Business Archives - the bird on fire

California Pizza Kitchen–Behind the Scenes

April 29, 2025 by szachik@pvs.org Leave a Comment

By Middle-School Blogger Greenlee Bartley

A lot of people have favorite restaurants, and I’m one of those people. My favorite restaurant is California Pizza Kitchen (also known as CPK). I got introduced to it when I was very little because my mom and aunt used to work there. I asked them for info about what life was like working for CPK.

First, I interviewed my Mom, Trisha:

I asked her, “What was your favorite part about working at California Pizza Kitchen?”

And, she said, “All of the friendships I made while working there, and a lot of [those friends] I am still friends with today.”

Next I asked her, “Why did you choose to work there?”

She responded, “I didn’t choose; my mother brought home an application and told me to apply.”

Then I asked her, “What were your favorite and biggest accomplishments working at California Pizza Kitchen?”

She said, “Becoming a counter bar trainer [which is someone who trains people on how to serve customers at the counter bar], and opening new locations.”

Here you see my mom working at CPK in the 1990s.

Next, I interviewed my Aunt Summer about her experience behind the CPK scenes:

I asked her, “What was your favorite part about working at California Pizza Kitchen?”

She said, “Getting a discount on the food when I ate there.”

Next I asked her, “Why did you choose to work there?”

She said, “Because my sister worked there, and she got me the job.”

Lastly I asked her, “What were your favorite and biggest accomplishments working at California Pizza Kitchen?”

She said, “My biggest accomplishment was becoming the best server they had and eventually a server trainer.”

Why I like CPK:

California Pizza Kitchen is one of my favorite restaurants. I love the vibe there because it has lots of windows, and I like that because I love natural lighting. Also, I love the food. It is mainly an Italian restaurant with pasta, pizza, salads, drinks, desserts, and more! I love them for their pasta. I get buttered fusilli. My favorite and only California Pizza Kitchen location I’ve been to is the one on El Paseo, and I really recommend it!

Local Coffee: How Does It Stack Up?

February 2, 2023 by szachik@pvs.org 1 Comment

By a new blogging voice @ thebirdonfire.org: Jess Billimore

In the words of George from George of the Jungle, “Java, java, java, java.” Yes, we’re looking at more coffee. Blog Coffee Rater Jess took on the arduous task of going undercover to investigate three local coffee shops to determine which serves up the best iced-cold brew in a soothing atmosphere and pleasing locale.

Hi! It’s Jess, in today’s post I will be doing a coffee review of three different locations in the Coachella Valley in order to determine where serves the best coffee. So, how will I be ranking these locations? I will rank them according to location/atmosphere of the shop, the menu, price, and above all- the taste. Each of these categories will be rated out of 5, and the final rankings will be calculated at the end. At each location I will order a medium iced-cold brew to make this as fair as possible.

I’m going to begin with Starbucks. There are several locations around the area, but I chose the one on El Paseo at 73520 El Paseo, Palm Desert, CA 92260. To begin with, it is a very beautiful location. You get a nice view of the mountains if you choose to sit outside, and inside is lovely too. This is a smaller location than most Starbucks, which I personally really like. It had a great vibe–the majority of those dining in were working which really inspired me to come back sometime and do the same. Usually, I find the inside of Starbucks far too loud and hectic, but this one wasn’t, so I would return for that reason also. I would give them a total of 4/5 on location/atmosphere. The barista was also kind and even offered my dog a pup cup, so this location gains +1 bonus point for that. As for the menu, I personally really liked it. Starbucks has a very large menu, which means there’s bound to be something for everyone. I really can’t fault them on it, so they get a 5/5 for that. As for the price, a medium (grande) cold brew cost me $3.25, which in my opinion is a very fair price, so they also get a 5/5 for that! And, of course, the taste–honestly, it was only okay. I personally like my coffee on the stronger side; this was quite a strong roast, so it has the nice bitter coffee taste. It was just very, very diluted. Unfortunately, I would only give them a 2.5/5 on taste. Overall, Starbucks gets a 17.5.

Now, onto my second location: The Vintage Coffee House located at 49990 Jefferson St., Indio, CA 92201. As for the location, it’s lovely. It has indoor and outdoor seating and is so beautifully decorated it feels very homey. It is also a local, independent business, so it is great to support them. The staff is super friendly–definitely the sweetest workers I’ve ever met! They also offered my dog a pup cup and treat so they gain +1 bonus point for that. All the customers were super lovely, too. It’s clear they have a lot of regulars. This is a perfect place to come to work or hang out with friends. I could have seriously stayed there for hours. Overall atmosphere/location is 5/5. The menu was amazing; they had so many unique flavors: lavender, cinnamon roll, butter pecan, and tiramisu. They would also get a 5/5 for this. My medium iced-cold brew cost me $4.50, which, yes, is a little more than Starbucks but still low and totally worth it to support a local business. I give the pricing a 5/5. The coffee was absolutely delicious. It was the perfect level of strength. They get a 5/5 for this also. Overall, The Vintage Coffee House gets a whopping 21.

Finally, I visited IW Coffee, located at 74-995 CA-111, Indian Wells, CA 92210. The location is very pretty outside and the patio has a good amount of sun. I also liked the modern/minimalist vibe on the inside. This seems to be a very popular spot to go with friends, and everyone was super friendly. For atmosphere/location they get a 5/5. As for the menu, it was decent, not as much variation as the previous locations, but there was nothing wrong with it. I am giving them 4/5 for this. The price was $4.85, which isn’t bad at all, so a 5/5 for this, too. Honestly, the taste was disappointing. It was very watered down, similar to Starbucks, so they only get a 3/5 for taste. Overall, IW Coffee gets a 17 score.

All in all, The Vintage Coffee House is the clear winner. It is my new favorite spot for coffee, and I would definitely recommend going there.

The Vintage Coffee House in Indio as featured on TripAdvisor.

THE DESERT IS FINALLY GETTING A CHICK-FIL-A

May 11, 2022 by szachik@pvs.org 2 Comments

By Luke Sonderman, Fast-Food Expert

Finally, after years of rumors, a Chick-fil-A is coming to the desert! On Monterey and Dinah Shore, Chick-fil-A signs have been put up in the new Monterey Crossing Shopping Center next to the Quick Quack Car Wash, Habit Burger Grill, Spectrum, and AT&T Store (desertsun.com).

For those of you who haven’t been to Chick-fil-A, I am very sorry for you. Chick-fil-A may just be the best food to ever enter my mouth. Chick-fil-A’s menu consists of spicy fried chicken, regular fried chicken, and grilled chicken sandwiches; fried and grilled chicken tenders and nuggets; a cold chicken wrap; and a chicken salad. They also have a breakfast menu which has breakfast sandwiches with biscuits instead of regular sandwiches.

In the past eight years, Chick-fil-A has been in the center of controversy for being a Christian-owned company that isn’t open on Sundays (yahoo.com/lifestyle). In July 2021, a Chick-fil-A spokesman made a comment to Yahoo News saying, “Chick-fil-A does not have a political or social agenda, and we welcome everyone in our restaurants. We are proud to be represented by more than 180,000 diverse Team Members nationwide, and we strive to be a positive influence in our local communities. We do this, in part, by contributing $25,000 to food banks in each community where we open a new restaurant and donating more than 10 million meals through our Shared Table program.” In recent years, the controversy has begun to die down as Chick-fil-A has stopped donating to the Salvation Army and the Fellowship of Christian Athletes who both have made homophobic and anti-same-sex marriage comments (marketwatch.com).

Personally, I believe that private companies are allowed to put their money where they want, and consumers can purchase their product without agreeing with the company’s personal beliefs. By eating at Chick-fil-A, I am not agreeing with their beliefs, whatever they might be, but I am eating there because I think the chicken is absolute fire.

So, for all the Raising Canes, KFC, Mickey Dee’s, and Dave’s Hot Chicken fans, head over to Chick-fil-A (it isn’t actually open yet), and eat some actual bomb chicken. It will change your life forever.

Why You Should Stop Going to Starbucks and Visit Some Local Coffee Shops

February 24, 2022 by szachik@pvs.org 1 Comment

I know everyone loves Starbucks. There are so many locations. You can order ahead, and it’s just a good menu. But, I think it’s time we switch it up and start going to some local coffee shops. – Editor Abigail Horwitt

By Lilah Nick, Who Orders Tea in Coffee Shops

Koffi

Koffi is a locally owned coffee shop. The first Koffi store opened in 2002 in uptown North Palm Springs. They currently have four locations: three in Palm Springs and one in Rancho Mirage. It is a popular spot to stop in with a friend and get some coffee. Their menu consists of things like breakfast sandwiches, coffee, iced tea, their version of a frappuccino, bakery items, and small lunches. Koffi offers mobile orders. In person, I ordered an egg-and-cheese sandwich and a lavender crimson berry iced-tea fusion. It was so good, and I also liked how they cut their sandwiches in half. I frequent the South Palm Springs Koffi pictured below.

Gré Coffee House and Art Gallery

Gré is located in downtown Palm Springs right across from the Sandwich Spot. The floor is covered with vinyl records along with wall displays of rare records as well. They also have a huge selection of vinyl that ranges from their $1 section to $100 for their rare records. On special occasions, they also have live music.

They have coffee, tea, hot chocolate, fountain drinks, and frozen drinks, along with a few bakery items that change every so often. I tried their hot chocolate one time, and it was the best chocolate I’ve ever had. It wasn’t burning hot and it wasn’t watery; it was super chocolate-y.

Photo Credit: Gré Coffee House and Art Gallery

Café La Jefa

Café La Jefa is a Latin-influenced coffee shop in uptown Palm Springs. The atmosphere there is really fun. There are many photo opportunities, and they have lots of comfy seating. They have coffee, tea, kombucha, salads, wraps, sandwiches, and pastries. Ani Madanyan says, “They have really good coffee. I really like their sitting area. Half the time the bakery items are sold out–they’re just that good. They also have shops in the store so you can shop while you wait.” They have clothing, crystals, hair accessories, necklaces, and art.

These are some popular coffee shop alternatives in the desert. They are super good, and I hope you visit these. There is coffee beyond Starbucks.

Raising Canes Is Overrated and You’re Wrong

February 22, 2022 by szachik@pvs.org 3 Comments

Raising Cane’s Chicken Fingers is a fast-food restaurant chain that specializes in chicken fingers. They recently opened at 5601 Ramon Road, in Palm Springs, California. Is Cane’s worth the hype? Is Cane’s even good, other than the fact that it’s blowing up on social media? Luke Sonderman tells us about other fried chicken that is superior to Raising Cane’s. Is Cane’s chicken too bland? Too cold? Not worth it? Well, we’re about to find out thanks to Luke’s straightforward review. — Editor Ani Madanyan

By Luke Sonderman, Chicken Connoisseur

Fried chicken is a very important piece of American cuisine. Recently, the newest fried chicken sensation has been the glorious fried-chicken sandwich which has spread to fried-chicken joints all over the world, even in our Coachella Valley.

My favorite fried-chicken place in the Coachella Valley is Dave’s Hot Chicken on Jackson Street in Indio. Dave’s Hot Chicken serves massive chicken tenders and chicken sliders. While ordering, you get to pick your spiciness level from Lite Mild to Reaper (which is so spicy, it requires the consumer to agree to a waiver before ordering).

Number 2 on my list would have to be Popeye’s Louisiana Chicken on Varner Road in Palm Desert. I have been eating at this Popeye’s since before I can remember. Popeye’s not only serves tenders and delicious sandwiches but also bone-in chicken, unlike most other fried chicken places in the Coachella Valley. I usually order their spicy-fried-chicken sandwich or their spicy tenders.

Before I trigger all of the die-hard Cane’s fans, let’s just hate on Kentucky Fried Chicken for a little bit. I have to admit, their bone-in chicken is pretty good. But their popcorn chicken, chicken tenders, and chicken sandwich??? I’d rather eat sand. Their chicken tenders and sandwich are completely dry and have way too much black pepper on them.

Although we don’t have one in the Coachella Valley (for now), I have to give Chick-Fil-A some appreciation. Chick-Fil-A is by far my favorite fried-chicken joint and fast-food restaurant outside the Coachella Valley. They have the juiciest chicken in their sandwiches and their tenders along with the tastiest buttered buns with two pickle slices. Their waffle-weave fries are so waffley they’re out of this world. On top of that, their milkshakes are the best milkshakes out of every fast-food joint in the United States. They do something to the milkshakes, I don’t know what, but they are so good.

Finally, this one is for all the Raising Cane’s fans out there. YOU’RE WRONG. Raising Cane’s is not even close to the best fried-chicken joint out there. Yeah, their tenders aren’t too bad, but what’s all the hype about? Their menu is super basic, and everything is so plain. They completely copied Del Taco’s crinkle-cut fries, which aren’t even that good to begin with. I went to the newly opened Palm Springs location and waited over an hour in a super-slow drive through just to receive cold chicken, a missing piece of toast, and a lemonade full of melted ice. And, after being open only a month, there has already been a corpse found in front of Raising Cane’s (kesq.com).

So, if you don’t want plain cold chicken, or if you don’t want to be found dead in the parking lot, you may not want to wait an hour in the drive-through at Raising Cane’s Chicken. Get some Dave’s Hot Chicken instead.

The Vending-Machine Crisis

February 9, 2022 by szachik@pvs.org 3 Comments

Abigail Horwitt tells us about the controversy going on in the PVS Upper School. The vending machines are charging $1.25 instead of $1.00 for food and drinks. We find out what the students are trying to do about it and why the 25 cents is such a horrible idea. – Editor Lilah Nick

By Abigail Horwitt, Vending-Machine Objector

Recently, there has been a major problem in the Palm Valley Upper School. About a month ago our vending machines were hijacked. Instead of our drinks and snacks being a dollar, the price was raised to a dollar and 25 cents. This sparked an outrage between both students and teachers. Having to have an extra 25 cents is inconvenient and troublesome. Due to these issues, ASB Co-President Sara Habibipour has taken it into her own hands by putting up signs protesting against the vending machines. With the help of the students, Sara has managed to get many signatures with the hope of bringing back only having to pay a dollar for your Diet Coke. I have heard countless students and teachers complain about not having two dollars, or not having an extra quarter just to buy a snack or drink. The amount of students and teachers going to buy something from the vending machines has decreased due to the pain of carrying around an extra quarter. I used to buy a drink from the vending machine everyday until the price unexpectedly rose an extra 25 cents.

Not only is the food overpriced, some of the food had been reported to be stale. The Palm Valley Upper School students are also hoping for a different variety of snacks in the vending machine, since some of the food has been sitting in these machines for most of the school year. The selection is “not good,” says senior Jesse Denyer. Hopefully, the spark of controversy with the vending machines helps raise enough attention to the school vending market and helps to bring change to our machines.

Bring back our $1 drinks and snacks!

The Ford F-150 Lightning vs. Tesla Cybertruck

June 2, 2021 by szachik@pvs.org 1 Comment

America’s best- selling vehicle now has an electric alter ego. Allow Blogger Jake to introduce you to the new Ford F-150 and Tesla’s upcoming Cybertruck.

By Jake Sonderman, Business Correspondent

2022 Ford F-150 Lightning First Look: The Electric Pickup Has a Shockingly Low Price, Mega Specs

With over 600,000 units sold a year, the Ford F-150 pickup has been America’s best-selling vehicle for years (kbb.com). More recently, Tesla has grown exponentially in the last year and has made a name for itself by being different from other traditional car manufacturers. Tesla further differentiated itself with the introduction of the Cybertruck, an electric pickup with very high performance and a very unique, futuristic look. Ford, however, recently introduced the Ford F-150 Lightning, an electric F-150 that is almost indistinguishable from a traditional F-150 in appearance. These two trucks are set to hit the market in 2022, and I am fascinated to see how they will measure up. Though you cannot buy either of these trucks from the dealership just yet, we still can compare them to see each’s advantages and disadvantages.

Performance

The performance for the dual motor versions of each truck is remarkably similar, with the Cybertruck at a slight edge.

For both, 0-60mph is around 4.5 seconds.

The F-150 Lightning upgraded version (about the same price point as the Cybertruck dual motor) has 563 horsepower, and the Cybertruck has an estimated 690 horsepower (motortrend.com). Take this with a grain of salt as Tesla hasn’t released numbers like the truck’s horsepower, and that number is only an estimated number.

The F-150 Lightning has 775 lb-ft of torque, and the Cybertruck dual-motor is estimated to have 824 lb-ft of torque. For reference, a gas-powered 2021 F-150 has 570 lb-ft of torque.

Both models (including the upgraded F-150 Lightning) have a 300-mile range.

*stats from ford.com, tesla.com, and kbb.com.

Exterior and Interior Appearance

Obviously, the Cybertruck is not exactly trying to fit in. Those who purchase the Cybertruck are looking to stand out. This is pretty much the stark opposite of the F-150 Lightning. This truck is barely distinguishable from the normal F-150. I have to say that the appearance of the Cybertruck is certainly limiting its market. While the Cybertruck might have superior performance, it has a look that only a specific consumer likes. In my opinion, if the Cybertruck adopted a more tame look in line with Tesla’s other cars, it would most definitely end up selling more trucks in the long run. The appearance is the most clear difference between these two vehicles.

The interior of the Cybertruck follows suit with the exterior. Instead of a steering wheel, it has an airplane-inspired yoke. All features are available in the 17-inch display, and, of course, there is no switchgear (kbb.com). The F-150 has an interior very similar to other Ford 2021 vehicles, with a 15.5-inch touchscreen in the middle of the dash.

Ford F-150 Lightning Advantages

Ford is touting the Lightning’s ability to be used as a backup generator for your entire house for three days (with a full charge)! There are also multiple outlets on the vehicle to use during a camping trip or whatever you please. The F-150 Lightning also appeals to a different market than the Cybertruck in my opinion, simply because of its appearance. The Lightning is a clear attempt to create an electric vehicle meant for work and practicality. The Cybertruck is probably competing more with the Raptor crowd, looking for high performance and flash. The F-150 also has an actual steering wheel.

Cybertruck Advantages

The most clear advantage of the Cybertruck is the option for a tri-motor truck. This truck has the performance of a sports car, with a sub 3 second 0-60 mph, 800 horsepower, and 1,000 lb-ft of torque. For reference, 18 wheelers have 1,000-2,000 lb-ft of torque (auto.edu). This much performance is far beyond practicality but will certainly attract the certain niche sporty-truck audience. You can also, of course, use Tesla chargers.

Pricing

F-150 Lightning:

*NOT including possible upgrades, all models are double motor, all wheel drive.

Lightning Pro: $39,974

XLT: $52,974

Lariat: $58,630

Platinum: $69,500

All Possible Upgrades: $90,474

Eligible for $7500 Tax Credit (kbb.com)

Cybertruck:

Single Motor: $39,900 (rear-wheel drive)

Double Motor: $49,900 (all-wheel drive)

Triple Motor: $69,900 (all-wheel drive)

Editor-in-Chief: Hannah Hall

Sources:

https://www.kbb.com/comparison/ford-f-150-vs-tesla-cybertruck/

https://www.ford.com/trucks/f150/f150-lightning/2022/

https://www.tesla.com/cybertruck/design#battery

https://www.motortrend.com/news/tesla-cybertruck-electric-pickup-fast-0-60-range-payload-towing/

https://www.ford.com/trucks/f150/features/power/

Student Loan Debt, Its Effect on the American Economy, and If We Should Forgive it All

May 26, 2021 by szachik@pvs.org Leave a Comment

Blogger Jake writes about a costly epidemic crushing our nation, specifically putting a huge burden on young people who are fresh out of college with a mountain of student debt trying to survive in an increasingly expensive world.

By Jake Sonderman, Business Editor

As of the first quarter of 2021, total student loan debt is numbered at $1.74 trillion (fred.stlouisfed.org). The average student loan debt amount, for the 43.2 million people with student loan debt, is $39,351. The average interest on these loans is 5.8%; the average monthly payment is $393, and the average timeline to pay off the loans is 20 years. 15% of American adults have student loan debt, of whom 82.3% are above the age of 25 (educationaldata.org). In 2016, 3% of individuals 65 to 74 were still paying off student loan debt (washingtonpost.com). The primary cause of this is skyrocketing tuition rates, which have risen 183% since 1998, 3x faster than the rate of inflation (aei.org), second only to rising hospital service costs.

So how does student loan debt affect our economy?

First, it hurts the housing market. When adults have to pay monthly payments on a student loan, they are less likely to take out a mortgage on a house and add to their monthly bill. The Fed’s survey of consumer finances notes that student loan debt kept 400,000 individuals from home ownership. This contributed to 2% of the 8.8% drop in home ownership for those 20-40 from 2005 to 2014 (washingtonpost.com).

Student loan debt also stifles entrepreneurship. According to Prof. Karthik Krishnan of Northeastern University, individuals who graduate with $30,000 in student loans are 11% less likely to start a business (cnbc.com). This is due to of course a lack of capital because of the student loan, and because of difficulty obtaining credit to start a new business.

The Federal Reserve has also stated that it intends to do more research on the effect of student loan debt on credit later in life, and that preliminary data suggest that “higher student loan debt early in life leads to a lower credit score later in life” (washingtonpost.com). Ability to obtain credit not only has an effect on the housing market and entrepreneurship, but on the auto industry and other industries that rely on credit to sell their products.

All of this has led to calls by progressives such as Senate Majority Leader Chuck Schumer (D) to forgive $50,000 of student loan debt. This call sounds very appealing at first glance, and forgiving this much debt would certainly give an adrenaline rush to the economy, but I don’t think it is a good idea, and I don’t think it is a very progressive idea.

Those with college degrees make substantially more money than those who don’t. As of 2020, high school graduates made a median salary of $38,792 a year, while college graduates with a bachelors made a median salary of $64,896 (Northeastern.edu). Student loan debt forgiveness is, in practice, a stimulus check for people with student loan debt. Student loan debt forgiveness would have an anti-robinhood effect, giving more money to those who make more money. This is also exacerbated by the fact that those with master’s and doctorate degrees make substantially more than those with a bachelor’s degree, and also have more student loan debt (educationdata.org). This is why it almost surprises me that some progressives are pushing so hard for this, as it would certainly contribute to more income inequality. And, even if we did shell out the trillions of dollars to do this, it’s still treating the symptoms rather than the problem, as college would still cost the same–and students would continue to take out loans to pay for it.

This doesn’t mean there is nothing we can do to fix the problem. These solutions are solely my opinion, so take them with a grain of salt. The root cause of rising student debt is rising tuition rates. This is simply caused by rising demand over the past decades. The New York Fed has also reported that for every dollar of federal loan expansion and Pell Grants, tuition increases by 55-65 cents (forbes.com). This means that expanded federal loan programs and grants are essentially putting gasoline on the fire. There’s not an obvious solution or an easy fix to this problem because having high demand for college is a good thing and having federal support to pay for it is also good. In my mind, there are two options that aren’t necessarily mutually exclusive. One, mandate that public universities justify tuition increases and require justification not include non-teaching staff and substantial wage increases for that small number of administration officials at the top. Two, roll back federal grants and loan programs. I know this sounds totally backwards, since these two things are entirely for the purpose of helping more people go to college. But, if federal grants and loans drive up tuition, even for those receiving grants, then doesn’t that defeat the entire point? The rollback of these programs would of course have to be followed by regulation to ensure that predatory private loans don’t take the place of federal loans.

This issue is very real to us seniors graduating and continuing on to college. To those who aren’t yet seniors, my advice would be to strongly consider scholarships for a college that might not be your first choice versus taking out loans for your first choice. Choosing a college is incredibly hard and also important, but name and size really aren’t as important as they always seem to be. I hate to say it, but it’s not just about what college you go to, it’s about what you do while you’re there.

Editor-in-Chief: Roman Rickwood

Sources:

cnbc.com/2018/10/22/starting-a-business-when-you-have-student-loans-can-be-a-challenge.html

https://www.washingtonpost.com/business/2019/01/18/student-debt-has-kept-home-ownership-out-reach-young-families-fed-reports/

https://www.federalreserve.gov/econres/scfindex.htm

Chart of the Day…. or Century?

https://educationdata.org/student-loan-debt-statistics

https://www.northeastern.edu/bachelors-completion/news/average-salary-by-education-level/

https://www.statista.com/statistics/274636/combined-sum-of-all-holders-of-mortgage-debt-outstanding-in-the-us/#:~:text=The%20total%20mortgage%20debt%20outstanding%20in%20the%20U.S.%20amounted%20to,the%20third%20quarter%20of%202020.

https://www.forbes.com/sites/ccap/2015/07/21/the-bennett-hypothesis-confirmed-again/?sh=8142609794ac

The Roaring 2020s

May 19, 2021 by szachik@pvs.org 1 Comment

Coming out of quarantine, we see the streets filled with people and hints that life is returning back to normal. What does this mean for the economy? Let’s ask Business Editor Jake Sonderman! — Editor-in-Chief Sara Habibipour

By Jake Sonderman, Business Editor

We are entering a new decade as the American people. We are just starting to come out of a deadly pandemic that has killed hundreds of thousands. We have been involved in military conflict around the globe in the previous decade but seem to be moving more towards isolationism with some calling for “America First.” But, on the bright side, consumer demand seems to be rising at a brisk pace and isn’t showing signs of slowing down. Only, the year isn’t 2021; it’s 1921!

Warren G. Harding campaign poster - Warren G. Harding Collection - — President Warren G. Harding, 1921-23

The 1920s are a well known period of economic growth and consumerism. They saw the introduction of technologies like the radio, combustion engine, and refrigerator. America had just come out of the Spanish flu, which killed 675,000 Americans (there were 100 million Americans at the time) (biospace.com). The decade was also a period of isolationism and tariffs. Presidents and Representatives campaigned on the idea of “America First.” Congress enacted the Fordney-McCumber Act, which raised tariffs to 40% pretty much across the board (britannica.com). The Hawley-Smoot tariff was enacted just as the Great Depression hit, raising tariffs by another 20%, making a bad problem worse (Britannica). By today’s standards, this would be considered a “trade war” with Europe.

Some of this might sound familiar. We are again exiting out of a world-wide pandemic that has killed hundreds of thousands in America. Markets are reaching record highs monthly and consumer demand for things like cars and houses is through the roof. Under Trump, we entered a trade war with China, raising tariffs to nearly 20% for $350 billion in goods (cnn.com). That’s not quite the same as the 1920s tariffs, but we are certainly moving in that direction as Biden does not seem to oppose the tariffs (cnn.com).

But, what about consumerism in the next decade? Will we truly, again, enter into a new Roaring 20s?? Well, short-term, it would seem like “Yes.” Median predicted GDP growth for the year is 4.7% (Bloomberg). We are seeing innovations in electric vehicles, renewable energy, machine learning, artificial intelligence, and more. But, long-term economic growth rivaling that of the 1920s is not likely. Breakthroughs in information technology and biotech simply do not rival the innovation of the combustion engine and widespread electricity (Bloomberg). Robert Gordon, economics professor at Northwestern University, is a proponent of the idea that “there is no chance of sustained decade-long growth that matches the achievement of the 1920s” (Bloomberg). Though we are still the world’s largest economy, we do not have near the production capacity of the 1920s and no tariff or government spending can bring us back.

But, that’s okay! We are not the same economy. We probably won’t see the same decade-long boom the 1920s did, but steady, healthy growth is certainly achievable. So, in short, no, we are not entering the “Roaring 2020s.” But, personally, I think with the innovation happening because of COVID (check out Blogger Erik Bearman’s article for more about that) and confidence from investors in the American economy, we can see a decade of economic prosperity.

Second Editor-in-Chief: Sara Habibipour

Sources:

https://www.biospace.com/article/compare-1918-spanish-influenza-pandemic-versus-covid-19/#:~:text=More%20than%2050%20million%20people,is%20calculated%20at%20about%202%25.

https://www.bloomberg.com/news/features/2021-01-26/roaring-twenties-2020s-will-try-to-roar-like-1920s-after-covid

https://www.britannica.com/topic/Smoot-Hawley-Tariff-Act

https://www.cnn.com/2021/03/24/politics/china-tariffs-biden-policy/index.html

Tax Cuts?

May 14, 2021 by szachik@pvs.org Leave a Comment

Politics is conflictual by nature, and just one of the many controversial issues that divide the parties is that of tax cuts. The blog’s resident Business Editor and economics buff, Jake Sonderman, offers an analysis of this issue.

By Jake Sonderman, Business Editor

“What we don’t need is more spending, and what we don’t need are taxes, and what we do need is a lot less of both.”
— Ronald Reagan

It is the age old question. Tax more, or tax less? In 2017, under Donald Trump, the Tax Cuts and Jobs Act was passed, and after-tax revenue for the top marginal income tax bracket went up 3% (taxpolicycenter.org). So it would seem that the “tax less” side had won. But, with President Biden in office, it seems inevitable that taxes will go up for some to offset spending in many other areas. There is a lot of criticism on both sides of the aisle on tax policy, with Republicans ripping Biden for proposed tax hikes, and Democrats ripping Trump for tax cuts for the rich. I would like to put a pin in the politics of this issue for a second and discuss whether tax cuts are really productive for an economy and whether they do indeed “pay for” themselves.

Are Tax Cuts Productive?

To start, any tax cut will result in more money in the hands of citizens. For a tax cut or any spending to be effective, it needs to “multiply” or circulate through the economy instead of simply going straight into the bank. So if any tax cut puts more money into the economy, who should get the tax cut to make it the most “productive”? Owen M. Zidar at The National Bureau for Economic Research looked back at history to see which tax cuts are the most effective in states in terms of employment growth. He found that tax cuts for low-income brackets produce substantially more growth than tax cuts for income brackets in the top 10%. Specifically, he found that a 1% tax cut for the bottom 90% of earners resulted in 3.4% employment growth over two years, and that a cut for the top 10% produced 0.2% employment growth over the same period. (nber.org)

Summed up, tax cuts are productive for the economy. But tax cuts for low income brackets produce much more growth than tax cuts for higher brackets.

Do Tax Cuts “Pay For” themselves?

The short answer to this question is “No.” For a tax cut to “pay for” itself, it would need to produce an absurd amount of economic growth. For example, if the government introduced a tax cut that costs $200 billion and brings the income tax rate to 20%, the tax cut would need to produce about $1 trillion in growth. 20% of $1 trillion is $200 billion. This is an oversimplified essence of the idea. The idea that tax cuts produce more revenue for the government is based on the Laffer curve, an idea adopted in the Reagan era. It is based on the idea that if an income tax rate is 100% or 0% the government will receive the same amount of revenue. In the Laffer curve, there is a “sweet spot” where the government produces the most amount of revenue (investopedia.com) (taxpolicycenter.org).

The problem with referring to the Laffer curve in my opinion is that it is often used out of context and used incorrectly. The Laffer curve is often misconstrued to say that somehow lowering tax rates for high income earners and large corporations will result in booming growth that pays for itself entirely. The Laffer curve has to work both ways, meaning that cuts can substantially lower tax revenue if the tax rate goes too low.

Too often politics gets in the way of the facts when it comes to taxes. Too often politicians say “tax cuts” when they mean tax cuts for only high income earners. Tax cuts are an economic tool that can be more effective even than government spending, but they are only sometimes used effectively. Tax cuts for low income earners undoubtedly spur substantial employment growth, and those are, in my opinion, the tax cuts we should be talking about.

First Editor-in-Chief: Elizabeth Shay

Sources:

https://www.taxpolicycenter.org/briefing-book/do-tax-cuts-pay-themselves#:~:text=Cutting%20tax%20rates%20thus%20almost,percent%20of%20the%20tax%20cut.

Click to access w21035.pdf

https://taxfoundation.org/the-distributional-impact-of-the-tax-cuts-and-jobs-act-over-the-next-decade/

https://www.investopedia.com/terms/t/trickledowntheory.asp