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Davis Journal

CYCLOPS: Target those stimulus checks to those in need

Feb 08, 2021 08:58AM ● By Anna Pro

 Charles Dickens wrote “A Tale of Two Cities.” This column is “A Tale of Two Economies.”

When talk turns to the economy, the focus is usually on the nation as a whole.  Most readers would agree that today’s economy is not healthy.  As a nation, we have 10 million fewer jobs than a year ago and we are closing in on almost 20% of small businesses shuttering their doors.  COVID has ravaged the travel and hospitality industries, and normally small government Republican business owners are now pleading for the government for a short-term bailout.  

But there are two economies as well as local economies.  As an example, Zillow found that the number of cities where home prices averaged at least $1 million grew by 17% during the pandemic.  But a deeper look found that the vast majority of these gains occurred in just nine coastal urban areas (San Francisco, New York City, etc.).  The same goes for Utah. An economic boom in Salt Lake City, for instance, does not mean the economy is flourishing in Duchesne or Milford.

As bad as the pandemic has been for many, a significant number of Utahns and Americans haven’t been economically affected.  A friend recently attempted to purchase an all-electric General Motors Hummer.  The cost of the vehicle is over $100,000, and yet over 100 would-be buyers are on a waiting list since there are only six in stock at an area dealership. A client did minimal advertising about a specialty treatment to tighten skin. The treatment cost ranges from $1,500-$3,000 and he received 19 reservations in the first two hours.

An acquaintance entered a high-end steakhouse in Salt Lake last weekend where a steak, salad, and vegetable averages about $91 per person.  Every table was taken and he was forced to make a reservation for the following weekend. Lower-priced automobiles are slow-sellers – but not trucks selling for $45,000-$50,000 each. Similarly, JC Penney had declared bankruptcy, but the stock price of Lululemon which sells upscale T-shirts for $90 (OK, label it gym wear) reached an all-time high during the pandemic.  Likewise, Pelaton is struggling to meet the high demand for its pricey exercise bikes and its stock price has surged 700% in just nine months.

All this is happening while millions of Americans are really hurting. In fact, about one-third of all those who have lost jobs say they doubt their jobs will ever come back, even if the national economy improves. The early stimulus checks helped people keep their mortgages or apartment rents current, leaving them a bit extra to fill the kitchen pantry.  But even then, some 30% of all households didn’t spend their stimulus checks; these folks, inoculated against job losses or reduced work hours, simply deposited their checks in the bank.

Republicans and Democrats can argue over the size of President Biden’s latest proposal to give people economic relief. Yes, it is needed; even the nominally conservative U.S. Chamber of Commerce is pushing for it. But the facts demonstrate that a large number of men and women do not need the stimulus check; if anything, their money on now-cancelled vacations and restaurant meals is piling up in their savings and retirement accounts.

The stimulus checks should be targeted not to everyone, but to those who need it the most.