NECESSITY IS THE MOTHER OF INVENTION: Julie Jargon and Eric Morath have a great piece at the Wall Street Journal that explains how the labor shortage is causing the rise of machines, “Experts have warned for years that robots will replace humans in restaurants. Instead, a twist on that prediction is unfolding. Amid the lowest unemployment in years, fast-food restaurants are turning to machines—not to get rid of workers, but because they can’t find enough…https://on.wsj.com/2lAdNyl

RECORD LOW: The 6% unemployment rate for restaurant workers is the lowest on record, according to the Labor Department

HAPPIER WORKERS: Dunkin Donuts is of the companies mentioned who is making menial jobs a thing of the past, “Workers used to create thousands of hand-written labels daily for everything from coffee to cheese expirations. Last year, Dunkin’ installed small terminals that print out expiration times.”

Dunkin also made brewing coffee easier and more precise.  This is one of the main advantages of robots.  They can be more consistent and it saves time for the human worker.  This, in turn, is creating happier workers and reducing the incessant turnover that plagues the industry, “Alexandra Guajardo, the morning shift leader at a Dunkin’ Donuts shop in Corona, Calif. said she’s likely to stick with the job longer now than she otherwise would have.”

FULL AUTOMATION: Scott Murphy, COO, said he doesn’t believe fully automated stores are going to be here anytime soon, “The company experimented with a robot barista nearly two years ago at an innovation lab in Massachusetts. The robot did fine at making simple drinks, but couldn’t grasp custom orders, such as ‘light sugar.'”


BLUE-COLLAR WORKERS:  Last week, Edward Conard wrote a great piece for the National Review explains much of the stagnation among blue-collar workers wage growth is because of a lack of productivity gains, “In today’s information-driven economy, high-skilled workers are in demand — and their presence or absence is what enables or constrains growth. As a result, high-skilled workers design products and processes that increase high-skilled rather than low-skilled productivity. Capital investment has shifted toward these products as well. Blue-collar productivity and wage growth have lagged.” http://bit.ly/2tB3y0i

THE WAY IT USED TO BE: Conrad argues that previous economic expansions were mostly to the benefit of blue-collar workers, “Previously, economies of scale from capital-intensive manufacturing drove growth. High-skilled workers designed products for lesser-skilled mass-market consumers and created higher-paying jobs for them. Capital investment increased blue-collar productivity and wages.”

THE LULL BEFORE THE STORM: Martin Wolf, of the Financial Times, argues that there are several reasons that could explain the slow down in productivity growth.  However, it is his final reason that could be the most exciting, “The final possibility — and the one that the paper by Mr Brynjolfsson and his co-authors unsurprisingly believes — is that this is the lull before a storm. It argues that the same productivity pause happened with electricity in the 1920s. It takes time for a new GPT to transform an economy. Today, AI is in its earliest stages. Soon, they argue, it will change everything.” https://on.ft.com/2tAH93g

DISRUPTION: Will this explosion of technology cause a major disruption?  Absolutely.  However, as Jay Richards argues, this has happened before, “Around 95 percent of the population got by on farming at the time of the founding of the United States, just as most people had for thousands of years before. Today, the American population is ten times larger. Farmers produce far more food with far less labor, which brings the cost of food down for everyone. Instead of mass poverty and joblessness, most people now do something other than farm, and they have a much higher standard of living as a result. Roughly 1 percent of the U.S. population now works on farms. Most of the jobs of the other 99 percent didn’t even exist in 1776.”

MY COMMENTARY: John Tamney wrote a great book about this explosion of technology and the end of menial jobs.  It’s called “The End Of Work.”  I had a great interview with him about his book and the future of the economy.  LISTEN HERE


IMMEDIATE DEPORTATION: President Donald Trump tweeted about illegal immigrants who “invade” our country and floated the idea of forgoing due process, “We cannot allow all of these people to invade our Country. When somebody comes in, we must immediately, with no Judges or Court Cases, bring them back from where they came. Our system is a mockery to good immigration policy and Law and Order. Most children come without parents…”

FOLLOW UP: President Trump followed up that tweet with this one, “Our Immigration policy, laughed at all over the world, is very unfair to all of those people who have gone through the system legally and are waiting on line for years! Immigration must be based on merit – we need people who will help to Make America Great Again!”

NOT THE FIRST TIME: This is not the first time President Trump has floated the idea of removing due process.  After the Parkland shooting, in a televised meeting with lawmakers, President Trump proposed removing guns then going to court, “Take the gun first, go through due process second.”

BACKLASH: Conservatives were not happy with President Trump’s comments on confiscating guns.  The NRA, Tucker Carlson, and others respectfully disagreed with the President’s comments.  Dana Loesch, NRA Spokeswoman said on “The story” with Martha MacCallum “We’re talking about punishing innocent Americans and stripping from them constitutional rights without due process and making them pay for what the political class has done,”

MY COMMENTARY: When President Trump made his comments about due process with gun rights the Republicans were outraged and Democrats were then happy to comply.  I have a feeling the roles will be reversed on immigration. Most Republicans will have no problem with deporting first and then asking questions second.  Democrats, on the other hand, will be outraged at the removal of due process rights for illegals.  Some Republicans will think there is a difference because illegals are not American citizens so they don’t deserve constitutional protections.  This is true except for the fact we don’t know they are illegal aliens until they go through the process. Giving the government carte blanche to deport whoever they want is a terrifying precedent.  There is wise saying that says laws should be created in a way in which you imagine your worst enemy was in control of them.  Republicans might like for Trump to have this power.  I, however, do not want to live in a country where Elizabeth Warren or Bernie Sanders can deport anyone they want.


GOOD NEWS FOR GOP: Amy Walter, of the Cooke report, says the good news for the GOP is the data says this election might be bad, but it is not 2006 bad.  She gives three reasons…http://bit.ly/2Io9yz9

  1. Trump’s job approval rating in the Gallup survey is 45 percent, eight points higher than the dismal 37 percent where George W. Bush was sitting at this point in 2006.
  2. Gallup also found that satisfaction with the direction of the country at a 12-year high. A marked improvement from 2006.
  3. Republicans are also more enthusiastic about voting this year than they were back in 2006. In the most recent Pew survey, when it comes to casting their ballot for Congress, Democrats have a narrow, five-point ‘enthusiasm’ advantage over Republicans…that’s a lot better than it was back in June of 2006, when the gap was 17 points.

NOT ALONE: Josh Kraushaar, at National Journal, argues he may be second-guessing his earlier analysis of a big blue wave for the Democrats, “I’ll admit to some second-guessing, especially after Democrats released some of their own polling this week from battleground districts that should be trending in their favor.” http://bit.ly/2K6RgrX

NOT ALL GOOD NEWS: Kraushaar says despite some recent good polling for the GOP there are some troubling signs, “there are plenty of competing surveys that show Democrats expanding the map and running competitive races in GOP-friendly seats.”

UNPREDICTABILITY: Kraushaar says there is at least one similarity to 2006, “There is one aspect to this election year that is shaping up to be similar to 2006: the unpredictable path of the wave.”


THE COMPROMISE: HB142 repealed HB2 and sort of reset the law and controversy in North Carolina over transgender bathroom access, “House Bill 142 created a moratorium on local nondiscrimination ordinances through Dec. 1, 2020. And it left regulation of bathrooms, showers and changing facilities to state lawmakers, not the universities, community colleges, local school systems and other state agencies that had been setting their own policies.”

ACTIVISTS WERE NOT HAPPY: LGBT activists were not happy with HB142 because it does not provide protections for LGBT individuals and it prohibited local municipalities from providing those protections independently of the state.

COURT TODAY: A federal judge (U.S. District Judge Thomas Schroeder) will hear pending motions set forth by the ACLU and Lambda legal in a lawsuit challenging HB142 being brought on half of 6 North Carolinians…http://bit.ly/2ImZoyx

NO STANDING: Legislators are arguing that the original plaintiffs don’t have standing because of the repeal of HB2. They argue that any contention of harm and discrimination is purely speculative. Attorney Kyle Duncan, who is representing Senate leader Phil Berger & House Speaker Tim Moore, explains, “Even if they come to pass, the time, place, factual circumstances, applicable trespass or other legal rules, and private and government actors involved — all are unknown,”

NEW CHALLENGE: A Wilmington mother says New Hanover County teachers and administrators stopped her daughter from using the girls restroom because of their interpretation of HB142, “In court documents, Ericka Myers describes how school administrators used House Bill 142 to continually prohibit her second-grade daughter from using the girls’ restroom, causing her ’hostility, anxiety, and humiliation.’” http://bit.ly/2tqRsI2


THE OLD SWITCHEROO:  State regulators on Friday not only rejected Duke Energy’s request to raise rates on its customers.  They also told Duke they had to cut rates…http://bit.ly/2Kessu4

REFUND: Regulators also ordered Duke to refund customers money it collects from in advance for state income taxes.  They have 40 years to do it, and it will cost them 60 million dollars.

THANK GOP & TRUMP: The commission pointed to benefits Duke is getting from a lower tax rate for corporations approved by Congress last year and signed by President Donald Trump

WHY THEY ASKED FOR THE HIKE: Duke had initially requested an average 13.6 percent rate hike.  Duke Energy was looking to bring in $700 million annually from customers.  They were looking to recoup costs related to coal ash cleanup around the state & upgrade the states electrical grid.  Duke lowered it’s requested rate to 8.5% arguing the new lower corporate rates mitigated some of the cost.

REMINDER, DUKE ALREADY HIKED EASTERN RATES: This latest decision only applies to central and western North Carolina.  Earlier in 2018, Duke hiked rates for eastern customers by 6.2%…http://bit.ly/2yDSTrJ

MY COMMENTARY: Being a resident of Eastern North Carolina I can’t say I’m too thrilled with this.  Why were our rates allowed to go up and central and western North Carolina get a pass?  I’m almost not entirely sure the regulators are correct here.  I think the ash coal cleanup story is BS but I don’t feel the same way about the electrical grid.  Duke Energy is arguing that have to upgrade their grid to get more “clean energy.”  This is not a decision they are choosing to do. They have to do this.  State law requires Duke to get a certain amount of its energy from clean sources.  Clean energy is notoriously pricey and forcing them to buy it is not fair.  If the state is going to require Duke to pay more for the energy they have to let them charge more.  The politicians are trying to have their cake and eat it too.  They want to appease the environmentalists and ratepayers.  Sorry guys, you can’t have it both ways.  Expensive energy is expensive.  Either you get rid of RPS or you let them raise rates.  You don’t get to do both.


SCOTUS: A recent Supreme Court ruling says that states can now tax internet retailers for sales that happen within the state.  Previously the court had determined that an internet needed to have a physical presence in the state to have to pay state sales tax.

WINDFALL: This could be a big windfall for certain states including North Carolina, “A 2017 study by the federal Government Accountability Office estimated that North Carolina was losing $235 million to $350 million a year in sales tax on online purchases. ‘That’s money that could be used for a number of things. You could take it and lower everybody’s sales tax rate or everybody’s income tax rate, or you could devote it to teacher pay or school construction,’ said Andy Ellen, president of the North Carolina Retail Merchants Association.”

MY COMMENTARY: I have to admit I was wrong.  On Friday’s show, I ridiculed the idea that the state could see a windfall as much as 300 million dollars.  I crunched the numbers over the weekend and those numbers look right.  That, however, does not mean it is the right thing to do.  In fact, this goes against everything Republicans/Conservatives stand for (or used to).  It’s not like this money was being collected by another state and is now coming back to its proper owner.  This is money that wasn’t collected at all.  That means 300 million dollars that was floating around the private sector is now going to find its way into the government’s coffers.  I understand the whole fairness argument, but that doesn’t mean we should do it.  Anytime a loophole allows more money to stay in consumers hands we should support it unequivocally.