The political divide in this country has been increasingly getting worse over the last few decades. Some researchers are saying that the rift in the United States is reaching the point of no return.  According to the Proceedings of the National Academy of Sciences, “the pandemic failing to unite the country, despite political differences, is a signal that the U.S. is at a disconcerting tipping point.” Boleslaw Szymanski, a professor of computer science and director of the Army Research Laboratory Network Science and Technology Center at Rensselaer Polytechnic Institute states, "If the polarization is too extreme...we cannot unite even in the face of war, climate change, pandemics, or other challenges to the survival of our society." In order to determine the long term effects of this political polarization, we need to look at some of the hot topics implemented by the current administration, that are dividing our nation, and what the potential long term consequences could be. 

Federal Vaccine Mandates:

The Biden administration’s COVID-19 vaccine mandate for federal workers went into effect Nov. 22, 2021. More than 20 House Republicans voiced their opposition to what they are referring to as an “unconstitutional” mandate. This mandate could result in more than a hundred thousand people being disciplined or fired for refusing to comply, even if those workers are otherwise excellent employees or if their loss will severely disrupt the government’s ability to function. Dismissing workers, based on a personal health decision to not get an experimental COVID-19 shot,  without regard to their performance is not an effective way to run a business or a government. President Biden’s action could cause significant delays and disruptions in federal services and increased costs for federal taxpayers.

Lack of Labor Force:

The Biden administration enacted several COVID stimulus packages that allowed individuals to continue to receive compensation (through extending unemployment benefits and removing the requirement of actively looking for work in order to receive benefits) despite the fact that they were no longer looking for work, or wanted to return to work. The result of the ongoing “extension” of these benefits have resulted in individuals refusing to return to work, because they can stay home, not work, and still get paid. Although several states have recently reinstated the requirement to “actively look for work” in order to receive benefits and have ended the unemployment extensions, the damage has been done. People have gotten complacent, lost the motivation to work and provide for their families, and are hoping that the government will still take care of them. Finally, Biden’s vaccine mandate will worsen the nation’s labor shortage. All this to say, the lack of a labor force will have an extremely negative impact on the overall economy of our country. 

Empty Shelves and Shipping:

The ports of Los Angeles and Long Beach process about 40% of all containers of goods entering the United States. At the beginning of November, more than 70 ships were  awaiting anchor off the coast of LA. Thousands of containers are onboard, full of everything from car parts to baby diapers. New ships arriving at the ports are facing up to three-week delays in unloading and processing. Yet Americans are facing nationwide shortages. 

The Biden administration likes to attribute these delays and shortages to worldwide factory disruptions during the pandemic and increased consumer demand. While these factors do play a role, that is not the complete story. Government regulations and restrictions at both the state and federal level have  prevented the market from responding efficiently to the demand for processing at the L.A. ports.Without those regulations, the market would have been able to respond more quickly to the rising number of ships, additional workers and shifts could have been implemented, and 24/7 would mean what it says. With fewer restrictions, available trucks would be able to come from neighboring states to get containers and goods out of the overloaded ports—and into the hands of frustrated Americans.

The California ports should start running 24/7 today. The federal government and California should remove labor and environmental regulations that dis-incentivize work and make it more difficult for goods to get from the ships to our shelves. And they certainly should refrain from imposing new ones that make it worse.

Inflation:

Economic indicators showed that inflation hit a nearly 40-year high in November, 2021. According to Joel Griffin, research fellow for Roe Institute for Economic Policy Studies, Biden’s economic policies have contributed to the rising inflation. Per Griffin, the cost of living has increased at the steepest rate in more than three decades under Biden’s leadership. Furthermore, Biden’s tax and spend package, currently being pushed in Congress, would exacerbate the economic problems hurting working Americans, including inflation, labor shortage and supply chain. 

Historically, the stock market has reacted positively to a politically divided country. However, the current political polarization is unprecedented and could potentially make the market very unstable. Should the market waiver into a constant state of instability, the current administration may come under fire. 

Tickers to consider: AAU.V, SSVR.V,  CEI,  FRSX, RNAZ, PPCB & TZA

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