The Economy: The Fed’s Beige Book was released today. The Beige Book is produced 8-times a year. It is a summary of current economic conditions in the U.S. Today’s Beige Book highlighted “modest growth.” There’s no real news here. The U.S. has had modest growth since 2009. What we should be seeing by this time in the economic cycle is an economy that’s in danger of overheating. We don’t have overheating. Instead, we have a Fed that is uncertain of continued economic expansion and terrified that another quarter point interest rate hike will destroy American capitalism. On the contrary, our informal street poll tells us that even a 2% rise in interest rates wouldn’t change people’s buying habits. Is the confidence we encounter on the street due to life in the sunny California Fast Lane? As we’ve noted previously, California is a dynamic Pacific Rim Country. The Golden State is flush with Defense dollars, booming high-tech/med-tech, enviable tourism, manufacturing and agriculture. Most Californians appear to be doing just fine. So why the national wailing and moaning? Are we missing something out here on the Left Coast?
Food for Thought: The interesting thing about the current economy is that many Americans are still talking about the 2008 financial crisis almost a decade after the fact. By contrast, in the late 1980s nobody was still talking about Paul Volker and struggle to end runaway inflation. In the late 1990s, nobody was still talking about the Savings and Loan crisis. At the peak of the last economic cycle in 2007, no one was still talking about the Dot-Com bust of 2000. Yet today people still talk about the Financial Crisis and its lasting effects. Perhaps this is because median family net worth for the middle class is 30% below its 2000 peak and lower than it was in 2002. Perhaps it’s because the internet has created an information explosion manned by screaming click-bait gadflys who are obsessed with sensationalizing the negative.
Music of The Week: Van Morrison’s “Astral Weeks”