COVID is behind us.  Business is over that bump in the road.  The S&P 500 Index and the Dow have recovered. Their all-time highs were in late March, barely a month ago, and the indexes remain near those highs.  

And yet, nobody would say the economy is doing great.  Nobody would say the outlook for the economy for the rest of 2024 or for the next few years is one of optimism and growth.  The doomsayers still warn of a pending drastic downturn.

“Malaise” is a word that has been used in the past – in the 1970s by Democrat President Jimmy Carter.  

A clue as to the cause lies in the fact that the Fed is keeping interest rates high, and their reason why:  to fend off inflation.  

Inflation is being “forcibly reigned in”, so to speak, by the Fed.  Inflation is painful for everyone, at any income level.  If there was no threat of inflation, the Fed could and would bring interest rates down to a much lower level.  

Lower interest rates would make growth more affordable for businesses.  Growth would mean more and better-paying jobs for you and me.  We could afford to buy more of the things we would like to have:  a new car, a dream vacation, home improvements or a new house, college for our kids – and just get away from feeling like we are living on a shoe string.

If only the economy would improve.

But “the economy” is not some nebulous and mysterious object.  The economy is nothing more than the sum of the many small actions of individuals – of decisions we make about spending our money.  

That includes executives making decisions about how much money they can afford to spend on the running and hoped-for growth of a business, as well as families deciding how much money to spend on the things they want and need.

Those kinds of individual decisions – in sum – are the economy.  

We are the economy.

Why don’t we feel like we are improving?  

It’s not quite so easy as being something “we feel like doing.”

We all make choices based upon the environment we live in.

What environment is that?

Mother Nature’s physical environment – the sunshine, the rain, night and day, spring, summer, fall, and winter – are a constant – they come and go with very little impact.  

The Fed, for example, does not factor the physical environment into its decisions on what interest rates need to be.

But the Fed is very aware of the inflation rate.  Inflation is usually the primary focus of the Fed.  

Then it would seem that the real question is, “What causes inflation?”

Inflation is not caused by economic growth.  When companies are more productive, they increase the amount of things – goods and services – available for sale.  The increase in the amount of money matches the increased productivity of us all – the economy.

In contrast, inflation is when the amount of money increases, with no corresponding increase in productivity.

Who can just create money out of thin air?  Who can spend money without having any increased bunch of products to sell?

There is only one entity that can do that:  the Federal government.

Biden’s inflation

President Biden and the Democrat-controlled Congress of 2021-2022 pushed through their 2.3 trillion-dollar “infrastructure” deficit spending package.  That amount is almost ten percent of the U.S. Gross Domestic Product (GDP) – in other words, a ten percent inflation of the money in circulation in the U.S.  

A matching level of real inflation in the U.S. has been the result in the years since (2022 to date).  That inflation has hurt the well-being of lower-income families, whose financial stability by definition is borderline at best.  Inflation raises that level to a higher dollar amount; i.e., the income level required to live.  

The increase in the number of homeless people in the U.S. is one consequence of Biden’s inflation.  These are people who, thanks to Biden’s inflation, can no longer afford to rent or own a place to live.

If there is a line below which you cannot afford housing, the number below that line is increasing.

Biden and the Democrat Congress made decisions and took actions which caused that increase.

Socialism and Fascism – all the same

California is compounding the Democrats’ economic destruction.  

Socialism is when the government takes over all private businesses.  Fascism is when the government “permits” you to have a business, but dictates what you can do with it.  

Democrat Governor Newsom’s actions are clearly fascist: dictating what companies must pay their employees.  

Is there any connection to the fact that California has the worst homeless problem in the U.S.?  

Definitely.  Setting pay levels higher simply reduces the number of people who can be employed.  

What you get paid reflects the value of your work to the business which employs you.  

A minimum wage law sets the bar above what some people are worth.  Newsom’s increase in the minimum wage for businesses in California guarantees that those who are borderline-employable will no longer be able to find work.  

“Minimally employable” can be due to a number of factors for any given person:  physical health, mental health, attitude and willingness to put forth the effort to do a job, etc.  

Newsom’s increase hurts those who are minimally employable.  Despite his typical Democrats’ claims of being sensitive to the poor and acting in their interest, Newsom’s actual impact is to put more of the poor below the level defined by his new minimum-wage law.  

And that puts a number of people “below the line” of being able to afford housing.  California’s number of homeless and “street people” is inevitably bound to go up, thanks to Democrat Governor Newsom and the Democrat-controlled state legislature.

A Real Solution

How can Newsom get the poor and homeless off the streets and back into jobs where they can support themselves?

The answer is simple:  eliminate California’s minimum-wage law.  Lower the bar so that people who could not get work are once again able to find jobs, and are thus better able to support themselves.

Socialism or Fascism – it is all the same to those on the receiving end – to you and me.

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