It's interesting how under Trump US academia (and media) is really concerned with 'what people really experience'.
While under Biden (in 2024 'the best Biden ever', btw) we got Paul Krugman's perception that people who don't vote for Biden have a false - economic - consciousness...
Similar i guess to Democrats' ridiculing of conservatives' immigration worries until Greg Abbott began to bus fresh immigrants up north to democrat states...
So i guess we do not only have two US economies, we also have 2 US realities.
Under Biden, the economy was bad because there was a global post-covid inflation. Under Trump, the economy is getting worse because of horrible policies. And also based on what exactly do you think US academia and media weren't concerned with inflation under Biden? Inflation and prices were on the news cycle 24/7 back then.
Excuse me, but the Wuhan Flu did not cause inflation. Our vast over-reaction to it caused inflation. Biden was president during most of that vast over-reaction, so he is partly to blame.
Good article. What's interesting is that for the first time since the 2008 GFC, the US is seeing a huge gap between consumer & business spending. Put simply, GDP looks fine (consumer spending) but Gross Output does not (business spending). The trade war is impacting businesses, so how long before we see further employment cuts & a hit to consumption?
Bloomberg: Consumers in the top 10% of the income distribution accounted for 49.2% of total spending in the second quarter, up from 48.5% in the first quarter, reaching the highest level in data going back to 1989, according to an analysis of Federal Reserve data by Mark Zandi, chief economist for Moody’s Analytics.
Concentration is evident in the market, too. The top 10 companies account for 40% of the S&P 500. Reports suggest that AI-related capital expenditures have overtaken consumer spending as the primary driver of economic growth in the first half of 2025, contributing 1.1% to GDP growth. Michael Cembalest from JP Morgan Asset Management notes that "AI-related stocks have represented 75% of S&P 500 returns, 80% of earnings growth, and 90% of capital spending growth since the launch of ChatGPT in November 2022."
Additionally, there are many circular financing deals occurring right now. Unfortunately, I cannot post graphics here, but you can see more information at this link: https://substack.com/@microexcellence/note/c-164069310.
If the AI bubble bursts, we could face a market meltdown, while a successful AI expansion may lead to double-digit unemployment. I am not an expert, but I believe it is difficult to foresee a neutral outcome. The timing and significance of the impact on the economy and stock market remain unpredictable.
This seems really bad news for increased populism if the have nots keep losing ground to the have mores. Ben Franklin once remarked Democracy is a good thing, if done wisely. He knew if done unwisely it could end up in what we're seeing today. Marx issued a warning to the capital owning class about what could happen if you keep screwing the working poor; Marx's predictions were wrong but his warning seems timely. How long can this inequality and screwing the working poor for nothing more than spite continue? The words 'roost' and 'chickens' come to mind. The Dems gave up on the working poor a long time ago during B. Clinton so it's not a party political point. Maybe another Depression will help us Americans remember what we know but have forgotten.
It's interesting how under Trump US academia (and media) is really concerned with 'what people really experience'.
While under Biden (in 2024 'the best Biden ever', btw) we got Paul Krugman's perception that people who don't vote for Biden have a false - economic - consciousness...
Similar i guess to Democrats' ridiculing of conservatives' immigration worries until Greg Abbott began to bus fresh immigrants up north to democrat states...
So i guess we do not only have two US economies, we also have 2 US realities.
Under Biden, the economy was bad because there was a global post-covid inflation. Under Trump, the economy is getting worse because of horrible policies. And also based on what exactly do you think US academia and media weren't concerned with inflation under Biden? Inflation and prices were on the news cycle 24/7 back then.
"Under Biden, the economy was bad because _insert_fav_excuse_here". Say anything
Excuse me, but the Wuhan Flu did not cause inflation. Our vast over-reaction to it caused inflation. Biden was president during most of that vast over-reaction, so he is partly to blame.
Good article. What's interesting is that for the first time since the 2008 GFC, the US is seeing a huge gap between consumer & business spending. Put simply, GDP looks fine (consumer spending) but Gross Output does not (business spending). The trade war is impacting businesses, so how long before we see further employment cuts & a hit to consumption?
This article explains it well: https://navellier.com/10-7-25-low-gross-output-implies-that-gdp-may-over-estimate-growth/
Bloomberg: Consumers in the top 10% of the income distribution accounted for 49.2% of total spending in the second quarter, up from 48.5% in the first quarter, reaching the highest level in data going back to 1989, according to an analysis of Federal Reserve data by Mark Zandi, chief economist for Moody’s Analytics.
Concentration is evident in the market, too. The top 10 companies account for 40% of the S&P 500. Reports suggest that AI-related capital expenditures have overtaken consumer spending as the primary driver of economic growth in the first half of 2025, contributing 1.1% to GDP growth. Michael Cembalest from JP Morgan Asset Management notes that "AI-related stocks have represented 75% of S&P 500 returns, 80% of earnings growth, and 90% of capital spending growth since the launch of ChatGPT in November 2022."
Additionally, there are many circular financing deals occurring right now. Unfortunately, I cannot post graphics here, but you can see more information at this link: https://substack.com/@microexcellence/note/c-164069310.
If the AI bubble bursts, we could face a market meltdown, while a successful AI expansion may lead to double-digit unemployment. I am not an expert, but I believe it is difficult to foresee a neutral outcome. The timing and significance of the impact on the economy and stock market remain unpredictable.
What are your thoughts?
This seems really bad news for increased populism if the have nots keep losing ground to the have mores. Ben Franklin once remarked Democracy is a good thing, if done wisely. He knew if done unwisely it could end up in what we're seeing today. Marx issued a warning to the capital owning class about what could happen if you keep screwing the working poor; Marx's predictions were wrong but his warning seems timely. How long can this inequality and screwing the working poor for nothing more than spite continue? The words 'roost' and 'chickens' come to mind. The Dems gave up on the working poor a long time ago during B. Clinton so it's not a party political point. Maybe another Depression will help us Americans remember what we know but have forgotten.
What are the numbers after tax?