Cops and Capex

I talked about how the economy is shifting from an industrial model to a technological model that I'm calling the Conversion Economy.

Basically what that means is we're mired in this recovery so long because the major industries are retooling for the new economy. Massive layoffs initially gave them the opportunity to consider how they were going to rehire and restructure.

The massive stock buybacks have kept stock prices for big firms safe from the free market during this time and they've been able to sock away their money and collect decent returns from borrowing at low rates.

What they haven't been doing is reinvesting into the economy - the old economy. That's why capex spending continues to drop. This article once again proves that capex is an old metric for economic recovery. The problem is, durable goods suffer when there's no capex and that effects the entire economic cycle, especially in a consumer and debt driven economy like the US.

Also, in a related story, Walmart is squeezing its suppliers to the point where many may end up collapsing. That's not a good thing for the US economy. 

I've heard stories from Walmart suppliers over a decade ago about what a nightmare it is to work with Walmart. The company is so cheap it's very hard to make money. But once you're in, it's too tempting not to try. But now, it seems for Walmart to make money, the suppliers have to lose money and that's untenable for both sides.

Both these stories tell a story about US and global recovery that bears watching. I know I will be.

A Chilling Effect?

So, FBI Director James Comey is saying that cops are gun shy now that Ferguson has occurred. Well, my first thought is, "Good."

But what he means as gun shy is supposed to strike fear in all middle class people, especially white people. He means the cops aren't arresting as many people (read poor minorities) as they used to.

That leaves them prowling your gated communities and running off with all your stuff or violently attacking you outside Starbucks.

What I'm saying is, it's a veiled threat. Question law enforcement tactics and they'll stop doing anything. No one seemed to feel like the air traffic controllers could get away with that. Or the trash collectors. Or teachers. 

Look, if cops would stop shooting everyone who runs away, that would be a start. And actually a few less arrests may be a good thing. Remember the riots in Baltimore were for a questionable arrest gone south, not that these cops had apprehended Scarface. Maybe just taking his knife and sending him on his way after kicking the crap out of him would have been sufficient?

But these veiled threats from a guy that works for the citizens of this country is a bit nauseating. Kind of totalitarian actually. And the White House has come out in disagreement to Comey's opinion. Wonder if Comey is polishing up that resume for the Conversion Economy?