: repairing the broken foundations of our economy, and on top of them, building something stronger and fairer than what came before.

Perhaps Yellen has forgotten about Obama’s $831 billion spending plan in 2009.

The American Recovery and Reinvestment Act put signs on roads and bridges all across the land. It, too, was supposed to be the plan that saved America and got her working again.

We should have saved our money.

In 2011, the National Bureau of Economic Research released a report that showed every new job created cost the nation $170,000. But the same report also touts another way of calculating the number that puts the figure at $400,000 per job.

Either way… we wasted money. Lots of it.

What’s most interesting, though, is that the models predict the free market – if left to its own devices – would have created those jobs within three years.

It makes us wonder how much spending a new president would be interested in if reelection were not a concern. What would the nation’s balance sheet look like if presidents got a single six-year term?

But alas, readers want to know how all this will shake out.

“What I am supposed to do about it, Andy?” they write us and ask.

Ahhh… we merely have to pick our head up and look around.

Third-World America

We took a peek at Venezuela earlier this week. It’s a mess. And many readers feel it’s where we’re heading.

Perhaps… in due time.

But what about a less extreme case? Maybe something here at home?

We’re always eager to point to the nation’s dairy industry. Subsidies were supposed to save it from collapse 30 years ago. And yet, each week we see auctioneers scrambling to sell another family-owned farm and its Holsteins to the highest bidder.

The industry runs on government prices… and it’s running out of time.

But we’d rather point readers in a different direction today – toward Egypt.

It’s done the sorts of things Washington is looking to do. In a nod to the same “fairness” Yellen demands in her op-ed, Egypt began subsidizing its bread in the 1940s.

Everybody needs access to cheap food, right?

You don’t want this bread. It’ll kill a nation and your kids.

Because of rising input costs and the Egyptian government’s refusal to raise the price of bread to where it needs to be, the production cost of a loaf is now 10 times what it fetches at the store.

To combat the issue… loaves have gotten smaller – 30% smaller.

But the real question is: Have the subsidies created a healthier, better-fed country?

We know the answer. Anybody who has paid attention knows the answer.

One in five Egyptian kids under the age of five have stunted growth and nearly one in three are anemic.

So much for a free lunch.

So what’s the answer?

Simple.

Stay the hell out of this mess.

Do whatever it takes to stay as far from this system as possible.

Don’t rely on government handouts. Don’t bid on government jobs. Don’t fall for its subsidies. And don’t believe any of its promises.

We’ve said it a million times… rely on yourself and your own wealth.

All around the world, folks are divided into two classes – those who depend on the government and those who don’t.

One lot is healthy and free… The other lives a tortured life.

We know it doesn’t feel like it, but what’s happening will continue to send asset prices to the moon. They’ve been rising ever since Obama put those signs along American highways.

With so much pressure in the system and so much free money being printed each day, it’s the only option.

If you want to avoid the mess ahead… it’s simple. Don’t sit on your cash.

Put it where it will grow.

Until the idea on that bumper sticker comes true… it’s the only way to stay ahead.

Andy Snyder
Andy Snyder|Founder

Andy Snyder is the founder of Manward Press, the nation’s premier source of unfiltered, unorthodox views on money and what it means for a free society. An American author, investor and serial entrepreneur, Andy cut his teeth at an esteemed financial firm with nearly $100 billion in assets under management. Andy and his ideas have been featured on Fox News, on countless radio stations, and in numerous print and online outlets. He’s been a keynote speaker and panelist at events all over the world, from four-star ballrooms to Senate hearing rooms. Today, Andy’s dissident thoughts on life, liberty and investing can be found in his popular daily newsletter,  Manward Financial Digest.