Sunday verse

 

Good news

I haven't posted since Sunday, it's been an extremely busy week for me for a number of reasons, and it continues to be the case. In the interim, here's a good news projection for the 2022 election cycle from Red Eagle Politics.

The downside of the story is that thanks to some poor redistricting in some states, and some regional entrenchment, there is an upper boundary to how many seats the GOP can pick up in congress and the senate.  It doesn't matter if a GOP candidate in a liberal district loses 51-49 instead of 71-29.  A loss is a loss.  Speaking of which, state redistricting in Republican states was not as aggressive as it should have been.  So here's some free advice for state and local Republicans -  when you win, act like winners!! The Democrats have no compunction about doing so and that's why you are always ceding ground, not taking ground in the Overton window battle. Oh and conservative voters; you have to be more involved.  Get involved in the primaries and elect conservatives not RINOs. Just my two cents.

On other damper on the good tidings; this is January not November.  There's lots of time for things to change, for the better or worse. 

Sunday verse

 

SCOTUS killed the unlawful vaccine mandate

 In case you missed it, Ben Shapiro and others at The Daily Wire gleefully (and rightfully so)  summarize:

A fantastic discussion from Tim Pool et. al.

Tim and regulars Ian, Luke, and Lydia were joined by author and editor of Newsweek Batya Ungar-Sargon to discuss what it happening to CNN's ratings.  But the discussion went well beyond that into the media in general and what has happened to it.  CNN's ratings are merely a reflection of what preceded that in the news media behind the scenes.

The Bureau of Labor Statistics is going to fudge it on inflation in 2022

Interesting: the Bureau of Labor Statistics has a couple of Notices on their Consumer Price Index page. One note indicates that "Starting in January 2022, weights for the Consumer Price Index will be calculated based on consumer expenditure data from 2019-2020. The BLS considered interventions, but decided to maintain normal procedures."   That's interesting. During the COVID lockdowns people bought a lot more toilet paper initially, but the most impactful change would be the reduction of fuel usage, particularly gasoline, as people were forced to stay at home, vastly reducing fuel expenditures.  This as fuel prices have started to skyrocket in 2021 and 2022. In other words, they are going to try to dampen or hide the inflation numbers they are going to share by treating it as a smaller factor in consumer spend, by using fuel expenditures during the height of COVID lockdowns as part of the calculation.  During COVID that share of spend most definitely shrunk, dramatically. That effect will take about two years to work it's way through the system, disappearing in a presidential election year.

Let's Go Brandon.

The other note states "Each year with the release of the January CPI, seasonal adjustment factors are recalculated to reflect price movements from the just-completed calendar year. This routine annual recalculation may result in revisions to seasonally adjusted indexes for the previous 5 years. Recalculated seasonally adjusted indexes as well as recalculated seasonal adjustment factors for the period January 2017 through December 2021 will be made available on Tuesday, February 8, 2022."

This one is a bit trickier because they have not yet posted any of the adjustments as of yet. What they do is take an item in a basket of consumer goods like say potatoes, and adjust it's cost impact based on the month of the year.  In January for example they might see it at 98.928 and in July at 103.920 but seasonally adjusted factors to smooth the months, it might be factored instead at 98.921 in January and 103.946 in July.  This sort of tweaking is done to smooth the rate towards a more annualized sort of number and make it less volatile.

That alone is not a problem.  The issue arises when they use it for politics.  There are so many items that factor into the total number that it is fairly easy to hide the fudging.  And keep in mind that this is something they typically do annually. It may amount to nothing.  It may even be a distraction from their other note.  But if some of the numbers are significantly different from what they used in 2021, it is a sign of malfeasance. The problem is that it will probably be  hard to find.   Stay tuned.

Inflation and other factors mean Sour Times in America

Prepare for a period of sour times in America. The 12-month percentage change of inflation was 7% for December.   Think about that.  The target rate according to the Federal Reserve Board's target rate is 2%. Instead we've had the Let's Go Brandon administration and the monetary establishment give us this:

That chart is scarier than I had predicted.  I thought 2023 might be year we see steep increases in inflation. Nope. 2021. Energy alone was up 29.3%. I recently said it was going to be bad, repeating what I've said many times in fact. If energy is up that much, and it continues to be up, it will have a downstream effect of food prices, and everything else. Energy is the lifeblood of everything. It takes energy to get food to your door. Energy costs are embedded in everything. But with the Fed having trillions of dollars (almost 9 trillion in fact) on it's balance sheet, effectively money printing (which takes a bit of explaining - for a decent explanation check here -- and ignore the incorrect conclusion).

Now The Fed has to do something and it appears they will. Slowly. They'll start running off some of the 'assets'  on their balance sheet along with decreasing the pace of increasing it in the interim. Yeah, they're that late to the party. And Let's Go Brandon plans to re-nominate Jerome Powell to his current role. This is more of the same, more "nothing to see here", from the same crowd that told you almost a year ago that this inflation would be transitory.

Meanwhile, while the reported unemployment rate and the more telling U6 unemployment rate are returning towards pre-COVID levels, they have not reached Trumpian levels. Neither has the labor force participation rate, where we were seeing a turnaround of a decades long macro trend for the first time in decades: 

source: tradingeconomics.com

Things do not look normal by any stretch. Given the inflation, given the soft stance on trade deficits by the Let's Go Brandon administration, expect to see offshoring return. Perhaps due to energy prices affecting transportation costs, it might move to Mexico instead of China. The effect is the same. Unemployment. Rising costs mean rising prices. Businesses have few levers to pull, but one of the biggest is labor. Shifting to part time and offshoring are two options but ones that hurt American workers.

This is good news for Republicans but unfortunately at the expense of the economy.  But if they can win the House and Senate this November, which is looking very possible, perhaps they can work on turning the situation around.

The medicine is going to be painful, but it's something that is necessary.  Higher interest rates.  Much higher interest rates.  That has it's own costs and fallout including bankruptcies, a soaring government debt burden, and mortgage foreclosures. But if the bleeding can be condensed to a 12-18 month period, it could halt inflation and return us to a normal growth economy fairly quickly.  Then underlying macroeconomic issues like the trade deficit and the Debt-to-GDP ratio could be a little more easily addressed. Of course that demands a return to normalcy from the COVID-aided mass psychosis sweeping the globe.

Are America's best days still ahead?  At this point I am not optimistic about the current state of the union. There's still a light of hope, but it keeps getting further away. It's a very different feeling than during the Trump years. What we need is more people to wake up and demand change. 

Is it going to be a red wave in 2022?

 Here are three views on what is going to happen in the midterm elections. First Tim Pool explains why he sees a red wave coming.

Next, Red Eagle Politics discusses what he sees as the best case for Republicans in 2022 in the senate and governorship races:

And lastly, the left-leaning Let's Talk Elections has a reasonable assessment of what he sees as the 2022 senate scenario that's shaping up.  Kudos to him for being even-handed in his assessment.

Keep in mind it's still very early.  But the tea leaves in the form of the generic ballot are currently leaning Republican (which is rare in polls), and the Let's Go Brandon sentiment is also quite strong at the moment.  There would have to be something very positive for Democrats on the horizon to swing the mood in the opposite direction it's headed now. And I don't think that's going to happen.