Copy of AFF Sentinel V21 #32-Politics and Economics Moving in High Gear
- Steve Dittmer
- Jul 22
- 5 min read
Economic Effects on Consumers; Political Implications for Beef Industry
Steve Dittmer | AFF Sentinel
Colorado Springs, CO
Originally sent to subscribers 08/08/24
It’s not often both politics and economics step as lively as they have been the last few weeks.
“Honeymoon” surveys showing big poll boosts for Harris, including internet activity from paid influencers, spooked the political outlook and the stock markets a bit. The prospect of possible heavy taxes on businesses and citizens, much higher capital gains taxes, banning fracking to increase energy prices, even taxes on unrealized gains are frightening possibilities to investors.
While those things contributed to the unease in stock markets, fundamentals, both in the national economic system and the beef supply chain are more important in the longer term. Short term, while the election is technically nearly three months away, some states start voting next month. That is not a preferable voting system but it’s what we have to deal with right now, so we have to play by those parameters.
Some states start mail-in balloting right after Labor Day and early voting Sept. 20. Those in the know suggest people concerned about any “glitches” on Election Day “bank” their votes early, by mail or early voting, so as to avoid being told on Election Day their precinct’s computers are down or printers are malfunctioning and finding out lines are very long.
In our interconnected world, apparently the trigger for the stock market selloff was a move by Japan’s central bank to raise interest rates. Big investors had been doing a “carry trade,” using very cheap, low interest money in Japan to invest in U.S. stocks. Higher interest on Japanese loans and a stronger yen, coupled with major tech stocks in the U.S. showing some weakness, suddenly made that carry trade unworkable, triggering stock selloffs here.
When the unemployment rate increased a couple notches for July, more doubt crept in. As we’ve written here before, the majority of jobs created in recent months have been government jobs or jobs in industries heavily involved in government financing and regulation like health care. They’ve invented a new term for the latter, “government adjacent” jobs.
On the plus side, services, which includes jobs the beef chain depends on, showed some strength. Then, the new applications for employment were down sharply, also countering fears.
As has been true for some time, bad news for the economy is good news for prospects of the Federal Reserve lowering interest rates. A slowing economy makes rate cuts before the end of the year more likely.
The Fed’s job is not easy to calibrate, as economic data is always after-the-fact, historical, delayed information.
But, corporate earnings on average are still positive, GDP is still positive in the upper 2s, demand for necessities like beef is still relatively strong for the supply available and inflation is still high but not increasing for now. Consumers’ biggest problem is prices have not come down much, and compared to 2019, they are roughly 20 percent higher for food, higher yet for energy and wages have not kept up.
There is no consensus as to whether we are beginning a recession, in a recession or whether or not there will be a recession. Regardless of the economic data, we agree with the pundit who said most consumers feel like they have been in a recession for the last year or more. True as that may be, consumers have kept buying our product, pushed ground beef prices to unusually high levels, as well as many with higher incomes shifting to pricier Choice and Prime options.
So, will the shift in poll numbers hold up for the Harris-Walz ticket, should that really still be the ticket after the Democrat convention beginning Aug. 19? After all, neither one has ever gotten even a single primary vote in a presidential election campaign nor been nominated by a national party convention. With the skeletons crawling out of Walz’s closet, he could well be a casualty. But that’s another story.
Interestingly, the relatively far left senator from Ohio, Sen. Sherrod Brown has said he will not attend the convention in Chicago. Having been alive during ‘68s Democrat convention, we’re not sure if there is any safe way to attend this one, except staying hunkered in your Abrams tank. Brown is the most liberal senator from Ohio since Howard Metzenbaum, but even he has said he has no plans to campaign with Harris and has given indications, by some reports, of distancing himself from the increasingly radical and progressive stances of today’s Democrat Party.
Harris’ choice of Gov. Tim Walz for her running mate has only intensified the far left economic and cultural promises of the Democratic ticket this year. She and the media are desperately trying to disavow her long-time positions and paint her and Walz as “moderates” and centrists. They mean moderate politicians but -- fact check -- they should classify them as moderate socialist/communists. But Harris’ past statements and her support of Biden administration policies on big spending and increased regulation, open borders and government-specified cultural liberalism are public knowledge -- except to the “uninformed.”
Walz’ record on all those issues can be based on deeds as governor. His budget jumped 40 percent right away, he’s welcomed illegal immigrants in every way, hiked taxes and is driving businesses and people away from Minnesota.
Voters have been coping with high inflation; intractably higher prices; Green New Deal restrictions and costs; more restrictions and prescriptions on businesses small and large; more DEI directives in corporations and government agencies and cultural trends reinforced by government edicts. As they compare Harris’ record and promises, bolstered by Walz’s record, compared to the recent economic conditions under Trump, voters in the political middle may well push the poll numbers down for Harris. Ditto for traditional Democrats not happy with the “progressive” or the chanting, marching new “terrorist wing” of today’s party.
For agriculture, we’ve before reported Harris’ comments on supporting “incentives” to reduce red meat consumption as a climate change advancement. She also mentioned changing dietary guidelines. Would that be by regulation, government mandate or tax?
Trump has exaggerated a bit by saying she called for a ban but there is a fine line between government regulations, taxes, nutrition guidelines -- disincentives, if you will -- and outright bans. Of course, the media “fact checkers” have labeled Trump’s statement as false, most not mentioning the likely implications of her statements. Media Matters also used the opportunity to repeat the false claims of “Livestock’s Long Shadow.” As a devoted climate change disciple, Harris and an administration she would install would certainly make life more miserable for animal agriculture.
Our address: Agribusiness Freedom Foundation, P.O. Box 88179, Colorado Springs, CO. 80908.
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