Recession: What's In A Name?

The latest Fox News talking point is that the Democrats have redefined the word "recession" and refuse to declare that our current economy is in one. I'm shocked! The party currently in power doesn't want to advertise we're in a recession. Scandal! 

Technically we are in a recession. GDP has dropped 2 quarters in a row. You wouldn't know it on my street though. People are remodeling homes, upgrading landscaping, taking delivery of new cars (2 new Teslas on our street in the last month or so!). Everyone I know is still employed. 

What would you do different if Biden held a press conference and declared we are in a recession? I wouldn't change anything in my life. I maintain it wouldn't change most people's daily behavior. The people who care the most are in the political class. The right-wing political geeks would react with glee. Their ads in the midterm elections are going to be about the "Biden recession" anyway, but a formal announcement would make that even sweeter. (Have you seen the term "Bidenflation" yet? Ridiculous. I wonder if they call it that in the UK and Europe and everywhere else on the globe inflation is running high?)

It's all political BS that gives the media something to use in the 24/7 news cycle. It's a fight to control the narrative. The side with the most compelling (not truthful or in the interest of our country) narrative wins the game. That's how things work now.

The Indiana Harbor Departs Duluth

 From the Duluth Harbor webcam.

Book Review: Ingenious by Jason Fagone

Ingenious: A True Story of Invention, Automotive Daring, and the Race to Revive America by Jason Fagone
My rating: 4 of 5 stars

This book is about the X Prize -- specifically for the 100 MPGe car. The author follows four of the contestants and chronicles their challenges, failures and successes.

But it is also about quite a bit more. The book is about a spirit of inventiveness and practicality, Yankee ingenuity, that is being lost. Fewer of us make physical, tangible things. And our world needs better, energy efficient things more, much more, than it needs social media software, internet advertising, or financial innovation. How did we get here? The author offers an observation on page 190:

"Then something sad happened. In the eighties and nineties, in the name of budget savings and short-term profits, the engines of American invention forfeited their powers. NASA ramped down, struggling to find a mission that made sense in the absence of the Soviet Union. Ronald Reagan and George H.W. Bush pushed defense spending at the expense of science and technology -- DARPA veered into making military machinery. Corporations outsourced jobs and factories to other countries, making it harder to quickly scale up ideas in America. Bell Labs was spun off into Lucent Technologies, which later sold itself to a French company. By 2009, only one thousand people worked at Bell Labs, down from thirty thousand in the early 2000s."

People need shelter, clothing, clean water, food and transportation. We need energy, in various formats, to get all those things. It seems much of the US effort and fortune is headed in other directions. As I write this, the top 10 companies on the NYSE by valuation are: Apple, Saudi Aramco, Microsoft, Alphabet/Google, Amazon, Tesla, Berkshire Hathaway, United Healthcare, Meta/Facebook, and Johnson & Johnson. Six out of those 10 do not make things. We do need some of the 6 companies' offerings in our modern economy (we need healthcare!), but if Apple, Microsoft, Alphabet/Google, Amazon, and Meta/Facebook disappeared tomorrow, that would not be an existential event. We'd be fine in the long run, perhaps better without Facebook.

Since the rise of the MBAs in the 80s our economic lives have been distorted by the predominance of finance. We need financial markets to make things work, but finance should serve the needs of organizations that make things we truly need and for the last 40 years it's been the other way around -- and now we are dealing with the ramifications.


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Saturday Morning Pictures

 Here are a couple of shots of the pedestrian bridge over the Fox River at Batavia, Illinois.