The Long Term Investor

The APPLE stock split is the perfect example of HUMAN behavior. ALL the investing writings will tell you that a stock split is a neutral event. BLAH, blah, blah. BUT.......yesterday when this split was announced the BUZZZ was immediately noticable. Articles poped up everywhere. People are talking about it. Shareholders are excited. It.......will not.....be a neutral event.

 

AND.....just as FOOD FOR THOUGHT.....

Should Dr. Fauci Be the Economic Czar?

https://www.aier.org/article/should-dr-fauci-be-the-economic-czar/

MY COMMENT

Right.......up front.....on this post. My opinion...the last person I want making economic decisions...or ANY decision for that matter.........for the WHOLE country........... is some unelected government health care beurocrat. Give your opinion to the President or others that are elected to make the hard choices and........sit down and shut up. THAT.........is ALL I will say. BOLD is MY OPINION below:

Should Dr. Fauci Be the Economic Czar?

https://www.aier.org/article/should-dr-fauci-be-the-economic-czar/

"Dr. Anthony Fauci has had a tremendous and honorable career in the field of medicine. He has served as the Director of the National Institute of Allergy and Infectious Diseases and has advised multiple United States presidents. He has seen the country through a number of pandemics such as HIV/AIDS, Ebola, Zika, and now COVID-19.

AIER has extensively covered COVID-19, particularly the devastating economic consequences that have resulted from draconian lockdown policies and media-driven hysteria. Dr. Fauci is certainly a tremendous medical professional. Oftentimes he is praised for his ability to keep politics out of public health. He is known for giving an unbiased and straight commentary on the issues facing the health of the nation.

The problem is when Fauci starts to deviate into the realm of public policy, which is inherently political. There is no such thing as an unpolitical solution when the force of the state is involved. In particular, he has made plenty of statements on how he feels the economy should be managed. Whether it is the implementation of lockdown measures or comments on what he feels is an appropriate time to “reopen the economy,” Dr. Fauci has either implicitly or explicitly spoken on matters of economic policy.

Furthermore, many public health experts have gone even further, signing a letter making explicit demands about resetting lockdown measures, reclosing “nonessential businesses,” barring interstate travel, mandatory mask orders, and many other awful ideas. Not only are the policies they advocate for outside the realm of scientific or medical research, but they are also just bad ideas in general with no basis in real-world application.

These suggestions not only come from a position of tremendous privilege and insulation from the consequences of their policies, but are clearly outside of the expertise of public health.

However, nothing in this article should be construed to suggest that one needs a title or an extensive background to comment on economics or any other subject matter. Ideas should be engaged on their merits, not the qualities of the bearer. AIER scholars like Phil Magness routinely engage and critique the flawed models of epidemiologists through the utilization of reason as well as interdisciplinary knowledge. At the end of the day, if Dr. Fauci and others in the medical field want to step into the arena of policy and economics, they are free to do so. However, they should also understand that medical knowledge is not enough to make policies that are appropriate for running a society.

Evaluating Fauci’s Ideas
Dr. Fauci has made a number of recommendations that certainly fall under the realm of economic policy. The most obvious point he tends to make is on the continued use of lockdown measures. Not only does he advocate for such policies but he also makes comments on specific aspects such as how long he thinks businesses should stay closed, the general effectiveness of lockdowns, and what he thinks of the economic tradeoffs.

Fauci remarked during a congressional committee that

“I served six presidents and I have never done anything other than tell the exact scientific evidence and made policy recommendations based on the science and the evidence.”

Although there is nothing wrong with having a trusted expert like Fauci commenting on issues of medical importance, he must also recognize the shortcomings of his judgment. Nobody is in a position to understand all the moving parts of society, especially at the federal level. That is fundamentally why many economists are in favor of free markets and not government command and control. The government is not in a position both physically and philosophically to be micromanaging people’s lives from 3,000 miles away. That’s because there are tradeoffs and consequences that are oftentimes unseen by policymakers but felt by those at the microlevel.

When CNN’s Anderson Cooper asked Fauci “Does it make sense to you that some states are still not issuing stay at home orders?” Fauci replied

“I don’t understand why that’s not happening. (this BOLD is part of the original article) As you said, the tension between federal mandates vs states rights is something I don’t want to get into but when you look at what’s going on, I don’t understand why we’re not doing that. We really should be.”

It should raise a few eyebrows that someone at the highest levels of government does not understand why some states would be reluctant to essentially place all their citizens under house arrest. Such a policy not only violates the conscience of American liberty and the notion of a free society but also the effectiveness is questionable. Furthermore, there are a number of countries and states that didn’t lock down that have shown either similar or better results as those that did. The case for stay at home orders not only lacks clear evidence for their effectiveness but carries a plethora of awful tradeoffs.

Stay at home orders and lockdown measures more generally have economically devastated the country. Businesses are closing, lives are being destroyed, and communities are being drained of life. The American Physiological Association warns that the effects of lockdowns and social distancing will lead to adverse mental health outcomes for countless Americans. Substance abuse, domestic violence, and suicides are all increasing in part because of the social and economic devastation these policies have brought upon society.

No society was ever built by micromanaging people’s lives and relegating the agency of individuals to the will of experts. Breaking down social barriers and restraining government was how we unleashed human potential. The potential to build prosperous civilizations capable of eradicating disease and ensuring the most vulnerable are protected.

Such contempt and misunderstanding of these principles are reminiscent of the big government experiments of the 20th century. Stay at home orders and other lockdown measures bear a troubling resemblance to the brave new world of omnipotent government. Where society is nothing more than a testing ground for the theories and egos of experts. So perhaps Fauci is missing something when he says he doesn’t understand why more states haven’t implemented stay at home orders.

When asked about when the country can start to reopen the economy he responded by saying

“We are hoping that, at the end of the month, we could look around and say, OK, is there any element here that we can safely and cautiously start pulling back on? If so, do it. If not, then just continue to hunker down.” (this bold is part of the original article)

The problem is that some people can’t afford to just “hunker down.” Whether it’s economic devastation that destroys businesses large and small, social repression that leads to substance abuse and suicide, or a generation of students losing out on key developmental experiences in their lives, keeping the economy closed isn’t just “hunkering down.”

There are serious consequences that come from draconian lockdown policies, and it doesn’t look like Fauci is able to appropriately account for them. Eventually, there comes a point where the social and economic costs of closing down society drastically outweigh the marginal benefits of reducing infections. Perhaps reducing the number of COVID-19 cases is the only thing Fauci may care about, but there are a plethora of other problems in society, some of which were exacerbated by the decisions he endorsed.

Furthermore, Fauci and other public health experts might think their policies work based on their computer models, but how they play out when real human beings are involved is another thing entirely. This is why all throughout the country and even the world we see the emergence of anti-lockdown protests. The reason is quite simple, and it is that people eventually get fed up with having to be arbitrarily prevented from living their lives. Eventually, there comes a limit where people are not only unwilling to obey overly restrictive policies but also see their fellow citizens’ lives destroyed as a result.

However, Fauci doesn’t seem to be totally ignorant from the economic devastation brought on those who must live under his recommendations. On NBC he remarked

“I know it’s difficult. We’re having a lot of suffering and a lot of death. This is inconvenient from an economic and a personal standpoint, but we just have to do it.” ( these bolds are part of the original article)

The ongoing economic and social devastation is “inconvenient.” People’s lives are being destroyed, communities are crumbling under the boot of lockdowns, and the social fabric of the nation is fraying. The development of a generation of students is in danger because of school closure policies that will unleash far more devastation compared to the infections they may prevent. Power-drunk state governments like the Cuomo administration in New York forced COVID-19 patients into nursing homes while barring them from conducting further testing. On top of all this, it’s possible that it could have all been avoided as it turns out the epidemiology models used to inform these decisions were wildly incorrect.

Dr. Fauci says that this is simply “inconvenient” and “we just have to do it.” That should tell you all you need to know about how in tune he is with the consequences of his own ideas. Consequences in which understanding is necessary for making informed decisions about the economy and the nation.

The Verdict
Much like how I would not want to have my ideas regarding COVID-19 to be barred from the discourse solely because of arbitrary restrictions based on titles and certifications, I would not do the same to Fauci on matters of economics. After all, who should be the arbiter of acceptable opinion? We are better off when we are able to engage with and hear solutions from all sorts of perspectives. Ideas should be judged on their merits and not the qualities of the bearer. Although I criticized Fauci’s comments on the economy to a great extent sometimes he says things that I agree with, such as when he said,

“Stay-at-home orders intended to curb the spread of the coronavirus could end up causing “irreparable damage” if imposed for too long.”

He also said that

“The United States doesn’t need more widespread lockdowns to bring its COVID-19 outbreak under control.”

As the saying goes, even a broken clock is right twice a day. These comments also seem to be a little contradictory to his previous statements but it’s nice to see Fauci coming around nonetheless.

Ultimately there should be no barrier that disqualifies an individual from commenting on the economy. Much like how the response to COVID-19 requires understanding and input from a variety of perspectives, the same goes for economic policy. Dr. Fauci and public health experts like him have more than a right to voice their opinions on the economy. Whether or not we should take them seriously is another question entirely." (THIS BOLD is MINE)

 

Yes, T0rm3nted......I agree. Those were certainly great earnings. I will be interested to watch the behavior of the stock from now till the day of the split. We have a whole bunch of NEW investors over the past 15 years that have little to no experience with stock splits. Prior to that they were routine and normal.

I HOPE this starts a trend of renewed stock splits for successful companies with high share prices.

 

ACTUALLY......my post above got me thinking that there might be a lot of newer investors that are not too experienced with stock splits. HERE is the basic info:

Understand the What and Why of Stock Splits

https://www.investopedia.com/ask/answers/what-stock-split-why-do-stocks-split/

AND.....some other reading on the topic:

Opinion: Stock splits have dried up — why that’s not good for the market

https://www.marketwatch.com/story/s...-why-thats-not-good-for-the-market-2019-10-11

Why Aren't Companies Splitting Their Stocks Anymore?

https://www.thestreet.com/markets/why-arent-companies-splitting-stock-anymore-14584642