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Thursday, April 3, 2025

The Drums Beat Louder - Karl Denninger

(I have come to the conclusion that when it comes to the reality of understanding math,  Americans in general and their elected officials in particular are 'missing a couple of cans in their sixpacks.'  - CL)

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If you attack cost in a serious way then those who benefit from said increased cost are sad because their margins compress.  Some will be sad enough that their businesses fail since they built overhead-heavy systems that can't operate without that artificially-imposed cost on the end-user.  This means unemployment goes up temporarily, which is bad for a President when it comes to election time because nobody votes for the guy that got them fired.  But people do vote for the guy who got them hired especially if their compensation went up and their cost of living went down in the meantime, and quite-rapidly if you cut that excess and forcibly-imposed cost out of the population's living expenses jobs will be created and economic activity becomes more-competitive to place here in the United States -- but that adjustment will take time.

Thus you cannot be in the middle of a significant economic downturn and expect to do well in an election.