The New Normal. Low Interest Rates Forever.

The markets, investors, consumers, politicians, and most importantly savers had better come to the grip with the fact that we have low interest rates for as far as the eye can see right now.  The New Normal is a normal where consumers spend less, banks lend less, and putting your money in a FDIC insured savings account is not going to cut it for any real income.  This is as is was in the late 1930's and since we are reliving that economy one can expect low interest rates for at least another decade plus.  I would bet another couple of decades. 

The Federal Reserve has been saying low rates forever for some time now as any attempt to raise the federal reserve rate has been met with stock market sell offs and most importantly the US ten year Treasury Bond selling off down to right at 1.6% and today is still trading below 2%.   Bond ghouls are fear ghouls and those same traders know what is becoming obviously to everyone except those who pine for a pro-growth economy we are dead in the water for a long time.  Like it or not the idea of thinking the real normal for lending rates is somewhere in the 3% to 5% range and ten year bond rates is silly, almost as silly as the same people thinking a return to the gold standard will solve all our currency issues. 

The reasons for this are quite simple.  Millennials and Generation X having either been born into or lived through the Great Recession have cut spending and cut household costs to the bone.  They are saving their money and holding onto jobs too. In the past this would have been considered a good thing when the Greatest Generation having itself lived through the Great Depression put spending on hold and saving on cruise control.  These generations are not buying homes and taking on debt and when they do are making sure to buy what they can afford if and when economic times turn down again.  They are not buying new cars either, the recent surges in vehicle buying has been mostly done by those over 50 years old in secure jobs or safely in retirement with disposable income.  The are buying into "experiences" like inexpensive travel and dining out, which is cheaper than big ticket items and can be done on a debit card.  Nothing tells this story better than the fact the credit card companies are getting hit hard right now by the significantly heightened use of debit cards by the younger set. All this in turn mean banks have lots of money to lend and no one to lend it to. So with no demand for loans there is no demand for savings to lend.  Rates stay low on both ends. 

Politicians best come to understand this new normal.  There is going to be a reckoning day with deficit spending and over allocated medicare and social security accounting too.  I will bet with anyone right now as the more adult leaders in the Generation X, supported by more sober leaders in the Millennial ranks assume more power in Washington DC as many have in state capitals there will be a changing of how the Federal Government spends, or more precisely NOT spends. 

There will not comeback for the markets and investors need to get on board here too.  The markets will move up and not go backwards as some expect, but that moving up will be in the 4% to 6% category, not the former double digit gains annually we have known in the past.  Much of this new normal reset is the fact that with inflation low and consumer prices growing at a snails pace that market gains will be similarly depressed.  However with interest rates at 1% and a market growing at say 5% the result are assets there growing correctly as compared to inflation.  Again we suggest S&P 500 index funds for most people and a sprinkling of managed stock assets to add some additional protection to long term growth.   What will likely happen is many people will keep their savings in saving accounts freeing them from stock market fear which is so recent to most workers. 

Some advice for you savers who worry about markets.  Your ancestors who lived through the Great Depression did the same and kept passbook savings accounts and such for years to avoid stock market crashes.  That portion of our history is past us now so put some of your hard earned savings into the stock market and you will be ahead of your peers several decades from now when you are looking into the retirement years. 

This new normal is frankly not so bad if you consider the change in spending and savings habits of younger workers.  Maybe we need to get used to a no growth economy and learn to invest and live in it.   Stock buy backs and safe dependable dividends from large corporations is still something to desire if you have assets to invest or building assets to invest.  Slow growth and stable markets can be rewarding if you are taking a long term view and a long term view is the best choice for smart savers and investors. 

Investing and Living in a Gone with the Wind Economy

We live in what can be called a Gone with the Wind Economy.  Lots of companies doing nothing to grow, lots of people sitting home doing nothing, and the federal government doing nothing to make it better.  As we have stated in the past we see little to change that scenario through 2016 and frankly well into the next four plus years unless voters come to their senses and elect some pro-growth leaders.  As for pro-growth leaders we have heard little of that kind of talk in the current presidential campaign, so therefore one can expect the same old economy we got now to live on for some years past 2016. 

We have opined in the past that the current political economy which spends deficits to oblivion and the federal reserve that keeps interest rates rock bottom misappropriates cash and resources to the rich while keeping the lower classes satisfied with just enough of government largess.  Sorta like the Old South in Gone with the Wind, where the slaves toil and get by and the rich landowners live a charmed life.  Indeed both blacks and white in the lower and middle classes seem pleased and willing to accept less by living on today's plantation, that being the government plantation.  If they work it is at jobs that require little skills and more than likely part time due to Obamacare.  They get by with some food stamps, maybe some welfare checks, and more and more on Medicaid,  which more and more doctors refuse to take due to lower and lower pay outs for services rendered.  Many do not work at all as the real jobless rate is likely in double digits and the labor force participation rate is about 62%.  Much of this not working is the lack of desire to go get skill sets that are in demand, better to blame someone or some company for shipping what is basically the low wage low skills jobs to some offshore location than get up and learn a marketable skill.  The government's hand in this is obvious to anyone who wants to look and that is the now almost sacrosanct $15 minimum wage rate. Trump has made hay blaming everyone for what he and other politicians support in the higher wages to appease the few employed and harvesting votes from those not employed.  The mob is restless, but they are not going to change much unless they get smart and get jobs and get smart and vote pro-growth. 

The well off, called the rich by the media, enjoys the current environment.  Low rates mean they can buy homes and cars with assets they already have at cheap long term payments.  The well off can invest in companies where the low rates allow companies not growing to buy back stock and doing so issuing tax advantaged debt at long term dirt cheap rates.  Those stock buy backs make stock prices move up and the lessening stock float means more concentrated ownership of companies by those same well off owners. These same companies use some of the cash to raise dividend pay outs regularly to keep the well off, well, well off in their lifestyle. Talk about life in the plantation home this is it on steroids. 

Now if you are in the lower and middle classes the best investment you can make is get a skill that is in demand, move to where there is demand for that skill, and save your money like mad.  Put most of that money in the mega capitalization stocks where the well off are now and ride the tide upward with them.  At some point you should accumulate enough assets to at least survive the current no growth mess.  If nothing else you can make life better for your children if nothing changes. We again suggest using Vanguard Funds or ETF's,  preferably the S&P 500 index for your assets.  Forget bonds and money market they are losers for you. 

If you are in the well off category you too need to put some assets in the mega caps where your money will grow and keep you up with inflation.   Other assets should be in mega cap dividend paying stocks and some tax free closed end bond funds.  Stocks like AT&T, Verizon, Wells Fargo, and JP Morgan are long term safe.  We also like Triangle Capital and New Media Investment Group for some higher risk in the dividend paying category.  A good mix of Vanguard mega cap funds/ETF's and some safe dividend paying stocks will keep your assets safe long term and provide some cash flow if needed.  As for bonds we like two approaches.  One buy a good number of individual state municipal bonds for safety making sure you buy bonds issued from your state for triple tax free treatment.   Either general obligation and revenue bonds are fine here.  Add some closed end bonds funds for some extra income and frankly safety since low rates are here for a long time. We like VKI here paying over 6% tax free and it pays monthly dividends.  In all this will keep you living in the plantation house until pro-growth policies resume with new leadership. Lastly if you have not taken advantage of the long term below 4% mortgage rates do so, buy a home, refinance your mortgage, or buy a beach home.  You can enjoy them and your heirs at some point will be appreciative of your smarts of locking in those low rates. 

The Gone with the Wind economy is not the preferred choice for those of us who like growth and more people getting to make life better moving towards the top of the ladder, but it is what it is and only fools do not play the hand they are dealt.  If you are living in the plantation house take another sip on the mint julep and enjoy the beach breeze.  If you are living in the poor house get up and find a way out or just accept no one, no government, no politician is going to get you out.  Here is a fact no one will nor any politician will tell you, it takes some sacrifice on your part.  If you do not get up and get going your life will be truly gone with the wind. 

If you like YOUR no growth economy then you can keep it.

THIS is what you get when a no growth economy has run it's course.  Morbid business prospects, interest rates going lower, stock market trending lower, and investors, business owners, and consumers in a funk.  

We have run the table in this no growth economy and unless some new leadership is put in place in Washington DC late this year you will get more of this mess.  Voters this is YOUR no growth economy and you can keep it.

Business is not growing except if you are in the drug store business which is booming due to the regulation of Obamacare.  Even that business growth is artificial since people needing health care more and more are told to go home take a pill and be quiet since actually doing something to help your health condition costs more than taking a pain pill. Most other businesses are reporting near no growth earnings and of course that means more layoffs than hiring.  The only hiring is occurring in the restaurant business, which is low wage and mostly part time due to more of that regulation,  where young millennials who are avoiding buying cars and homes are spending on "experiences". 

 Interest rates for the 10 year US Treasury this morning is in the dumpster at just over 1.5%.   Think about that the best you can get for a decade is 1.5%.  That means bond investors are willing to take a bet that doubling their money in 48 years is good enough for long term investing.  No retirement can be funding with that kind of return and one must have huge piles of money to actually make enough income to live on at 1.5%. Home sales continue to trend lower as only the rich are buying and they mostly with cash.  So banks are content to just make the spread between what the Federal Reserve will pay them on deposits and not the better spread they would get lending out for mortgages.  This lower demand keeps mortgage rates below 4%. 

All this gloom is spreading like a virus over US markets where investors are dumping risk assets like stocks and bonds since fear trumps greed every time.  Consumers continue to avoid buying anything that improves their life instead just buying what is absolutely needed such as repairs and staples like food.  Gloom breeds malaise and a no growth economy.  The end of the ability of high government spending to enhance business since the Federal Government has basically spent out their credit card.  The political economy still reigns however in high regulation where if you are one of the lucky industries like drugs stores one can prosper.  Crony capitalism is great if you are on the receiving end of the crony.  The federal reserve is out of bullets but their continued lower than low rates still makes the mega corporations like Apple and Google richer by the day with the ability to use profits to buy back stock and finance it with lower than 1% 50 year bonds.  Like we noted above if you are are on the receiving end of the crony capitalism life is great.  Obama continues to make the profits center in Silicon Valley happy.  Hillary will continue the same. 

Now notice we said "GLOOM", not "DOOM" as this no growth economy will not end in a doom, but a continued gloom.  If you like YOUR no growth economy you can keep it and all this gloom too. Smart investors continue to invest in mega cap corporations since their stock is still advancing about 3% to 4% due to all those stock buybacks and reward the rich with a steady diet of dividends. For example Cisco just upped their buyback by $15 billion yesterday and upped the dividend by 25%. Smart investors still look at municipal bonds too which can pay upwards of 6.5% tax free, which is about 8.6% in the federal 25% tax bracket.   We bought big into Invesco Municipal Trust in early January and as of now have a 3.2% gain in our buy.   That is over 25% if continued annually. We continue to look at closed end bond funds for gains and income since rates are going nowhere keeping our capital safe and adding to mega cap stocks for protection against any inflation that might appear. 

We hope Americans will come to their senses and put in place in November some pro-growth leadership.  Jobs, business growth, and the lifting of the gloom make for a much more enjoyable environment.  If not we will remain happy with taking advantage of the crony capitalism.

             

Yes, they really are Two Americas.

Some weeks ago we had lunch with a high income high net worth person who had been introduced to us with the idea they might want to consider doing stock and bond investing and trading our way  

The lunch conversation was about how smart investors and traders survey the financial and political environment and do not try to change it,  but rather take advantage of it. Simply put the country is becoming more and more divided between those who are upper middle class and above and those who are lower middle class and below.  There are less and less people in the once largest American class the true middle class.  This is the result of decades of public education doing a worse and worse job of educating the middle class on how to achieve the once wonderful American Dream of financial security at some point in their lives.  In has been further pushed by the erosion of a common core of values held by most Americans. The results of this downsizing of the American Dream is clearly shown in Friday's jobs report where despite being hailed by many as great the truth is we continue to replace full time higher pay jobs with part time and lower paid positions.  All this is being embedded into place by current political economics and financial engineering. 

Thus we have a situation where there is less hope to improve one's life and even less desire to do so. However for those who have made the jump to the shall we call it "good life" the opportunities to keep that way of life are quite numerous and most rewarding financially.  We have long opined here that with Obama the federal government has embedded in many Americans the desire to just accept what crumbs of money and goodies the government gives you plus  maybe some part time with no future employment as something everyone in the lower middle class and below should be just happy with and be quiet.  On the other hand these same political policies that involve lots of deficit spending have lead to the situation where those who have made it in this country along with the financial engineering by the Federal Reserve of low rates which enable mega sized corporations to pay good dividends and buy back stock make the upper class richer by the day.  Those in the upper middle class and above see the federal government largess under Obama as being nothing more than throwing some candy to the masses to keep them quiet, while the better off dine out well, drive fine cars, and vacation at their beach homes. 

This is not the way it should be or has been in America, but until someone pulls the plug on this arrangement at the ballot box and in their daily living values it will not change.  As I said to my lunch person "it IS what it IS whether you like it or not and only fools do not invest and trade with the flow." There are days now when we wonder if America has finally jumped the shark and can never find the American exceptionism that once made us the land of opportunity for anyone who wanted to try.  We have traded equal opportunity for equal misery, unless you happen to be blessed to be in the priviledged class. Most days now we consider ourselves blessed we are not in the bottom group. Most days too we wish we knew how to change the dynamics to the way it was when everyone had a good paying job with a future and the chance to move up in lifestyle and leave a better American for their children.  But until that day when the masses decide they too want a piece of the good life and elect pro growth politicians who EXPAND the wealth pie, instead electing those who think of just dividing the pie that is there we will do as others are doing in the upper class and above and continue to take from the lower middle class and below and expand our own personal wealth.  This is the side of the so called financial inequality that one must as we said go with the flow. 

If you have any chance to get into the expanding wealth category your best option is to avoid the masses and get a good paying job of those few that are available by learning a skill that is in demand then investing your paycheck like a religion in mega cap ETF's or mutual funds.  Savings rates of at least 15% and preferably more is needed and put it on autopilot. As we have suggested here ad nauseam use Vanguard Funds as your investment choice, which are cheap and investor owned too. Yes we all hope that new policies will change the current economic landscape, but smart people know to work hard and go with the flow. 

Joe Sugars of St. Pauls 1916 to 2016

Maybe the most enjoyable of my experiences growing up and spending most of one's working life in a number of Southeastern North Carolina counties are the friends one meets along the years.  in January 1982 I got to meet someone who would teach me as much about marketing in 30 minute visits each Tuesday morning as any college course could ever do. 

In early 1982 I began work as a retail advertising salesperson with the Fayetteville Observer and took on the Robeson County route.  Part of that route was the weekly stop at Joe Sugars of St. Pauls NC clothing store for their weekly ads in the newspaper.  Frankly I was not prepared for the first experience of walking into this clothing store in the small town of St. Pauls. By small town I mean something like 1000 population tops and a small main street of at most two blocks.  But I went to do my first call on Stanley Sugar at his clothing store in this small town pulling up to a store that was from the outside rather normal for a town this size.  Into the store I went and unto my eyes I see on table after table thousands and thousands of pants, hung in rows thousands of dress coats, and stacked on shelf after shelf thousands of shirts, and huge selections of absolutely everything a well dressed man would need. Thus was Joe Sugars of St. Pauls NC and their slogan "if you got a figure we can fit it" because they have a piece of men's apparel for every need for any size man. Also in almost any color too. Seriously this was and likely still is the most men's apparel one would will find  under one roof in one location on the East Coast.  

So for the next decade plus of serving the newspaper advertising needs of this clothing store from my posts at two newspapers I got the priviledge of spending some time about once a week with Stanley Sugar, who was the second generation of this soon to be 100 year old establishment. Stanley would always run a series of small ads each week in the newspaper touching about every day and almost every section of the newspaper.  Simply put he did this since he knew most people would look at certain sections they favored and almost any ad no matter what size would be noticed if the ad had something worth reading.   He would tailor his business card sized ads for the particular section of the newspaper it was in such as women's section, sports section, general news, etc.  He would generally come up with a new group of ideas each week too in what I quickly realized was a fertile mind of marketing ideas.  He would do the original pull an envelope and get a discount ads and would go clever with "closed Wednesday afternoon, but open late Saturday to make up for it" ads. He had a picture in his store of a very old looking man that was labeled "35 year old clothing merchant."  His dressing rooms well...err...ahh.. were labeled X rated, R rated, and G rated but all were in good taste.  He had a plaque with the words " Price is what you pay and value is what you get and those who consider price alone are another man's lawful prey."  To this day I have that plaque on my wall as well as I considered it wise advice. 

On the days I would go pick up his ads I would either go to the back of the store and get them or go to the shoe sales area where he would be sitting and doing some book work or just taking a break. Here in the shoes I would get my masters degree on how clothing retailing and marketing worked and how it would apply to other businesses too.  Stanley had a wonderful dry sense of humor that everyone would enjoy.  One day I asked him what type of customer he liked to do business with best and he said it easily would be a salesperson of any type, in that they always needed good looking clothing for sales work and would buy his wares on sales and on non sales periods too.  Just fine customers who would not quibble too much and he would do all he could to keep their business.  As for the worst customers, he said easily lawyers and doctors, who would complain about the offerings he had and then complain more about the price.  He noted they would try and "Jew" him down with one of his great laughs.   Stanley being a Jew himself made the comment most funny. Stanley took his store, employees, customers, and family seriously, himself not so much. 

I always found it cool and rather nice that Stanley Sugar successful clothing merchant and first in the nations now cool trend of wearing outlandish colored socks would take time to school me a young advertising salesperson.  Over the years I discovered if he really liked you, he really liked you, and he would take time to chat even during a busy day.  Later in his life he was wanting to pass on his store to family and was working on convincing his young nephew and the store's original owner namesake Joe Sugar Jr. to come take over the business.   During the period of decision I told Stanley that he was having problems getting young Joe to come forward that I would do him the honor of marrying into his family and converting to Judaism if he would let me take over the business.  Stanley laughed so hard he about feel out of his chair, then said that might have been the most honorable offer he ever had.  Friends could talk with Stanley that way and I considered myself blessed to be a friend of many years. 

Stanley passed on sometime later and indeed his family took over the store.  Joe Sugar Jr. as expected became owner of the now almost 100 year old establishment.  Since I retired I do not see Joe Jr. as much since my dress up clothing needs have dwindled a bit.   However my main navy blue blazer in my closet as I write this is still labeled Joe Sugars of St. Pauls.  As Stanley taught me now those almost four decades ago no well dressed man is without a good quality navy blue blazer in his closet as they go with many dress pants and make a man well dressed.   So sometime next during the next 6 months I am going to drive the less than hour drive down I-95 to St. Pauls and get another blue blazer in a toast to Stanley Sugar my old friend.  Might even walk around the store and think about those days we used to talk in the shoe dept.  Hopefully Joe Sugar Jr. will read this and invite me to the 100th Anniversary event sometime next June 2016. In the meantime if you have not done yourself the favor of checking out this one of kind men's store do so and you will be glad you got to know Joe Sugars of St. Pauls. NC.

               

Ode to Jim Parker

Even across the room my old friend and boss recognized me with his now 91 year old eyes. There was also that twinkle one would always see in his eyes when he saw somebody who had worked with him and enjoyed doing some catching up. Those who worked for him know about that twinkle.  I had come this November 2015 day to Clinton NC in response to his son's book signing event in his former hometown, but in truth I was really there to see my old friend who a former newspaper co-worker had alerted me was to be there. 

It was now over 37 years ago that I walked into his newspaper and began discussing the advertising job opening he had due to the recent promotion of salesperson to advertising director at the Sampson Independent.  Little known to me at the time Jim Parker had already pretty much decided I was the one he wanted to hire since I came with then some over 3 years of experience doing what he wanted to me to do at his newspaper, sell advertising  We talked that July 1978 day, and he and his new advertising director sized me up, and they offered me the job on the spot.  Never in my over 3 decades of seeking employment did I get that and on this day I was more than ready to accept since I was ready to come home to Eastern North Carolina from a time working at a newspaper in another state.  

Even today I consider the next nearly four years working for Jim Parker, and the next decade getting his advice before he retired,  maybe the most satisfying and most learning of my life and career. Over the four years of working at The Sampson Independent I would meet several lifelong friends. Over the next four years I would find enjoyment with working with a group of professionals still unequaled in my career.  Over the next three decades many of those I met there would keep in contact and consider ourselves blessed to have come together at that moment and that time. 

Jim Parker was without doubt the person with the most integrity, most class, and the finest boss I ever had the priviledge with which to work.   I expect he knew he had assembled a special team at the Sampson Independent during those heady late 1970's days of the newspaper business.   Jim knew to just point us in the right direction and let us go and good things would happen.   Good things did happen too not only in advertising revenue, but also in news and advertising awards, quality of work done in all the newspaper's departments, and lots of good times for those working there.  One of those times of one being at the right place at the right time. 

That group also did something else too in the newspaper industry I expect is unequaled today.  The Sampson Independent trained and sent out more publishers and newspaper department heads at that newspaper and to other newspapers that of my last count was more than four dozen. For a small daily newspaper of just under 10000 circulation that was unheard of, but then again Jim Parker was a special boss and special person who knew who to pick good quality staff.

Jim Parker literally oozed integrity when he spoke and when he directed staff.  Jim got his honors through the years, NC Press President for a term being one of the best known, but I expect knowing him the most joy he got was watching his employees grow in the newspaper profession and do well. One could tell that from that twinkle again in his eye when he spoke of someone who had worked for him and went off and did good as they say. Jim respected us and pushed us to achieve to our best and in return anyone who ever worked for him never had a bad word to say about him and would perform at their highest level to get his approval. 

So this weekend in Clinton I got to talk newspapers and other topics with my close friend Jim Parker and for a moment relive those wonderful days of working with him at The Sampson Independent all those years ago.  Of course during our conversation Jim Parker made talk of his old newspaper there in town and right on cue as the old editor made points of criticism about how he thought they could do a better job of covering the news.   Riding around Clinton before I headed back home I got to revisit some old haunts and rode by the newspaper office that is still there after over four decades plus.  What I would give to go back and do it all over again. 

Thank you Jim Parker for the memories, the years of setting an example I always wanted to live up to, and most importantly the personal approval that comes from those who see that twinkle in your eye and know that means they are and will always be part of your extended newspaper family. 

The Economy remains Stuck on Stupid.

Stock market sell off...check.   New US House Speaker...check.  New US Government budget...check. Paris terrorist attack...check.  Nothing, no one, not a single activity can change the direction of this market.  That direction has been for over 6 years an uneven but steady climb upward for mega and large cap stocks.  Indeed no government policy or business policy has changed much either and we do not expect much change until at least Spring of 2017 and even then it is a big IF.  

We are as they say "stuck on stupid" and for those of us who have held and are still holding mega and large cap stocks we say "thank you very much."  For those needing jobs and those needing good paying jobs the tide is out and will be out for at least another two years or maybe longer.  For those needing higher interest rates that tide could be out for years.  So holding US Treasuries or buying CD's for safety has been less than rewarding and mostly a fools errand.  We have been stating and posting for some time now there will be no interest rate increases by the Federal Reserve for at least until late 2016 and we doubt any then.   The economy is just not capable of withstanding a rise in rates and with an election season upon us there will be none. 

Keeping up with inflation, or what used to be called inflation is pointless.  Witness that Social Security gave no increase this year and likely will not next year either.  Witness mortgage rates back down in the 3% range.  Here is a fact you can take to the bank. If you are in a business that needs human capital, or is human capital intensive, we would highly suggest you start considering another profession unless you are old enough to run the clock out.  Human capital, otherwise known as jobs, is a receding expense in most businesses due to the advance of technology.  McDonalds and Walmart are fast approaching the point where robots and such will replace higher cost humans.  Only in businesses where experienced or well trained human capital is needed is there job safety.  We say all this to note one of the reasons inflation is dead is that the highest cost of business which tends to be labor is fast losing the ability to ask for more compensation.  So the need and push for higher interest rates follows the inflation trend. 

So the beat goes on and we remain stuck on stupid.  Financial engineering by large cap companies buying back stock and increasing dividends to reward those with assets.  Political economy rewarding those who do not work, will not work, or feed off the government largess of the spending of those same non workers.  Crony capitalism remains alive and doing this well and those of us who have assets say another "thank you very much." 

As we stated in our next to last post the Doom and Gloom crowd, which is always wrong, has gone completely into hiding with the recent stock market surge back to this summer's highs.  They will likely stay there awhile, unless so real global crisis occurs such as someone gets mad and enters someone else's safe space, and even then if a terrorist attack can not stop money movement what can?  In any case keep your assets in mega and large cap stocks, mutual funds, or ETF's and enjoy the ride.  If you need a job, maybe even a high paying job, since you have been unable to figure out how to get on the government plantation gravy train of not needing a job, we suggest you consider electing a pro-growth President and Congress next time.  Of course with the two leading contenders not being pro-growth that might not be in the cards.