Car Rentals Explain What’s Happening In Our Economy

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Whitney Tilson’s email to investors discussing how car rentals explain the 2021 economy; how accounting giants craft favorable tax rules from inside government; revolt of the delivery workers.

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Q2 2021 hedge fund letters, conferences and more

How Car Rentals Explain The 2021 Economy

1) I think what's happening in the car rental sector is a representative case study for what's happening in our economy – extreme dislocations during and in the first phase of the emergence from the COVID-19 pandemic, followed by a slow return toward normalcy – which bodes well for the future: How Car Rentals Explain the 2021 Economy. Excerpt:

Few markets better crystallize the topsy-turvy nature of the American economy during the pandemic than the rental car business.

The industry shows how economic decisions made in 2020 keep having serious implications in 2021. While most other industries have experienced less severe swings, the same basic dynamics apply. These dynamics explain why inflation and product shortages spiked earlier in the year – and why they are starting to abate but are not yet close to prepandemic norms.

How Accounting Giants Craft Favorable Tax Rules From Inside Government

2) Kudos to the New York Times for exposing this outrageous revolving door that screws all of us: How Accounting Giants Craft Favorable Tax Rules From Inside Government. Excerpt:

The largest U.S. accounting firms have perfected a remarkably effective behind-the-scenes system to promote their interests in Washington. Their tax lawyers take senior jobs at the Treasury Department, where they write policies that are frequently favorable to their former corporate clients, often with the expectation that they will soon return to their old employers. The firms welcome them back with loftier titles and higher pay, according to public records reviewed by the New York Times and interviews with current and former government and industry officials.

From their government posts, many of the industry veterans approved loopholes long exploited by their former firms, gave tax breaks to former clients and rolled back efforts to rein in tax shelters – with enormous impact.

Revolt Of The Delivery Workers

3) Talk about the dark underbelly of capitalism...

I wasn't surprised to hear that being a delivery person was a tough job, but hadn't realized just how horrific it is: Revolt of the Delivery Workers. The next time you order from Uber Eats, DoorDash, or Grubhub-Seamless, be sure to tip generously! Excerpt:

Even before the thefts started, the city's 65,000 delivery workers had tolerated so much: the fluctuating pay, the lengthening routes, the relentless time pressure enforced by mercurial software, the deadly carelessness of drivers, the pouring rain and brutal heat, and the indignity of pissing behind a dumpster because the restaurant that depends on you refuses to let you use its restroom.

And every day there were the trivially small items people ordered and the paltry tips they gave – all while calling you a hero and avoiding eye contact. Cesar [Solano] recently biked from 77th on the Upper East Side 18 blocks south and over the Ed Koch Queensboro Bridge, then up through Long Island City and over another bridge to Roosevelt Island, all to deliver a single slice of cake for no tip at all. And now he had to worry about losing his bike, purchased with savings on his birthday.

Best regards,


P.S. I welcome your feedback at [email protected].