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America The Emerging Market
It's no secret that the last four decades haven't been especially kind to Main Street.
Sure, the pandemic and, now, inflation, were outright cruel to "regular" people, notwithstanding the extent to which stimulus programs of various sorts temporarily reduced poverty. Like every other sort of hardship, the scourge of the virus and, later, the weight of inflation, were borne disproportionately by those least able to handle them.
If the question is whether a hypothetical poll of every person in t
The problem in America has been the poor government social safety net. This a result of greed, foreign adventure spending, and too much baseline spending on defense. Public goods are far underfunded. As a result, risk of very poor outcomes are shifted to those that can least afford it and when there is economic structural change instead of adapting it is seen as a major threat (which it is for those without the adequate safety net). Want to make the USA strong and resilient? Build up public goods and make sure there is more opportunity for those in the bottom 2/3 income strata.
Yes
Before you bash US military spending- the untold truth is that the US military provides one of the best opportunities for low income and uneducated people to improve themselves financially, gain work experience and get educated.
Military spending I am talking about is on weapons primarily. But if we did shrink our standing military, there is a lot of other ways to emply people that is a lot more productive for society than toting a rifle. (Building bridges, roads water and sewer systems, teaching in poor areas, health care for poorly covered, you get the drill). Military spending is one of the most capital intensive enterprises around. If you spent government funds on other things, you would get more not less employment opportunities. And lower inflation when productivity went up.
Been alive in Main Street for 4 decades and this sham of a meritocracy is all I’ve ever known.
Agree with RIA here. The government should maintain a baseline of decent support for folks living on the brink.
In general, people are proud and few actually want to get paid to sit on the couch all day. Let them sit I say. Proctor and Gamble doesn’t care.
The problem is that powerful charlatans rule on fear. A baseline of support obviates a life in fear.
There are many opportunities for government to help and this will also help get folks off the couch.
The inflation rate for consumer prices in the United States moved over the past 61 years between -0.4% and 13.5%. For 2021, an inflation rate of 4.7% was calculated. During the observation period from 1960 to 2021, the average inflation rate was 3.8% per year.
The above is copied and pasted from Google, perhaps this is where we are going?
USA USA is NOT an E-merging Market……it is SUBmerging
One thing this post brought to mind is the question of what happens next. Real wage growth has been in the basement since the early eighties for sure. But more recently in response to the sudden bump in inflation and the shortage of workers, nominal wages have surged, especially at places like Walmart, McDonald’s and other previously low wage havens. Overall the trend in rising wages hasn’t created much, if any, net real wage growth. Cut to 2023 or 2024 when inflation has started to fall, mostly a result of pushback from consumers, In my econ classes I was always taught that wages tend to be “sticky downward.” Once WMT has raised its starting pay it’s unlikely to turn around and cut it in two years. That means those rising labor dollar costs will stay there, raising costs and hitting profits, especially when inflation goes to 2 or 3 percent.
If inflation doesn’t peak and start dropping and if the Fed doesn’t at least pause on further rate hikes, I think the coming or current recession is going to be far worse than anyone anticipates. The consumer is just starting to feel the pinch now, I know from what I see with friends and family around me right now, their mortgage rates have already gone up hundreds of dollars and then the added cost of food and fuel is putting a lot of them under water already. I live in Vancouver Canada and most mortgages up here are variable rate.
God help us if there’s a credit event or black Swan geopolitical event (think China).
I’m sure H is familiar with her and possibly most his subscribers but Pam Martens writes excellent articles, Mostly exposing FED and politicians unethical or corrupt behaviour.
Worth a read, make sure to use “reader view”.
https://wallstreetonparade.com/2022/08/astonishing-charts-from-new-york-fed-show-the-dire-straits-of-u-s-consumers-during-the-2008-crash-and-its-aftermath-versus-today/
+1. Thank you for the link to Pam Martens. I had not heard of her. Her Aug 9 article on China was precious. Thanks again!
Few generalized comments here…1) I’m anticipating moribund growth and elevated inflation for the foreseeable future. 2) I believe Powell succumbed to Trump’s intimidation and kept QE way too high too long given that Congress had enacted significantly expansive and multiple monetary stimuli. 3) I am thankful and comforted that Janet Yellen is an influential person at present. 4) I remain forever shocked and terrified that Trump was allowed to meet privately with Putin, and now there’s reports that highest level classified nuclear information and technology were the basis for the FBI’s raid. 5) I find Every’s commentary eloquently brilliant here…thanks so much, H., and GLTA…