Three Card Monte: Remember that street hustle card game? It’s the one that targeted Times Square tourists long before costumed characters like Hulk and Spiderman separated them from their money. (See this video.) Well, watch out for Congress. It’s great at hiding the winning card from you with trickery and slight of hand. As you know from reading my columns, I’m unhealthily focused on Congress’ reluctance to extend certain unemployment benefits — and help state and local governments that have enormous COVID budget deficits. The reason, according to Republicans like Sen. Rick Scott of Florida: you cannot bail out states that aren’t well run. (Like Florida and Mitch McConnell’s Kentucky, both of which take in more Federal bucks than they pay in taxes. Moocher states, in other words.) And they often attack unemployed folks who they accuse of spending their days watching Netflix because their benefits are so wonderful. To see what’s really going on with bailouts—and see the Three Card Monte thing in action— check out these two great recent stories. While you weren’t really looking, according to ProPublica’s Allan Sloan, Congress was larding on CARES Act payouts for wealthy folk who had no business getting them. And the New York Times recently reported that big hospital chains got billions in bailout bucks, but still laid off, or threatened to layoff, a bunch of people. (One was HCA Healthcare, once run by Mr. Scott and, under his watch, defrauded Medicare.) Congress will be dealing with another bailout bill soon—watch those cards closely.
Stock Pickers Ain’t Pickin’: At the Berkshire Hathaway annual meeting last month, Warren Buffett was asked if the days of passive investing—putting your money in an index fund instead of trusting stock pickers—was a thing of the past. No, Buffett sneered. Well, he’s right again. Per the Wall Street Journal: From January through April of this year—including the big COVID market collapse—64 percent of actively managed U.S. stock funds underperformed the S&P Composite 1500 index. (That tracks large, mid and small-cap stocks.) To be sure, an improvement. Over the past 15 years, 88% of actively managed U.S. equity funds did worse than the composite index. But still, my money’s on Buffett.
Loose Change: As I said, I’m wondering about the anticipated U.S. Senate race between Mitch McConnell and Amy McGrath in Kentucky, which is pretty close in the polls. Big question: If McGrath becomes the Democratic nominee, which is likely, will McConnell’s reluctance to provide aid to states and municipalities—and extend unemployment benefits— help put her over the top? Latest Kentucky unemployment filings don’t look great—in fact, about 45 percent of the workforce has filed over the past 12 weeks, per the Courier Journal. The state’s projected revenue shortfall doesn’t look all that great either…The U.S. entered the recession zone in February, ending a record-smashing 128-month expansion, the National Bureau of Economic Research declared. President Trump accounted for about three years’ worth. The rest? Obama. But don’t tell the president…Song of the week? This thanks to Pitchfork: The track Chameleon, from the Jazz/Funk classic, Head Hunters by Herbie Hancock. Listen here…Until next week.
