3 Things 12-13

12/13/2021 Although MAS is a financial services company, not everything published herein will be about numbers or investing. But no matter the topic, we hope for three things: 1) That you find the time you spend engaged worthwhile. 2) That you’ll reach out to us for help in any of our areas of expertise if something we discuss creates an urging in you to do so. 3) That you’ll share this with somebody new each time you read it. Thing One Stay Informed And Invested (If You Can) We learned last week that inflation is now running at 6.8%. This is despite the fact that the Federal Reserve Bank Chairman, Jerome Powell, repeatedly told us earlier this year that it was transitory. Certain politicians also told us earlier this year that the headline inflation we were seeing was mostly caused by the spike in used car prices and that it would subside. Well, here’s where we are on a range of items on the subsiding front: Used car prices - up 31% YoY Washer/Dryer pair prices- up 18% YoY Refrigerators and Dishwashers up 12% YoY Meat prices - up 16% YoY Furniture prices - up 11% YoY Clothing prices - up 5% YoY And let’s not even talk about gasoline prices. We’ve all seen what’s going on there and we've got a sense for what’s about to happen to our home heating costs. As was mentioned in a recent newsletter, inflation is the result of too many dollars chasing too few goods. Certainly, the too- few-goods part was partly caused by the production disruptions brought on by the pandemic, but the problem was exacerbated by policy measures. Note below how writers at the Wall Street Journal summarize the problem: “The causes of all this are clear: Democratic spending spurred a surge in demand at the same time supply was constricted by the pandemic and labor shortages caused by government incentives not to work. This will get worse with iBBB’s (Build Back Better plan) taxes and regulations.” It looks like we’re in an upward price spiral that our government is about to exacerbate in other words. Oh, and by the way, while aggregate prices are up 6.8% our ability to absorb them has not kept pace. According to CNBC, the median budgeted salary increase for 2021 is 3%. The same is currently projected for 2022. Your cash is being taxed at almost 7%. Keep that in mind the next time someone tries to talk you into buying a “safe” 2-year bond paying .65%, or a 10-year bond paying 1.45%, or something else safe like a money market fund.

Thing Two Ben Carson Revisited Several years ago, when Ben Carson was running for president, I wrote the piece below about him. Current events have inspired me to re-share it. I hope you enjoy it. ............................................................................................................ Why Do People Hate Horatio Alger And Ben Carson? The best coaches, teachers, bosses, and mentors I had were hard asses. I'm not saying they were soulless jerks who ranted constantly and belittled me to bolster their own sense of superiority. But, in some weak moments over the last twenty-five or so years, I'm sure I had those kinds of thoughts. Those people had the audacity to tell me that I could when I was telling myself I couldn't. They told me I hadn't put forth enough effort when I thought I had. They told me only results mattered when I wanted credit for my efforts. And they told me that my circumstances were my responsibility when I wanted to fall in with the crowd that blamed others and waited for others to fix things. They all told me I needed to do more - that I could do better- when I either didn't believe it possible or didn't want to try. They were right, but I didn't think so at the time. It turned out they weren't the uncaring, arrogant, out-of-touch people I had imagined them to be. Instead, they were (lucky for me) experienced people who knew what would happen to me later if they accepted less from me at the time. I'm so glad they took their responsibility to me so seriously. They were preparing me for life in the real world, beyond their gym, beyond their classroom, beyond their office, and beyond their presence. Don't get me wrong, it was very easy to hate them for pushing, for yelling, for being mean, and for being what I thought was clueless and insensitive. And I did hate them at times. It would have also been very easy to quit. I never did. But I freely admit that I contemplated doing so often. So what does this have to do with Horatio Alger? I guess I should explain first that Horatio Alger Jr. was a prolific 19th-century writer who commonly used the rags-to-riches theme in his works. In fact, he used it so much that the idea of doing so became synonymous with his name - The Horatio Alger Myth. In a recent opinion piece in the Wall Street Journal titled, "Everyone Is For Equal Opportunity Except...", William Galston throws water on the myth, as many have, by citing some statistics from a study on equal opportunity done by the Pew Charitable Trusts in 2012. See an excerpt below: "...The Pew Charitable Trusts have conducted some of the best work on the former question. A study issued in 2012 found that 43% of individuals raised in the bottom income quintile end up there as adults, and 70% remain stuck below the middle. By contrast, 40% of those raised at the top stay there, and 63% stay above the middle. Horatio Alger-type rises from the bottom to the top occur in only 4% of the cases. For African-Americans, the odds of rising are even worse. Fifty-five percent of them born at the bottom stay there, and fully 75% fail to make it into the middle class. That is a huge share of the total: 65% of African-Americans are born into the bottom income quintile, versus only 11% of white Americans." So the rags to riches odds aren't great, but even at 4%, that means there are lots of from-the-bottom-all-the-way-to-the-top success stories to talk about. And there are even more rags-to-very-decent-living stories out there that Galston would rather we not discuss. All that said and in light of the recent denouncement of him as a praiseworthy figure by a group among whom he was once revered, I'm particularly interested in the Horatio Alger-esque story of presidential candidate, Ben Carson. His story is well known by now, but just the same, here's a synopsis courtesy of a not-so-flattering GQ article: "....He grew up poor in Detroit, raised by a single mother who had dropped out of school after the third grade and was married at 13. Nonetheless, she required her two sons to read two books a week and write reports (never mind that she could barely read them). Her boys quickly became star students. Not that there weren’t other challenges. Carson had a terrible temper. When he was in high school, he got into an argument with a friend over the radio station they were listening to. In a flash of anger, Carson tried to plunge a camping knife into his friend’s stomach. But the knife hit the boy’s belt buckle instead and snapped in half. As Carson tells it, the moment was a turning point. He ran home and prayed for patience. "God heard my deep cries of anguish," Carson later wrote in his memoir Gifted Hands. "A feeling of lightness flowed over me, and I knew a change of heart had taken place. I felt different. I was different." Carson eventually went to Yale and then on to med school at Michigan. In 1984, when he was just 33, he became the head of pediatric neurosurgery at Johns Hopkins, the first African-American to run a division at the prestigious hospital. He quickly earned a reputation as a daring surgeon, and in 1987 Carson performed one of the most storied operations in medical history by separating a pair of Siamese twins joined at the head. It was the first time such a surgery had been successful, and it made international headlines. "I knew that my life was going to change after that, because the media isn’t completely stupid," Carson says now. "They’d start looking at my background, and they’d say, ’Whaaaaaat?’ " He soon received the first of his sixty-two honorary degrees..." Despite how inspiring all of that is, Carson is becoming more and more hated by liberals generally and blacks specifically for speaking out against Obama and Obamacare (in Obama's presence no less) and for talking to them like a good coach or teacher might - honestly, and with their best interests in mind. Here's an example of his ideology taken from an appearance on The View. (Note he was asked if he thought welfare was racist): "When you rob someone of their incentive to go out there and improve themselves, you are not doing them any favors. When you take someone and pat someone on their head and say there there, you poor little thing… I am going to give you food stamps… let me give you housing subsidy… let me give you free health care… and because you cannot do that and those people over there that are causing half of your problems. So what would be much more empowering, would be to use our intellect and our resources to give those people a way up and out.” For saying that, Dr. Carson, who was once universally admired and adored, gets a favorability rating among blacks of 29% (according to Public Policy Polling). He gets characterized as arrogant and out of touch. And people say things like this about him: Paul Smith May 5, 2015 "I would love to refer him to Herman Cain. Another duped fool who thought that he was one of them. Carson has certainly forgot where he came from and who brought him there. He has denounced black people and could care less what they think about him. He only cares what conservative white people think of him. Ask Herman Cain. They will use him as their show monkey and trot him out as window dressing for crossover votes, but the minute they are finished with him they will toss him aside like yesterday's newspaper. FOOL!" Bruce Lightner · Shaw University "I know you had fun writing this piece. But frankly, Ben Carson is not worthy your time. I'd say, let the stupid vote for the stupid and everyone else vote for those who a making some sense. Carson is a joke and just the GOP's way of saying "see we even have Black folk in our big tent" I doubt that he receives 3% of the vote in any state's primary." Those are just two examples (among many) of people that have misunderstood (perhaps purposely) what Carson has said and what he is about. In my own interpretation, he isn't saying there aren't poor people. He isn't saying poor people should starve and die of disease because they can't get jobs and healthcare. He isn't saying there aren't racists. He's saying that the government's policies, while perhaps intended as palliatives of poverty and racism, have largely only helped perpetuate them. And, just like my old coaches and teachers, he's saying that people should strive despite their circumstances and know that the expectations of them are high. F.Scott Fitzgerald once said, "Show me a hero and I'll write you a tragedy." I don't believe in heroes, but I do believe in role models and I think it is nonetheless tragic that a role model like Dr. Carson is viewed by so many who could benefit from his example and advice as a villain. It's tragic that so many people reject out of hand the proposition that we should first confront and address our own shortcomings. And it's also tragic that many people still choose to throw in with those who offer sympathy and soothing words that will not lead to better long-term outcomes for them and their families. Sadly, I fear there are many who have closed their minds and have opted instead to be saved by people and systems completely incapable of doing so. The odds are they will spend their lives waiting to be saved. But for those currently desirous of better who have heard Ben Carson and not rejected his self-help-first notion, I am willing to bet that twenty to thirty years from now they will credit him, or someone like him, the same way I now do the good coaches and teachers I, at times, despised. Note: this post and the one above it mentioned Democrats/Liberals critically. Republicans/Conservatives could have been easily been spoken of in the same terms. The point is this isn’t about politics. We couldn't care less who you vote for or which political ideology you align with. This is about being informed and making sound individual decisions, with or without some advice or assistance. That's all.

Thing Three Just A Thought "There are two types of people in the world. People who think the government is looking out for their best interests and people who think." - Nathan Fraser