Economy: When Does the Other Shoe Drop?
soon, cupcake, soon
I have this conceit, that, because of my staggering knowledge and understanding of the world, I am always too far out in front in predicting the trend of the economy.
For instance, I think that, given the money printer go brrr in 2020 and 2021, that we were bound to have a rendezvous with stagflation and recession.
So at Instapundit, they are noting that credit card debt and interest rates are sky-high. And then they note the Wahington Post take.
“The federal deficit is projected to roughly double this year, as bigger interest payments and lower tax receipts widen the nation’s spending imbalance despite robust overall economic growth.” [Emphasis added.]
Yeah, yeah. Except that “Biden’s deficit spending is the growth.” That’s the meaning of the Inflation Reduction Act and all the spending that Sen. Manchin (D-WV) whined about but eventually voted for.
And then there is Stein’s Law, that if something cannot go on forever, it will stop.
I was reading a similar take on national politics in Britland, where the Labour Party has a five point agenda: High growth; Clean energy; Build the NHS; Fix crime; Break barriers to opportunity.
Do you not see, dear Labourites, that “high growth” doesn’t go with “clean energy” and “build the NHS.” Especially if the NHS continues as “free at the point of delivery?”
But that’s the point of modern government. It is full of ideas to make the world a better place. With justice. With fairness. With protection for the traditionally marginalized.
Only if it all adds up to 35-40 percent of GDP rigidly controlled by the government and the ruling class, then. Well, that’s a heck of a lot of the economy that can’t and won’t respond to changing conditions on the ground. Not until something breaks.
So, the Biden administration proudly passed a ton of new spending to implement its vision of a world without climate change and a world without systemic racism.
Unfortunately, such a mission misses out on the needs of the ordinary middle class. Like these middle-class blacks who are a bit miffed about the economy right now. Leo Beatty works for US Steel, according to Salena Zito:
“Biden dropped the ball for me on inflation, so no I don’t think he’s doing a good job — not just because I don’t think he has the cognitive ability to do it effectively, but because he knows no one like us. And by that I mean middle-class America,” said Mr. Beatty, who is now a registered Independent.
And Zito goes on with a bunch of other quotes from these middle-class blacks. That’s my point, of course. When middle-class people can’t live their lives in moderate tranquility they start to reckon that the gubmint just has no clue about “people like us.” Race and gender and whatnot don’t matter then.
That’s the point about politics. If you raise your arm from the podium and promise to make the world clean and just, people will nod their heads. Who doesn’t want justice and peace? But what they really expect and desire is to live lives of moderate prosperity with a decent job, with their family and in their neighborhood. And they don’t get it when the result of the glorious vision of peace and justice adds up to inflation and stagflation, followed by recession.
After all, ain’t you experts supposed to have figured all that stuff out, already?
It often amuses me how our liberal friends sneered at Reagan and Thatcher. Tax cuts? Reducing spending? That’s what you think the country needs? While the patriarchs rule over all? While the planet is roasting from climate change? Yes, cupcake, because then the gubmint takes less money and leaves more for ordinary people to live their lives in peace and tranquillity.
In fact, of course, all government spending and programs and subsidies and handouts are a corrupt mess and are all setting up problems for the future. And when the inflation, and the high interest rates and the bank failures and the electricity blackouts occur, for some reason it’s all the fault of bad actors like greedy bankers and corporate profit-seeking — and that racist behind the tree — rather than sauntering politicians.
Now, of course, I’m a bit too quick to see economic disaster around the next corner arising out of big spending, big climate, big NGO, big money printer go brrrr.
But, of you are an economic forecaster or a political handicapper then you’ll notice that the voters in the ordinary middle class are already hurting. If I were a ruling class supporter I wouldn’t be feeling good right now. Of course, it’s wonderful that dozens of ultra-MAGAs and Proud Boys and “armed insurrectionists” are going to jail for a decade or two. But that doesn’t really register with the ordinary middle class deplorable. What matters to them is an affordable house, a decent job, and a good school for the kids.
All stuff in pretty short supply right now.