Paulitical Economy™

A famous and important quote from perhaps the greatest economist that ever lived.Minding your own business will not save you.Dollar General continues to drive traffic to their stores.In part because they are doing well with that $100,000 and above crowd.A look at professional mourners.I’ll need some of those.Government is calling for more government.Like the encroachment of government on our economy hasn’t already done enough damage.Yum Brands ditches Pizza the Hut.And Taco Bell sales suffered due to a parasitic illness.Financial RuctionsJob growth in Canada is negative.As is real wage growth.Cue more immigration to drive down wages.Book ReviewWe finish our review of Henry Hazlitt’s Man vs. The Welfare State.More than a century ago Herbert Spencer predicted the negative impact that growing government would have on economic security.Even back in the 1960s, if people didn’t agree with government ideology they were shamed or threatened into silence.Plus ça change.As government involvement in the economy and (taxpayer) relief grow the solvency of the nation will steadily deteriorate.This includes governments sacrificing the real economy on the altar of higher asset prices.

📍A poem for this time of year.📍Netflix sales continue to decelerate. As does its share price.📍Visits to foodbanks in Canada are soaring. We look at why that may be.📍UPS continues its turnaround plan. Lower volumes but better pricing and profitability as they ditch their business with Amazon.📍Fares at JetBlue soar, but not enough to cover sky high fuel prices. Its share price is 76% below its IPO price (split adjusted) in 2002.📍Whirlpool sales have fallen four quarters in a row. Its share price is down 85% over the last five years.📍Burger King turnaround plan continues. Popeyes continues to struggle.Financial Ructions📍We look at the press’s love affair with big government. And the bureaucratic leviathan in the U.S. 📍And we look at global debt. It’s both bad news and bad news. Book Review 📍Man vs. the Welfare State by Henry Hazlitt. We look at how foreign aid can prevent economic prosperity from taking root in developing nations. 📍And how a growing government loses sight of its core functions and acts as a disservice to society. And a service unto itself. 

Home builders in the U.S. are now the least optimistic since 2012.It’s worst in the west.Lennar is the second largest home builder in the U.S.Home prices, new orders and gross margin are all down.And so is its share price.Homes increasing in size are often used as justification for higher home prices.We revisit this fallacy.The mystery of the disappearing barf bag.Financial Ructions:None this week. Plenty about but didn’t have time to write about them.Book ReviewMan vs. The Welfare State by Henry HazlittA look at the arrogance of policymakers who believe the economy can’t function without them.Uruguay used to be known as the Switzerland of Latin America.Then there was a change in government.Inflation (currency devaluation) accelerated in the 1960s around the world.The Keynesian miracle.

Xerox has had twelve straight quarters of sales declines.And its share price is 90% lower than where it was in 1986.Inflation in the U.S. is moving back up.And no, smartphone prices are not falling like the government would like you to believe.Bill Gates believes that the government should tax productivity investments.You can’t make this stuff up.Financial Ructions:Wholesale inflation in the U.S. is soaring.Soaring energy prices are largely responsible.Book Review:Henry Hazlitt’s Man vs. the Welfare StateHigh corporate taxes lead to lower investment, a weaker economy and fewer jobs.It’s not rocket science.And the government stepping in to invest where the private sector won’t is really bad for the economy.The motive of the private sector is to satisfy the sovereign consumer.It does so by putting its own capital at risk.Motives of the public sector are driven by ideology.And done so by putting taxpayer capital at risk.

Billionaires are becoming landlords.The great Henry Hazlitt and my notes from his book Thinking as a Science.I have sent these notes to numerous people over the years but today I add my own PM notes.No Financial Ructions or Book Review this week.Back to regularly scheduled programming next week.

McDonald’s focused for a number of years on strategic menu price increases.It’s now starting to bite.The prime property market in London, England peaked in 2014!The world’s largest producer of spirits, Diageo, is now seeing double-digit declines in U.S. sales.Nike’s sales decline accelerates.And is expected to get worse the rest of the year.Financial RuctionsThe A.I. spending frenzy is greater than:The 19th century U.S. railway boomThe 1990s .COM bubble.A group of property investors in Ontario are getting hosed.Book Review: Man vs. the Welfare State by Henry HazlittWe look at the negative income tax and how Milton Friedman believed it wouldn’t discourage those who were receiving taxpayer benefits from seeking employment opportunities.And the outrageously high marginal tax rates of the 1960s.

Procter & Gamble continues to hold its prices in check.But volume is not responding.Used car prices in the U.S. are rising again.But not according to the government.Home Depot sales improved but are still very slow.Their customers are suffering.Uber’s gross bookings continue to soar.And we revisit their propensity to pay model.And I sum up some of my Uber vs. Lyft comparisons.Higher gas prices take their toll on auto parts sales.The return of the establishment hacks.Who once again point out that the problem is the ignorance of the people.In Financial RuctionsU.S. 30-year fixed rate mortgages are now over 7%.And comparing a mortgage payment from pre-COVID to today.57% of the companies in the S&P 500 Index are now in bear market territory.Book ReviewWe see that competition can protect consumers (within reason)And how a guaranteed income for some is a guaranteed obligation for others.And how this can lead to the impoverishment of society

People grow older in Japan. Especially the women.Netflix experiences its slowest sales growth in almost three years. And its share price goes south. This is what happens when the focus switches from focusing on improving the customer value proposition to trying to monetize them.Financial Ructions: As government grows the economy slows. And incompetence is rewarded.A look at a post on X which discusses good deflation. Government prevents us all from fully benefiting from savings, investment and freedom of competition.Book Review: Man vs. The Welfare State by Henry Hazlitt. We see how economies slow as governments grow. And government hypocrisy concerning monopolies.

Pepsi maintains price increases that are less than inflation. And they see their first volume increase in four years. Who would have thought (note sarcasm).Meanwhile, Kimberly-Clark’s sales dip into negative territory.A third of American workers have seen their wages grow slower than inflation.Rents in Canada continue to fall and should continue to do so as more purpose-built rentals enter the market.Macy’s continues their turnaround plan. Turning around to higher income consumers.Financial Ructions: Longer-term interest rates continue to rise. This puts upward pressure on mortgage rates. But they’re still only back to where they were in 1998.Yet houses in the U.S. are far more expensive than 28 years ago.Book Review Henry Hazlitt’s Man vs. The Welfare State We see how governments distorting prices have grave consequences for the economy. 

The sales of Lululemon plummeted despite management saying that 2026 was off to a good start.Its share price has lost three quarters of its value over the last five years.Growth at Hilton Hotels went negative in 2025 but has since rebounded.Benefiting from the World Cup and infrastructure spending.And occupancy is down for their higher end hotels.The Dick’s Sporting Goods share price had been soaring until they bought Foot Locker.They are slowly turning Foot Locker around.Financial Ructions:We look at an opinion piece that complains about a tax break for Canadians.You can’t make this stuff up.Book ReviewWe look at the next two chapters of Henry Hazlitt’s Man vs. the Welfare State.He looks at how the Bretton Woods system set the stage for global inflation originating in the U.S.And how President Lyndon Johnson wanted to impose a vacation tax if Americans went abroad.And how a well-intentioned but misguided minimum wage law does more harm than good.Only 0.5% of American workers are paid the minimum wage.