US households are noticing the cooling jobs market

(…) The labour differential – jobs plentiful less jobs hard to get looks especially worrying. This suggests people are now noticing a clear cooling in the jobs market and this measure has a tendency to lead changes in the unemployment rate. We are currently at levels historically consistent with the unemployment rate rising above 5% in the next few months. If that happens the market is right to expect another 50bp cut at either the November or December FOMC meetings – remember last week the Federal Reserve said it was only expecting the unemployment rate to rise to 4.4% by year-end.

This data is also consistent with the fall in the quit rate – the proportion of workers quitting their jobs to move to a new employers. That has been indicating that either the jobs on offer were not particularly attractive or that workers were starting to value tenure in case they were to be laid off. This really puts the onus on next week’s US jobs report. Anything around the 50,000 mark on non-farm payrolls or if the unemployment rate resumes its upward grind would lift talk of the Fed needing to loosen monetary policy more swiftly.

Consumers are feeling a cooler jobs market, which points to further rises in the unemployment rate

Source: Macrobond, ING

On the other hand, this chart from Ed Yardeni shows that more jobs are available, equivalent to rising labor demand (next JOLTS report on Oct. 1).

BTW, Goldman just boosted its Q3 GDP forecast to +3.0%.

The Biden Manufacturing Boom That Isn’t U.S. industry output has been flat for two years, despite huge subsidies.

The WSJ Editorial Board piggybacked on my Monday post which included these two charts showing world manufacturing wages and the well above average growth in U.S. manufacturing wages before, after the pandemic and even recently in spite of flat production and employment. I wondered whether MAGA can happen given the high and still rising U.S. manufacturing costs.

The WSJ Editorial Board opted to politicized the manufacturing stagnation:

(…) The problem for U.S. companies is that Mr. Biden’s anti-business policies offset the impact of subsidies. Inflation caused by all that government spending has raised business costs, and soaring electricity prices have been especially damaging. (…)

EPA’s regulations “stand to paralyze an industry” and “impose billions of dollars in mandates” on U.S. manufacturers, (…) The Biden EPA has also imposed stringent emissions limits on paper, cement, glass, steel, iron, and chemicals manufacturers in the name of reducing smog in downstream states despite little connection between the two. (…)

Being Canadian, I am not a party to the American political debate.

Being an investor, I can observe the following facts:

• Contrary to the WSJ article headline, manufacturing output has been flat as a pancake since 2007, that’s 17 years.
• So has employment, suggesting little, if any, productivity gains in manufacturing.
• Manufacturing unit labor costs rose 50% since 2007 vs 30% for the whole U.S. nonfarm business sector. (Boeing just offered a 30% wage increase over 4 years + performance bonus, ratification bonus, and improved retirement benefits. Is BA in a solid growth phase currently?)
• Environmental regs and other “anti-business policies” did not prevent a more than doubling in manufacturing construction since mid-2021.

• However, this huge additional capacity has yet to move the needle on actual production and employment. Manufacturers’ new orders are flat since early 2022 in spite of the surging capacity. Manufacturing capacity utilization dropped from 80% in early 2022 to 77% in August. American manufacturers have spent $155 billion in the last 3 years with nothing yet to show for it.
• Either production will soon explode, although new orders and employment have yet to move, or disastrous returns on capital will eventually bite many rear ends.

Could it be that American manufacturers are finally heavily investing in robotics to boost productivity and competitiveness?

Nah! The grey bars below seem frozen in time.

According to World Robotics, in 2023, the average robot density in the manufacturing industry was 162 robots per 10,000 employees.

• Asia’s average robot density grew by 13% CAGR from 2018 to 2023 and was 182 units per 10,000 employees in 2023. That’s 12% above average.
• During the same period, the European robot density grew by 7% CAGR to 142 units. That’s 12% below average.
• In the Americas, it was 127 robots per 10,000 employees (+6% CAGR since 2018). That’s 22% below average, growing at less than half the Asian growth rate.

In case you are wondering,

China’s operational stock of industrial robots, which had been growing impressively by 22% on average each year since 2018, exceeded the one-million-unit mark in 2021 and the 1.5-million-unit mark in 2022. In 2023, it grew by 17% to 1.76 million units.

This represented 41% of the global stock. Every other robot installed worldwide in 2023 ended up in China.

Could the tariffs war be part of the problem?

• An August 2018 analysis from economists at the Federal Reserve Bank of New York warned the Trump administration’s intent to use tariffs to narrow the trade deficit would reduce imports and US exports, resulting in little to no change in the trade deficit.

• A March 2019 National Bureau of Economic Research study conducted by Pablo D. Fajgelbaum and others found that the trade war tariffs did not lower the before-duties import prices of Chinese goods, resulting in US importers taking on the entire burden of import duties in the form of higher after-duty prices.

• In December 2019, Federal Reserve economists Aaron Flaaen and Justin Pierce found a net decrease in manufacturing employment due to the tariffs, suggesting that the benefit of increased production in protected industries was outweighed by the consequences of rising input costs and retaliatory tariffs.

• A May 2023 United States International Trade Commission report from Peter Herman and others found evidence for near complete pass-through of the steel, aluminum, and Chinese tariffs to US prices. It also found an estimated $2.8 billion production increase in industries protected by the steel and aluminum tariffs was met with a $3.4 billion production decrease in downstream industries affected by higher input prices.

• A January 2024 International Monetary Fund paper found “mostly adverse consequences of protectionism, in aggregate and across sectors and regions. Tariff shocks are more important than trade policy uncertainty shocks. Tariff shocks depress trade, investment, and output persistently. Undoing the 2018/19 measures would raise output by 4% over three years.”
• Another January paper by MIT/Harvard/NBER and the World Bank concludes that “So far, the trade-war has not provided economic help to the US heartland: import tariffs on foreign goods neither raised nor lowered US employment in newly-protected sectors; retaliatory tariffs had clear negative employment impact (…). Nevertheless, the tariff war appears to have been a political success for the governing Republican party. Residents of regions more exposed to import tariffs became less likely to identify as Democrats, more likely to vote to reelect Donald Trump in 2020, and more likely to elect Republicans to Congress. Foreign retaliatory tariffs only modestly weakened that support.”
• “Tariffs are the greatest thing ever invented,” the former president declared at a town hall in Michigan last week.

I certainly do not have all the answers. But the questions must be asked: if it takes 1.5 years on average to build a plant, why is U.S. manufacturing production still flat after 3 years of booming investments? Why are new orders not rising at all? Where are the robots?

Good thing the U.S. is really a service economy.

AI CORNER

The Intelligence Age (Sam Altman)

(…) It won’t happen all at once, but we’ll soon be able to work with AI that helps us accomplish much more than we ever could without AI; eventually we can each have a personal AI team, full of virtual experts in different areas, working together to create almost anything we can imagine. Our children will have virtual tutors who can provide personalized instruction in any subject, in any language, and at whatever pace they need. We can imagine similar ideas for better healthcare, the ability to create any kind of software someone can imagine, and much more.

With these new abilities, we can have shared prosperity to a degree that seems unimaginable today; in the future, everyone’s lives can be better than anyone’s life is now. Prosperity alone doesn’t necessarily make people happy – there are plenty of miserable rich people – but it would meaningfully improve the lives of people around the world.

Here is one narrow way to look at human history: after thousands of years of compounding scientific discovery and technological progress, we have figured out how to melt sand, add some impurities, arrange it with astonishing precision at extraordinarily tiny scale into computer chips, run energy through it, and end up with systems capable of creating increasingly capable artificial intelligence.

This may turn out to be the most consequential fact about all of history so far. It is possible that we will have superintelligence in a few thousand days (!); it may take longer, but I’m confident we’ll get there.

How did we get to the doorstep of the next leap in prosperity?

In three words: deep learning worked.

In 15 words: deep learning worked, got predictably better with scale, and we dedicated increasing resources to it.

That’s really it; humanity discovered an algorithm that could really, truly learn any distribution of data (or really, the underlying “rules” that produce any distribution of data). To a shocking degree of precision, the more compute and data available, the better it gets at helping people solve hard problems. I find that no matter how much time I spend thinking about this, I can never really internalize how consequential it is.

There are a lot of details we still have to figure out, but it’s a mistake to get distracted by any particular challenge. Deep learning works, and we will solve the remaining problems. We can say a lot of things about what may happen next, but the main one is that AI is going to get better with scale, and that will lead to meaningful improvements to the lives of people around the world.

AI models will soon serve as autonomous personal assistants who carry out specific tasks on our behalf like coordinating medical care on your behalf. At some point further down the road, AI systems are going to get so good that they help us make better next-generation systems and make scientific progress across the board.

Technology brought us from the Stone Age to the Agricultural Age and then to the Industrial Age. From here, the path to the Intelligence Age is paved with compute, energy, and human will.

If we want to put AI into the hands of as many people as possible, we need to drive down the cost of compute and make it abundant (which requires lots of energy and chips). If we don’t build enough infrastructure, AI will be a very limited resource that wars get fought over and that becomes mostly a tool for rich people.

We need to act wisely but with conviction. The dawn of the Intelligence Age is a momentous development with very complex and extremely high-stakes challenges. It will not be an entirely positive story, but the upside is so tremendous that we owe it to ourselves, and the future, to figure out how to navigate the risks in front of us.

I believe the future is going to be so bright that no one can do it justice by trying to write about it now; a defining characteristic of the Intelligence Age will be massive prosperity.

Although it will happen incrementally, astounding triumphs – fixing the climate, establishing a space colony, and the discovery of all of physics – will eventually become commonplace. With nearly-limitless intelligence and abundant energy – the ability to generate great ideas, and the ability to make them happen – we can do quite a lot.

As we have seen with other technologies, there will also be downsides, and we need to start working now to maximize AI’s benefits while minimizing its harms. As one example, we expect that this technology can cause a significant change in labor markets (good and bad) in the coming years, but most jobs will change more slowly than most people think, and I have no fear that we’ll run out of things to do (even if they don’t look like “real jobs” to us today). People have an innate desire to create and to be useful to each other, and AI will allow us to amplify our own abilities like never before. As a society, we will be back in an expanding world, and we can again focus on playing positive-sum games.

Many of the jobs we do today would have looked like trifling wastes of time to people a few hundred years ago, but nobody is looking back at the past, wishing they were a lamplighter. If a lamplighter could see the world today, he would think the prosperity all around him was unimaginable. And if we could fast-forward a hundred years from today, the prosperity all around us would feel just as unimaginable.

Hopefully, the IA (Intelligence Age) will arrive before the RIA (Really Imbecile Age) which would be as long as a nuclear flash…

Altman may be pleading for more energy and energy infrastructure. The energy wall is racing towards us at increasing speed. See Monday’s post: Power Play

FYI: China Says It Test-Fired Intercontinental Ballistic Missile

(…) Drew Thompson, a senior research fellow at the Lee Kuan Yew School of Public Policy in Singapore, wrote on social-media platform X that the timing of China’s launch appeared to be motivated at least in part by geopolitical frictions with Japan, the Philippines and Taiwan.

“Timing is everything,” wrote Thompson, a former Pentagon official, who said separately that he believed it was Beijing’s first public acknowledgment of an ICBM test launch since 1982. “This launch is a powerful signal intended to intimidate everyone.”

Separately on Wednesday, Taiwan’s Defense Ministry said it detected 23 Chinese military aircraft around the island, all but one of which crossed into the island’s air-defense identification zone. The region has been on edge this week as a Russian military reconnaissance plane entered Japan’s airspace on Monday, prompting Japanese jet fighters to fire warning flares in response. On the same day, Russia and China each sent four warships through a strait dividing the Russian island of Sakhalin from the Japanese island of Hokkaido, according to Japan’s Defense Ministry.

U.S. Flash PMI: Services drive sustained robust economic upturn in September, but optimism wanes and prices rise at faster rate

The headline S&P Global Flash US PMI Composite Output Index registered 54.4 in September, down slightly from 54.6 in August but rounding off the strongest quarter since the first three months of 2022.

However, growth remained uneven by sector. While service sector activity grew at a solid pace, the rate of increase running at the second-highest seen over the past 29 months, manufacturing output fell for a second successive month, albeit dropping only modestly and at a slower rate than in August.

Sector variances were even more marked in terms of order books. Inflows of new work in the service sector rose at a rate just shy of August’s 27-month high, but new orders placed at manufacturers fell at the sharpest rate for 21 months. Similarly, new export orders for services rose at an increased rate while goods export orders fell at a faster pace, highlighting divergent broader global demand conditions.

Backlogs of orders consequently rose slightly at service providers, hinting at a lack of spare capacity, but fell sharply, at the fastest rate for nine months, in factories.

Optimism about output in the year ahead deteriorated sharply, the survey’s future output index falling to its lowest since October 2022 and the second lowest seen this side of the pandemic. The deterioration in confidence was led by the service sector amid concerns over the outlook for the economy and demand, often linked to uncertainty regarding the Presidential Election. In contrast, sentiment held up in manufacturing, shored up in part by hopes of sales growth and investment reviving from recent weakness in response to lower interest rates.

Employment fell for a second month running in September and has now fallen in four of the past six months. That said, the overall decline was only very modest, and less than reported in August amid reduced job losses in the services economy. The decline in service jobs was often linked to difficulties replacing leavers, though the addition of new staff was curbed by uncertainty about the outlook.

Manufacturing payrolls were meanwhile cut at pace not recorded since June 2020. Excluding the pandemic, the decline in factory jobs was the steepest since January 2010 as an increasing number of firms reported the need to reduce operating capacity in line with weak sales.

The September survey also showed average prices charged for goods and services rising at the fastest rate since March, representing the first acceleration of selling price inflation for four months. The upturn lifted the rate of inflation further above the pre-pandemic long-run average.

Rates of selling price inflation moved up to six-month highs in both manufacturing and services, in both cases running above pre-pandemic long-run averages to point to elevated rates of increase.

Higher charges were driven by increased costs, with input costs rising at fastest pace for a year in September. A one-year high rate of cost inflation in the service sector was often linked to the need to raise pay rates for staff.

In contrast, manufacturing input cost growth cooled to a six-month low thanks to lower energy prices and fewer supply chain price pressures. Delivery times quickened for a second month running as supplier were less busy amid weakened demand.

Commenting on the data, Chris Williamson, Chief Business Economist at S&P Global Market Intelligence said:

“The early survey indicators for September point to an economy that continues to grow at a solid pace, albeit with a weakened manufacturing sector and intensifying political uncertainty acting as substantial headwinds. A reacceleration of inflation is meanwhile also signalled, suggesting the Fed cannot totally shift its focus away from its inflation target as it seeks to sustain the economic upturn.

“The sustained robust expansion of output signaled by the PMI in September is consistent with a healthy annualized rate of GDP growth of 2.2% in the third quarter. But there are some warning lights flashing, notably in terms of the dependence on the service sector for growth, as manufacturing remained in decline, and the worrying drop in business confidence.

“Business sentiment, demand, hiring and investment are being subdued by uncertainty surrounding the Presidential Election, casting a shadow over the outlook for the year ahead at many firms.

“The survey’s price gauges meanwhile serve as a warning that, despite the PMI indicating a further deterioration of the hiring trend in September, the FOMC may need to move cautiously in implementing further rate cuts. Prices charged for goods and services are both rising at the fastest rates for six months, with input costs in the services sector – a major component of which is wages and salaries – rising at the fastest rate for a year.”

 

To recap:

• strong economy thanks to strong demand for services more than offsetting weak manufacturing;
• stalled employment, in part because of political uncertainty (services), in part because of weak demand (manufacturing);
• yet, wages are rising the fastest in 12 months;
• overall inflation back above pre-pandemic levels.

Maybe a good thing there is no FOMC in October.

The purchasing manager survey findings are supported by the sales managers survey:

• US Sales and Market Growth Indexes Stay Positive But Confidence and Employment Indexes suggest problems in store

While the Sales and Market Growth Indexes continue to show overall growth in September, the Confidence Index, crucially reflecting views on what’s in store for respondents over the quarter ahead, suggests the trend reversal is building momentum.

Market Growth           Sales Growth            Prices Charged

  

• U.S. Economy Stabilized in August, Chicago Fed Says The Chicago Fed National Activity Index improved to 0.12 in August from minus 0.42 in July

(…) Despite August’s recovery, the index’s three-month moving average decreased, suggesting headwinds continue to buffet the economy. The CFNAI diffusion index—which captures how much the change in the monthly index is spread among the indicators over three months—similarly declined to minus 0.23 from minus 0.11 in July. Periods of economic expansion have historically been associated with values of the CFNAI diffusion index above minus 0.35.

Indicators relating to production and employment improved in August, suggesting some good news for the labor market, a key focus of concern in recent months. In contrast, sales, orders and inventories fell back, pointing to faltering demand, while personal consumption and housing also declined, the index showed. (…)

Cyclical industries are once again seeing an increase in 52-week highs

(…) If stocks are teetering on the brink of a bear market or an economic downturn is imminent, would over a third of cyclical industries be recording new 52-week highs?

History suggests otherwise.

Whenever more than 35% of cyclical industries closed at a 52-week high, and the S&P 500 closed at a 5-year high, the world’s most benchmarked index was likely to continue trending higher, rising 86% of the time over the subsequent six months. However, one should not rule out a brief pause in the near term, which also aligns with seasonal trends near the end of September.

The potential for a short-term pause becomes more apparent when looking at the maximum gain and loss table, where risk overshadowed reward in the following month. This behavior is typical after a breadth surge to record highs, often leading to a buyers’ strike. In the subsequent six months, the S&P 500 recorded just one instance of a maximum loss greater than 10%. (…)

Just for fun, let’s see if these periods of cyclicals frenzy were followed by good economic growth measured by employment. In other words, let’s substitute the FOMC and its hundreds of Ph.Ds for equity investors frantically buying cyclical stocks.

• In the 6 months after the 29 times since 1950 that SentimenTrader says more than 35% of cyclical industries closed at a 52-week high, U.S. employment always rose, by 1.44% on average (range +0.2% to +4.2%).
• Let’s eliminate years of strong economic expansion. Since 1980, the average growth in employment was 1.18% (range +0.2% to 1.7%, median +1.3%).
• Eliminating the highest and lowest reading, the average is +1.21% (range +0.8% to 1.5%, median +1.3%).

If history repeats, at current employment levels, monthly job growth through February 2025 would range between 212k and 397k with a median growth of 344k.

Since 2000, the first instance being June 2007, 6 months before the official start of the Great Financial Crisis, the 6 periods of cyclicals outburst were followed by average employment growth of 0.97% or +230k per month, which includes the 0.2% gain just before the GFC, which, BTW, was the only time investors totally misread the situation (though employment still rose 0.2%, before crashing miserably).

Other than the 0.2% growth of 2007, the slowest growth since 2013 was +0.8% which would be +212k jobs per month.

Let’s see who proves right.

Here’s Goldman Sachs’ take:

Looking ahead, while the end of catch-up hiring will weigh modestly further on job growth, margins are expanding again, election-related uncertainty will abate, and, though uncertain, we would expect productivity growth to moderate from its elevated pace, which should support job growth. On net, we expect these impulses to turn modestly positive in the coming quarters, stabilizing job growth around our longer-run estimate of 160k and the unemployment rate around current levels. However, with underlying labor demand and especially supply growth difficult to pin down today, the path ahead for the unemployment rate remains more uncertain than usual.

GS’ estimate is the lower dash line. The higher dash line is the 212k growth trend if history rhymes.

Yardeni Says Fed Cut Raises Odds of ‘Outright Melt-Up’ in Stocks Compares impact of policy easing to dot-com boom in late 1990s

The latest policy decision lifted the odds of an “outright melt-up” in equity prices — like during the dot-com bubble when the S&P 500 Index roared 220% from 1995 to the end of the century — to 30% from 20%. He placed the chances of a bull market at 80%, while reserving a 20% probability for a 1970s-like scenario, when stock markets around the world were gripped by volatility due to inflation and geopolitical tensions.

But there’s a broader risk if things start running too hot.

“If they overheat the economy and create a bubble in the stock market, they’re creating some issues,” the founder of eponymous firm Yardeni Research Inc. said in an interview with Bloomberg Television Monday. He added that the Fed is ignoring the upcoming US presidential election, in which both candidates are proposing policies that could trigger inflation. (…)

Yardeni again leaned into his idea that markets are in a new “Roaring ’20s” period, marked by productivity, growth and substantial equity returns. However, he said his odds of such a scenario fell to 50% from 60% previously. (…)

• Trump Dangles So Many Tax Breaks Even Some Advisers Are Confused Former president’s tax wish list has ballooned to $11 trillion

(…) Not since President George H. W. Bush asked voters to read his lips has a president made such big promises on taxes in an election campaign. For Trump, as with Bush, the question is whether he can keep them. (Bush, despite his “no new taxes” pledge, increased levies.) (…)

If elected, Trump would go into negotiations with Congress regarding a wish list totaling $11 trillion and counting, according to the Tax Foundation. That includes the extension of the 2017 tax cuts, which will expire unless Congress acts. He has also pledged as much as $2.8 trillion in additional revenue from tariffs to offset a portion of that cost. The former president and his allies have said his tax-cut proposals would bolster economic growth, helping to offset some of the cost, though his campaign hasn’t provided any details. (…)

Vice President Kamala Harris has also made tax policy a central part of her campaign, pledging to increase the child tax credit, create incentives to first-time home-buyers and expand deductions for startup businesses. She even co-opted one of Trump’s signature ideas — no taxes on tips, giving the proposal bipartisan momentum. Harris is planning her own economic-focused address this week.

The Tax Foundation found that Harris’ tax plan would decrease the deficit because the reductions are more than offset by higher levies on corporations and wealthy households. (…)

China Tries to Jolt Ailing Economy Central bank cuts interest rates and dangles loans for stock-market investors as concerns around world’s second-largest economy intensify

(…) The People’s Bank of China said Tuesday that it would cut its benchmark interest rate and lower the amount of cash that banks need to hold in reserve—a bid to free up more resources for lending. It also said it would cut the interest rate payable on existing mortgages and lower down payments for second homes.

At a press conference in Beijing, PBOC Gov. Pan Gongsheng said further easing is in the pipeline, with another reduction in bank reserve requirements expected before year-end.

The central bank also announced it would offer 500 billion yuan in loans, equivalent to roughly $70 billion, to funds, brokers and insurers to buy Chinese stocks as part of an effort to lift the country’s ailing stock market. It said it would put up another 300 billion yuan to finance share buybacks by listed companies. (…)

Borrowing costs are already low, yet credit data suggests households and businesses aren’t that interested in borrowing. Consumer confidence is near record low levels, reflecting anxiety over jobs in a weak economy and the cost of the meltdown in property. Barclays estimates that the property crunch since 2021 has incinerated some $18 trillion in household wealth, equivalent to around $60,000 per family. (…)

Above all, the housing market remains China’s biggest economic problem. Rather than trim rates to prop up already-weak demand for homes, many economists say the government needs to let home prices fall further and take bolder steps to clear an enormous backlog of unfinished homes to restore confidence in the market. Consumer spending will only get back to prepandemic rates of growth if households see light at the end of the tunnel after more than three years of real-estate pain, they said. (…)

Or aggressively pump the economy with much larger central government deficits to offset the balance sheet recession.

• Top Economist in China Vanishes After Private WeChat Comments Government adviser is detained as Xi Jinping targets negative comments about Chinese economy

(…) The investigation of Zhu Hengpeng, who for the past decade was deputy director of the Institute of Economics at the state-run Chinese Academy of Social Sciences, comes as the Communist Party ramps up efforts to suppress negative commentary about China’s economic health. (…)

Under Xi, the party has directed a far-reaching clampdown on dissent that has punished critics of his leadership inside the party and beyond, with some high-profile targets, including influential business people and academics, getting detained, imprisoned or forced into exile. Authorities have also tightened controls on data, curtailing access to information prized by investors and analysts for insights into China’s economy. (…)

The status of the investigation of Zhu couldn’t be determined and it wasn’t clear whether he had legal representation. He didn’t respond to emailed requests for comment. No one answered the door at a Beijing apartment listed as his address on a Hong Kong corporate filing. (…)

The WSJ article included this picture:

Uncompleted homes in Shenyang, China. The efforts to stifle dissent come as the country’s sluggish economy is weighed down by a persistent property slump. Photo: Bloomberg News

It’s getting dangerous to be an economist in China. Somebody should keep track of this fellow:

• Xu Gao says China must not delay stimulus to its economy The Chief Economist of Bank of China International urges Beijing to emerge from Friedrich Hayek’s shadow and listen to John Maynard Keynes.

Resistance to economic stimulus runs deep in China, often likened to drinking poison to quench thirst. Xu Gao, Chief Economist at Bank of China International Co. Ltd. and adjunct professor at the National School of Development (NSD) at Peking University, traces this sentiment, somewhat surprisingly, back to Friedrich Hayek.

After thoroughly evaluating the logic behind stimulus measures, it is important to refute a common misconception that likens stimulus measures to “poisonous liquor” and suggests that stimulating the economy is akin to “drinking poisonous liquor to quench thirst.” The underlying assumption is that while stimulus measures may provide short-term relief, they inevitably result in severe long-term consequences. However, the discussion in section IV of this essay on the sustainability of stimulus measures demonstrates the bias in this view. This misunderstanding will now be analyzed and refuted from a historical perspective. (…)

ON FOREIGN POLICY

Yesterday I posted “US Worries Deepen as Adversaries Team Up to Challenge Dominance Tighter ties among Russia, China, Iran, North Korea alarm US” concluding with my question “does the U.S. have a foreign policy other than an isolationist economic policy?”

David, an avid and keen geopolitical analyst sent me this link https://www.youtube.com/watch?v=uvFtyDy_Bt0.

Well worth one’s time.