Economy

I don’t gamble. But in October 2016, I made a bet. It was obvious Trump didn’t just have skeletons in his closet but a walk-in necropolis. As we stumbled toward November, the question wasn’t whether one of these skeletons would break free, but just how bad the October Surprise would be. It was supposed to be a polling-shifting, election-sealing, reputational nuclear bomb. And if you read the press, that’s what the “Pussy-Grabbing Tape” was. But to me, it was just another example of Trump being vulgar. And Trump had always been vulgar. And voters liked that he was vulgar, or didn’t care that he was vulgar, or liked that he was so unlike other politicians that he could be vulgar.

The Hawk Tuah girl, a young woman famous for a viral video in which she tawdrily describes a sex act, launched a meme coin this week — because of course she did. It instantly lost over 90 percent of its value. This, too, comes as no shock. But out of ignorance, stupidity and greed, many people put their real money into $Hawk and lost it all. And so, 2024 ends with assassinations in the middle of New York City, attempted coups in South Korea and @jiggadrin_ tweeting out that his $35,000 in “$Hawk is now $2,000 after ten minutes of buying,” and that “I am a huge fan of Hawk Tuah but you took my life savings.” In some replies, he tried to spin this as a joke post. But it appears he genuinely lost the money, as did many others.

Throughout the West, particularly the Anglosphere, housing costs are ravaging the middle class. Homeownership, long the key to social mobility, is on the decline, particularly among younger generations and minorities. According to the Organization for Economic Cooperation and Development, house prices in high-income countries have been rising “three times faster than household median income over the last two decades,” causing the standard of living “to stagnate or decline.” Unlike previous housing crises, this one is not primarily caused by mass displacements due to wars or natural disasters or population growth.

Kamala Harris is a master shapeshifter — whether through codeswitching, pandering or just being phony. One moment she’s rolling up masala dosa with Mindy Kaling on live TV; the next she’s FaceTiming the BET Awards, declaring, “Girl, I’m out here in these streets.” Donald Trump’s bumbling attempts to highlight her cultural inconsistencies briefly shifted the election focus to Harris’s race and ethnicity — and away from far more important qualities. Perhaps it’s because her actual policy ideas have been so scant and vague that attacking them directly has proven difficult. Perhaps her chameleonic history has made anything beyond a surface-level attack difficult.

By almost every historical indicator, the US is clearly approaching a debt crisis. The federal government’s aggregate liabilities now exceed its gross domestic product. The annual interest required to service federal obligations is greater than what Congress spends each year on defense. And projected annual deficits for the next decade are well ahead of estimated revenues by more than $2 trillion. Many state legislatures are deeply underwater as well, despite receiving generous Covid related bailouts from President Biden’s 2021 American Rescue Plan Act. California’s temporary $100 billion surplus in 2022, for example, has morphed into a projected deficit of $68 billion over the next two years.

Some 14,000 cast members at Disneyland in California voted by an overwhelming 99 percent to authorize a strike on Monday; however, a coalition of union members reached a tentative agreement with Disneyland Tuesday, mainly revolving around wage increases. The coalition, titled Disney Workers Rising, will open a vote on the agreement at Disneyland for employees on July 29. According to Disney, there are more than 35,000 cast members (what they call their employees) who work at Disneyland in Orange County, California. The terms of the agreement have yet to be disclosed, but if Disney agreed to raise wages by twenty-five cents an hour — which certain employees have hypothesized could happen, though it will likely be by much more — that would cost them more than $18 million per year.

It’s not often that anyone — much less an academic — writes a book that launches a revolution, but that’s exactly what Burton Malkiel did in 1973 when the Princeton economist published a short, potent book called A Random Walk Down Wall Street. As of 2023, the book is in its thirteenth edition. Malkiel famously insisted that “a blindfolded monkey throwing darts at the stock listings could select a portfolio that would do just as well as one selected by the experts,” and then he spent his entire career doing his best to prove that hypothesis.

Do you like scary stories? How about this recent report from the United States Treasury, “Advancing Equity through Tax Reform: Effects of the Administration’s Fiscal Year 2025 Revenue Proposals on Racial Wealth Inequality.”  That sleep-inducing mouthful of grade-A bureaucratese may seem anodyne, the sort of thing that requires a surgeon general’s warning. But even a cursory trip through this twelve pages of reader-proof gobbledegook will be enough to give any sentient being nightmares. For what this malodorous blueprint aims at is nothing less than the confiscation of your wealth and property. Beginning with its title, this report bristles with loaded buzzwords —“equity,” “racial wealth inequality.

When I was a college student in Texas, I told someone at a bar that I was from Pennsylvania. The guy’s eyes lit up. “Pennsylvania?!” the man exclaimed. “That means you get to drink Yuengling whenever you want!” Yes, I mused, with a shrug and a swig of my Shiner Bock. So what? The barfly informed me he was such a big fan of America’s Oldest Brewery — established 1829 — that he and his family would haul cases of the traditional lager, Smokey and the Bandit style, back to the Lone Star State any time they traveled east of the Mississippi. Fast-forward (just!) a few years, and Yuengling is now available in twenty-six states. Texas, my old friend would be tickled to know, was the first western state to get a taste of Yuengling back in 2021.

As I’ve said before, I hold no brief for Dr. Mike Lynch, the founder of the Cambridge-based software firm Autonomy, who faces fraud charges over the $11 billion takeover of his company by Hewlett-Packard (HP) in 2011. But I watched with foreboding as US marshals bagged Lynch under the lopsided 2003 US-UK extradition treaty and flew him to California — after the then home secretary Priti Patel declined to halt the process — and a judge there changed his pre-agreed bail conditions to place him under armed house arrest. Now, having comprehensively lost the argument that as a UK citizen running a UK company he should have been tried in British courts, Lynch is pleading “not guilty” to a San Francisco jury.

Artificial intelligence (AI) and its related technologies — machine learning and the metaverse — represent a watershed in the evolution of the global economy. Like other such shifts, its emergence is likely to favor certain interests, notably a handful of technology giants, the media and a small cadre of highly skilled programmers. Everyone else faces economic danger, certain to roil domestic and international politics in coming years. Eighty-two percent of millennials fear AI will reduce their earning ability — and they are right to be worried. The first group to lose will be the usual suspects: factory and warehouse workers as well as professionals with largely routinized occupations suited to automation.

Bernie Sanders is the bottomless cup of bad ideas. He keeps refilling it. Take his latest venti, a law that says everybody gets to work thirty-two hours for forty hours pay. That’s a magical 25 percent pay increase. His next trick is to pull free steak dinners out of a hat. What do you think would actually happen if such Bernie’s law were passed, enforced and found constitutional? (None of those would actually happen, of course.) The immediate effects would be another 25 percent price increase for labor-intensive products, a huge burden on low-income consumers and an additional incentive to replace more expensive workers with machines and computers.

On one of those dark-too-early winter afternoons that might as well be midnight, I assessed my Subaru’s all-wheel drive capabilities with a slick spin up a long, snow-covered driveway. My destination: the sugar shack. Scott and Kelly Kolesar live on a piece of property Kelly’s great-grandfather homesteaded. And for all I know, standing on the clear-cut hillside that’s only ever been disturbed by the planting of some potatoes and strawberries and the hooves of cattle that grazed it decades ago, I could be right back in those early days of central Pennsylvania’s settling. The sky is clear and dark, with no light pollution to speak of, and diamonds twinkle above. The Kolesar home glows as a North Star up ahead, and another beacon next door serves as Halley’s Comet.

The governor of the Mexican northern state of Durango Esteban Villegas announced last Monday the first “grand investment of the year.” The investment is of close to $400 million — and the investor is China. This project is one of many. So it appears shortsighted to celebrate Mexico surpassing China to become the US’s top trading partner as an absolute “decoupling” success. While Mexico and the US are economically integrating, so are Mexico and China. Politicians in Washington, most notably members of the Select Committee on the Chinese Communist Party, are now warning that Beijing is attempting to use Mexico as a “back door” to the American market as direct trade between the great competitors sharply declines.

Few developments have more cheered progressive activists than the perceived resurgence of labor unions. This has been sparked by largely symbolic efforts to unionize in places such as Starbucks and Amazon, as well as more sizable wins by the Writers Guild of America and the Screen Actors Guild and United Auto Workers, the country’s most important private labor union. In 2022 strike activity more than doubled from the previous year. Yet ultimately these wins may turn out to be largely Pyrrhic.

A soon-to-be-public audit of Disney’s special governing district in Florida details the “shocking” ways in which the nearly $200 billion company was effectively governing itself for half a century. Investigators described the Reedy Creek Improvement District as Disney’s “creature” that maximized company profits at the expense of Floridians, according to a copy of the report obtained by The Spectator. Disney placated Reedy Creek employees with millions of dollars' worth of special park passes, significant discounts on cruises, food and merchandise and handpicked leadership through shady land deals to ensure that Reedy Creek would do its bidding.

It is only fitting that the low point of the American labor movement occurred in 2009, the Year of the Rat. The Great Recession may have started with Wall Street speculation in the housing market, but your average American had most likely never heard of Henry Lehman or his siblings until the day Dick Fuld drove the 150-year-old bank bearing their name into the ditch. But General Motors, Chrysler? Cars, even more than Hollywood, jazz and the semi-automatic rifle, are the quintessential American business. How could those get driven into the ground? As soon as freshly evicted homeowners finished packing the remains of their subprime split-levels into the backseats of their battered Tahoes, they went looking for culprits. They settled on the United Auto Workers.

It’s a familiar response whenever the National Weather Service warns of a Category 5 hurricane, a life-threatening winter blizzard or some other looming natural disaster. Government officials urge local citizens to seek shelter immediately, while promising that area police will keep guard to ensure that looters do not use the emergency to rob boarded-up homes and abandoned stores. Today, Americans are being warned to brace for another kind of storm, one involving not the weather but their personal finances.