Fortune Magazine is highlighting five economic shocks that they say are “about to hit the US all at the same time”, they include the national debt being over $33 trillion, which obviously will have the effect of increasing the interest paid on this enormous debt (2) oil is headed north of $100 a barrel; (3) the UAW strike could crush the car market; (4) student loan borrowers are faced with the restarting of payments; and (5) mortgage rates are nearing 8%. Interesting facts, more for the Fed to ponder.
Northern Canada has $67 billion of rare earth materials buried. These deposits are essential for EV batteries but lie beneath vast peak bogs, and could have dramatic positive impact on Canada’s economy as it would substantially reduce reliance, yet again, on China for the necessary resources. This, of course, comes with environmental risk that will have to be assessed, but again, we need to explore to see if any potential new technology might make this less damaging to the environment.
Republicans in their chaos may have propelled Hamas into action. This analysis is based upon the fact that Republicans are objecting to support for the Ukraine, thus it is not unreasonable for Hamas to see the chaos in the Republican party as weakness and becoming isolationist. This is a potential threat to support for Israel. The fact that Congress may not be able to generate legislation to fund support for Israel may have also spurred them on. Our news programs have focused on US responses, and have largely ignored those from the Arab world which have been pro-Palestinian. It is fair to say that the Republicans have shown virtually zero leadership during the speaker crisis, whether intra caucus, or to the country as a whole. Chaos breeds instability and Republicans have created more than their fair share. They may be elected officials but they are not leaders.
Vermont on the other hand, led by a Republican governor and Democratic legislature, has seen its public electric utility come forward with a plan to provide people batteries who suffer from frequent power outages as a less expensive and more efficient way to ensure power to homes and businesses. This sounds to me like a solution that Vermont regulators should be ready to act on, and potentially other states should be doing the same.
The most recent jobs report has been described as a “blockbuster” and clearly was a pleasant surprise to economists and the Fed. Well, the Fed might not have viewed it as pleasant, but certainly even if there is some level of inflation running through the economy as a result, knowing that people are working lessens the impact. Some Fed governors are being reported as saying that there is no need for another rate hike in light of the jobs report. I think that is good news.
Mr. Trump rambles on digging his hole deeper frequently, yet he continues to lead by wide margins for the Republican nomination. Go figure.
It looks like Republicans are in for a long battle after nominating Representative Scalise and his subsequent withdrawal. This is likely to lead to a fight which they hope to contain intra caucus. Politico, in a story over this past weekend, indicated the Jordan Camp will bring a vote to the floor tomorrow in hopes of pressuring 217 “ye” votes. A big gamble which I am hoping they lose. Jim Jordan is not a consensus builder, but a chaos creator and nothing more. The Republicans have entered into this period of chaos to some extent because they have no plan as to how to reduce spending that is rational, nor do they for dealing with inflation. So, when you don’t have a plan, you create a diversion. Or better yet - chaos. They have been very successful.
Bill Owens is a former member of Congress representing the New York 21st, a partner in Stafford, Owens, Piller, Murnane, Kelleher and Trombley in Plattsburgh, NY and a Strategic Advisor at Dentons to Washington, DC.
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