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Going back to bed is still an option
Wow, here it is Thursday already and this morning is not getting off to a good start. There’s snow on the roads here in central Indiana and already that snow appears to have claimed its first life in a vehicle accident quite literally just up the road from us. There’s more coming in, so be aware that there are slick spots all over, especially at intersections this morning. The chance of snow continues throughout the day so please be careful if you must be out.
The world is not looking to be an especially friendly place this morning as over 100 prisoners escaped from a Phillipinne jail, the impeachment trial for South Korea’s president is underway, and Chicago police have arrested four people who live streamed a kidnapping. Rather makes you wonder if the entire world has lost its freakin’ mind, doesn’t it? We have 5 things you need to know, but hang on, it’s going to be a bumpy ride.
The train stops here
The Long Island Railway is the busiest commuter railway in the United States, carrying over 300,000 passengers daily. If you are one of those who uses this train to get back and forth to work in New York and Brooklyn, you know how crowded it can be during rush hours. People pack as tightly as possible into the cars, hoping to not get stuck next to someone wearing too much perfume. Those packed conditions likely contributed to over 100 people being injured when the train crashed into a bumper block and partially derailed as it pulled into Brooklyn’s Atlantic Terminal yesterday morning1.
Fortunately, none of the injuries were considered life-threatening and most of the hysteria seems to have come from the fear of not being able to escape overcrowded cars. The train had already slowed for its approach to the station, but the partial derailing was still serious enough that a rail punctured the bottom of one of the cars. Somewhere between 600-700 people were on the train when it came to an abrupt stop. The most serious injury recorded so far is a broken leg.
What’s not so clear still this morning is exactly what caused the accident. The Metropolitan Transit Authority is initially looking at the train’s driver, who says that it was the driver’s responsibility to stop the train, but no one knows yet why that didn’t happen. Trains are an integral part of the New York transit system, so expect a full investigation here. If the fault were individual or mechanical, it will no doubt be corrected as quickly as possible to prevent a repeat of yesterday’s chaos.
Hey Doc, I’m feeling a pain in the ass
If anyone had the displeasure of walking around the United States Capitol yesterday, they likely saw some rather disturbing protest signs that read, “Make America Sick Again.” The people carrying the signs were, of course, protesting Republican legislation that would largely dismantle the Affordable Care Act created under President Obama’s administration. The lines were drawn yesterday as both President Obama and Vice President-elect Mike Pence lobbied lawmakers regarding the set of health care laws2.
We knew this fight was coming and we don’t expect it to be over anytime soon. While repealing the Affordable Care Act was one of the things that brought Republicans to power in this Congress, the challenge before them is how to actually live up to that promise without leaving millions of Americans stranded without insurance and healthcare providers looking for payments that may not be coming. For his part, President Obama has been urging Democratic legislators to vehemently oppose any changes to the law, using whatever parliamentary procedures necessary to prevent a vote. After six years of complete obstruction, Republicans may be about to feel what it’s like to be on the other end of partisan politics.
Among the items that were proposed yesterday are repealing the individual mandate, which has been immensely unpopular, capping funding for Medicare, basing tax credits on age rather than income, which would shift more credits to older people who currently have none but could leave younger people with less income stranded, and allowing insurers to sell across state lines3. None of these are likely to become law without a significant fight in both houses of Congress. I’m sure this is just the first time we’ll talk about the issue. It’s not going away.
When free speech disrupts the economy
Just as the US Congress is getting back to work this week, so too are state lawmakers who often have a habit of introducing legislation that, while limited to their own state, is important because of how it could potentially spread if not found unconstitutional. One of those laws was introduced this week in the Washington State legislature where Sen. Doug Ericksen introduced legislation that would increase penalties for economic disruption from a misdemeanor to a felony with up to five years’ imprisonment4.
Exactly what is Ericksen upset about? Well, remember all those protests that occurred after the election last November? One of the nation’s largest was in Seattle, where thousands of people took to the streets to protest the electoral outcome. One of the consequences to those protests was that stores were not able to open or conduct business as usual. The Senator, and those who think like him, see this as economic disruption and their intent is to hold someone responsible for events such as this.
This is kind of scary because it very blatantly flies in the face of that little line in the US Constitution that prohibits “abridging … the right of people to peaceably assemble.” What Ericksen is going to argue is that such protests are not “peaceable.” Windows are sometimes broken. Looting sometimes occurs. What he’s looking to do, however, is shut down vocal opposition by threatening event leaders with imprisonment and a felony record. I cannot emphasize how every dangerous it is that such a law was even introduced. Watch this one closely, and don’t be afraid to protest.
A bit of good news
If there is an apparent bit of good news, it is that Americans are buying a lot of new vehicles. For the second year in a row, US car and truck sales have set a record, this time some 18.4 million of them, an increase of 0.4 percent over 20155. This would seem to be proof that America’s economy is genuinely stronger than has been perceived. The average price for a new vehicle is somewhere in the neighborhood of $35,000. That means a lot of people are spending considerably more than that. When one factors in the interest on a standard five-year loan, what we’re actually spending on those new cars is north of $100,000.
Of course, for the economy, this appears to be very good news. Stock prices for GM, Ford, and Toyota, the new “big 3” in American auto sales, were all up yesterday, as were a number of other car manufacturers. The best-selling vehicle continues to be the Ford F-150 pickup, and pickups, in general, are still the best-selling class. While December sales involved some very heavy discounts, on average around $4,000, GM says that per-vehicle sales, even with discounts, were still up some $740 from the month before.
Major sales such as automobiles are key economic indicators that not only show that we’re willing to spend money, but that we have enough confidence in the economy to make a long-term commitment. While some economists had expected a slowdown toward the end of last year, that doesn’t appear to be happening. The good news wasn’t so good for Fiat Chrysler, however, as sales there slid ten percent. Not everyone gets to be a winner.
And then the bad news
While we’re busy buying a lot of trucks, what we’re not buying are clothes and pots and pans from major retailers. Two retail giants, both Macys6 and Sears7 announced significant store closings yesterday in the face of continued declines and an absolutely horrible sales drop in the month of December. Macys is closing 68 stores by the end of the year and Sears will be shuttering some 108 Kmart stores and 42 Sears stores by April. This is on top of additional closings both stores had announced last year.
Additionally, Kohl’s says its sales were down dramatically as well, but they have yet to announce any store closings. The general retail sector as a whole took a huge hit in the last quarter of the year, with Black Friday and other holiday sales failing to generate the level of revenue generally expected during the final month of the year. Online sales and sales at niche boutiques are getting a lot of the blame for the woes at traditional retailers, with even discounters such as Wal-Mart showing slower sales than the same period last year.
This probably says something about American’s priorities that we’re buying big-ticket items like trucks and SUVs but not so much clothes and household items. We’re much more willing to hold on to the clothes and things we already have while the improved safety and fuel conservation of newer vehicles seems to be a particular draw. Where we’re spending, we are still being very careful to justify our purchases.
And that’s all we have time and space for today. We’re keeping a close eye on everything going on, including Congress and the weather. As always, no matter where you are, if you have to be out, please be safe. We’ll do the same and be back here with more stuff you should know tomorrow.