Anyone who believes in magic is a fool – Harry Houdini.
Something is mesmerizing about a magic act, how a well-trained magician can use their abilities to captivate the crowd and take them to what seems like a different world. These magicians can make things fly, disappear, or reappear in the blink of an eye. The entertainment value they provide is fun at the moment it is seen and can last for a few days.
A good magician keeps the audience from knowing exactly how the illusions are created and frequently keeps them engaged by moving from one illusion to the next. By the end of the show, the audience is entertained but questions how the various tricks were performed.
When we go see a magician, we know what to expect from them because we want to be separated from reality for a while and taken to a place where illusions seem real.
Every so often, we encounter illusions in real life. One is happening right now. We have seen the illusion of inflation turn into the reality of struggle. As prices have gone up, it has become more challenging to make the income necessary to purchase even basic goods and services needed to survive.
People are starting to make difficult decisions about where to spend their hard-earned dollars. Reports have shown that people who make over $250 thousand have less than $1000 for emergency expenses. This type of income used to be considered the top 5% of all income earners, but now it is not.
The illusionists keep telling us that prices have increased by 22% for groceries, 23% for dining out food, 25% for fuel, and 27% for auto insurance costs. The reality will tell you that these numbers are significantly higher. So, who will you trust? What your wallet, or what the assumed experts are saying? Most people believe these price increases are much higher and do not take themselves as fools.
Meanwhile, as prices for what we buy go up, the cost to produce these goods has gone up as well. Henry Ford was not only recognized for his design of the assembly line but also for his willingness to pay his employees a wage that would allow them to buy the cars they made. Now, wages are not able to keep up with the goods produced.
The challenge is that companies are obligated to their employees and shareholders. Suppose the cost to produce goods erodes the company's earnings potential. In that case, the company will reduce employee headcount and may even reduce their operations or move the operations. We are starting to see this right now as more and more companies are laying off employees, moving their business from one state to another (it seems like companies based in California have been leaving consistently) due to tax burdens or working conditions, or they are even moving to other countries as Ford recently announced they will be moving more manufacturing to Mexico because labor costs are cheaper.
We have been part of a grand illusion to make everything appear suitable, but that illusion is beginning to fade, and reality is setting in. Recognizing this is important to be prepared for what will happen in the future. Magically, all the financial data produced has been of the Goldilocks variety, where it is not too bad and not too good.
Don't be enthralled by the illusion. Sooner or later, reality will set in, and that will be when real challenges will begin. Change will be necessary, even if it is not desired. Go forward and break the change.