1) Commodity Prices Are Up 8% With the Fed's "Jumbo" Rate Cut
Regular readers know that we like to look at commodity price changes as the best forward-looking indicator of where consumer prices are going. If you know what's happening with corn, and oil, and aluminum prices, et al, you have a pretty accurate indication of where consumer prices on the store shelves are headed.
We don't like to make too much out of short-term trends, but we can't help noticing that prices have stormed back up by about 8 percent from the low a week before the Fed announced its 50 basis point cut 50 days before the election. The Fed's deep thinkers said inflation was tame, but they may have uncorked a new round of higher prices.
And, of course, the strike of the dock workers (see below) will start jacking up prices as early as next week if the merchandise gets stacked up at the ports.
It seems that wherever Joe Biden goes, supply-chain disruptions follow.
Ronald Reagan ended union domination of the economy early in his presidency by firing illegally striking air traffic controllers. The unions thought he would blink. Reagan sent a message across the globe: don't mess with me.
Contrast that with our feckless leadership in Washington today. Biden sent a message to the Longshoremen: whatever you do, I'm your stooge in the White House.
So now we have a union of 40,000 workers that has shut down operations at 36 ports from Boston to Houston. We have a union boss with alleged mob ties who arrogantly declares to the nation: "I will cripple you and you have no idea what that means." He is holding a gun to the head of the American economy that the union has taken hostage.
We agree that union workers have been flattened by Bidenflation - and Trump has made this case. But the union demands in the ransom note are breathtaking:
Strict restrictions on automated cranes and other technological improvements that are in use in ports all over the world.
A 77% wage hike over six years. His members already earn well north of $100,000. Daggett has already turned down an offer from port owners for a 50% wage hike per six years.
All container royalty funds must be transferred to the ILA union.
This thuggery is only happening because we have a president and vice president with no backbone. No regard for the damage the strikers will inflict on the economy. They are pro-union to the bitter end – and if that means crashing the economy – so be it.
This is the price we pay for having a mentally incompetent administration. We are frighteningly lacking leadership today.
This, from the National Catholic Register, caught our eye:
The new analysis by researchers at the Institute for Family Studies, examines the states that are attracting and losing families. It finds that "families are leaving many of the most progressive U.S. states and heading for states that are considered more conservative or politically diverse." This confirms our Unleash Prosperity analysis over the years, but also shows that children are becoming more scarce in "progressive" states.
Blue states that voted for Democratic presidential candidates in both 2016 and 2020 lost some 200,000 families with children in 2021 and 2022. In the chart below, the states shaded dark green are gaining families, and the bright yellow states are losing families.
The study also documents that the types of social programs devised by the left to attract and retain families aren't working.
"Parents are not generally moving towards states with the preferred family policies of progressives. They are moving out of these states, including Democratic states, like New York, California, Massachusetts, and Oregon, all well known for their liberal family policies," researchers Lyman Stone and Brad Wilcox wrote.
Child credits and mandatory family leave policies aren't important to parents.
What IS important to parents? Low crime states, low cost of living, and affordable housing.
The blue states that have lost the most families include California, Massachusetts, Minnesota, New York, and Oregon.
The authors conclude: "No amount of tax credits will ever be more valuable to a family than safe streets and decent housing for middle-class earners. Parental leave will never outweigh a good job market."
Two years ago, liberals rushed through their first installment of the Green New Deal (aka, the Inflation Reduction Act), which raided Medicare to pay for Biden's weird obsession with windmills, solar panels, and batteries.
This summer, the Biden-Harris administration acknowledged the impending financial distress for Medicare drug plans that UP senior fellow and University of Chicago economics professor Casey Mulligan and his colleague Tomas Philipson warned about. The administration proposed a temporary bailout for insurers to prevent huge premium hikes from hitting before the election. They labeled the bailout with the Orwellian title of "demonstration."
We expect the cleanup to be almost as messy as the original. Half of seniors are in Medicare plans that are ineligible for the bailout. So far, the Biden administration has been tight-lipped on how exactly each of the Medicare Advantage plans will be adapting to their administration-inflicted wounds.
The small bit we know as of October 1 is that benefit cuts are on the way, such as the dental benefit cuts just released by one of the major insurers in Florida.
5) Congrats to Our Friend and Colleague Heather Mac Donald
A reader sent us this classic 2008 quote from the leftist rag Mother Jones about Manhattan Institute scholar Heather Mac Donald's veracity:
If you believe that the criminal justice system is racially biased, you need to know Heather Mac Donald.
She'll mess with your mind and make you either up your politico-cultural game or admit you were wrong. What worries me is that so few on 'our' side can, or bother to, go toe to toe with her. Just about every one of her pieces is a statistical and analytical tour-de-force, while we liberals tend too often to mouth liberal pieties like inside jokes.
Just yesterday, I was listening to Angela Davis address the Commonwealth Club on my car radio. I agreed with nearly everything she said, but they were dissatisfying lefty bromides, one and all. Racist criminal justice system. Slavery was bad. War in Iraq. The crowd whooped and hollered, but where was the beef, the analysis, the facts? Forgive me Angela, patron saint of the streets, but Mac Donald would have had you for lunch.
Heather has, despite this warning, eaten quite a few leftists for lunch in the years since!
