Bad Moon Rising

Jim Geraghty writes in National Review Online that we're headed for some very difficult times and that much of our media is burying its head in the sand.

The media's disinterest notwithstanding the evidence pointing to a coming U.S. recession is starting to pile up:

At 8:30 a.m. on Thursday, October 28, the U.S. Bureau of Economic Analysis will unveil the Gross Domestic Product numbers for the third quarter of fiscal year 2021, which covers July, August, and September.

Economists expect the third-quarter GDP to be a significant drop from the previous few quarters: “Buffeted by the delta variant, supply shortages and inflation, the world’s largest economy is projected by economists to have expanded by an annualized 2.8 percent, amid a sharp slowdown in spending by American consumers.

That’s less than half the 6.7 percent gain of the previous three months.”

Less than 3 percent growth would be pretty lousy for an economy that is supposed to be rebounding out of a pandemic. But it sounds as if Hassett [Kevin Hassett, former chairman of the Council of Economic Advisers],thinks it could be even worse, and he’s not alone: “IHS Markit, the gold standard among Wall Street forecasters, estimates GDP is on track to grow just 1.5 percent.

The Atlanta Federal Reserve’s GDPNow forecast is even weaker: 0.5 percent.”

Those projections are perilously close to zero growth in the third quarter!

We should also expect worse in the fourth quarter that we’re currently in. Businesses can’t find workers — we have 10.4 million unfilled jobs. You’ve probably noticed that everything you buy seems to be getting more expensive, and every time you fill up your car, you wonder if they’re making gasoline out of diamonds these days.

Those GDP numbers would be bad enough. Coupled with inflation they're even worse. Geraghty notes that,

Twitter co-founder Jack Dorsey tweeted a few days ago that “Hyperinflation is going to change everything. It’s happening.” And when one respondent referred to how Nigerians experienced 16 percent inflation, Dorsey responded that, “It will happen in the US soon, and so the world.”

Sixteen percent inflation? The U.S. inflation rate was only at 5.4 percent in September. For inflation to skyrocket like that, someone would have to dump tons of money into a U.S. economy that already had too few goods and services to purchase — something like . . . er, $2 trillion in a “Build Back Better” bill and a separate $1 trillion in an infrastructure bill?

That's not all:

The supply-chain problems are just catastrophic: There are more than 100 cargo vessels now anchored off the California coast, waiting to unload their goods — about 200,000 20-foot containers, according to CNN. Factories are temporarily shutting down because of a lack of supplies.

As if oblivious to this perilous situation the Biden administration is planning to fire any employee of a federal contractor who refuses vaccination:

The National Association of Wholesaler-Distributors, an influential trade group that represents an industry with nearly 6 million workers, is pleading with the administration to delay a December 8 deadline for employees of federal contractors to get vaccinated.

“If tens or hundreds of thousands of employees are terminated just two weeks before Christmas . . . the result could be nothing short of catastrophic for the newly unemployed and their families and for the US economy,” Eric Hoplin, the NAW’s president and CEO, wrote in a Wednesday letter to Biden.

The trade group’s members include grocers, lumber, florists, beer, wine and various other distributors.

Read the rest at the link. Americans under the age of fifty are too young to remember the 1970s with their miles long gas lines and roaring inflation, but it did happen, and something like it could happen again. I doubt that this is what the majority of voters thought they were voting for last November, but here we are.