The “R” word” – recession. Next to “inflation,” it’s the one word that drives politicians to distraction, distortion and worse.
There’s been a lot of “R” word talk in the markets lately, with recent data, such as the May consumer spending numbers, showing a slow down as inflation settles in:
Consumer spending cooled to a 0.2% advance in May, the Commerce Department said Thursday. That was the smallest monthly gain this year, and down from the revised 0.6% increase in April.
Following the soft spending figures, economists at S&P Global Market Intelligence cut their estimate for economic output twice [in the same day]. They expect gross domestic product to contract at a 1.5% annual rate in the second quarter, which ends [June 30]. Earlier this week, they expected very slight economic growth.
Contracting GDP is one of those signs that the “R” word is coming closer to reality – depending on how you prefer to define what a “recession” looks like.
The definition matters for the Federal Reserve, which currently is committed to repairing its shredded inflation-fighting credibility. That effort means higher interest rates for everything – homes, cars, credit card bills…
…oh, and interest payments on all that federal government debt, too.
Does any of this mean a Fed-induced recession is inevitable? The New York Times’ Jeanna Smialek wrote:
“It’s certainly a possibility; it’s not our intention at all,” Mr. Powell said of a recession. “Certainly the events of the last few months around the world have made it more difficult for us to achieve what we want, which is 2 percent inflation and still a strong labor market.”
What Mr. Powell wants is the best of all possible worlds. What he – and the rest of us – should prepare for is a return of the “R” word to our daily conversation.
The opinions expressed in this article are those of the author and do not necessarily reflect the positions of American Liberty News.
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Norman Leahy has written about national and Virginia politics for more than 30 years with outlets ranging from The Washington Post to BearingDrift.com. A consulting writer, editor, recovering think tank executive and campaign operative, Norman lives in Virginia.
It can only be delusions of grandeur that allow the Federal Reserve to believe it can control the spending/saving habits of billions (literally) of people. As the adage goes, “Man plans; God laughs.”
Let’s go Brandon! Remember in November.
Do we need to give prospective presidents an economic literacy test? There’s little doubt that, judging by this tweet, Joe Biden would get an “F.”
Wow. Jeff Bezos accused the U.S. president of either deliberately misleading the public or lacking a “basic” understanding of the forces that actually drive prices.
Biden apparently doesn’t know that gas station owners are mostly independent small businesses whose razor-thin profit margins make it impossible to willy-nilly lower prices at the pump just because the president orders them to.
At least the Chinese agree with Biden. They mocked the American president for proving their point about “capitalist exploitation.”
New York Post:
In response to Biden’s demand that oil companies lower their prices, the president was trolled by Chinese state media.
“Now US President finally realized that capitalism is all about exploitation. He didn’t believe this before,” wrote Chen Weihua, EU Bureau Chief and columnist for China Daily, an English language media outlet owned by the Chinese Communist Party.
Biden’s unseemly begging comes on the heels of a White House advisor’s warning that we must suffer these high prices for fuel because “This is about the future of the liberal world order, and we have to stand firm.”
Biden himself suggested Americans are just going to have to grit their teeth and get used to it. At a press conference in Madrid, he made it clear that the high prices would be with us as long as Ukraine could convince the United States to stand with them
Q : The war [in Ukraine] has pushed [oil] prices up. They could go as high as $200 a barrel, some analysts think. How long is it fair to expect American drivers and drivers around the world to pay that premium for this war?
THE PRESIDENT: As long as it takes, so Russia cannot, in fact, defeat Ukraine and move beyond Ukraine. This is a critical, critical position for the world. Here we are. Why do we have NATO?
“So Russia cannot, in fact, defeat Ukraine and move beyond Ukraine,” is very cold war-ish, don’t you think? It was the rationale used by the right in every American intervention during the Cold War. The left mocked any notion of Russian expansionism at the time as childish and an excuse for imperialism.
What say ye now, Joe Biden?
Supplies wouldn’t be short and prices wouldn’t be as high if Biden had continued the policies of Donald Trump that made America virtually energy independent.
Biden is going to Saudi Arabia later this month, hat in hand, to beg the Kingdom to open the spigot and pump more oil. What’s worse is that Biden refuses to take any responsibility for gas prices spiking. He has blamed everyone else for his failures. This latest idiocy demonstrates a shocking ignorance of basic economics and a childish political effort to evade blame.
The left is so dumb and arrogant they don’t realize they have put the economy in a tailspin with their policies and actions over the last year and a half.