Politicians, consumers and Wall Street denizens are all focused on the economy for many of the same reasons. All want a strong, growing economy … well, except for the left, who want a bad economy and chaos.
The war in Iran has changed everyone’s plans, as Iran has done many times for over 47 years. As with many problems, the longer no one addresses them, the worse the solution becomes. So it is that finally making progress on wringing energy-fueled inflation out of our economy, it is foisted on us again by necessary American action. The difference is this time we can be sure it really is transitory.
Ironically, while the present administration has moved to make sure we have an adequate supply of domestic oil and gas, oil is priced on the world market and the prices reflect the rest of the world’s supply problem. Many of you don’t remember the gas lines of the early 1970s when domestic supply was a problem.
Fuel prices were the main factor in the Consumer Price Index (CPI) for March (0.9 for March, 3.3 year/year; core 2.6).
The President Donald Trump/Chinese President Xi Jinping meeting is slated for mid-May. With the fights over tariffs, rare earth minerals, computer chips and ag products, this was going to be a delicate meeting anyway. But the Iran war has doubtless heightened the tension. One trigger this time was Iran’s aggressive resumption of nuclear and missile rebuilding after Operation Midnight Hammer destroyed their nuclear capability. Guess who was helping them rebuild? Guess who bought most of Iran’s oil before the war? China.
The U.S.’ beef packing plant registrations for China expired a year ago. The U.S. Trade Representative is aware of our need for access to that market. China’s economy was already sluggish before they were cut off from oil from Iran and other Gulf states. Their mood might be churlish when Trump visits, but hopefully they’ll be receptive to a better relationship—politically and economically. We could have some leverage.
The Greeley, CO, JBS plant should be back up to speed by the time you get this WLJ. JBS and the union reached a tentative agreement that yielded wage increases and healthcare improvements. Pension benefits were shifted to wage increases. The union will drop unfair labor practices allegations. Other plants covering thousands of workers had ratified agreements with JBS before the Greeley strike.
We had hoped that the “affordability” concern would persuade the administration to open the southern border to feeder cattle, given the strict protocols the cattle go through on both sides of the border. More cattle in feedyards and packing plants is the fastest way to get consumers more beef. There are indications USDA is considering opening the border at entry port(s) farthest from the latest Mexican cases.
Speaking of Trump giving orders to officials, it would seem wise to have U.S. Attorney Jeanine Pirro drop the investigation of Fed Chairman Jerome Powell. It serves no major purpose and Sen. Thom Tillis (R-NC) has blocked a confirmation hearing for Kevin Warsh as new Fed chairman with the case extent. May 15 is coming fast, given the Senate’s plodding pace.
We need a Fed with new econometric models, new economists that don’t believe growth is a bad thing; in short, a Fed that is not always wrong at analyzing the past and present, predicts the future better and really understands interest rates.
Speaking of terrible research and ignoring up-to-date data, the American Heart Association (AHA) came out with a report recently that was just like decades ago. And it disagreed totally with the revision of the Food Pyramid that Robert F. Kennedy Jr.’s Health and Human Services revealed just weeks ago. The report recommends eating more fruits and vegetables and less meat and dairy products.
The Fed’s staff economists are trapped in the 1950s with AHA’s doctors and nutritionists. Land sakes, as my Grandma used to say.
John Carney, Breitbart Business Digest, notes that the latest government data show 40% of the CPI prices went down in March, including food prepared at home, down 0.2%.
The trend under Trump of fewer government employees and more private sector jobs has continued. There were 100,000 new private sector jobs in March (178,000 total jobs). So, we have 300,000 fewer federal employees and an estimated 3 million fewer illegals in America. Now we need Congress to make guest worker programs with less red tape, lower costs and more workers.
Incidentally, the White House’s Stephen Miller reported that the border wall is now going up at the rate of one mile/day. — Steve Dittmer, WLJ columnist
(Steve Dittmer is the author of the Agribusiness Freedom Foundation newsletter. Views in the column do not necessarily represent the views or opinions of WLJ or its editorial staff.)
