The long-term impact of the federal government's actions in the wake of the Covid-19 pandemic is still being felt by consumers today, although U.S. stocks continue to thrive globally, according to TV personality Roben Farzad. 

Farzad, the host of National Public Radio’s “Full Disclosure” program, spoke Tuesday to kick off the second day of the eMoney Summit, where he discussed the state of the economy and potential trends.  

He discussed the government’s response to the pandemic—the infusion of stimulus checks into the economy as well as the controversial Paycheck Protection Program (PPP), which offered forgivable loans to certain businesses as long as they did not reduce their employee rosters.   

Farzad described PPP as an inflationary program that directly led to record high prices at the gas pump and the grocery store. Those high prices have severely hindered the average consumer, he said, and it’s part of a larger trend.

“The purchasing power of the U.S. consumer dollar has been obliterated over the last several decades,” he told the audience. 

Farzad pointed out that the consumer price index in multiple areas has gone up, including the CPI for groceries, which is up more than 22%; gasoline is up 44%, home prices are up 47%, and auto insurance is up almost 60%, he said. The high prices have forced the average consumer to seek less-desirable ways to pay down their bills. 

“If you are unable to stretch out that dollar, if it’s not invested you have to use more expensive credit cards to make your inflationary ends meet,” he said. “And credit card interest rates are at highs we haven’t seen in a long time.”  

The biggest problem has been interest rates, which Farzad said were kept too low for too long. For many consumers, using credit cards to help pay bills—especially during a period of high interest rates—is just not sustainable.  

“This is a horrible, horrible tax on people [and] you’re always behind,” he said. “If you’re using plastic to make ends meet, you’re just trying to push sand against the tide, I guess.”  

The pain has not been felt not only by consumers, but by banks as well. Last year, several banks failed, including Silicon Valley Bank, Signature Bank and First Republic Bank.  

“The institutional memory is not there [and] when you see interest rates run up the way that they did, we suddenly saw a bunch of bank failures, some of them ... during no apparent financial crises,” he said. “The fact [is] that they didn’t quite understand risk management and the yield curve.”  

Despite these issues, U.S. stocks have performed much better than others globally. Since October 2007, the MSCI USA Index has increased by 420%, when there was only a 40% increase in emerging markets, a 67% increase in 10-year Treasury bonds and a 79% increase in the EAFE index (representing Europe, Australasia, and the Far East). 

“It blows my mind, but ... since the global financial crisis, the United States has smoked the rest of the world,” Farzad said.   

While U.S. companies have been strong for more than 10 years, he cautioned that the tide will turn again, although he was not sure when.   

The question mark for all investors is China. Farzad said the country has not experienced a so-called hard landing—but it’s poised for one. That could ultimately affect other emerging markets and even the United States.