Americans Are a Cheap (And Stupid) Date

For years now, marginal interest rates for the European Central Bank have been sitting at or near 0% (depending on which loans you’re talking about), where they have been since the financial crisis swept into Europe like a red, white, and blue plague in 2010.

The US federal funds rate remains at 2.5%, right around where it’s been since the Great Recession started in 2008. For perspective, the US federal funds rate had peaked at 5.25%, a “normal” growth economy interest rate, right before the recession in 2007.

Taken together, these numbers provide us with a grim picture of both the European and American economies. Sure, stock markets are expanding, jobs are being created, and profits are still being made in the shadow of the historically loose post crisis fiscal policy.

Yet despite the low cost cash swirling around, inflation rates have remained flaccid, which means demand hasn’t exceeded supply. Could this have anything to do with the fact that US labor force participation rates are at their lowest levels in almost 50 years?

Yes, but the media talking heads, the banks, and, most of all, the White House constantly assure us things are “great“, because unemployment is low and the stock market is up. Why, then, is the president pressuring the Federal Reserve to lower interest rates?

Are we missing something? After all, doesn’t a GDP growth rate for the first quarter of 2019 of 3.2%, which beat expectations, mean things are going well in the economy, despite weak labor force participation and the zero inflation pressure?

Or does it mean it’s been so long since Americans have seen strong GDP growth that they simply don’t know what it looks like anymore? 3.2% is a full percentage point below 4.2% of the Q2 of 2018, and almost two points below 5.1% GDP growth of Q2 2014.

But go back just a few more years, and the GDP growth rate hit 7.0% in Q3 2003, more than doubling Trump’s meager 3.2%. The problem is that someone turning 30 today was only 13 or 14 years old in 2003. What are the chances they were even paying attention?

And we’re not even talking about Ronald Reagan’s economy that peaked at 9.4% in Q2 1983, but, even if no one else in the world remembers Reagan’s economy, the Republican Party talking heads should. So why have Republicans forgot about Reagan and Bush, Jr.?

I think the answer is pretty obvious. You can buy a very different kind of meal with a $94 or $70 gift certificate than you would with one only worth $32. How stupid and gullible must Trump supporters be then? Maybe they like fast food as much as Trump does.

Liberty is For The Win!

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