I really don\u2019t have much good to say about Ohio\u2019s former Governor, John Kasich.\u00a0\u00a0 He wanted to “bust unions\u201d, and tried to break the public employees organizations with his failed \u201cIssue 5\u201d.\u00a0\u00a0He brought his experience making a fortune working for the now bankrupt Lehman Brothers investment firm to government, encouraging state retirement services to hire private investors rather than using more transparent public investments.\u00a0\u00a0As it turned out, state-sponsored studies show that the teacher retirement system lost $60 Billion in potential gains, and paid many millions of dollars to private firms for the loss.\u00a0\u00a0As a retired teacher, that\u2019s a big deal to me.<\/p>\n\n\n\n
Kasich was, is, and always will be a business Republican in the \u201cold school\u201d model.\u00a0\u00a0In all fairness, he did do at least two things right.\u00a0\u00a0When the Obama Administration offered Medicaid expansion, Kasich immediately signed Ohio up, adding 1.2 million citizens to the insurance plan who weren\u2019t covered before.\u00a0\u00a0And, when Trump ran for President in 2020, Kasich did his duty as an American. He supported Joe Biden.<\/p>\n\n\n\n
Kasich is out of politics right now (he\u2019s seventy-two), but he does serve as a commentator for MSNBC. <\/em>When I see him broadcasting from the halls of Otterbein College, just up the road in Westerville, I still remember marching on the Ohio Capitol against Issue 5. But he occasionally brings up a valid point, and this week was no different.<\/p>\n\n\n\n The Governor commented on the momentum of the Democratic Convention. He\u2019s skeptical that the high spirits and imaging from Chicago will make a dent in the incredibly narrow polling difference between Harris and Trump. Kasich kept coming back to one point: voters vote their \u201cpocketbook\u201d ahead of all other issues. Democratic Campaign operative James Carville makes the same point in his usual, blunt, Louisiana bayou way: \u201cIt\u2019s the economy, stupid\u201d.<\/p>\n\n\n\n I disagree to some extent.\u00a0\u00a0Abortion, the future of American Democracy, foreign policy, and justice and equal rights for all Americans will make a difference too.\u00a0\u00a0But, for the moment, let\u2019s assume that Kasich and Carville, opposite sides of the coin, are right.\u00a0\u00a0So what is the state of the American economy today \u2013 and how will it impact the election?<\/p>\n\n\n\n When Donald Trump was President, he continually measured his success against the stock markets. (Measuring is a big thing to Trump, from crowd size to hand size to\u2026never mind).\u00a0\u00a0So on Trump\u2019s scale, where is the American economy today?\u00a0\u00a0Last week the Dow Jones Industrial Average ended within 200 points of a record high, over 41,0000 (at Trump\u2019s best, the Dow was close to 31,000).\u00a0\u00a0Other indexes, Standard and Poor\u2019s and NASDAQ, are also in record territory.\u00a0\u00a0<\/p>\n\n\n\n That impacts more than just high-priced investment guys like Kasich. Most major retirement programs in the United States (even Ohio teachers, though not enough) are based on market investments, as are personal Individual Retirement Accounts (IRA\u2019s). So when investments are up, so are folks retirement \u201cnest eggs\u201d, always a good thing. <\/p>\n\n\n\n When Trump says that our economy is \u201cthe worst ever\u201d in American history \u2013 what is he talking about?\u00a0It’s all about the inflationary period we just went through, when prices went up 20% over the last four years.\u00a0 It happened since Trump left office and Biden came in. But more importantly, it all happened after Covid.\u00a0<\/p>\n\n\n\n When Joe Biden became President, he had to deal with the economic impacts of the Covid pandemic.\u00a0\u00a0Trump already did some of the right things. He pumped money into the economy to keep the US from a Covid economic depression.\u00a0 (Remember those checks with the huge \u2013 size again \u2013 Trump signature on them?).\u00a0While many of us have a memory \u201cgap\u201d from the Covid year, prices dropped (especially gas) because people couldn\u2019t do a lot.\u00a0\u00a0We were stuck in our homes, trying to dodge the virus.\u00a0<\/p>\n\n\n\n Products that jumped in price were construction supplies, some food (like meats), and, of course, toilet paper. \u00a0That was caused by problems getting the supply to retail market, and in part, because we had nothing better to do than build on our homes (while we were stuck there).\u00a0\u00a0Buying deck boards and outdoor furniture in 2020 was difficult and expensive.<\/p>\n\n\n\n So Trump, and then Biden, pumped money into the economy to keep people spending .\u00a0\u00a0And that money kept America going. Other countries suffered deep economic problems.\u00a0 But\u00a0even though US unemployment rate briefly shot to over 13% and there were lots of product shortages, most Americans managed to stay afloat.<\/p>\n\n\n\n The United States avoided an actual depression, but the \u201cpayback\u201d for adding so much money into the supply was inflation.\u00a0\u00a0It\u2019s simple supply and demand economics:\u00a0\u00a0if there\u2019s more money in the economy, the money will be valued less.\u00a0\u00a0That means it takes more money to purchase something \u2013\u00a0\u00a0inflation.\u00a0\u00a0<\/p>\n\n\n\n Once the American economy got going after Covid, Biden\u2019s biggest goal was to increase employment and wages, and get control of inflation.\u00a0\u00a0Price increases were as high as 9% for a while, and Biden and the Federal Reserve Board worked to tighten credit, so that the \u201csupply\u201d of money was smaller and inflation was controlled.\u00a0\u00a0Biden called it the \u201csoft landing\u201d of the US Economy.\u00a0<\/p>\n\n\n\n Wages increased too (same supply and demand principle). From April of 2021 to January 2023 inflation was ahead of wages, but since then, wage growth has been way ahead of the inflation rate. Today, inflation is under control (less than 3%), jobs are plentiful (unemployment rate 4.3%) and wages are going up (annual wages up 4.72%). The Federal Reserve will reduce their interest rates next month, signaling that the inflation crisis is over.<\/p>\n\n\n\n The inflation \u201cbump\u201d was, and still is, a shock.\u00a0\u00a0The Trump campaign is making \u201chay\u201d on the four year gas price trend, from $1.50 during the depths of Covid, to $3.30 today.\u00a0\u00a0But in 2020 and part of 2021, we couldn\u2019t go anywhere because of Covid, so the supply of gas was high and the demand was low.\u00a0\u00a0Dig deep in that Covid memory hole; gas didn\u2019t do much good, restaurants and hotels weren’t open.\u00a0\u00a0And gas was close to $2.70 in the summer before Covid, not so far from what it costs today.\u00a0<\/p>\n\n\n\n Where\u2019s the economy today?\u00a0\u00a0There\u2019s still that consumer \u201csticker shock\u201d.\u00a0\u00a0But investments are up, prices are stabilized, unemployment is low and wages are increasing.\u00a0\u00a0Biden earned his \u201csoft landing\u201d, and prevented a Covid depression in the process.\u00a0<\/p>\n\n\n\n \u00a0So in real economic terms, Biden fixed most of the problems (Thank You, Joe Biden!!!). Voters will recognize the alternative the US avoided; an actual Covid Depression. \u00a0Now it\u2019s up to the Harris Campaign to explain that to America, and take advantage and credit for Biden\u2019s great work.\u00a0 <\/p>\n","protected":false},"excerpt":{"rendered":"Economics<\/h3>\n\n\n\n
Investments<\/h3>\n\n\n\n
Covid Depression<\/h3>\n\n\n\n
Inflation and Wages<\/h3>\n\n\n\n
Today<\/h3>\n\n\n\n