“It is significant that the nationalization of thought has proceeded everywhere pari passu with the nationalization of industry.” – EH Carr
Denying the Truth
Central planners grapple with a daunting task. They attempt to dictate behaviors that contradict the principles of individual freedom. Only those with an inflated sense of self-worth would find fulfillment in this endeavor. Surely, you’ve encountered these individuals…
Thou shalt only take public transportation. Thou shalt pay income taxes. Thou shalt consume bugs. Thou shalt use electric leaf blowers. Thou shalt own nothing and be happy. Thou shalt have a permit to sell lemonade. Thou shalt do as I say, not as I do.
Even when the masses comply, the strategies devised by central planners invariably fall short. They are costly, generate excess workloads, and can result in significant harm.
Rather than acknowledge their limitations, central planners often double down. They devise convoluted incentive programs, favoring one industry while undermining another. Continue reading
When Walter Cronkite, the nation’s most trusted news anchor, signed off from the CBS Evening News for the last time, a significant shift occurred in the U.S. credit market. Few, aside from financial experts like Bill Gross and A. Gary Shilling, grasped the gravity of the situation.
In hindsight, it’s easy to assess that the rising interest rate cycle peaked around 1981. This single event fundamentally altered the economic landscape. In the following 39 years, interest rates steadily declined, leading to the inflation of massive asset bubbles.
The link between interest rates and asset values is straightforward. Strained credit typically yields lower asset prices, while abundant credit tends to inflate them.
As credit becomes cheaper and more accessible, both individuals and businesses are more inclined to borrow for assets they could not otherwise afford. This influx of inexpensive credit elevates asset prices correspondingly. Continue reading
The Conference Board, a respected nonprofit think tank, has recently released its latest Leading Economic Index (LEI) for the United States. The results are discouraging. In December, the LEI declined for the tenth month in a row.
The LEI combines various economic indicators—including credit conditions, interest rate spreads, consumer sentiment, building permits, and new orders—to gauge economic trends. Over the last six months, the LEI has plummeted by 4.2 percent, marking the most rapid six-month drop since the troubling times of the COVID-19 pandemic.
This week, the Bureau of Economic Analysis shared its advance estimate of Q4 U.S. gross domestic product (GDP), revealing a real GDP increase of 2.9 percent for the last quarter of 2022.
How can it be that GDP is on the rise while the LEI is in decline? Continue reading
Clear reasoning, sound assumptions, and well-founded conclusions seem rare these days, yet they are greatly sought after.
Readers who have endured the financial impact of a major project going awry understand that professional life is seldom organized or seamless. A meticulous team member’s focus on trivial details can swiftly deplete the budget. Additionally, a rigorous regulator or a supply chain snag can throw schedules into disarray.
Nonetheless, navigating through such challenges can yield invaluable life lessons. For example, one encounters plentiful opportunities to develop character, irrespective of whether they desire a dose of humility.
Having spent over two decades as a project manager for an international consulting firm, my daily focus revolved around bidding, winning (and losing), contracting, delivering, and billing for work.
Anyone familiar with this line of work can attest to its inherent challenges. Despite the difficulties, the character-building experiences are irreplaceable. Continue reading
