Presidential Politics & Threading the Economic Needle – Top 3 Takeaways – November 28th, 2022
- The more things change the more they stay the same. Hopefully your Thanksgiving weekend was a wonderful one with your family. If that was the case, it wasn’t likely the first time you’ve had a great family Thanksgiving. In the event your Thanksgiving wasn’t what you’d have hoped it would have been...that likewise probably wasn’t the first time either. As the saying goes...that’s life. Life tends to work in cycles and families and holidays generally are part of them for the better or for the worse. Life is full of joy if we allow it, but also complications and change. Just think about how much has changed in our society over the past couple of years. At the same time, if you look around at many of the key players, especially politically in our society, it’s more of the same. Yes, in coming months you’ll see a new name on the gas pump as Wilton Simpson flipped the Agriculture Commissioner’s seat from Democrats. No, they’ll be no other change in Florida’s cabinet after the record red wave election in Florida. Nationally, yes, Republicans flipped the House and there will be a new Speaker, but in the Senate control and leadership will remain the same – in both political parties. And speaking of the absence of change, yes, its 2022, November is almost over and there are still somehow votes that have yet to be counted in Congressional races. It’s about as little change politically as one could possibly imagine given just how much change has happened in our society since the 2020 cycle. And it appears...
- More of the same is on the horizon. While the lion’s share of the 2024 conversation over the weekend focused on the questionable characters Trump was hosting at Mar-a-Lago, perhaps the most notable bit of news came from California, of the aforementioned uncounted votes. Gavin Newsom, aka The Hair, has long been flirting with a 2024 presidential run. A flirtation complete with an unofficial White House visit he made while the actual president was away and political ads he ran in Florida over the 4th of July weekend while running for reelection in California. Now his fiscal mismanagement of California has proven to be so poor I suppose one could infer that his management of campaign funds would be similar, and thus, the Florida run political ads. The more plausible explanation is of course his setting the stage for a presidential run, in which Florida would play a huge role for him during a Democrat primary for president. That’s why Politico's weekend report, citing conversations with the First Lady and Biden’s chief of staff, was perhaps surprising. According to the story, Newsom won’t challenge Biden in a primary, should the president choose to run for reelection, which is a bit surprising, but even more so, the story states he wouldn’t run even if Biden doesn’t. If Politico is right, which is a legit question, and Biden’s perceived top challenger on the left isn’t going run – one might imagine the field is already being cleared to pave the path for Biden having a smooth nomination process for a reelection bid in 2024. This would continue the current political trend of the more things change, the more they seemingly are staying the same. And btw, if that does prove to be the case, we might just have the much-anticipated Newsom/DeSantis battle for president...in six years.
- Threading the economic needle. Economics is complicated. What makes the economy go isn’t. It's you and me. Consumer spending makes up about 70% of the US economy. Over any longer period of time, as you and I go, the economy goes. And right now, we’re in an especially precarious period of time in which we’ve already had a technical recession this year, on the back of 40-year high inflation and continue to hear about a steady stream of layoffs and hiring freezes at companies that just months ago were saying they couldn’t hire fast enough. While interest rates continue higher, and hopefully future inflation reports will continue lower, the question is where will this economy go? The latest economic forecast shows exactly 0% economic growth for 2022. And as for next year...worse. Consensus is now for negative growth of just under 1% next year. It’s no fun to think about the economy being worse next year than it's been this year. On the brighter side, most economists were wrong about inflation getting out of control last year, and the economy turning negative earlier this year, so maybe they’ll be wrong again... We can hope anyway. And one of the first tells with one of the biggest keys looks positive coming out of this holiday weekend. In store traffic was up 2.9% on Friday and online sales grew by 2.3% to record levels. Growth is good. Were we just taking advantage of deals after two years of there being very few to be found? It’s possible. Is the growth sustainable through the remainder of the holiday shopping season? That will be the key as to if we, as consumers, can stave off another recession and large job losses across the economy to start the new year. For now, there’s room to be optimistic that we have a chance of threading the economic needle.