Black Friday- Don’t Worry About the US Consumer
Giving Thanks. What an incredible time to be alive! We stand just five weeks from the end of a decade that saw prosperity spread far and wide. Some don’t see it that way, as pouting pundits and rancorous politics skew our visions. But, if we simply step back from the day to day noise and take in the magnitude of progress around us, there is a great deal to be thankful for.
Income Inequality, Taxation, and Redistribution. One of our favorite economic parables is the Fish Story, from Paul Zane Pilzer’s 1990 book, “Unlimited Wealth.” It is an excellent tool for thinking about wealth creation, inequality and redistribution.
Another Fed Rate Cut on the Way. In our opinion, this rate cut is completely unnecessary. The unemployment rate is 3.5%, much lower than the 4.2% that Fed policymakers think it will average over the long run. Nominal GDP – real GDP growth plus inflation – is up 5.0% annualized in the past two years, well above the level of short-term rates. The M2 measure of the money supply is up 6.5% from a year ago, a healthy acceleration from the 3.4% increase the year before.