Economy

Cockburn was on one of his regular jaunts through LinkedIn this week, on the lookout for more gainful employment than the Speccie currently offers him. During his perusal, one word kept catching his eye on the profiles of other users: “Rescinded.” Prospective employees are deciding to denote when a company had made them a job offer — and then changed their mind after a change in corporate hiring plans. The cryptocurrency wallet company Coinbase appears to be one of the biggest offenders. Ashutosh, a software engineer, posted the following: After considering several factors, I had chosen to join Coinbase over pursuing a PhD.

All is not well with the economy. It’s true that 390,000 jobs were added last month, exceeding estimates, while hourly income is up 5.2 percent since May 2021. However, analysts guessed unemployment would drop a tenth of a percent, which didn’t happen. Gas prices keep rising, as GasBuddy.com reports a 43 cent jump over this time last month. It’s enough of a problem that OPEC has agreed to increase production in July and August. The economy remains stricken by inflation, with Treasury Secretary Janet Yellen issuing a mea maxima culpa earlier this week. “I think I was wrong then about the path that inflation would take," she told CNN on Tuesday.

Inflation last month increased to 8.5 percent over a year ago. That’s up from 7.9 percent just last month. It’s the sixth straight month that inflation has been over 6 percent, and the highest it’s been since 1981. The Fed will almost certainly be raising the funds rate steadily for the rest of the year, perhaps by fifty basis point increments instead of the usual twenty-five basis points. The trick, of course, is to rein in the inflation without causing a severe recession. The price of gasoline rose a staggering 18.3 percent in March alone. But even if you take out the cost of fuel and food, which tend to be much more volatile than other commodities, the “core inflation” was 6.5 percent, again the highest in decades.

Every year, the president puts forth a budget. And every year, the media diligently reports on it as if it matters to what the government will do over the coming year. Don’t get me wrong: budgets are important. They provide a sense of their crafters’ priorities and a roadmap for achieving their goals. But budgets don’t hold the force of law, which means — in our government — they serve as non-binding blueprints and little else. This is especially true of presidential budgets. That’s because while the budgetary process starts with the president, where it goes from there is determined by Congress alone. During the Trump years, Congress didn’t even bother bringing the president’s budget to a vote.

The Federal Reserve raised interest rates by 0.25 percent last week, the first increase since December 2018. Back then, Donald Trump had been very vocal in his criticisms of the Fed and its chair Jerome Powell, demanding no more rate increases. There was no resistance from the White House this time with press secretary Jen Psaki saying that the Biden administration respected the Fed’s independence. Powell called the rate increase necessary due to inflation coupled with rising prices. “As we emphasize in our policy statement, with appropriate firming in the stance of monetary policy, we expect inflation to return to 2 percent while the labor market remains strong,” said Powell, before warning that it will take longer than expected for inflation to sink.

The war in Ukraine will dominate the news for the foreseeable future. But while the bombings will eventually cease, the economic consequences for the world have just begun. That’s because in an era of increasing interconnectedness, economic impacts don’t stop at borders. Most attention has been focused on the immediate impacts of sanctions on Russia, and they are significant. In the past, sanctions have proven largely ineffective at punishing foreign enemies. President Barack Obama, for example, failed to use them effectively in 2014 during the last Ukrainian-Russian dispute. But this time, the actions taken against Russia were largely unprecedented, with even traditionally neutral countries like Switzerland and Sweden calling for restrictions that are “as big as they can be.

A new report finds that for the first time since these things have been kept track of, rural America’s population has shrunk. This trend is a shame for all Americans (except for a few of us who inhabit rural America and enjoy the solitude). The University of New Hampshire Carsey School of Public Policy findings are based on Census data from April 2010-April 2020, pre-dating the Covid outbreak and its dubious effects on people’s migratory habits (a Pew Research survey suggests that reports of a mass urban exodus during the height of the pandemic were overblown).

After serving in World War Two and many years working in the dental supply business (sans a high school diploma), my grandfather made a decision as a husband and father of five young children: he went into business for himself. It takes guts to start your own enterprise, especially when it means leaving the relative safety and security of steady employment. My grandfather worked long hours. He recruited his children to help with all manner of odd jobs, such as cleaning the warehouse. With no retirement package to speak of, he might have worked into old age, except for a clever merger with another small business aimed at attracting the attention of a UK-based company that in time bought him out. I suppose you could say the global capitalist system worked for my grandfather…sort of.

Many are familiar with the old aphorism that in real estate the three most important determinants of value are location, location, location. Things are a bit different in making economic forecasts and predictions, where two variables matter most: accuracy, of course, but also timing. Regarding accuracy: a lengthy list of economists — some quite eminent — have ended up with egg on their faces because of inaccurate predictions and forecasts. In this regard, there’s the observation by the distinguished economist Irving Fisher, 92 years ago today on October 16, 1929, that stock prices had reached 'what looks like a permanently high plateau’. Since the Great Crash occurred two weeks later, Fisher’s timing wasn’t so great either.

Is President Joe Biden living up to expectations? It’s hard to say, since the expectations generated on his campaign trail were so murky. Biden made plenty of promises on the stump but only one thing was ever clear: he wasn’t Donald Trump. Beyond that, no one was really certain what iteration of Biden would enter the Oval Office on Inauguration Day. A pragmatic moderate or a progressive ideologue? A return-to-normal steady hand or a malarkey-scourging bomb thrower? The law-and-order author of the PATRIOT Act or the 'Black Lives Matter' anti-racist he suddenly morphed into last summer? Biden was so defined by who he wasn’t that no one ever quite worked out who he was. Now we have our answer. Whatever moderation was once attributed to him has been quickly abandoned.

It would be great if the President was an icon of virtue and goodness, but he isn’t. As much as my Democratic friends want to parse otherwise, neither was Bill Clinton, but we overlooked Clinton’s repugnancy because we loved his booming economy. When you strip away the media noise, the fundamental question is: do you want a Trump or Biden economy in 2021 and beyond? Thankfully, both men have records in leading the country so the question isn’t a speculative one. Additionally, given that the states are experiencing dramatically different post-pandemic economic recoveries, we can see what a Trump economy is doing under conservative leadership and policies compared to what a Biden economy is doing under progressive leadership and policies.

COVID-19 is still raging, with little sign of coming under control. The economy is already a tenth smaller than it was at the start of the year. Joblessness is soaring. And the budget deficit? Don’t even ask. But, hey, perhaps we shouldn’t worry about any of that. As the President of the United States keeps pointing out, the stock market is doing great, and, in his opinion, anyway, that means America, to borrow the kind of slogan that fits neatly onto a baseball cap, is great again as well. There is a problem, however, with Trump’s breezy 21-character analysis. It is not really true. The main equity indices reflect many different things, and the health of the economy is not always one of them. https://twitter.