Conn's, Inc. was a 153-year-old retailer in the southeastern United States that operated more than 550 stores and employed approximately 4,000 people. By the end of October, the retailer that sold home appliances, electronics and furniture will be out of business. Creditors will lose an estimated $2 billion in unrecoverable loans and shareholders will lose their investments completely.
Cohn's bankruptcy is just one of more than 3,000 bankruptcy filings since January this year, a 34 percent increase over the previous year. This is largely the result of “Biden economics” and its take on Keynesian economics, which is based on the foolish but destructive idea that governments, particularly the U.S. government, can simply print all the money they need. When inflation occurs, the Federal Reserve can simply raise interest rates and slow the economy.
Austrian School economist Murray Rothbard argued that money is not wealth.
It is the abundance of goods (not money) that gives us abundance, and it is the scarcity of resources like land, labor, and capital that limits that abundance.
Making more money (inflation) does not create these resources, and although we may feel temporarily twice as rich, all we are doing is diluting the money supply.
As people rush to consume their newfound wealth, prices roughly double.
Cornell's business relied on consumers buying appliances and furniture, primarily to fill the new homes they had just purchased. When the Federal Reserve began raising interest rates to stifle the economy, the housing market took a hit. Home prices rose to reflect the depreciation of the currency, and as the Federal Reserve raised interest rates, so did the cost of financing homes.
This is the triple whammy that Biden economics has dealt to Kohn: spend money, pay for it by expanding the money supply, and squeeze the economy by raising interest rates.
Among the theorists pushing this 4,000-year-old tyrannical dream is Stephanie Kelton, a “professor of economics” at Stony Brook University, who writes:
To save the planet and right historic inequalities, we must change how we approach the federal budget — abandoning our obsession with “paying for” everything with new revenues or spending cuts.
Nothing is free, and Mother Nature cannot be fooled. Gone are the roughly 4,000 jobs that Corn provided. Gone are the estimated $2 billion in creditors who had lent the company the risk they were owed. Rather than getting a return on their money, they lost all hope of getting a return on their money. Investors' portfolios were wiped of money they had invested in the company's stock.
Corn CEO Norman Miller cited the impact of Biden economics in a court filing supporting the bankruptcy and liquidation of the company he has run since 2015.
However, in recent years, our continued growth and success has faced significant headwinds, including dramatic changes in consumer behavior driven by macroeconomic trends, including shifts in consumer spending as a result of multiple government stimulus packages related to the COVID-19 pandemic, market-wide interest rate pressures, and/or inflation, as more fully described below.
As a result, our growth has slowed and our revenue and liquidity position have been strained.
The strain has become so deadly that the company plans to complete the liquidation of 553 stores by the end of October through deep discount sales.Corn's joins tech company Dynata, seafood chain Red Lobster, biotech company Invitee Corp and Enviva, the world's largest producer of industrial biomass, which have all filed for bankruptcy protection from creditors this year thanks in part to the Biden economy.
