August 9: There’s Bigfoot, chupacabra, yeti, and the American economy

In which, an explanation on the economy remains elusive, Iran asks for a breather, Ukraine bares its claws, and the Veep picks a Veep.

There’s BigFoot, chupacabra, yeti, and the American economy

Don’t read this as sour grapes on my part. I don’t consider myself an economic prognosticator, but when all the alarm bells of impending recession are going off and markets are tanking along with cryptocurrencies (again, these are consumer products), and nothing really happens, it’s weird right?

In the space of a weekend we went from “OMG, the markets!” to “This is fine.” Not only did markets bounce back, but apparently employment numbers suddenly righted themselves? At this point, it’s safe to say that no one knows what’s going on. The booming American economy and the recession-bound American economy both appear to be elusive creatures of myth at the moment.

At the very least, the up and down economic indicators should point to the conclusion that markets are manipulable, but not controllable. In other words, you can create short term shifts intentionally or unintentionally, but you can’t exercise much control at the policy level. It seems like every effort by the Fed to control inflation or every effort by the Biden administration to reorient is being met with resistant market forces. Not necessarily hostile, there just seems to be something fundamental, organic in the American economy that policymakers are not accounting for. Perhaps that something is the spending limits of the average American? Or perhaps there’s a misalignment with the needs of said Average Joe? If so, then a corrective recession may actually be what’s needed.