Why We Need a Recession

Inflation is up. Not just a little. A lot. And according to the standard definition, the US is in a recession.

Working- and middle-class Americans have noticed. Everything from milk to toilet paper to automobiles and airline tickets are going up fast. And they are looking for someone or some thing to be angry with.

The conservative media are blaming the Biden administration and the Green New Deal for the state of the economy. And it’s going to worse, they say, because of the insane levels of unfunded spending by the Democrats to shore up their chances of doing well in the mid-terms. They cite the trillions spent during the first year of Biden’s presidency. And they are lambasting the Orwellian-named Inflation Reduction Act, pointing out that it will add at least another $600 billion of fuel to the inflation fire.

The Biden administration and the mainstream media are disputing both points. As to inflation, they point out that July’s numbers were down slightly from June’s. (About one-half of one percent.) And they are denying we are actually in a recession.

The standard definition of a recession is two consecutive quarters of lower GDP. This, in fact, did happen from January to June this year. But the Biden administration and the mainstream media and their pundits are noting that official unemployment rates are very low. How can we be in a recession when there are two jobs waiting for everyone that wants one?

It’s confusing. Doubly so because it is so political.

My take: Inflation is here to stay. But it’s not the fault of the Biden administration or the Democrats. Or rather, it’s not solely their doing. Inflation is the natural and inevitable response to what our government has been doing since Nixon unhooked the value of the dollar to the price of gold bullion in 1971. Since then, every administration, Democrat or Republican, has continued to print heaps of fake dollars. The only thing one can fairly and accurately state about this is that the overspending has accelerated drastically since 2008. Today, federal debt exceeds $30 trillion.

What most people don’t realize is that the government can’t magically make that debt disappear. It has to “balance” its books by finding money to pay off the interest on it. It does so by selling Treasury bills. To attract buyers for those bills, it has to offer an attractive interest rate by raising the federal lending rate. Which the Fed is currently doing.

The problem is that when you raise the federal interest rate, you make it more expensive for everyone – banks, businesses, and even the government – to do their business. That means charging more for loans, products, and services, which has to be paid for by taxpayers. Both commercial taxpayers and working people. Those rising costs result in less business growth and less consumer spending. And that, my friends, leads to continuing higher prices, lower economic growth, and higher unemployment.

That’s the bind the US finds itself in now. There is no magic cure. The fiddler must be paid. And it’s done in two ways: inflation and/or recession.

That’s how I see it. In a future issue, I’ll tell you what I’ve done (and am still doing) to protect myself and my family from what seems inevitable.

Meanwhile, I found what I thought was a very clear and simple explanation of all this by Ramin Nakisa from PensionCraft. He believes that the Fed will continue to battle inflation by raising interest rates. That will prolong and possibly deepen the current recession. But he also believes that a moderate amount of inflation is not such a bad thing.

You can hear his argument here.

 

How College Broke the American Dream

For decades, a college degree has been considered the ticket to a better life. And for decades, quality-of-life studies verified that idea. College-educated kids not only earned a good deal more money than their less-educated peers, they lived better, had better health, and lived longer. So did their children. And so, for decades, parents and students willingly went into debt to achieve those advantages.

As the years passed, however, the costs of a higher education increased at rates well above inflation. Today, the total student loan debt is at $1.8 trillion! That’s not good for the economy.

First-year college-educated kids still earn a good deal more than kids with a high-school diploma. But do they earn enough over their careers to take on a six-figure level of debt? Parents are worried. And rightly so. Recent studies have shown that some degrees – e.g., in engineering and medicine – are still financially justified. But as for kids that go on to become teachers and social workers and speech therapists, the numbers look grim

Click here to read a CNBC article on the subject.

And click here to watch Charles Mizrahi interview Will Bunch, the author of How College Broke the American Dream and Blew Up Our Politics.

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Hybrid, Not Remote, Working Is the Future 

In the executive boardrooms of the companies I work with, the debate about remote vs. in-office working rages on. Well, rages is not fair. It continues, but with less vehemence and certainty, as employees and their managers try out different arrangements.

In a recent study conducted by Future Forum, 34% of workers said they were working full-time (30+ hours a week) in the office. 48% said they were working in a hybrid arrangement, and 18% said they were working full-time remotely.

In my industry (digital publishing), the percentage of employees working full-time is considerably less than 34%. According to a very casual survey conducted by yours truly, it ranges from zero to 10%.

The Future Forum survey also reported that 80% of participants want flexibility in where they work and 94% want flexibility in when they work. But few want their offices to disappear. Two-thirds of those surveyed said they want their offices to say open as an anchor for interacting with other employees, for “collaborating with co-workers/clients, building camaraderie, and facilitating in-person meetings.”

Click here for details.

 

This Sounds Like Another Political Conspiracy Theory, but It’s Fact!

Boy… this is weird. And worrisome. It will surely be called another conservative conspiracy theory. But I’ve double-checked. And it looks like it’s true. Here is the story, in brief:

The US Census Bureau just released a statement saying it had, in the 2020 census, “miscounted” the populations of 14 states. It overcounted the populations of eight states and undercounted the populations of six. And not by a little. Or without a big effect. Because the miscounting had a major impact on the subsequent rearrangement of the Electoral College, which, as we all know, plays the most important role in the outcome of our federal elections.

The result significantly favors the Democrats and hurts the Republicans, since seven of the overcounted states were blue. And five of the undercounted states were Republican.

What it means: When the Census Bureau reapportioned the House of Representatives, Florida was cheated out of two additional seats it should have gotten. Texas missed out on another seat. Minnesota and Rhode Island were each able to keep a representative they should have lost. And Colorado was awarded a new member of the House that it didn’t deserve.

Click here and here to learn more.

 

Another “Victory” for Identity Ideology

I swear. I did not get this from The Onion or The Bee

In a split decision, the 4th Circuit Court of Appeals ruled that a prisoner in Fairfax County, VA, that identified as female should be housed with female inmates. Even though he retains his male body parts.

The “enlightened” perspective on this is that if a man with a penis really believes he’s a woman, it would be cruel and unusual punishment to have him locked up with a bunch of men. His fellow prisoners might berate him or, worse, use him unwillingly as a woman.

The “transphobic” perspective is that this guy might be looking to hang out with a building full of women, showering with them, and possibly trading chewing gum for favors.

I’m confident that both points of view will be proven both right and also wrong.

Regardless of one’s perspective, the background of the suit and the legal arguments make for fascinating reading. I’ve gathered two reports on this. One from the conservative-leaning Daily Signal news site, and another from the left-leaning Washington Post. You can read them here and here.

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How safe are your kids and grandkids?

It’s not common, but there are predators out there kidnapping children. According to a study I recently read, they don’t do it by swooping in and scooping them up. They do it by beguiling them and luring them away from their yards or playgrounds.

Are your kids or grandkids in danger of being stolen? Have you given them the tools to avoid “stranger danger”? Check out this social experiment. It’s eye-opening.

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Do wine aerators really work? 

In this video from the Bonner Private Wine Partnership, Julien Miguel puts them to the test.

 

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Au fond (oh FAWN) – a French term – literally means “at the bottom.” It’s used as a highfalutin synonym for “fundamentally,” “essentially,” or “in reality.” As used by Margaret Atwood in The Testaments: “Some days I see myself as the Recording Angel, collecting together all the sins of Gilead, including mine; on other days I shrug off this high moral tone. Am I not, au fond, merely a dealer in sordid gossip?”

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Another short, little gem from Omeleto…

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