Another indicator, and this according to some articles I’ve read, is that over 90 percent of Americans have some side hustle going on, and sure, some folks want to make a little extra cash but many others are doing it to pay the bills. My neighbor does Instacart to earn some cash to pay off her car, and she told me they are having a hard time getting new people to sign on right now because the profit margin is extremely thin and tips are drying up so the bottom line is that you’re barely making minimum wage.
But be of good cheer fine people of Illinois. Our wonderful benefactor-governor has approved every taxpayer in the state to receive $50.00 to help with this nasty inflation. Plus, and please hold on to your seats! They have suspended the 1 percent sales tax on groceries. Don’t spend all that extra wealth in one place.
I have a friend who sells household items on Craigslist. He has sold rolls of aluminum foil, on old Mr. Coffee, used glassware and utensils, things you wouldn’t even think of selling. You would not believe the mundane stuff on Craigslist. He sold a salad spinner the other day for $5. Many times buyers pay with change.
I've been watching this phenomenon for years, noticing behaviors in the US originally analyzed as survival mechanisms in developing countries (my day job).Black and gray economies sustain and improve life for huge swaths of the population in uncertain and unstable times. It's not just side hustles but increasingly has been and will be the barter trade in goods and services, which is doubly beneficial since the government gets no cut. Barter works best in less transient, better networked (personal networks, I mean) locations. Contract enforcement by reputation is real and more tangible and immediate than going through courts.
Jul 1, 2022·edited Jul 1, 2022Liked by Jeffrey Carter
Good post as usual.
I am a tad more optimistic, and I do not think housing is going to be unduly influenced in the economic issues especially with rents so high and climbing. Location, too, is important.
HOWEVER . . . I own and run a successful and robust military history publishing company. The world in which I swim in infested with left-of-center people. Some authors have become wonderful friends over the years, and they are nice folks, but we do not talk politics. Only books and history.
That said, many BELIEVE Biden. We have a robust social media program, and I rarely scroll around because I am so disgusted when I see what some of my authors and friends write and believe.
Do not be fooled by Biden's low ratings. A healthy number of these people may think the country is on the wrong footing, BUT they still blame the GOP, guns, Trump, Reagan, Coolidge, et. al.
We must work together hard and not get cocky and make sure this November wipes out the Left. And I no longer use Democrats. I call them what they are--Leftists, Socialists, Marxists, etc. They are not Democrats in the American sense of the word.
I think even extremely clear-eyed people who aren't forced to swim in leftist waters are missing some aspects of now versus earlier, and of course on the other side we may be missing other pieces. (My leftist waters are international development, aggressively secular do-gooders, and alas the periphery of academia and their effects on local politics.)
The extremism has been there since the '60s refrain: the personal is political. I now recognize the totalitarianism intrinsic to that perspective. Are there power dynamics in personal relationships? Perhaps often. Is there an authoritative allocation of resources through a recognized, legitimized source or process of decision-making? Rarely if ever. That is positive aka descriptive political economy. Since the '60s the push is totally normative. Whether or not we agree "human nature is X", the left compels us to first acknowledge, then embrace, then proselytize that "human nature should be Y" and, in the present, behave *as if* human nature were Y.
It has always been there in the abstract, and - disguised as good intentions - has been continuously insinuating itself to disenfranchise reality increasingly over time. Within the last 3 to 5 years, this progressive falsification has crippled my ability to do my professional, empirical work. Instead of measuring reality, institutions and powerful individuals demand a "participatory process" that "empowers" the "marginalized voices" to "shape the narrative". Honestly, it is tragic. Those perpetuating these myths will not bear the cost of ineffective programs, wasted billions, the destruction of human and social capital.
The wild card, in my opinion, is the extent to which reality can shock the lazy or unthinking indoctrination out of (m)any, or how many. Kids getting their first paycheck with major deductions suddenly have insight into taxes; getting mugged provides new insight into the value of law and order. No one knows exactly how the coming shocks will hit people or how they will react.
I loved your post. I agree with you on what Democrats are -- I call them "Leftists." "Progressive" suggests that they are actually achieving progress, which they are not. "Liberal" suggests that they live and let live, which they absolutely do not do. Democrat reminds me of working and middle class people in the 60's and 70's. They are not that, for sure.
As for economics, I hope you are right, but I suspect we are in for some serious problems and carnage ahead.
Thanks. I am torn on how bad it will be. We don't have the credit freeze up issue or giant housing bubble of 2008. rents are rising and I think houses will remain relatively stable within a 10-15% range (here in Nor Cal, the Bay area going mobile is driving thousands out into Sac valley and up where I live. Market is slowing, inventory is climbing a bit, but prices are steady. )
Let's hope taking the House and Senate sends a positive message to the USA and world markets, and we ease into and out of a soft recession. Good luck!
Jamoke. A word I haven't seen in some time, but it describes people like Deese and Emanuel perfectly.
This is a possible definition: adj.: Someone who has "never built anything in their lives but worked the non-government organization circuit, got placed in a do-nothing position with some private-sector organization that favors Democrats to make it look good."
It's such a Chicago word not a lot of people have heard it but we used to use it all the time on the floor. Schmuck was another but it's Yiddish and I didn't want to offend. But, no one should be a schmuck either.
I appreciate your noting Emmanuel's term at Wasserstein Perella. No doubt that Emmanuel has a certain cunning, but really, this guy was a managing director there? With zero background in finance???
The graft involved in these moves from public-to-private-to-public sectors is unbelievable. Trump is a shoplifter compared to these bank robbers.
I own a couple restaurants, and restaurants are great leading indicators. I have seen sales dip uncharacteristically right before a recession begins; or, anyone knows we are in one.
At this point, with Covid, it's too difficult to base any theories on sales, but I can tell you that prices are still sky high on the supply side. Labor is still scarce, but better than it was 6 months ago, when there was NO ONE. Things are softening a bit.
I too get the feeling that we are nowhere near the bottom, and that there is still a lot of room to go. I think that the data for earnings in the coming weeks is going to be abysmal. Sales will be flat and costs will be up. Way up.
Yup, Covid sure makes it super hard for someone like you to forecast based on past history. I would suggest ditching all numbers between Mar 2020 and Dec 2021, and then see how it looks. Still won't be pretty. Like a fat girl shopping at Lululemon.
I had a similar or related conversation with a friend we haven't seen lately. (She bought into the virus panic and it was hard to talk on a rational level for a while; more manageable in email.) She's been approaching retirement and is getting mildly concerned. Yet so far her worry is focused on whether or not she'll be able to do all of the tourist travels overseas she's been planning for her 'golden' years, as fares shoot up daily.
She is not thinking about preparing for 20 years on fixed thus shrinking income without going hungry or being able to pay for utilities. She's worried about a boat cruise up or down some European river. She is hoping things will soon start getting better. She is a smart lady we like a lot, therefore I want her coping for herself (not showing up on our doorstep in a year with no resources and no skills).
I gave her the smallest, most watered-down version of my real opinions. She was shocked and I was trying to cushion the blow and ease her into a more realistic mindset. I went no further at that point, though, saying (like you) "I could be totally wrong!" And I could be, but I don't think so.
What I told her: We're always prepared and have been layering in greater preparations since Jan 2020. It's going to be worse than 2008, worse than the '70s.
What I could have said: In what we used to call the industrialized world, I'm betting on worse than the Great Depression and institutional disequilibria at a scale we're not prepared to handle peacefully. Globally, 100% bet on at least localized famines, which isn't much of a prediction since that's already happening, but in future with no help coming.
I am not sure it will be "worse" but it will be different. The 1930s Depression would have been different with better central bank moves-and remember, we had a very different kind of economy then than today so it's hard to compare eras exactly. 2008 was bad, but it was housing generated. This is centralized government bureaucracy generated so in 2024, it could change drastically.
Thanks - good points. I think the experience will be worse only partly because of the nature of the crisis and mostly because what we might laughingly call the social fabric is, to use your word, different. I don't romanticize the past but more people lived in more stable and interrelated political economies with more diversified resources, and more personal and family skills applicable to various challenges. As a whole but especially outside cities, we were less complexly mechanized, not fully electrified, and less crowded. More used to coping, and ability to cope was less vulnerable to external points of failure. Possibly more importantly, how many people in the '30s expected something (food, housing) for nothing? - much less everything (four years of partying while getting a worthless degree, following their bliss) not only for nothing but with a guaranteed minimum income.
Twenty years ago I found myself on an Almaty roadside with two other Americans, neither of whom had the faintest idea how to change a flat tire. Today I'm not surprised that large portions of the US population behave as if they think all goods, services, and knowledge are produced by magic fairy dust and/or morons who will spend $15k today to make $5k six months from now. If a hobo comes to my door in 2024 asking for a meal, s/he'd better offer something in exchange other than interpretive dance and a lecture on pronouns.
I'd love to see Deese say what he said to the faces of my buddies at the sportsman's club. There might be a total of 30 college degrees among the 500 or so members there. Many of them are contractors, who have seen their costs go through the roof and will now charge customers for extra runs to Home Depot for supplies if they don't have something they need.
When asked what their plan was to deal with inflation, either Biden or Harris said “we are going to lower prices”.
Regarding your Bloomberg appearance, for the last few months I especially enjoyed the 35 year old guests on the financial networks who have never seen a bear market try to paint a rosy picture about everything and talk about soft landings. Gaslighting everywhere.
Joe Biden gives no evidence of being able to evaluate advice and to filter it for the 'GOOD STUFF." As you so ably and correctly note, he is surrounded by lightweights.
His absurd utterance in Madrid that inflation and high - highest ever - gas prices are the price tag to confront Putin in Ukraine is pure nonsense.
Nobody is fooled by this fool.
There is not a single policy initiative undertaken by this admin in the last 12 months that will dampen or ease inflation and there are a goodly number that will exacerbate it.
We are doomed for the next two years. Until then it is going to get very, very dicey.
A blind man can see he is a poseur, a fakir, a naif, and a liar.
I watched film of him in Madrid and he has really, really aged. He looks absolutely frail and confused. They had some film from 5 years ago also and he was a different person.
I feel sorry for the fraud.
What kind of man lets his subordinates give him BIG PRINT instructions to "take YOUR seat?"
He should be on the beach in Florida waiting for the Holy Ghost to come get him.
The FBI has and has had indisputable proof that Hunter has committed a plethora of felonies. They have done nothing because they are corrupt and his last name is Biden.
Again, the FBI proves it is a hack organization, hopelessly politically weaponized and unworthy of America's respect.
Another indicator, and this according to some articles I’ve read, is that over 90 percent of Americans have some side hustle going on, and sure, some folks want to make a little extra cash but many others are doing it to pay the bills. My neighbor does Instacart to earn some cash to pay off her car, and she told me they are having a hard time getting new people to sign on right now because the profit margin is extremely thin and tips are drying up so the bottom line is that you’re barely making minimum wage.
But be of good cheer fine people of Illinois. Our wonderful benefactor-governor has approved every taxpayer in the state to receive $50.00 to help with this nasty inflation. Plus, and please hold on to your seats! They have suspended the 1 percent sales tax on groceries. Don’t spend all that extra wealth in one place.
That's interesting. I wonder how big the black market underground cash economy is these days?
I have a friend who sells household items on Craigslist. He has sold rolls of aluminum foil, on old Mr. Coffee, used glassware and utensils, things you wouldn’t even think of selling. You would not believe the mundane stuff on Craigslist. He sold a salad spinner the other day for $5. Many times buyers pay with change.
I've been watching this phenomenon for years, noticing behaviors in the US originally analyzed as survival mechanisms in developing countries (my day job).Black and gray economies sustain and improve life for huge swaths of the population in uncertain and unstable times. It's not just side hustles but increasingly has been and will be the barter trade in goods and services, which is doubly beneficial since the government gets no cut. Barter works best in less transient, better networked (personal networks, I mean) locations. Contract enforcement by reputation is real and more tangible and immediate than going through courts.
Good post as usual.
I am a tad more optimistic, and I do not think housing is going to be unduly influenced in the economic issues especially with rents so high and climbing. Location, too, is important.
HOWEVER . . . I own and run a successful and robust military history publishing company. The world in which I swim in infested with left-of-center people. Some authors have become wonderful friends over the years, and they are nice folks, but we do not talk politics. Only books and history.
That said, many BELIEVE Biden. We have a robust social media program, and I rarely scroll around because I am so disgusted when I see what some of my authors and friends write and believe.
Do not be fooled by Biden's low ratings. A healthy number of these people may think the country is on the wrong footing, BUT they still blame the GOP, guns, Trump, Reagan, Coolidge, et. al.
We must work together hard and not get cocky and make sure this November wipes out the Left. And I no longer use Democrats. I call them what they are--Leftists, Socialists, Marxists, etc. They are not Democrats in the American sense of the word.
Housing isn't like 2008. It will drop in price since interest rates are going up but it won't be like 08. Agree, they are socialists et al.
I think even extremely clear-eyed people who aren't forced to swim in leftist waters are missing some aspects of now versus earlier, and of course on the other side we may be missing other pieces. (My leftist waters are international development, aggressively secular do-gooders, and alas the periphery of academia and their effects on local politics.)
The extremism has been there since the '60s refrain: the personal is political. I now recognize the totalitarianism intrinsic to that perspective. Are there power dynamics in personal relationships? Perhaps often. Is there an authoritative allocation of resources through a recognized, legitimized source or process of decision-making? Rarely if ever. That is positive aka descriptive political economy. Since the '60s the push is totally normative. Whether or not we agree "human nature is X", the left compels us to first acknowledge, then embrace, then proselytize that "human nature should be Y" and, in the present, behave *as if* human nature were Y.
It has always been there in the abstract, and - disguised as good intentions - has been continuously insinuating itself to disenfranchise reality increasingly over time. Within the last 3 to 5 years, this progressive falsification has crippled my ability to do my professional, empirical work. Instead of measuring reality, institutions and powerful individuals demand a "participatory process" that "empowers" the "marginalized voices" to "shape the narrative". Honestly, it is tragic. Those perpetuating these myths will not bear the cost of ineffective programs, wasted billions, the destruction of human and social capital.
The wild card, in my opinion, is the extent to which reality can shock the lazy or unthinking indoctrination out of (m)any, or how many. Kids getting their first paycheck with major deductions suddenly have insight into taxes; getting mugged provides new insight into the value of law and order. No one knows exactly how the coming shocks will hit people or how they will react.
I really enjoyed this insightful comment. I need to read it again. Thank you for sharing.
I loved your post. I agree with you on what Democrats are -- I call them "Leftists." "Progressive" suggests that they are actually achieving progress, which they are not. "Liberal" suggests that they live and let live, which they absolutely do not do. Democrat reminds me of working and middle class people in the 60's and 70's. They are not that, for sure.
As for economics, I hope you are right, but I suspect we are in for some serious problems and carnage ahead.
Thanks. I am torn on how bad it will be. We don't have the credit freeze up issue or giant housing bubble of 2008. rents are rising and I think houses will remain relatively stable within a 10-15% range (here in Nor Cal, the Bay area going mobile is driving thousands out into Sac valley and up where I live. Market is slowing, inventory is climbing a bit, but prices are steady. )
Let's hope taking the House and Senate sends a positive message to the USA and world markets, and we ease into and out of a soft recession. Good luck!
Jamoke. A word I haven't seen in some time, but it describes people like Deese and Emanuel perfectly.
This is a possible definition: adj.: Someone who has "never built anything in their lives but worked the non-government organization circuit, got placed in a do-nothing position with some private-sector organization that favors Democrats to make it look good."
It's such a Chicago word not a lot of people have heard it but we used to use it all the time on the floor. Schmuck was another but it's Yiddish and I didn't want to offend. But, no one should be a schmuck either.
I appreciate your noting Emmanuel's term at Wasserstein Perella. No doubt that Emmanuel has a certain cunning, but really, this guy was a managing director there? With zero background in finance???
The graft involved in these moves from public-to-private-to-public sectors is unbelievable. Trump is a shoplifter compared to these bank robbers.
I own a couple restaurants, and restaurants are great leading indicators. I have seen sales dip uncharacteristically right before a recession begins; or, anyone knows we are in one.
At this point, with Covid, it's too difficult to base any theories on sales, but I can tell you that prices are still sky high on the supply side. Labor is still scarce, but better than it was 6 months ago, when there was NO ONE. Things are softening a bit.
I too get the feeling that we are nowhere near the bottom, and that there is still a lot of room to go. I think that the data for earnings in the coming weeks is going to be abysmal. Sales will be flat and costs will be up. Way up.
One caveat: I could be totally wrong. :-)
Yup, Covid sure makes it super hard for someone like you to forecast based on past history. I would suggest ditching all numbers between Mar 2020 and Dec 2021, and then see how it looks. Still won't be pretty. Like a fat girl shopping at Lululemon.
I had a similar or related conversation with a friend we haven't seen lately. (She bought into the virus panic and it was hard to talk on a rational level for a while; more manageable in email.) She's been approaching retirement and is getting mildly concerned. Yet so far her worry is focused on whether or not she'll be able to do all of the tourist travels overseas she's been planning for her 'golden' years, as fares shoot up daily.
She is not thinking about preparing for 20 years on fixed thus shrinking income without going hungry or being able to pay for utilities. She's worried about a boat cruise up or down some European river. She is hoping things will soon start getting better. She is a smart lady we like a lot, therefore I want her coping for herself (not showing up on our doorstep in a year with no resources and no skills).
I gave her the smallest, most watered-down version of my real opinions. She was shocked and I was trying to cushion the blow and ease her into a more realistic mindset. I went no further at that point, though, saying (like you) "I could be totally wrong!" And I could be, but I don't think so.
What I told her: We're always prepared and have been layering in greater preparations since Jan 2020. It's going to be worse than 2008, worse than the '70s.
What I could have said: In what we used to call the industrialized world, I'm betting on worse than the Great Depression and institutional disequilibria at a scale we're not prepared to handle peacefully. Globally, 100% bet on at least localized famines, which isn't much of a prediction since that's already happening, but in future with no help coming.
Hope I'm wrong, and we'll see.
I am not sure it will be "worse" but it will be different. The 1930s Depression would have been different with better central bank moves-and remember, we had a very different kind of economy then than today so it's hard to compare eras exactly. 2008 was bad, but it was housing generated. This is centralized government bureaucracy generated so in 2024, it could change drastically.
Thanks - good points. I think the experience will be worse only partly because of the nature of the crisis and mostly because what we might laughingly call the social fabric is, to use your word, different. I don't romanticize the past but more people lived in more stable and interrelated political economies with more diversified resources, and more personal and family skills applicable to various challenges. As a whole but especially outside cities, we were less complexly mechanized, not fully electrified, and less crowded. More used to coping, and ability to cope was less vulnerable to external points of failure. Possibly more importantly, how many people in the '30s expected something (food, housing) for nothing? - much less everything (four years of partying while getting a worthless degree, following their bliss) not only for nothing but with a guaranteed minimum income.
Twenty years ago I found myself on an Almaty roadside with two other Americans, neither of whom had the faintest idea how to change a flat tire. Today I'm not surprised that large portions of the US population behave as if they think all goods, services, and knowledge are produced by magic fairy dust and/or morons who will spend $15k today to make $5k six months from now. If a hobo comes to my door in 2024 asking for a meal, s/he'd better offer something in exchange other than interpretive dance and a lecture on pronouns.
Oligarch's gonna Fascist. Whatchagonna do...?
Brian Deese! I wrote a little song in his honor back when he was one of Obama's 'Czars'....Ruler of the Auto Industree:
https://chicagoboyz.net/archives/7390.html
Brilliant! I wanted to sing along!
I think I need to do an update....probably to the turn of "I've been working on the railroad", only it starts"
"I've been working up at Blackrock"
OMG, that's perfect.
I'd love to see Deese say what he said to the faces of my buddies at the sportsman's club. There might be a total of 30 college degrees among the 500 or so members there. Many of them are contractors, who have seen their costs go through the roof and will now charge customers for extra runs to Home Depot for supplies if they don't have something they need.
When asked what their plan was to deal with inflation, either Biden or Harris said “we are going to lower prices”.
Regarding your Bloomberg appearance, for the last few months I especially enjoyed the 35 year old guests on the financial networks who have never seen a bear market try to paint a rosy picture about everything and talk about soft landings. Gaslighting everywhere.
Joe Biden gives no evidence of being able to evaluate advice and to filter it for the 'GOOD STUFF." As you so ably and correctly note, he is surrounded by lightweights.
His absurd utterance in Madrid that inflation and high - highest ever - gas prices are the price tag to confront Putin in Ukraine is pure nonsense.
Nobody is fooled by this fool.
There is not a single policy initiative undertaken by this admin in the last 12 months that will dampen or ease inflation and there are a goodly number that will exacerbate it.
We are doomed for the next two years. Until then it is going to get very, very dicey.
JLM
www.themusingsofthebigredcar.com
If Biden worked for you in CRE, how long would you let him hang on?
I would never have hired him.
A blind man can see he is a poseur, a fakir, a naif, and a liar.
I watched film of him in Madrid and he has really, really aged. He looks absolutely frail and confused. They had some film from 5 years ago also and he was a different person.
I feel sorry for the fraud.
What kind of man lets his subordinates give him BIG PRINT instructions to "take YOUR seat?"
He should be on the beach in Florida waiting for the Holy Ghost to come get him.
JLM
www.themusingsofthebigredcar.com
But that Hunter guy has marketing skills, you'd have hired him no? : )
The FBI has and has had indisputable proof that Hunter has committed a plethora of felonies. They have done nothing because they are corrupt and his last name is Biden.
Again, the FBI proves it is a hack organization, hopelessly politically weaponized and unworthy of America's respect.
JLM
www.themusingsofthebigredcar.com
You called it. But it's not just the economy. They've screwed up everything they've touched.
I love it when you go on a tear. Not even one Germans at Pearl Harbor moment either. ;-)