In just a moment, Senator Roger Marshall is going to tell us about Joe Biden's $106 billion foreign aid plan and whether there will be any meaningful border security changes, but first, I want to update on a number of worrisome economic headlines.
The recent forecasting survey by the National Association of Business Economist (NABE) shows 50% expect recession and the rest only 1% growth. The November FOX poll found that 78% of voters rate the economy negatively, and inflation remains a top concern.
Over at Investor's Business Daily, the TIPP poll which has been rated the most accurate and objective of all the polls, that one says 50% believe we are currently in recession, 64% believe recession is likely in 2024, and 80% are simply concerned about a recession next year.
Interestingly, 41% of Democrats think we're in a recession, 58% of Republicans do, and 52% of independents and the New York Fed Interest rate model is now predicting 52% recession probability over the next year.
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Meanwhile, manufacturing has been contracting for 13 straight months. The Index of Leading Indicators, LEI has fallen 19 straight months. The money supply is shrinking.
Business investment is falling and the yield curve is upside down with short rates higher than long rates.
On the plus side, the stock market has been doing well and market interest rates have fallen significantly, even while the Fed is standing pat. A resilient labor market showed some cracks in today's JOLTs report. Job openings fell precipitously. Inflation has come down, but prices are still high and real wages are still falling and the Biden administration foolishly continues to pursue its big government socialist green new deal that is keeping fossil production low and fossil prices still too high, even though they have come down a bit.
Since early 2020, federal spending has increased $9 trillion and 60% of it has been monetized by the Fed according to former Federal Reserve Governor Kevin Warsh.
There's your fiscal and monetary inflation, which unfortunately has washed out much of the productivity and wage gains of the Trump Tax and Jobs Act of 2017.
So, almost surely, the economy is heading for a significant slump. It suffered inflationary recession in the first half of 2022 and it may be headed for deflationary recession in 2024, but there is a way out. There is a cure. How about spending less, taxing less, regulating less and fracking more? How about putting big government socialism into a deep-dug grave?
You replace it with economic freedom, where free market capitalism is the best path to prosperity. Growth makes people happier and America could use more of both. That's my riff.
This article is adapted from Larry Kudlow’s opening commentary on the December 5, 2023, edition of "Kudlow."
