Over the past seven decades, the U.S. government has embraced business. Both political parties and their leaders have continued and expanded a broad, business-friendly agenda. However, the judiciary tops the list when it comes to ruling in favor of American business.

 

In fact, the current Supreme Court of the United States (SCOTUS) appears to top the tape in handing down favorable decisions to corporations and small business, according to a research paper by the Virginia Public Law and Legal Theory Research. The authors, Lee Epstein of the University of Southern California, and Mitu Guli at the University of Virginia School of Law compared the last decade and a half of Justice John Roberts' court rulings. Businesses won a lot more cases than they lost. The authors concluded it may well be the most pro-business Supreme Court in the last century.

 

Historically, SCOTUS has only ruled in favor of businesses 41 percent of the time. In the Roberts Court, however, that number shot up to 83 percent  in 2020, and 63 percent  since John Roberts assumed the role of Chief Justice.

 

If you look at the makeup of the court right now, six justices with the best record for supporting businesses in their voting habits were nominated by Republican presidents. That list includes Clarence Thomas, Samuel Alito, Brett Kavanaugh, Amy Barrett, Neil Gorsuch, and John Roberts.

 

However, that does not mean that Democrats' appointees are anti-business. Elena Kagan, for example, has a better pro-business record than Antonin Scalia. Sonia Sotomayor ranks last of the justices at 48 percent in favor of business but that is still above the historical averages. The areas in which the Court has actively ruled in favor of business are in the realm of upholding arbitration clauses and denying class-action suits in the securities sector.

 

The study found that there were several factors that may be influencing the justices' decisions in coming down on the side of business. Government, for example, has a strong influence on the court's decisions. When the Solicitor General, whose office represents the Federal government in front of the Supreme Court, takes an interest in a case, the court listens.  It just so happens that the Solicitor General has rarely (20 percent of the time) opposed business interest during the Roberts Court and neither has the Court.

 

Over the last few years, there has also been a change in who pleads the case of businesses in front of the Court.  A small, but savvy group of elite attorneys with extensive experience before the Court, are now representing business 77 percent of the time. That compares to just 25 percent of business attorneys during the Burger Court between 1969 and 1985, when voting in favor of business was much less common. And whether a justice was appointed by a Republican or a Democrat, they were more likely to vote in favor of businesses represented by a SCOTUS-experienced lawyer.

 

It is a common belief that through the years, SCOTUS had done a fairly good job tracking public sentiment. However, in the case of business, while public opinion toward business has soured, the courts' decisions have gone the other way since the 1960s. Recently, the Court seems to be willing to ignore, or in some cases, even go in the opposite direction of prevailing public sentiment.

 

In any case, given that the Republican-nominated justices represent a six to three majority on the court, businesses can continue to count on even more favorable rulings in the years ahead.   

 

Bill Schmick is the founding partner of Onota Partners, Inc., in the Berkshires. His forecasts and opinions are purely his own and do not necessarily represent the views of Onota Partners Inc. (OPI). None of his commentary is or should be considered investment advice. Direct your inquiries to Bill at 1-413-347-2401 or email him at bill@schmicksretiredinvestor.com.

Many consumers have changed their diets over the last two years consuming more chicken, pork, and fish and less beef. Driving this substitution have been the stratospheric increases in meat prices. The good news is that high-end beef cuts are now dropping in price.  

 

As readers are aware, prices for food have been rising for months. On a personal basis, my custom of grilling outside at least once or twice a week is just not the same. The prices of steak — sirloin, rib eye, New York strip and steak tips — forced me to switch to chicken kabobs, hamburgers, hot dogs and maybe a cut of London broil.

 

Beginning in August, however, I noticed that some supermarkets were running sales on some high-priced cuts of meat.  Checking prices nationwide, I discovered that prices for rib-eye and beef loin are down nearly 10 percent compared to a year ago. Beef brisket has dropped by more than 18 percent.

 

On the other hand, ground beef prices, usually the cheapest choice of beef for consumers, increased by 7 percent over the same period. That is understandable from my point of view. I began substituting ground beef for prime rib and other expensive cuts of meat well over a year ago, as have many other shoppers. I suspect my wife is getting sick of eating my meat loaf, and I don't blame her.

 

I would like to think that the economic concept of product substitution is at work here. The idea is that a customer will substitute a preferred product for another product with similar characteristics. Consumers are increasing demand for ground beef and reducing their demand for high-priced beef cuts.

 

In this case, substitution occurs due to the large price deferential between the two products. At some point, as supply becomes greater than demand, prices should fall and they have. Meat processors argue that bottle necks had caused the price declines and not price gouging.

 

The tight labor market and higher employee turnover and absenteeism due to COVID-19 has eased somewhat since last year due to higher wages and fringe benefits, although it is not yet back to pre-COVID levels.

 

Climate change is another reason for higher beef prices. Drought has forced ranchers to push more cattle into processing plants as drought, high heat, and the price of feed forces the size of herds to be reduced. For example, thousands of cattle in Kansas died in June as a result of excessive heat. Cattle prices are up 15 percent versus 2021, for ranchers, but so has other expenses like feed fertilizer and fuel, so producers are struggling to just break even.

 

I wish I could predict that meat prices will continue to decline but that doesn't seem to be the case. Prices may see a temporary decline, but only if ranchers continue to reduce their herds. Industry experts and the USDA are forecasting that U.S. beef production will decline once again in 2023, and possibly out into 2024. The law of economics would say, as beef supplies dwindle, processors will be paying (and passing on to you) higher prices once again.

 

The morale of this tale is to take advantage of cheaper prices while you can and maybe buy a bigger freezer in the process. In the meantime, any meat lover will tell you that the taste of London broil is a far cry from a juicy, rib-eye, but steak is steak when you're craving beef.

 

Bill Schmick is the founding partner of Onota Partners, Inc., in the Berkshires. His forecasts and opinions are purely his own and do not necessarily represent the views of Onota Partners Inc. (OPI). None of his commentary is or should be considered investment advice. Direct your inquiries to Bill at 1-413-347-2401 or email him at bill@schmicksretiredinvestor.com.

Baseball continues to be one of the most popular youth sports in North America. More than 3 million kids in the U.S. play the game and about 10 million children play worldwide. They are not alone. In 2022, approximately 20 percent of Americans between the ages of 18 and 64 also play baseball, according to Statista. Every one of them do so with a baseball glove.

 

Prices have risen substantially since I was a kid. Today, the price of these baseball gloves can range from $20 to $400, depending on the kind of materials involved. Back in the day, most kids in my neighborhood kept their glove next to the bed. A typical summertime day started with pick-up games in the morning, followed by practice in the afternoon, and a little league game starting at 6.

 

In this age of the internet, children (ages 6 to 18) probably play less than we did, but they still spend four hours during the week in free play, another 6.5 hours in practice and training, and 4.5 hours at games, according to TeamSnap, a mobile and web service for managing recreational and competitive sports teams and groups.

 

Overall, the global baseball equipment market is valued at $13.3 billion in 2022 and is expected to top $16.6 billion by the end of 2027. Gloves account for a large share of those overall sales. COVID-19 dented sales, as well as the number of children who played baseball in 2020 and 2021. However, the long-term growth rate has turned back up. Analysts expect baseball equipment should return to its historical growth rate of 3.2 percent annually.

 

For those who do not play baseball, there are different types of gloves depending on what position is played, the size of the glove and dominant hand. Common glove types include outfield and infield gloves, first base and catcher's mitts, and pitcher's gloves. 

 

There are various types of gloves from the cheapest to the most expensive. There are plenty of lightweight and flexible gloves with enough padding constructed of all-synthetic fabrics. Many of these designs can resist moisture and absorb impact. These are normally the cheapest gloves (good for starters), but prone to breaking over time.

 

Full-grain, or cowhide leather gloves are more expensive ($30-$60), and are thicker, and more durable, but require time to break in. These are the gloves most familiar to players of my age. The problem is they require time, effort, and a lot of glove oil to break them in, molding them to your hand, and your play.

 

There are more expensive choices like steer hide leather gloves ($75-$300), that are even more durable and the choice of many amateurs, as well as professional players. Finally, another high-end product, the kidskin glove, is usually the favored choice of certain professionals and can fetch as much as $400 a glove. Infielders love these mitts. Light, smooth, and yet, durable, they balance comfort with ruggedness.   

 

The top brands in this market include Wilson, Rawlings, Easton, Akadema and Mizuno, among others. Many baseball manufacturers are based in the United States. However, many of these companies now outsource to other regions in order to reduce costs. In the 1960s, production shifted to Asia in places such as the Philippines, Vietnam and, of course, China.

 

Most of the wholesale baseball glove manufacturers are based in China. China boosts the factories, workforce, and training to deliver large orders in time. The quality is equal to most brand-name products, but at much lower prices. These are the gloves usually purchased by schools, clubs, sports centers, and youth leagues.

 

There is only one place in the U.S. that still manufactures baseball gloves from top to bottom. Based in Nocona, Texas, and founded in 1926, Nokona has been making baseball gloves in a small brick factory since the Great Depression era.

 

The process of making a glove requires about 40 steps and can take four hours to complete. Basic parts of a glove include the bridge, web, heel pad, hinge and the lacing. As a result, Nokona's gloves can run many times the price of a competitor's mitt that is produced on an assembly line. For example, a 9-inch kid's glove that you can pick up for $8 at your local big box store would cost $220 at Nokona for an equivalent-sized glove.

 

Surprisingly, most professionals have little interest in custom gloves. They usually purchase gloves from one of the many manufacturers. Rawling's and Wilson's gloves seem to be the manufacturer of choice for many pros. The good news, in my opinion, is that some things stay the same. Yes, the price has gone up by several multiples, but several generations can still relate to that feeling of slipping one's hand into a well-used glove as the game begins.

 

Bill Schmick is the founding partner of Onota Partners, Inc., in the Berkshires. His forecasts and opinions are purely his own and do not necessarily represent the views of Onota Partners Inc. (OPI). None of his commentary is or should be considered investment advice. Direct your inquiries to Bill at 1-413-347-2401 or email him at bill@schmicksretiredinvestor.com.

Your elderly dog has arthritis. His breathing is difficult. He needs assistance to get up, and his bladder is failing. The vet bills are far higher than your own, and it is getting more difficult to pay them. "How much is too much?"

 

Some say there is a limit, others would be willing to go into enormous debt to prolong the life of their pet. The veterinarian technological and medical innovations of today make preserving your pet's life achievable. Vets offer plenty of ways to prolong life, even in cases of terminal illness.

 

Specialists abound who can offer chemotherapy, radiation, kidney transplants, drug trials, and much more. Given all these options, it is no wonder that the emotion that wells up in most of us is "save my dog (or cat), no matter the cost."

 

Pet insurance, given the expense of pet health care, should be the obvious answer, but it isn't.

 

The American Pet Products Association (APPA) says that 67 percent of American families own a pet. Roughly 70 percent of those families own a dog, 45 percent have a cat, and roughly one third have another sort of animal. However, less than 3 percent of all dogs in the U.S. are insured, according to the North American Pet Health Insurance Association (NAPHIA).

 

The most common assumption is that pet insurance is just not worth it. And if you only consider annual routine veterinary care that's probably true, since the average cost is between $200 and $400 for a dog, and roughly half that for a cat. In comparison, the average annual wellness insurance policy can cost $300 per year.

 

Pet insurance becomes "worth it," however, when illness and accidents come into play. Consider that diabetes in a cat once diagnosed and treated will cost between $240 and $360 per year. Heartworm in your pet can cost upwards of $1,000 to treat. Emergency room care, $1,000 or more. If your German shepherd tears an ACL, you are facing $3,300 to treat and repair it, a herniated disc in a Labrador retriever (my personal experience) will cost you more than $15,000.

 

The older your pet, the more health issues it will likely have. As your dog ages, they become susceptible to a variety of illness, injuries, and health conditions. Many of these can be life-threatening, painful, and extremely costly to treat. For example, the American Medical Veterinarian Association reports that almost 50 percent of all dogs over the age of 10 will develop cancer. The minimum cost to treat this condition can be $5,000.

 

You might wonder when your dog becomes a "senior." Smaller dogs live longer than larger dogs. As such, they qualify as seniors at 11 years of age. Medium dogs at 10, and larger dogs at 7. Some of the physical signs of aging are greying snouts, reduced energy, lumps and bumps that begin to appear, and periodontal disease (bad breath is telltale sign).

 

The average monthly cost of pet insurance premiums in the U.S. for elderly dogs is just under $120 a month with an annual limit of $5,000 and a $500 deductible. If you decide to sign up, make sure you study the pre-existing conditions clause. Many elderly dogs will have developed one, if not more, health conditions like arthritis that many insurers will not cover.

 

The older your animal, the less likely it will qualify for many coverage options and the more expensive the premiums will be. Some insurance companies won't cover hereditary conditions, which often manifest later in a pup's life or cover periodontal disease. Fortunately, there are various insurance policies tailored for older dogs, although you can expect the premiums to be steeper than those that aren't.

 

As for my own experience, it is true confessions time. Our dog, Titus, a loving, energetic chocolate Labrador retriever, passed a little over four months ago at 13 1/2 years old. My wife and I failed to purchase insurance for Titus. Over the years, we spent large sums of money on his health care. Arthritis, and a herniated disc, were his main symptoms. We tried everything including water therapy, massage, and acupuncture plus dozens of medications. In his last year, laryngeal paralysis, a condition common to elderly labs, foretold the beginning of the end.

 

The decision to continue to pay his mounting expenses, his almost weekly visits to the vet, and the growing cupboard-full of medications that had little to no effect on his condition was never in question. We knew there were surgical options that may have worked, but at what cost? He loved the water and surgery on his larynx would make it impossible for him to swim, or even dip his paw in the water. His arthritis became so crippling and painful that he needed to lay down every 15 feet on his walks.

 

Fortunately for us, our vet had a talk with us in April 2022. I say "fortunately" because many veterinarians are not trained to have frank conversations about terminal conditions of pets with clients. She advised us that it was time to end the increasing pain and discomfort that Titus was going through. She gave us permission to do what suddenly became obvious to us. We were so focused on keeping him alive and with us that we failed to consider his well-being.

 

What I learned was that "how much is too much" should not begin with your pocketbook, but with what is best for your dog, cat, or other animal. How badly will your pet's lifestyle be impacted by its medical condition or its treatment? Is your pet in pain and is it increasing? Remember, animals live in the now. They have no projects to complete, nor do they fear death like we do, as far as we can tell.

 

End-of-life decisions are traumatic and intense and there is no right or simple answer. In our case, Titus had to come first, and his passing was the best way we could express our love for him.  As for the economics side of this equation, if we could do it all over again, (or if we adopt another dog), we will definitely purchase pet insurance. I advise you to do that as well.

 

Bill Schmick is the founding partner of Onota Partners, Inc., in the Berkshires. His forecasts and opinions are purely his own and do not necessarily represent the views of Onota Partners Inc. (OPI). None of his commentary is or should be considered investment advice. Direct your inquiries to Bill at 1-413-347-2401 or email him at bill@schmicksretiredinvestor.com.

 

 

Missing bags, canceled flights, stranded passengers, and interminable check-in times have made this summers' travel a nightmare. What's worse, the cost of travelling has exploded.

 

Consumers are paying an average 34 percent higher air fares this year versus last. The reasons why range from higher jet fuel costs, increased labor costs and sky rocketing demand among others. As the summer season progresses, it seems that the worse the experience gets, the more consumers are willing to pay. 

 

If you watch the horror shows on the news, chaos abounds not only here in the U.S. but in the international airline system overall. Short comings in one location, whether it be from the weather, labor shortages, lost baggage or some other cause, has an increasing domino effect that impacts airports and airline schedules throughout the country.

 

As the system continues to break down, airports and airlines are besieged from all sides from irate passengers to an increasingly concerned government. Readers who have firsthand experience or may be even now caught in this web of travel turmoil might ask a simple question. "How did we get here?"

 

The origin of this disaster has its roots in the COVID-19 pandemic. As we all know, the coronavirus devastated air travel worldwide. By 2020, airline travel was down a whopping 70 percent. To put that in perspective, the 9/11 attacks reduced travel by a mere 7 percent. For the airline industry overall, how to survive was the chief topic of conversation within corporate boardrooms.

 

The industry answer -- reduce employees, slash pilot headcount, sell aircraft, and retire older planes. Top airline managements were ruthless in their headcount. Delta and American Airlines, for example, laid off 30 percent of their staff, offering buyouts, early retirements or simply letting people go.

 

The common assumption among airline executives was that it would take five or six years to recover their former traffic. As such, managements continued to reduce their operating expenses to the bone. But the coronavirus did not occur in a vacuum. The government, together with the pharmaceutical sector, managed to develop several effective, COVID-19 vaccinations. That breakthrough reversed the six-year timetable.

 

The consumer suddenly became willing to fly. Travel demand turned around far faster than anyone expected, thanks to the government's vaccination efforts. The industry was caught completely off guard. But that was more than a year ago. Why is the industry still woefully unable to accommodate the surge in demand?

 

The scarcity of labor, which is plaguing the nation in general, is hurting airlines far more. Let's start with pilots. An army of experienced, older, industry pilots decided to retire, (or were asked to retire) and are gone forever. Hiring and bringing on entry-level pilots requires years of training.

 

 In addition, there are myriad regulatory requirements such as clocking at least 1,500 hours of airtime before being allowed to pilot a commercial airplane. Oh, and by the way, those who train these newcomers (instructors and flight simulators) are also in scarce supply.

 

Hundreds of thousands of workers from cabin crews, to ground staff, to baggage handlers were also let go. Many of those ex-employees have either found new jobs or have no wish to rejoin an industry that kicked them out during the worst crisis this nation has seen in a hundred-plus years. Many of these former employees don't see the upside in a job that once again exposes them to the mutations of new COVID strains. They also have no wish to face armies of angry passengers in an industry where job security is no longer guaranteed, if it ever was.

 

Traditionally, airlines have depended on redundancy in their system to handle unpredictable disruptions. Think of it as insurance that if anything goes wrong, a back-up staff is there to handle it. Without the staff, airlines are at the mercy of every sudden storm, pilot absence or COVID-related sick day. Today, a sudden cancellation can cascade throughout not only one airline, but throughout the entire system.

 

Compounding the industry's labor shortages, are shortages of TSA and customs personnel, as well as air traffic controllers. This results in long lines that delay check-ins, which delay departures and arrivals, which keep planes waiting, and incoming passengers on planes, sometimes for hours.

 

I wish I could say that the chaos in air travel will pass with the summer travel season. The problem is that the labor shortages the industry faces cannot be solved overnight. Competition for workers will persist in the months ahead. Industry experts say the problems besetting the airline industry will continue into 2023.

 

Bill Schmick is the founding partner of Onota Partners, Inc., in the Berkshires. His forecasts and opinions are purely his own and do not necessarily represent the views of Onota Partners Inc. (OPI). None of his commentary is or should be considered investment advice. Direct your inquiries to Bill at 1-413-347-2401 or email him at bill@schmicksretiredinvestor.com.