CIO Scott Martin Interviewed on Fox Business Tonight 7.27.21
Program: Fox Business Tonight
Station: Fox News Channel
BRIAN BRENBERG: Well, joining me now to discuss is Carol Roth, former investment banker and author of The War on Small Business, and Scott Martin Kingsview Wealth Management chief investment officer. Welcome to you both. Carol, start with you. And that’s what it looks sneaky to me. I don’t like it. But here’s the bigger problem. This is what rationing looks like when you’re standing in line for products that are shrinking and not there on the shelf. To begin with, the Biden economy has kind of become the rationing economy, has it not, as well.
CAROL ROTH: Any fan of Seinfeld knows this shrinkage is not a good thing. And so we don’t want to see things going down. It does. It does. There is a real cost here that’s being passed on to the consumer. And whether it’s the Biden administration telling us that we’re going to save 16 cents on a hot dog or these shifts in packaging, they’re trying to be deceptive about what’s going on in terms of central planning and the results, as you said, whether you want to call it rationing or less bang for the buck or whatnot. It is a tax. It is a cost to the consumer who is the one who ends up bearing it every single time.
BRENBERG: You know, Scott, it’s sneaky. You wouldn’t maybe notice this right up front when you’re at the grocery store. But over time, as these stories come out, as you go to the grocery store and start looking for it, people are going to notice that’s going to be their frame of reference for this economic moment, not the fact that we’re growing. We are. It’s the fact that you can’t get what you want, that people are having to cut corners a little bit. Scott, I just have to look at this and say this is eventually going to affect consumer confidence, business confidence, and it could get in the way of this recovery really getting to the level it ought to get to. Do you have that same concern?
SCOTT MARTIN: Agreed. I mean, it feels like somebody’s pulling one over on us, the consumer now like a frightened turtle. I go in to the grocery stores these days and I get worried about the prices themselves, you know what I mean? Like, it’s the prices that really bother me. The shrinkage, I don’t know. I mean, if you notice, most of the stuff that we’re showing is in this shrinkage or shrink basket of goods, it’s stuff you probably shouldn’t be putting in your body anyway. So maybe they’re doing you a favor there. But the reality is, you’re right, Brian, this is just one little thing, one little kind of like poke at the consumer to say, hey, you can’t have this, or maybe you had it better back in the day, but now it’s this way and you have to deal with it. And that’s not good for the future economy, if that’s the way it’s going to be.
BRENBERG: I think we have to pay royalties to Seinfeld for all the references we’re getting here. But that’s another issue. Scott Carroll, stick
SCOTT MARTIN: That was the scene.
BRENBERG: Stick a stick around. I got to go to AC Webster. He’s in Dundon, Florida, covering a sign of hope, thankfully for some businesses in the Sunshine State Ashley.
ASHLEY WEBSTER: Well, you know what, Brian, you guys were just talking about shrink inflation, which is a horrible term just by itself, but we can talk about inflation when it comes to the number of people who are actually working. What a concept. Back on June twenty six, Florida Governor Ron DeSantis cut off that extra three hundred a week in federal unemployment benefits, saying, no, we’ve got enough jobs that are open that can be filled. So we’re not going to pay people basically to stay at home. I’m at the Fenway Hotel, as you say, in Dunedin. Florida is in Pinellas County on the beautiful Gulf Coast and this place at the height of the covid pandemic. Brian had seven employees just managing to keeping it ticking over. But once things started to reopen, they had a hard time finding workers. But guess what? When you cut off that money supply from Washington, D.C., magic things happen. Let’s bring in Mickey Melendez. He’s the general manager of the family here. Mickey, listen, there are those who will say it makes no difference. People are not going to work. Even if you cut off that extra three hundred a week, you say it was like turning the spigot on.
MICKEY MELENDEZ: It was really pretty much going from zero to 100 percent. It felt like for us we saw a 40 percent increase in applications since that moment and we could not be any more thrilled than that.
WEBSTER: So you fully staff have, what, about 90 employees, employees?
MELENDEZ: And right now we’re touching around 50 to. And the best part is a lot of them been retained from the past in the ones of being able to bring on board since that time, also retained as well.
WEBSTER: So you’re saying thank you, Governor, the. Absolutely. All right, Mickey, thank you very much. I also wanted to point out, Brian, there is a lawsuit as that has been in other states, challenging the state of Florida for cutting off those benefits early. They are due to run out on Labor Day, September the 6th. That lawsuit says it was done purely for political purposes and that they still cannot get by on a living, cannot pay for basic essentials. So basically to see where that pans out, because both Indiana and Maryland lawsuits that were successful in the state again began paying those benefits. It’s not something that Florida wants to do, especially businesses who have been struggling for so long just to get enough workers to keep the business ticking over. Brian, back to you.
BRENBERG: Ashley Webster in Dunedin, Florida. Thank you, sir, for that reporting. Well, we’ve got Scott and Carol back with us on this one. Carol, go to you again. You know, you look at these employment issues when it comes to the unemployment benefits and the economists are all over the map. You know, they’re saying we don’t really know if this is making a difference when it comes to hiring, but you talk to every small business owner just like Ashley did, and they say exactly the same thing. Thank goodness we’re finally getting people applying for jobs. Your thoughts on what’s happening in Florida?
ROTH: Yeah, I mean, we know that it’s the case that you have the government competing with you for for an employee, obviously, that’s going to cause an issue. And they added in 2020, the unemployment benefits were taxable. There’s been stimulus money. Even if you haven’t made up every single dollar, that small amount differential to stay home versus going back to work, a lot of people are going to choose that, particularly during the summer months, maybe in the fall when the weather is not as nice or the kids can get back into school. That’s going to be a different choice. But we have seen this from small business owners and they have just been absolutely decimated. This is the group that has borne the brunt of the shutdown. They’re bearing the increase in inflation we’re talking about. They’re bearing the competing with the government for employees. And unfortunately, this is the backbone of the economy and not enough politicians seem to care.
BRENBERG: Scott. Those small business owners Carol is talking about, I think are just yearning for September to get here when across the country those enhanced benefits are supposed to go away. But now we’ve got the Delta variant and now we’ve got the mask mandates and that conversations about vaccine requirements. Again, it’s starting to look like a situation, Scott, where you get the federal government or state government leaders saying, you know what, we need to extend these benefits just a little bit further and guess what? It never ends. Are you afraid that that’s going to happen, Scott?
MARTIN: Right. Because, like, look at all the money we’re making, all the fun we’re having. You know, like I like how Carol said and she said it’s something that I’ve actually not heard it said before, which was the government competing with small businesses like trashing small business, the government with unlimited funds just to dole out non-stop to keep people out of the workforce. If you look at the latest JOLTS survey, which I think is job opening, labor turnover survey, don’t ask me to explain that again. That is nine million jobs, nine million plus, by the way, Brian, nine million plus jobs gone unfilled now at record levels. And so nobody wants to go back to work Carol’s right. It’s summer. Kids are home. Kids may go back to school in the fall. May not. And frankly, the other thing and we’re not thinking about guys psychologically, if you’ve been off work for like a year getting paid by the government, getting a nice wage, by the way, are you just going to run back into that hot kitchen or on the street and do whatever, drive the cab, whatever it is like? That’s another thing to psychologically. People aren’t quite there yet to want to go back and work a hard job either.
BRENBERG: At such a good point, Scott, nobody’s talking about the long term consequences of being out of work that long. We ought to be because they’re real. Scott and Carol, thanks to both of you for being with us today. We appreciate it.