The economy is in gear already!

I've been expecting a solid Q2 2026, maybe even Q1, but definitely Q2 onward. It turns out, 2025 has ss way ahead of schedule on the boom.

Via Breitbart:

The Commerce Department said U.S. gross domestic product—the government’s official economic scorecard—rose at a seasonally and inflation-adjusted 4.3 percent annual rate in the third quarter. The report on the July through September period was delayed due to the shutdown.

“Today’s blockbuster, expectation-smashing GDP report is the latest proof that President Trump’s America First trade and economic agenda continues to turn the page on the Biden economic disaster: American consumers are spending, and American exports are surging,” White House spokesman Kush Desai said. “President Trump built the greatest economy in the world in his first term, and he’s in the process of doing it all over again. Americans can count on benefitting from a historic economic boom in 2026.”

Gross domestic product is a broad measure of the goods and services produced across the economy. Economists had expected the economy to grow at a 3.2 percent annual rate after the second quarter’s 3.8 percent growth.

Prior to the inflation adjustment, the economy grew at an 8.2 percent rate.

...Donald Trump’s trade policies appear to have added to growth in the third quarter, as exports rose 8.8 percent while imports fell 4.7 percent. Exports add to GDP while imports, because they represent foreign production, are subtracted.

...Due to the government shutdown, this “initial estimate” actually combines data typically used for both the advance and second estimates, so it may be more reliable than usual initial readings.

Q2 2026 could be great

Scott Bessent is no the only one expecting a great 2026. "A lot of people are saying" that 2026 will be a strong economic year.

Canada really is a heartbreaking ship-show

If you live in America and you want to know how bad it has gotten in Canada in the last 10 years, watch this entire video (90% of which is people talking about specific issues). I guarantee you your mind will be blown. It's actually heartbreaking. 

(If you want to see the economic situation, skip to 6:40).

The saddest part of this is that Canadian media is 1000% in on the Liberal Party game. There is no Fox News or equivalent here (unless you pay extra to get the American Fox News channel). We are instead fed a steady diet of how great Trudeau was, how great Carney is, how terrible the conservatives are. And you know what?  The propaganda works. Even conservative leaders have to be careful to make sure they look like they see Trump as the bad guy or they will get politically wrecked. It's gotten so bad that that sort of thinking has infected many within the Conservative Party. 40% of Canadians back our common sense Conservative Party leader Pierre Poilievre. Yet it's not enough to overcome the political media machine that cranks up every election. Poilievre was on track to historically demolish Justin Trudeau, and potentially wipe out the Liberal Party. But as soon as the party switched leaders Mark Carney became Canada's supposed economic savior.

All that while Pierre Poilievre's since removed top political advisor was hanging up the phone on Donald Trump Jr., alienating the Trump family. That's what's called a perfect storm of BAD.

But ultimately it is the Canadian people who are being decimated by ruinous policies, whether they are brainwashed Liberal Party simps or clear-thinking rationale people (conservatives). Canada has become unsustainable and unless there is a change in the next 12 months, it will collapse in the coming few years.

Meanwhile in Russia

Is Putin sustainable?  Is Russia?

Things are not going well for China

Economically speaking, China is in rough shape. 

Behind the facade of China-topia:

Meanwhile in China

Is the China economic miracle coming to an end?

China struggles for friends

An economic alliance against the United States, fronted by the most predatory economy in the world? What could go wrong?

If you thought the economy sucks, you were right

Cooking the books is something the state does on a regular basis, but it seems to always be wildly off when Democrats are in charge. The latest reveal; jobs are not really doing as well as they were telling you:

Let's Go Brandon's economic advisor doesn't understand money supply

This is absolutely terrifying. If you can't explain money supply, you don't understand money supply.  If you don't understand money supply you don't understand monetary policy. If you don't understand money supply, you shouldn't be anywhere near the council of economic advisors, let alone be the chair.  But this is par for the course with this inept, directionless administration. 

Democrats' economics 2012 vs. 2024 - from bad policy to bad policy

I was digging through my old posts this morning, looking for a specific one (that I have yet to find).  It led me just now to post on a tangential topic.  And now it's led me to an entirely unrelated topic.  This time, it's about a notion that actually relates to my previous post - Democrats keep making the same mistakes.

In that previous post, I noted that the Democrats' mistakes on Israel and Hamas are driven by politics rather than by morality or even national security.  However, their mistakes on the economy and unemployment are driven by political and economic misunderstanding.  Socialist policies lead to bad outcomes. 

Some people look back on the Obama years with nostalgia, but it's undeserved:

The U6 president, unlike his Nobel Peace Prize, now has an accomplishment he has truly earned. He has presided over the longest stretch of unemployment above 8% in the history of unemployment in the United States (reported by HuffPo - emphasis added);

Stronger job creation could help President Barack Obama's re-election hopes. Still, the unemployment rate has been above 8 percent since his first month in office – the longest stretch on record. No president since World War II has faced re-election with unemployment over 8 percent.

This will be hard for the presidential apologists to spin.

Of course back then, spin mattered. Now it doesn't - few believe this "president" is doing a good, and few believe that spin matters more than who votes and which votes actually get counted. Sad but true.

None of this matters to Democrats, it's about accumulation and retention of power. That and their socialist agenda which they either believe completely or just use to help centralize their power. Nothing more. Hurt Israel, hell hurt Americans.  As long as it serves their purpose it doesn't matter to them. That's evil.  

As I've said many times over the years - they are either too stupid or too evil (or maybe both) to be allowed to lead the country.

Ouch!

The Let's Go Brandon economy?  Even worse than you thought, according to JP Morgan.

Need more info to get a sense of how bad it is?  Check out this YouTube post from Benny Johnson.

Yep, it's THAT bad.

West Virginia is the canary in the coal mine

Unfortunately, West Virginia is very poor.  The reasons are explained in the well made video below. Geography, demographics, politics, but it's mostly due change.  In economics there's a concept related to supply and demand called equilibrium.  The price and quantity of goods and services produced seek their own equilibrium, where supply and demand match.  When disruptions happen, like coal becoming less vital to the national interest, the equilibrium changes.  That causes all sorts of fallout including for example, poverty. West Virginia has experienced something that 

My take on a few of the points raised,  as well as the future of a broader swath of Western economies, follow the video.

The video points to the limitations of geography as a fundamental barrier to a renewal of West Virginia.  It's fundamentally true but it does raise questions. There are places in Switzerland for example that have worse geography than West Virginia with respect to economic prosperity but yet they do not have the same level of poverty. Why is that?  Perhaps they have the benefit of a longer time frame to stabilize their situation. Or maybe it was something else.  The point is geography does not have to result in poverty.

The biggest factor in the case of  West Virginia, clearly was the rise and fall of coal. Coal was a primary source of energy for a long time and is no longer as it has been replaced by oil, gas, nuclear power and more recently solar and wind power.  But coal still has its uses.  For example roughly 1.6 billion tons of coal worldwide were used in the production of steel in 2022, and steel is still a widely used material. The U.S. production of coal in 2022 was approximately 0.54 billion tons or one third of the world coal supply that is used to produce steel.   However it is important to note that only certain types of coal can be used to make steel.

Nevertheless there are other uses for coal.  For example, cement production, carbon fibers and foams, medicines, tars, synthetic petroleum-based fuels.   But the real drivers related to coal were domestic energy and of course military use as mentioned in the video.  These needs declined as alternatives arose.

The video also mentioned mechanization of the coal industry, which means the same or greater levels of production with fewer and fewer people needed to do the job. 

This is where West Virginia has become the canary in the coal mine - the first trial of massive change. Whether it lives or dies provides lessons for America and other Western economies - not relative to coal but relative to people.  The human cost of economic failure is far more important than any other sort of fallout.  West Virginia has experienced a downward cycle of poverty and health as result of not being able to adapt to the change that came upon its predominantly single-sourced economy.  That is the true lesson from the past, and present.  

With the advent of computers, robotics, and AI, fewer and fewer people are needed in more and more jobs.  This trend shows no signs of abating, indeed the equilibrium might be at or nero zero need for human involvement in work.  How do we navigate zero employment and avoid poverty, broad spread malaise in terms of personal motivation and self-worth with nobody working?  This has yet to be solved.  Sure there are some short-term answers for the West; do not rely on single-source economies and instead diversify.  But at best this solution has limited viability if eventually everything evolves to 100% automation.

There is no answer yet.  Universal Basic Income might mitigate the problem, for a time, but it is hardly a solution.  It does not address mental health issues and it certainly will not solve the wealth gap between rich and poor because the wealthy factory owners will still own the means of production and not be subject to the universal basic income.  In fact, it will likely worsen the problem.  A better solution is needed and we need to be working on it today.  

Chipping away at the foundation

If I were a communist I would want to take down the economy of the most powerful free market economy in the world, the United States. And in an adversarial role, you cannot simply go head to head economically with an economic superpower. You have to chip away at the edges. You have to make the United States spend money on things it shouldn't have to spend on so that you can level the playing field.  That means you go for the edges, like creating a need to build a border wall (not that the need for one was created by communists), or better still, you chip away at the foundation.

I've always said that without a robust economy you cannot do anything else (military, social security, education) and without those you have nothing - it's all about the economy.  I still believe that.  But a robust economy has to be founded on something. Yes there's a need for an abundance of land, labor and capital.  But some countries have those things and still flounder (Russia).  Why is that? I think it's because there is another ingredient required.  More foundational than an economy is a system that enables that economy, one founded on common sense, which is founded on values, which is founded on irrefutable principles. 

So a communist in order to subvert American principles of life, liberty, the pursuit of happiness and honorable behavior such as the Golden Rule, which in turn is deeply rooted in Christianity), you have to chip away at those, not the economy directly.  You remove the family and replace it with welfare and the education state.  You remove liberty and replace it with security (i.e. government protections).  You remove incentive and replace it with handouts.  You remove the pride in country and replace it with shame and then divide people into warring factions full of vitriol and hatred for each other. And of course you remove common sense and replace it with digestible, repeatable propaganda. You use emotion instead of logic, but logic would halt your sabotage in its tracks. 

In case you haven't noticed, all of this and more has been happening in America for decades.  It accelerated dramatically under president Obama. And while the people tried to pause it with president Trump it only abated slightly, the vitriol and hatred on one side even got dramatically worse. Under Let's Go Brandon (I see the irony of that being vitriolic) it has resumed apace. 

The infectious poison of communism established roots in America that long outlasted its source, the Soviet Union. America, that truly by now could be a bastion of hope and opportunity, is in decay.  People have slowed it for a time here and there but not vanquished or rooted out the source of the problem, which spread from places like university intelligentsia to every corner of the country.

This is the point we are at. People are awakening to it, but whether it is in sufficient numbers to stem the tide of failure and havoc this will wreak is not yet clear. 2024 will be very telling.

Canada's economy ripe for collapse

This is a fairly accurate prediction about the future of Canada's economy.  There are a few minor things to which I would take exception, most notably the conservative party does have plans to address the housing issue as well as the economy and it was glossed over as nobody has plans to deal with this.  Otherwise, this is an accurate assessment of the current situation and likely outcome.

A spate of horrible economic news

A recession could be coming. No, is coming. But here's the thing, they may have the wrong time frame on this.  A recession is inevitable and the recessionary impact is bound to be big, just when is what I question.

Bank of Canada bonuses for bad work

I just mentioned that Canada is not in good shape economically. But the Bank of Canada, despite missing a lot of obvious signs along the way (signs people with a modicum of economic knowledge could see coming), was still giving out raises and bonuses. Why?

Canada's economy secretly tanking

Justin Trudeau is Nero, fiddling while Canada burns.  The thing is if you live in Canada, like I do, you already know this, it's no secret.  Things are getting worse, hidden inflation, especially in food prices, is very, very real.  But that's not all - labor (or 'labour' as well spell it in Canada) productivity is falling, and real income is dropping well behind where it should be. 

This, is bad:

The pitfalls of capitalism

I am an avowed believer in and supporter of capitalism. I wholeheartedly support the concept of the free market. My initial foray into the political sphere, as a young teenager mind you, was from that trajectory.  I was first a fiscal conservative before discovering my social conservatism a decade later.  The benefits of capitalism over socialism, communism, fascism, monarchies, dictatorships or any other form of governance are spectacular and incontrovertible.  Capitalism supports the Biblical principle of the work ethic. Capitalism supports the notion of individual liberty as well as individual responsibility.  Capitalism supports the idea of a meritocracy.  The other forms of government do not. In many regards they even reject or overtly oppose much of those ideas.

The pitfalls of capitalism I am about to discuss are not meant as an indictment of it, rather a warning that we cannot allow it's few but obvious weaknesses to derail it from succeeding.  To appropriate some William Shakespeare's Mark Anthony, I come to praise capitalism, not to bury it. Nevertheless, I come to gird capitalism by pointing out where it has failed.  Or rather, more aptly, those who profess to practice it, have failed.

Let me preface the below by saying that while I am talking about capitalism, which is an economic system, it is inherently entwined with democracy.  You cannot have a free market without a free people.  Other economic systems are more often than not a political and economic model combined. My commentary below reflects this mix of the economic side of freedom (capitalism) with the political side of freedom (democracy, a representative republic or similar means of governance).  My critiques of capitalism stem primarily from the shortcomings of governance rather than capitalism itself.

Capitalism has never existed in an unfettered state.  If it were so it would be seen to be more brutal than how we observe it. If indeed we existed in a truly laissez faire capitalist society, taxation would be for the creation of roads, the common defense and provide laws that protect commerce and individuals from unjustness (theft, fraud, murder for example).  But capitalism is managed by humans, and where it is practiced, it does more.  

There is a social safety net to help the most unfortunate and weakest among us in every capitalist nation.  When done properly this is a boon to individuals as well as to the system.  When done improperly it can result in bloat (too many recipients, including those not truly in need), or shortfall (not supportive enough or corruption leaching funds from those in need by government bureaucrats).  It should be pointed out that these are not pitfalls of capitalism, they are the pitfalls of improperly executed capitalism, or warping of it by those who seek to gain from unwarranted opportunity. 

But there are pitfalls nonetheless.  Perhaps the most egregious of these is the advent of a kleptocracy by both government and the techo-industrial elite.

In a kleptocracy, corrupt politicians enrich themselves secretly outside the rule of law, through kickbacks, bribes, and special favors from lobbyists and corporations, or they simply direct state funds to themselves and their associates.

This is not a the flaw of capitalism, this is a distortion of capitalism.  Capitalism's flaw, is to lend itself to such distortion.  A free market system, with insufficient guard rails put in place can easily be corrupted by those with the money and power to do so.  Therein lies capitalism's greatest weakness; the inability to sufficiently protect itself from deliberate disruption by the lazy-greedy.  This extends to deliberate disruption by the unwise. Government in seeking to prevent disruption of the economy often inadvertently distorts the economy it creates bubbles.  The proper way to handle a recession is to endure it, not print money and artificially avoid it until the next election cycle.  This creates bubbles, and it creates incentive to expand the bubble and avoid the pain.  This makes the inevitable bubble-burst far worse.  Capitalism does not provide a way to prevent that.

The solution, good government, is not mandated by capitalism.  The smarter way to prepare for inevitable occasional economic weakness is to provide a sufficient safety net in those times and even more critically, provide the incentive and enable the populace the opportunity to prepare for it themselves. Does anyone save for a rainy day anymore?  Why bother when the government does not set the example and instead is willing to throw trillions of dollars they don't really have at the problem?  This is what is often referred to as generational theft.  The government borrows money that following generations will have to pay back. Lazy-greedy in a different way.

In defense of capitalism, no other form of government protects from this any better.  In fact they all serve a concentration of power that enables fewer and fewer to decide more and more and ultimately that power not only serves their corruption and enables it, it encourages it.  The imperfection of capitalism in this regard is far worse in other forms of system but capitalism is nonetheless not excused.

Capitalism requires a higher bar of protection against these weaknesses.  Not just legal protections are needed, as those can be rewritten or avoided through loopholes government has proven itself all-too-willing to use.   It requires a belief, strongly-held among the people, that government is a servant of the people and must be held to account for every action and decision.  This is a lot to ask of a population in terms of time and effort and even awareness.  The problem is that the awareness has been deliberately eroded over generations and even good intentions fail when awareness prevents their use. 

Coupled with the lazy-greedy issue, is the developed sense of entitlement.  Modern Caligulas across government and the wealthy elite and even the famous, feel entitled to their wealth and do not concern themselves that it comes at the expense of the middle class and poorer classes.  They are entitled after all.  They have lived it and been told it all their lives. They Marie Antoinette their way through life unconcerned that the price of eggs has dramatically increased and life has become significantly more straining on everyone else.

This oligopoly of wealth and power make decisions on governance outside of the purview of everyday citizens but in a way that affects everyday citizens (most often negatively).  Think COVID mask mandates "for thee but not for me" as one example. Think Jeffery Epstein's private island for a more direct and dramatic use of people as objects for another example.  All the while they tell you what you observe isn't real.  Inflation isn't bad, it's just you.  

This concentration of power and wealth builds upon itself.  Those inside the inner circle grow bigger and bigger feeding of the rest of society, and make rules to ensure competition to their aristocracy is fettered and hobbled and can never truly get to the top.  Again this is not capitalism, it is a distortion of capitalism.  But capitalism here is not snow-white and sin free.

Capitalism's inherent risk here, comes from it's strength.  one of the underpinning concepts of capitalism is competition. If there is a need going unfilled, capitalism rewards those who seek to fill that need by providing them with a growth in their wealth.  But competition inevitably means there will be more than one person or business entity that tries to fill that need with a solution.   Not all will do equally well and the best (based quality, price and other factors) will slowly grow market share at the expense of the less ideal solutions.  In a truly free market there is a potential that the one best idea ends up becoming the only idea, obtaining 100% market share (or perhaps 90% say). The competition has destroyed itself.  Capitalism has led to a market monopoly.  Perhaps this is inevitable in efficient capitalism.  But the strength of the best winning out, doing the best for consumers in the end, sews the seeds for its own demise.  Monopolies are not healthy in capitalism.  Maybe in the short term they are fine, but extended monopolies become like government.  They seek to exist for their own existence.  They serve themselves and only themselves. People be damned. This is a further recipe for corruption and perhaps collusion with government; you protect my market from other players and I donate to your election campaign. It doesn't matter if a newer and better option has been devised, it must be destroyed before it can grow and replace my monopoly.

It's a sick twisting of capitalism but capitalism itself has done nothing to prevent this twisting from occurring.  Or rather we have not done anything to prevent capitalism from being perverted. Again, laws exist to prevent these distortions but they happen anyway, because people are corrupt. Not just the elite, people in general look out for their own interests.  It's human nature, or in fact, just nature. What capitalism requires is an institutional way of preventing the corruption.  It requires it at a foundational level and it does not have it. More important than laws are two things; awareness and transparency.

Those unfortunately require complete openness about financial transactions at those levels (and in the interest of fairness the, at every level), and media coverage of anything that has been flagged as suspicious transactions. Yikes. While we are probably at a point where that may be technically possible, there are three things that are wrong with that solution.

1. The obvious one we rail over already as conservatives; the media is large enough and corrupt enough to become part of the problem already.  They will have no interest in exposing the problems.
2. There is no appetite to create a financially fully open society; not at the top level, not at any level.  Do you want everyone having the option to know or see everywhere you spend your money? Probably not. Very probably not.
3. This does not cover every possible transaction because not all transactions are financial. "Write a negative story about x, and I will make sure you have free access to y." That will still go undetected.

Capitalism also demands equality of opportunity (NOT outcome - I will never play basketball well enough to deserve an NBA level salary at the job. I do not have the physical traits such as height, to compete at that level).  Democracy as it has existed so far, does not ensure this is the case.  This requires equality of education, equality of access to opportunities, and a removal of unjust barriers to entry.

All is not lost for capitalism.  These problems also exist in every other form of government in some form or another, despite what utopian socialists or communist would have you believe. The strength of capitalism is invention and reinvention.  If those who believe in capitalism can come to grips with it's pitfalls, they can work more diligently to expunge them.  That can not be said to be true of most other systems of governance. Capitalism is redeemable but it requires constant vigilance and it does not have that, which is our own fault. 

The problem when you lie so much

The Democratic party, and particularly in this case, their leader (president Let's Go Brandon) are so invested in the lie that the economy is doing great, that they are hurting their chances in the midterms.

Good on them.

China steps closer to the abyss

I keep harping on China. America has A LOT of problems right now, make no mistake. But China is in even worse shape, they just hide it better because they can (and that's not a good thing for China, or anyone else).  You don't see much about China's struggles in the news for a few reasons, chief among them China is not the U.S., U.K. or a part of Western Europe.  That doesn't mean what happens in China will remain contained in China.

We have woven a world of entangled interdependence. While in some economic ways that's arguably a good thing, it also creates dependencies and the likelihood of a cascading ripple effect everywhere else. Too much of our manufacturing has been outsourced to cheaper labor that also happens to entail lower quality goods. President Trump raised the alarm about China and tried to start the process of onshoring production (and jobs).  The elites would have none of it and it never got far enough, so the dependencies remain largely. If China collapses (which I am not saying is likely, just feasible), America and the rest of the West, are in deep trouble thanks to our neglect on dealing with the dependency (much like with Middle Eastern oil).  

You think supply chain issues are a problem now? You think they are the major cause of inflation?  They aren't by the way, money printing is the issue).  Just wait until Chinese manufacturing plummets and the prices are not the issue but the empty shelves at WalMart.  

All of this and no mention yet of how the CCP (Chinese Communist Party) will not go quietly.  Just like the elites in the West, they will do whatever it takes including selling out their own people to hold onto power and wealth. We'll call it an atrocity when that happens, and it will be.  But it's no different than what is being done here in the West with one major exception; we are being deceived into believing it isn't happening to us.  Because it is being done without tanks and instead our wealth is eroding towards the already uber-rich without us knowing anything other than it keeps getting harder to stay afloat.