Sunday, September 18, 2022

“The threat is real and it is growing.” Election-Denying Candidates, crazy or eccentric or weird

What a cast of characters! . . Loyalists to Trump haven’t been chastened by the failed bid to overturn the 2020 presidential election, warned Bennett, who delivered the message in a conference room at FGS Global, among the capital’s leading crisis management firms. Rather, they have learned valuable lessons about the importance of installing allies in positions of authority — such as overseeing elections administration or writing the rules governing voting — in battleground states.

The fact that the elites are not alarmed enough and the money isn’t flowing in that direction at sufficient speed is really alarming,” said Matt Bennett, a veteran of Democratic issue campaigns and co-founder of the centrist policy group Third Way.

Arizona, a pivotal swing state and presidential battleground, is a case in point. Democratic Sen. Mark Kelly is flush with cash in his reelection bid — he’s raised more than $52 million to date, including $13.6 million in the most recent fundraising quarter.But Democratic donors have been slow to dig into their pockets for Arizona’s secretary of state race, where the GOP nominee is Mark Finchem, a state legislator who has claimed repeatedly and without evidence that the 2020 election was tainted by fraud, and who says he would not have certified the election for Biden. Through mid-August, Finchem pulled in $1.2 million, compared to roughly $700,000 for Democrat Adrian Fontes, according to a report compiled for POLITICO by the nonpartisan Center for Responsive Politics.

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"Kristina Karamo, Mark Finchem and Jim Marchant, the Republican secretary of state candidates in Michigan, Arizona and Nevada, respectively, attend a conference on conspiracy theories about the 2020 presidential election in West Palm Beach, Fla., Sept. 10, 2022. | Jim Rassol/AP Photo

Increasingly worried that big donors are failing to recognize the scale of the threat to democratic norms, Democratic strategists and party officials are rallying behind an effort to persuade them to redirect their cash to key state and local elections.

Wealthy party donors, these Democrats say, remain too focused on giving to higher profile congressional races. And it’s coming at the expense of under-the-radar contests that could put scores of Republicans who deny the legitimacy of President Joe Biden’s 2020 victory in charge of running elections and writing the rules governing them.

While Democratic candidates in top U.S. House and Senate races are flush with cash in the run-up to November, a number of those running for key state legislative and statewide posts aren’t nearly as well-heeled. At the statehouse level, the Republican State Leadership Committee, which mainly works to elect GOP state lawmakers, has spent nearly twice as much in the current election cycle as its Democratic counterpart, the Democratic Legislative Campaign Committee, according to the Center for Political Accountability.

That’s a problem in a midterm where GOP candidates who falsely claim Donald Trump won the 2020 election are on the November ballot in more than half the races for governor and at least one-third of attorney general and secretary of state races, according to States United Democracy Center, a nonpartisan pro-democracy organization. At least 600 GOP state legislators who held office in 2021 lied about the 2020 election, or supported legal efforts challenging its integrity, according to the Democratic Legislative Campaign Committee. . .

Republicans are reaping the rewards of their investment while expanding the battlefield to include state executives, law enforcement officials and state supreme courts. . .

A new generation of Trump-inspired lawmakers has Democratic officials warning that state legislatures could overturn the will of voters in future elections. Already, legislatures in 33 states are considering at least 244 bills that seek to undermine nonpartisan election administration, an acceleration from last year, according to a report released last month by States United Democracy Center and Law Forward, nonpartisan groups seeking to advance democracy.

What’s needed, Bennett told the group, is the same effort and coordination that goes into a presidential campaign — namely a $1 billion investment to repel a “systematic, sophisticated and serious” assault on the next presidential election that could be more successful than the 2020 slapdash approach of legal challenges and pressure on local election officials that ended in a bloody assault on the U.S. Capitol.

Priorities for big donors should include matching or exceeding “the MAGA movement in its effort to recruit poll workers,” providing them with physical protection and legal representation if they are threatened with criminal or civil sanction, funding organizations that advocate for “clean” elections and recruiting lawyers “ready to sue to stop the unconstitutional abrogation of voting rights and attempts by partisans to grab power from nonpartisan elections officials,” according to Third Way’s presentation.

“They need more money, talent, people, social media presence and attention. A LOT MORE,” the presentation says.

Several attendees described the meeting as a sobering call to action for party “influencers” to convince more donors, party elite and corporate America that they need to take a “presidential campaign approach” to protecting democracy, including elevating local officials through support for nonpartisan elections administration and a shift to prioritizing more donations to campaigns of state and local officials in several swing states. . .

In the Pennsylvania governor’s race, Democrat Josh Shapiro’s fundraising is also far outpacing Republican Doug Mastriano, who has said he would require voters to “re-register” and has been subpoenaed by the House committee investigating the attack on the Capitol.

[ . . . ]

“A tradition unlike any other: state Democrats realizing at the end of the cycle that their socialist agenda is toxic with voters and sending out a smoke signal to their liberal billionaire donors to bail them out of political peril,” said RSLC spokesperson Andrew Romeo, in a statement responding to the premise that Democrats are financial underdogs in state and local races.

While isolated initiatives designed to counter what some Democrats consider to be the newest threats to democracy — such as the targeting of elections administration — are taking shape on the left, these efforts aren’t necessarily fully funded.

To many Democratic activists and strategists, those efforts pale next to what they’re up against. They cite a $1.6 billion gift to Federalist Society co-chair Leonard Leo, the largest known political advocacy donation in history, much of which they expect to flow to state-level coffers, including for attorney general, secretary of state and state supreme courts.

“A significant investment from big donors would make a big difference,” said Geoff Burgan, spokesperson for DAGA.

“We need more resources. Period,” he said.

Popular American Historian Michael Beschloss: Some kind of "Partisan" now?

Sooner or later someone can go after him - even when he unequivocally "I have carefully-developed views on historical subjects that I have studied, and I certainly have strong convictions about democracy. But beyond that, partisanship is just not my professional focus.”

Michael Beschloss is an historian specializing in the United States presidency. He is the author of nine books on the presidency.

✓ History With a Kick … Historian Michael Beschloss loves the archives. His Twitter is an oddly compelling stream of archival images that has gotten him a touch more than 800,000 followers over a decade. For most of that run, his history lessons have tended towards the anodyne. But in the Trump era, Beschloss has found his inner online provocateur, tweeting out pictures of the Rosenbergs as news broke that federal agents found nuclear secrets at Mar-a-Lago, or the Munich Beer Hall Putsch on Jan. 6th.

Is he that way “irl”? Michael Schaffer went to see him for this week’s Capital City column, on a mission to figure out whether Beschloss is the classic TV historian, the guy with the quick Twitter fingers or something beyond either of those public personas.

Michael Beschloss On Resisting Threats To Democracy - YouTube

m.youtube.com › watch

Duration: 7:05
Posted: Sep 2, 2022

Michael Beschloss: Mar-a-Lago Search Was Unprecedented, But So Was Trump's 'Indifference To The Law' - YouTube

m.youtube.com › watch

Duration: 7:06
Posted: Aug 9, 2022

"With his sonorous baritone and his taut jawline and his impeccably gracious manner all still intact, Beschloss today may be the greatest example (or at least the one whose living room backdrop has the highest Room-Rater score) of a contemporary Washington phenomenon: The radicalized establishmentarian.

You can see the radicalism when you peruse his Twitter feed, an oddly compelling stream of archival images that turns ten years old next month and now has a touch more than 800,000 followers. Though the feed’s early years focused on images connected to mostly anodyne milestones, over the the years the feed, like his TV appearances, has become increasingly peppery: Photos of Mussolini and Hitler, allegations of fascism and racism, insinuations of ex-presidential criminality.

But you can see the establishmentarianism when you ask him about it and the first thing he does is assure you — with a suitably generous preamble — that he’s no angry yahoo. “Let me say what I assume I should not need to,” he says. “I was not suggesting that Donald Trump be executed. I was doing a historical tweet about the most famous nuclear secrets case in American history.”

Longtime Beschloss-watchers will also be relieved to know that he hasn’t become some kind of partisan, either.

“I was going through life happily, not spouting any views I might have on healthcare and taxes, which are still not well-developed, because I’m not by nature a very partisan person.” But what are those views? “I don’t really have many elaborate, strong views on a lot of current political issues. I have carefully-developed views on historical subjects that I have studied, and I certainly have strong convictions about democracy. But beyond that, partisanship is just not my professional focus.”

Attempts to get Beschloss to spill the beans on his own voting history are similarly unsuccessful. “I’ve been a registered Independent for decades. I think the last time I gave any money to a candidate was a modest donation in 1988 to Al Gore, who that year was one of the most centrist candidates — and to my home state Senator, Paul Simon of Illinois. In both cases, friends asked me. None of that suggests much about ideology.”

But the display of dispassion comes to an end when the subject turns to American democracy.

“The point I’m trying to make is that, until roughly 2017, I was not inclined to take public positions on current events. And that is because I did not feel that democracy was under immediate and serious threat. But if you and I had talked earlier, and we had been told that in the near future, democracy was going to be in danger and a President might be eager to tear apart just about every major institution of democracy that you care about, including free and fair elections as well as the rule of law — would you speak out? I would have said yes, I certainly would.”

✓As it happens, this question is one of the big divides in American media and politics right now: Whether to view the constellation of issues Beschloss puts under the threats-to-democracy rubric as simple political disagreements where the obligation to impartiality holds sway, or to treat them as something outside the bounds of partisan politics, a subject where it’s quite all right to root for one side. Beschloss has picked the latter option. . ."

Revisiting Earlier Days American History: The State of Deseret

Information provided by this open reliable source

The State of Deseret ()^[1] was a provisional state of the United States, proposed in 1849 by settlers from The Church of Jesus Christ of Latter-day Saints (LDS Church) in Salt Lake City. The provisional state existed for slightly over two years and was never recognized by the United States government. The name derives from the word for "honeybee" in the Book of Mormon.^[2]

State of Deseret

1849–1850, Utah War

Flags of the State of Deseret

The boundaries of the provisional State of Deseret (orange with black outline) as proposed in 1849. Modern state boundaries are underlaid for reference.

Status

Unrecognized state

Capital

Great Salt Lake City

Common languages

English

Religion

The Church of Jesus Christ of Latter-day Saints

Government

Theodemocracy

Governor

• 1849–1850

Brigham Young

History

• Established

1849

• Disestablished

1850, Utah War

Preceded by

Succeeded by

Centralist Republic of Mexico

Utah Territory

Today part of

United States

HistoryEdit

Formation of the proposalEdit

When members of the LDS Church (the Mormon pioneers) settled in the Salt Lake Valley near the Great Salt Lake in 1847 (then part of Mexico), they wished to set up a government that would be recognized by the United States.

Initially, church president Brigham Young intended to apply for status as a territory, and sent John Milton Bernhisel to Washington, D.C., with the petition for territorial status. Realizing that California and New Mexico were applying for admission as states, Young changed his mind and decided to petition for statehood.^{[citation needed]}

In March 1849, realizing that they did not have time to follow the usual steps towards statehood, Young and a group of church elders quickly drafted a state constitution based on that of Iowa, where the Mormons had temporarily settled, and sent the legislative records and constitution back to that state for printing, since no printing press existed in the Great Basin at the time. They then sent a second messenger with a copy of the state's formal records and constitution to meet up with Bernhisel in Washington, D.C., and to petition for statehood rather than territorial status.^{[citation needed]}

Territory of DeseretEdit

The Deseret Stone used in the construction of the Washington Monument. The stone was donated by the territory in 1853 to represent the provisional state.

The provisional state encompassed most of the territory that had been acquired from Mexico the previous year as the Mexican Cession.

The Territory of Deseret would have comprised roughly all the lands between the Sierra Nevada and the Rockies, and between the border with Mexico northward to include parts of the Oregon Territory, as well as the coast of California south of the Santa Monica Mountains (including the existing settlements of Los Angeles and San Diego). This included the entire watershed of the Colorado River (excluding the lands south of the border with Mexico), as well as the entire area of the Great Basin.

The proposal encompassed nearly all of present-day Utah and Nevada, large portions of California and Arizona, and parts of Colorado, New Mexico, Wyoming, Idaho, and Oregon.

The proposal was crafted specifically to avoid disputes that might arise from existing settlements of Euro-Americans.^[3] At the time of its proposal, the existing population of the Deseret area, including Southern California, was sparse, since most of the California settlement had been in the northern gold rush areas not included in the provisional state. Likewise, the border with New Mexico did not reach the Rio Grande, in order to avoid becoming entangled in the existing disputes of the western border of Texas. Deseret also avoided encroaching on the fertile Willamette Valley of Oregon, which had been heavily traveled and settled since the 1840s.

Moreover, the proposal encompassed lands largely known to be inhospitable for cultivation, thus avoiding conflict over the issue of the expansion of slavery.

The Beehive symbol often associated with Deseret.

The proposal for the state was considered by some to be too ambitious to succeed in Congress, even disregarding the controversy over the Mormon practice of polygamy. Nevertheless, in 1849 U.S. President Zachary Taylor, eager to avoid disputes as much as possible, sent his agent John Wilson westward with a proposal to combine California and Deseret as a single state,^{[citation needed]} which would have had the desirable effect of decreasing the number of free states entered into the Union, and thus preserving the balance of power in the Senate.

The California Constitutional Convention debates of 1849 mentioned the Mormons or Salt Lake a number of times^[4]^[5] along with the North–South conflict over extension of slavery. Advocates of smaller boundaries (such as 116° west or the crest of the Sierra Nevada) argued that the Mormons were unrepresented at the convention, culturally different, and applying for their own territorial government. They also argued that Salt Lake was too far away for a single government to be practical and that Congress would not agree to such a huge state. Those advocating retention of all of former Mexican Alta California, such as pro-slavery future Senator William M. Gwin, argued these were not real obstacles or could be solved later.

Establishment of Utah TerritoryEdit

The Utah Territory is shown in blue, while the proposed State of Deseret is outlined by the dotted line. Modern state boundaries underlaid for reference.

On September 9, 1850, as part of the Compromise of 1850, the Utah Territory was created by Act of Congress, encompassing a portion of the northern section of Deseret.

On February 3, 1851, Brigham Young was inaugurated as the first governor of the Utah Territory. On April 4, 1851, the General Assembly of Deseret passed a resolution to dissolve the state. On October 4, 1851, the Utah territorial legislature voted to re-enact the laws and ordinances of the state of Deseret.

After the establishment of the Utah Territory, the Latter-day Saints did not relinquish the idea of a "State of Deseret". From 1862 to 1870, a group of Mormon elders under Young's leadership met as a shadow government after each session of the territorial legislature to ratify the new laws under the name of the "state of Deseret".^{[citation needed]} Attempts were made in 1856, 1862, and 1872 to write a new state constitution under that name, based on the new boundaries of the Utah Territory.

The idea of creating a state based on Mormonism began to fade away after the coming of the railroad, which opened the territory to many non-Mormon settlers

HOW DO YOU DO YOU?? . . .Open Fears A Recession

Compare this for SENSATIONAL HEADLINES and then the next following post

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Apocalypse 401k: Billionaire economist Ray Dalio, founder of Bridgewater hedge fund, says predicted Fed hike of interest rates to 4.5% will crater stocks by a FIFTH and bring 'the economy down with it'

18:19 EDT 17 Sep 2022 , updated 22:18 EDT 17 Sep 2022

Ray Dalio, of the Bridgewater Associates investment company, warned that the predicted federal interest rate hikes would send stocks falling by 20 percent
Dalio and other economists believe the central bank will hike interest rates by another consecutive 0.75 percent in order to reach a 4.5 percent rate by 2023
The hikes are meant to bring down rampant inflation, but are also predicted to send the US into a full Recession with the stock market plummeting
Wall Street's three major indexes have already suffered big losses this past month, with the S&P on its way to record its worst year since the 2008 crash

A billionaire economist has warned that the coming Federal Reserve interest rate hikes will lead to the stock market plummeting by 20 percent.

Ray Dalio, founder of the Bridgewater Associates investment company, joined predictions that the central bank would increase interest rates by another historical 75-percentage points, and that the year would end with interest rates at 4.5 percent.

It would be nearly double from the current range of 2.25 and 2.5 percent, which Dalio wrote would plunge stocks by a fifth as Wall Street's three major indexes have already seen a more than 9 percent drop this past month.

Dalio added that the negative forecast would impact all levels of the economy, including American's 401ks, which will see a significant drop along with the stock market.

'This will bring private sector credit growth down, which will bring private sector spending and, hence, the economy down with it,' he wrote.

Ray Dalio (above), billionaire founder of the Bridgewater Associates investment company, warned that the predicted federal interest rate hikes would send stocks falling by 20 percent

Dalio and other economists believe the central bank will hike interest rates by another consecutive 0.75 percent in order to reach a 4.5 percent rate by 2023

The hikes have caused shocks in the stock market, with the Dow Jones Industrial average falling by 9.34 percent this past month alone

The Federal Reserve has been ramping up interest rates this year after keeping them near zero during the pandemic in order to combat historically high inflation rates.

In June and July, the central bank raised interest rates up by 0.75 percent, the highest in more than two decades, and many economists predict the Fed will make a third, consecutive 0.75 percent hike in the coming weeks.

Many have predicted that the hikes will tip the economy into a full recession next year, which the country is technically already under after reporting negative GDP growth in the first two quarters of 2022.

And with a recession, comes a stock market crash that will take a huge hit on retirement accounts.

Since the latest report at the end of the second fiscal quarter in June, that average 401k balance stood at $103,800, down almost 15 percent from the previous quarter and down 30 percent from 2021.

And things have only gotten worse on Wall Street amid the interest rate hikes.

In the last month, the Dow Jones Industrial Average fell by more than 3,000 points, or 9.34 percent.

The S&P 500 also fell by 9.58 percent, of 410 points, in the past month, with the Nasdaq taking the biggest hit and falling by 12.18 percent, or 1,644 points.

The S&P 500 is heading for its biggest annual loss since the 2008 Great Recession.

The S&P 500 fell by 9.58 percent this past month and is heading for its biggest annual loss since the 2008 Great Recession

The Nasdaq suffered the biggest losses this month, falling by 12.18 percent

Wall Street is expected to suffer repeated losses as the nation is threatened by a looming recession. Pictured: traders looking over prices at the New York Stock Exchange on Friday

Despite open fears of a recession, Christopher Waller, governor of the Federal reserve, backed the central bank in making another 75 basis-point move, during a speech in Austria last week.

'I support a significant increase at our next meeting on September 20 and 21 to get the policy rate to a setting that is clearly restricting demand,' Waller said.

He said that the Fed will continue to take 'significant steps' to control policy and added that rate hikes may continue into early 2023.

Fed Chair Jerome Powell had already kept the option open for the increase, which is supported by many bankers in a desperate attempt to control inflation.

What is your guesstimate? What is your guesstimate? What are your estimates for these?

OK Process this: "The upshot is that it looks likely to me that the inflation rate will stay significantly above what people and the Fed want it to be (while the year-over-year inflation rate will fall), that interest rates will go up, that other markets will go down, and that the economy will be weaker than expected, and that is without consideration given to the worsening trends in internal and external conflicts and their effects."

It Starts With Inflation

Ray Dalio

Founder, Co-Chief Investment Officer…

Published Sep 13, 2022

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It Starts With Inflation: How Inflation, Interest Rates, Markets, and Economic Growth Relate to Each Other and What That Means for What's Ahead

✓In this post a) I will very briefly explain how I believe the economic machine that determines inflation, interest rates, market prices, and economic growth rates works, and b) work with you to apply current circumstances to that machine to come up with our expectations for the future.

How It Works

Over the long term, living standards rise because of people inventing ways to get more value out of a day's work. We call this productivity. The ups and downs around that uptrend are mostly due to money and credit cycles that drive interest rates, other markets, economic growth, and inflation. All things being equal, when money and credit growth are strong, demand and economic growth are strong, unemployment declines, and all that produces higher inflation. When the opposite is true, the opposite happens. Most everyone agrees—most importantly the central bankers who determine the amount of money and credit available in reserve currency countries—that having the highest rate of economic growth and lowest unemployment rate possible is good as long as it doesn't produce undesirable inflation. What rate of inflation is undesirable? It's a rate that creates undesirable effects on productivity; most people agree and central banks agree that it's about two percent for reasons that I won't now digress into. So, most everyone and most central banks want strong growth and low unemployment on the one hand, and the desired inflation rate on the other. Since strong growth and low unemployment raise inflation, the central banks deal with the inflation-growth trade-off which leads them to pick the greater problem and change monetary policy to minimize it at the expense of the other. In other words, when inflation is high (above 2 percent), they tighten monetary policy and weaken the economy to bring it down. The higher the rate is above their target, the more they tighten.

With inflation well above what people and central banks want (e.g. today’s CPI report showed a monthly change in the core CPI of 0.6 percent, which equates to an annualized rate of 7.4 percent) and the unemployment rate low (3.7 percent), it's obvious that inflation is the targeted problem, so it’s obvious that the central banks should tighten monetary policy. Everything will flow from that. Tell me what the inflation rate will be down the road without the central bank pushing interest rates and money and credit growth rates around and I can pretty much tell you what will happen.

So the process starts with inflation. Then it goes to interest rates, then to other markets, and then to the economy.

It starts with inflation. Since the price of anything is equal to the amount of money and credit spent on it divided by the quantity of it sold, the change in prices i.e., inflation is equal to the change in the amount of money and credit spent on goods and services divided by the change in the quantities of goods and services sold. This is primarily determined by the amount of money and credit and the level of interest rates that the central bank makes available, though it will also be influenced by the supplies of goods and services available e.g., supply disruptions.

Then it goes to interest rates. Central banks determine the amount of money and credit that is available to be spent. They do that by setting interest rates and buying and selling debt assets with money they print e.g., quantitative easing and quantitative tightening. Interest rates relative to inflation rates i.e., real interest rates have a big effect.

Then it goes to other markets. Interest rates rising relative to inflation causes prices of equities, equity-like markets, and most income-producing assets to go down because of a) the negative effects it has on incomes, b) the need for asset prices to go down to provide competitive returns i.e., “the present value effect”, and c) the fact that there is less money and credit available to buy those investment assets. Also, because investors know that these things happening will slow growth in earnings, that will also be reflected in the prices of investment assets, which affects the economy.

Then it goes to the economy. When central banks create low interest rates relative to inflation rates and when they make plenty of credit available, they encourage a) borrowing and spending and b) the selling of debt assets e.g., bonds by investors and the buying of inflation-hedge assets, which accelerates economic growth and raises inflation (especially when there is little ability for the quantity of goods and services to be increased). And, of course, the reverse is true i.e., when they make high interest rates relative to inflation and make the supply of money and credit tight, they have the reverse effect.

✓✓ Where these things settle will be around the levels that are most tolerable, all things considered i.e., if one thing is intolerable e.g., too high inflation, too weak economic growth, etc. it will be targeted by central bankers to be changed, policies will be changed, and other things will change to bring that about. So, the process of figuring out what will happen is an iterative process, like solving a simultaneous equation optimizing for a few things that matter most.

Applying This to What's Now Happening

Now, let's look at what that means for inflation, interest rates, the markets, and the economy. By plugging in our estimates of the determinants, we can estimate the outcomes.

As explained, it starts with what the inflation rate will be. Pick your number based on what you can see ahead. Right now, the markets are discounting inflation over the next 10 years of 2.6 percent in the US. My guesstimate is that it will be around 4.5 percent to 5 percent long term, barring shocks (e.g., worsening economic wars in Europe and Asia, or more droughts and floods) and significantly higher with shocks. In the near term, I expect inflation will fall slightly as past shocks resolve for some items (e.g., energy) and then will trend back up towards 4.5 percent to 5 percent over the medium term. I won't take you through how I arrived at that estimate (which I'm very uncertain about) because that would take too long. What's your guesstimate? Write it down.

Next, we need to guesstimate what interest rates will be relative to inflation. Right now, the markets are discounting 1.0 percent for the next 10 years. That's a relatively low real yield compared to what it has been over the long-term and a modestly high real rate given the recent past. What is your guesstimate? My guesstimate, based on the amount of debt assets and liabilities outstanding, what the debt service costs would be for debtors, and what the real returns would mean for creditors, is for a real interest rate of between zero and one percent because that would be relatively high, but tolerable, for debtors and relatively low, but tolerable, for creditors.

Put the inflation estimate and the real rate estimate together and you will have your projected bond yield. If you want to estimate the short rate, decide what you think the yield curve will look like. What's your guesstimate? Mine is that the yield curve will be relatively flat until there is an unacceptable negative effect on the economy. Given my guesstimates about inflation and real yields, I come up with between 4.5 and 6 percent in both long and short rates. However, because I think that the higher end of this range would be intolerably bad for debtors, markets, and the economy, I'm guesstimating that the Fed will be easier than that (though 4.5 percent is probably too easy).

While interest rates and credit availability will be influenced by what I just mentioned, simultaneously there is the supply and demand effect on interest rates that results from how much borrowing and how much lending there is. For example, the US government is going to have to sell a lot of debt to fund the deficit (4-5 percent of GDP this year) and the Federal Reserve is also going to sell (and let roll off) a lot (~4 percent of GDP). So the question is where the demand to buy this big supply (8-9 percent of GDP) will come from, or how much will interest rates have to rise to reduce private sector credit demand to balance the supply and demand. What do you think? I think it looks like interest rates will have to rise a lot (toward the higher end of the 4.5 to 6 percent range) and a significant fall in private credit that will curtail spending. This will bring private sector credit growth down, which will bring private sector spending and, hence, the economy down with it.

Now, we can estimate what that rise in rates will mean for market prices and economic growth. The rise in interest rates will have two types of negative effects on asset prices: 1) the present value discount rate and 2) the decline in incomes produced by assets because of the weaker economy. We have to look at both. What are your estimates for these? I estimate that a rise in rates from where they are to about 4.5 percent will produce about a 20 percent negative impact on equity prices (on average, though greater for longer duration assets and less for shorter duration ones) based on the present value discount effect and about a 10 percent negative impact from declining incomes.

Now we can estimate what the fall in markets will mean for the economy i.e., the "wealth effect." When people lose money, they become cautious, and lenders are more cautious in lending to them, so they spend less. My guesstimate that a significant economic contraction will be required, but it will take a while to happen because cash levels and wealth levels are now relatively high, so they can be used to support spending until they are drawn down. We are now seeing that happen. For example, while we are seeing a significant weakening in the interest rate and debt dependent sectors like housing, we are still seeing relatively strong consumption spending and employment.

The upshot is that it looks likely to me that the inflation rate will stay significantly above what people and the Fed want it to be (while the year-over-year inflation rate will fall), that interest rates will go up, that other markets will go down, and that the economy will be weaker than expected, and that is without consideration given to the worsening trends in internal and external conflicts and their effects.

Principled Perspectives

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Saturday, September 17, 2022

HERE IN MESA City officials say they are not trying to muzzle public voices by no longer reading submitted comments into the record during meetings,

Hmmm..The new City Clerk Holly Moseley described “reading comments into the record” as a temporary solution during the public building closures, but a side effect was to give members of the public a new tool to voice their opposition to council actions. . .

✓ At a handful of hearings, an avalanche of submitted comments led to marathon reading sessions of statements – generally opposed to a proposed action on the agenda.

✓ At times these masses of submitted comments read out loud appeared to have an impact, compelling, if nothing else, council members to respond on the record to the concerns.

But from the City Clerk’s view, reading written comments out loud is problematic and potentially unfair when mixed with in-person comments.

TOP STORY

"City officials say they are not trying to muzzle public voices by no longer reading submitted comments into the record during meetings, but are promoting fairness and dialogue .

✓[ . . .]

✓✓ Council members did not respond directly to questions from the Tribune about whether they supported the move away from reading written comments or why there was no discussion about it in a meeting prior to the change.

But Mayor John Giles issued a statement in response to the questions:

“The pandemic forced us to adopt new ways to engage our citizens. In the time since we resumed in-person council meetings, we have been able to identify inclusive and effective ways for the public to participate.

“I’m glad that we’re expanding public participation from pre-COVID practices by adopting phone accommodations for those who wish to comment on an agenda item but are unable to physically attend.

“We’re also working to implement an electronic comment card option. As elected officials, we’re always receptive to public input and we encourage residents to email or call our offices.”

MesaZona > Table of Contents : Here's The Menu. Enjoy