Perception vs. Reality, Jobs & Rocky Mountain Highs – Top 3 Takeaways – January 6th, 2023
- Perception vs. Reality. I’m going to throw a few names at you for a moment. Ron DeSantis. Matt Gaetz. Kevin McCarthy. Now, by way of Congressional voting records, who do you think is the most conservative? And how about the least conservative of the three? While researching for today’s Q&A, I uncovered a nugget that I believe is highly compelling in the House Speaker monkey feces fight on the right this week. The perception of who is perhaps the most conservative compared to who actually is by way of action. I ascribe to the notion that actions speak louder than words. And I know, that probably sounds a little weird from someone who talks into a microphone for a living. But I’m the first to say that talk, minus action, is cheap. Those who know me know that what I say and what I do are one in the same. And on that note, it’s what I look for when evaluating the character of others. And so, on that note, back to the question at hand. Rank DeSantis, Gaetz and McCarthy in order of conservatism based on congressional voting records. If you had DeSantis as being the most conservative of the bunch... You’d be wrong. He’s in the middle of the three. If you had Gaetz, DeFacto leader of the McCarthy opposition party as the most conservative... You’d be way wrong. He has far and away the least conservative voting record of the three. So yes, through the process of elimination you’ve now determined Kevin McCarthy as having had the most conservative voting record of the bunch. Now, if you had McCarthy at the top, congrats for having likely done extensive homework on all of this stuff previously (and for potentially being a bigger wonk than me – not that, that is something worth being congratulated for...but anyway). If you didn’t have McCarthy at the top, no worries, that makes you normal and it’s also a reason to tune into this show. But it also illustrates the point of my top takeaway about perception vs. reality. McCarthy was framed as a creature of the swamp, the establishment, by the original 19 GOP dissenters to his nomination for Speakership. On that note, Tuesday, after the first failed vote, Gaetz stood up to nominate Jim Jordan for speaker (who received the dissenters votes in that round) saying this in opposition to McCarthy: Maybe the right person for the job of speaker of the House isn't someone who has sold shares of themselves for more than a decade to get it. Well, McCarthy has been in GOP leadership for a while, and without additional context that’s a fairly compelling argument to be made. The problem with that logic is that his voting record doesn’t back up that assertion. In fact, McCarthy’s voting record during the Trump presidency was greater than 12% more conservative than Gaetz, and in fact more conservative than every single member of the dissenters who were in Congress during that time. That doesn’t inherently mean he should be speaker, but it does mean that there’s been a game of deception that’s been played by dissenters to his bid this week. Much more to come in today’s Q&A. But as always, there remain two sides to stories and one side to facts.
- Bipolar jobs report. At 8:30 this morning the Government jobs report for December comes out. These days it's the second most important economic report we get in a given month (sitting behind the monthly CPI release). And, as usual, in advance of that report we’ve received the ADP Private Sector jobs report. It’s the one that led to the stock market selloff yesterday. Not because it was bad, but actually because it was pretty good. It’s the latest reminder that there’s often a disconnect between what’s good for most people and what drives stock prices over the short term. Anyway, ADP’s report showed a better-than-expected 235,000 jobs being added last month. It’s a number that’s decent and thus one which indicates the economy is still running hotter than economists' projections. What that’s perceived to mean is higher interest rate increases for a longer period of time – hence the stock market selloff. But the thing is the report was much more nuanced than that. It was very much a bipolar jobs report but thankfully in a generally good way. For much of last year, including the first half when the US economy entered a technical recession, large companies were still adding employees in large numbers, but smaller businesses were struggling, often dropping employee counts in the process. What happened in December was just the opposite. There was meaningful job growth with smaller companies of all sizes while large companies engaged in large layoffs. Not that we want people to lose their careers within corporate America, however if we’re going to have dichotomy that’s the much healthier split as smaller businesses account for nearly 70% of all jobs and are leading economic indicators. The best of all worlds is if we can manage to avoid reentering a recession as the rate of inflation comes down. That remains to be seen, but we’ve entered the new year with small businesses appearing to be on better footing than a year ago.
- Rocky mountain highs. Amid Florida’s amazing migration boom, leading the country in population growth over the past six years, led by Americans fleeing high taxes, cold temperatures and lockdowns (often all three), for the Free State of Florida... I’ve often pointed out that there is of course a steady flow of Floridians seeking other (by no way greener) pastures. It’s just that the tsunami of freedom and sunshine seekers consistently dwarfs the defectors. That said, a new survey has shown the state, residents of all states who are looking to relocate, would prefer to move to this year. At the top of the list for Floridians... Colorado. Seriously, Colorado? A nice place to visit, yes! I’m a huge fan of hiking, once upon a time skiing and the mountains generally. But a nice place to live? How much of a glutton for punishment are you? A quick search of headlines for Denver as I put together this story found this in this order, and I’m not kidding: “Snow Thursday Night”. “Is it usually this cold in Denver in January?” “When does Denver plow side streets?” A few points, and this comes in part from my wife Ashley who grew up in Denver. It snows seven months out of the year. The combination of heating that’s required much of the year, compared to dry conditions outside of weather events, leads to conditions so dry your face will crack and fall off – especially when contrasted to our humidity which is great for your skin. And the state is run by a bunch of leftist lunatics – including income tax rates of about 5% and sales tax rates over 8%. But yes, recreational pretty much everything else is a thing, so there’s that... I think what this mostly confirms is another theory of mine. I think that part of Florida’s big lurch towards the right politically hasn’t just come from freedom seekers entering the state in record numbers, but from Fauchists who’ve never seen a mask they didn’t want to put on leaving it as well. Colorado is a, good in theory, but miserable in practical application alternative to our state but it is a great place to get high in all respects.