“Whether he is trying to influence the election, I don’t know but I am not counting on that,” said President Biden, referring to Netanyahu. “No administration has done more to help Israel than I have,” continued America’s Commander-in-Chief, defensively, politically vulnerable on this issue, on his way out.
Speculation swirled. Would Bibi respond to Iran’s missile attack by taking out the Ayatollah’s oil fields or nuclear facilities? Perhaps both?
And with the bear market collapse in Mullah pager usage, how would the Mossad neuter Iran’s leadership? Only Netanyahu knew.
This of course is the world we now live in. Long gone are the days when polite central bank governing boards determined the arc of world history. The age of the politician has returned.
“The Israelis have not concluded what they are going to do in terms of a strike. That’s under discussion,” said Biden. “If I were in their shoes, I’d be thinking about other alternatives than striking oilfields,” added the president, having not spoken directly with Israel’s leader since August.
An oilfield strike would lift oil prices, gasoline, inflation. And who knows, the Ayatollah might then strike Saudi oilfields, which would take crude well above $125/barrel. This would surely cost Harris the election.
But the Mullahs don’t want Trump II. Bibi sure does. MBS too.
And his Saudi forces could surely be doing more to take out the Houthis, who attacked two more ships this week. But the Ayatollah’s proxies continue to operate in the vacuum. Disrupting world trade, providing a glimpse of what our future will look like without overwhelmingly strong, fully engaged, principled US leadership.
And in this new political age, no one outside a few leaders with their fingers on the triggers can accurately predict what will happen next.
The only thing that seems probable is that most of what will unfold will occur between now and when America elects its next president. November 5th.
Silent mountains thick with Ponderosa pine surround the town where some of the nation’s best-kept military secrets reside.
The urban sidewalks are empty, except for the occasional tourist or dog walker, and many of the shops, restaurants, and office buildings are closed.
There’s no traffic on the road from Trinity Drive to Oppenheimer Drive.
But, it’s just a matter of time before Los Alamos townsite jumps back into action.
“You will see it on Monday,” said one resident, who lives in White Rock, 10 miles from the greenscaped Los Alamos urban center.
Sure enough, on Monday morning, Los Alamos townsite roars back to life as commuters arrive by the thousands. The population nearly doubles in this “census-designated place” of 13,460.
Cars line up at security checkpoints to enter the Los Alamos National Laboratory (LANL), the county’s biggest employer and the reason for the sudden increase in population.
Employees clear the first barriers, then move through more checkpoints to get to their jobs four days a week.
Many drove from residential areas across Los Alamos County (population 19,187) and as far away as Albuquerque, 96 miles south, and the state capital of Sante Fe, about 35 miles north.
There has always been a housing shortage in the county, local officials say, but the pressures are growing as LANL reaches peak employment at around 19,000. The lab hopes to begin offering round-the-clock shifts in 2025.
The Los Alamos Affordable Housing Plan approved in August said the “acute” housing shortage hurts the local economy and limits housing to those who can afford it.
The study also found that in 2021, nearly 55 percent of the LANL workforce lived outside the county.
“Over 9,300 people commuted in for work, and only 21.8 percent, or 2,200 people, commuted out of the county while living here,” the study said.
‘One Horse Town’
“We’re a one horse town. Everything the lab does affects everybody,” said local realtor Chris Ortega, owner/broker of ReMax Los Alamos.
“The hiring has increased demand. There are fewer houses on the market than there were five or six years ago,” Ortega told The Epoch Times.
“People are coming and going all the time. Half of the lab lives here in Los Alamos. The other half lives off the hill somewhere—Santa Fe, Espanola, Albuquerque.”
In 2022, there were 8,149 households, 5,229 with families, in Los Alamos County. They were usually made up of two or three people per household and had an average income of $135,801.
“Based on employment rates and high wages, a family household making more than median income is likely to have a member of the family employed at Los Alamos National Laboratory,” according to the study.
A plurality of LANL employees agreed in a previous study that it would be beneficial to live in Los Alamos, provided they can find suitable housing near the lab.
Housing is hard to find and has been for a long time. Now, it’s worse because of LANL’s latest hiring surge that started around 2022 with the government’s plan to modernize the U.S. nuclear arsenal.
“It’s difficult [to find housing]. We hear it anecdotally from people we’re hiring—people from the lab,” said Linda Matteson, assistant county manager for Los Alamos County.
Only 14 percent of the land around Los Alamos is county-owned or privately owned, she said. The U.S. Forest Service, Park Service, and U.S. Department of Energy (DOE) own the rest.
“We’re very constrained,” Matteson told The Epoch Times. “Of that 14 percent, think about private houses, private land. Think of our geography with mesas and canyons. It’s limited. We, the county, own less than 10 parcels that we could develop. Some are open spaces that you wouldn’t want to develop.”
The plan found that because there isn’t enough housing, many people who do essential work in the community can’t live in the community.
The median sold price of homes in Los Alamos was $599,583 in September, representing a 6.3 percent increase from last year, according to a Rocket Homes report. In the same month, there were 61 homes listed for sale.
According to the housing plan, rental costs have more than tripled. Real estate website Zillow lists 33 current rentals available and a 3 bed, 1 bath house is listed for about $3,000 per month.
The lab employed 11,743 workers in 2018 and 15,707 workers in 2022, and it is hiring hundreds more this year and next before slowing down.
Meanwhile, in the same four-year timeframe, the county population only grew by 400 people because of housing constraints.
“This reflects the high percentage of commuters into the county, a limited supply of available housing, and the potential displacement of families with less financial resources by those with more,” the plan noted.
The plan projects that the county will require 1,300 new homes between 2024 and 2029 to preserve the status quo, and 2,400 new homes to meet future housing demand.
Tax Revenue
The fiscal year 2022 budget for LANL included nearly $2 billion in salaries for employees and $155 million in tax revenues for the county.
The lab was responsible for creating 24,169 jobs and contributing $3.12 billion to businesses in New Mexico.
Matteson said that LANL accounts for about 85 percent of the Los Alamos County’s gross property tax revenues.
“People come here because of the quality of life and amenities and things like that. The county feels it’s our job is to maintain those, increase where we can, and provide those services so people still want to live here,” Matteson said.
In September 2022, LANL announced its master development plan for the next 30 years.
The plan includes an upgraded facility powered by 100 percent renewable energy from solar and wind. The goal is to have zero carbon emissions by 2040.
LANL has come a long way since the top-secret Manhattan Project at Los Alamos that made the first atomic bombs used at the end of World War II.
On Aug. 6, 1945, the United States dropped a uranium bomb called “Little Boy” on Hiroshima, Japan. Around 140,000 people died in the explosion, which had the force of 15 kilotons of TNT.
On Aug. 9, 1945, the second 21-kiloton atomic bomb, dubbed “Fat Man,” was dropped on Nagasaki, Japan. It killed 74,000 people.
Los Alamos National Laboratory, built in 1943, played a leading role in the development and production of the U.S. nuclear arsenal during the Cold War.
The $39 billion facility is located about 35 miles from Santa Fe. It covers nearly 40 square miles of DOE property, nearly 900 buildings, and 13 nuclear facilities.
From 1952 to 1989, plutonium production for U.S. nuclear weapons took place at the Rocky Flats plant near Denver.
When Rocky Flats closed, PF-4 at Los Alamos became the only plutonium facility in the country. The National Nuclear Safety Administration (NNSA) monitors and oversees the recycling of plutonium from old pits to make new ones by LANL.
“Today, the Laboratory is laying the groundwork for manufacturing new pits that are bound for a weapon already in the stockpile, the W87-1 nuclear warhead,” according to LANL.
“Los Alamos National Laboratory remains the only place in the country where pits can be made. This critical mission endures as the driving force for national security through deterrence.”
LANL declined a tour request by The Epoch Times.
Building a Better Bomb
The 2022 Nuclear Posture Review of the U.S. Department of Defense identified improving America’s nuclear deterrent as a top priority in the face of emerging global threats and challenges.
“That modernization effort, which is being carried out over the next two decades, includes initiatives to modernize all three legs of the nuclear triad,” according to a Defense Department statement.
The new intercontinental ballistic missile (ICBM) system, Sentinel, will replace the old Minuteman III, which entered service in 1970 and will continue to operate until the mid-2030s.
The Columbia class ICBM submarine will replace the Ohio class submarines, and the B-21 Raider will replace the B-2A Spirit bomber.
The program also calls for upgrading nuclear warheads at LANL, which the DOE controls. The research and production capabilities of the lab are central to that modernization effort.
A law passed in 2018 authorized the lab’s plutonium production facility to make 30 plutonium warhead cores, or “pits,” each year by 2026. They will be used to replace the cores in the aging nuclear stockpile.
The nuclear weapons to receive the plutonium pits made at LANL include the W87-1 warhead for the next-generation Sentinel ICBM, the submarine-fired W93 bomb, and the W76, W78, and W88 warheads.
As reported by the Federation of American Scientists, there are 12,121 known nuclear warheads in the world in 2024.
There were 5,580 in the Russian Federation, 5,044 in the United States, 500 in China, 290 in France, 225 in the United Kingdom, 172 in India, 170 in Pakistan, 90 in Israel, and 50 in North Korea.
Specifically we noted that at a time when funds were the most short oil on record, the broader energy space “was the most net sold sector” on the Goldman US Prime book, “driven entirely by short sales, which outpaced long buys (6.4 to 1).”
And here, we said, was “the hint to the next mega squeeze” as the recent short selling in energy was the largest in over 5 years.
What happened next was for the history books, as Brent crude soared the most in almost two years on the back of what was a historic market imbalance with record shorts suddenly starting to run for cover…
… with the Kamala lackeys at Bloomberg going so far as to mock those who actually did the right thing and trade ahead of the inevitable squeeze as “tourists”, when in reality the only tourists here are those who expected the ridiculous plunge in oil prices to persist despite Cushing approaching tank bottoms (Bloomberg’s message is loud and clear: keep shorting oil unless you want to be branded a “tourist”, especially since a spike in oil – and gas – prices may adversely impact its favorite presidential candidate).
Unfortunately for Bloomberg, the squeeze in energy is just getting started, and not just due to fundamentals.
Crude oil soared last week as a result of the rapidly deteriorating situation in the middle east. On Tuesday, spot month WTI and Brent rallied >5% from the lows on the initial headlines from the White House that an Iranian attack was imminent. Goldman’s research desk noted on Tuesday that the jump in oil prices reflected a moderate risk premium as actual production disruptions have been limited and spare capacity remains elevated. The energy complex jumped again Thursday on news that the US was considering whether or not to support Israel’s potential retaliatory attacks against Iranian energy infrastructure.
Then, over the weekend, the bank’s commodity analysts published a new report (available to pro subs) in which they tried to calculate the impact on the price of oil should Iran oil output be “limited” by Israel, to wit:
Assuming a 2mb/d 6-month disruption to Iran supply, we estimate that Brent could temporarily rise to a peak of $90 if OPEC rapidly offsets the shortfall, and a 2025 peak in the mid $90s without an OPEC offset.
Assuming a 1mb/d persistent disruption to Iran supply, reflecting for instance a tightening in sanctions enforcement, we estimate that Brent could reach a peak in the mid $80s if OPEC gradually offsets the shortfall, and a 2025 peak in the mid $90s without an OPEC offset.
But it’s not just fundamentals: Goldman’s Prime Brokerage wrote in its latest weekly must-read note (also available to pro subs) that “after heightened geopolitical tensions and rising crude oil price, HFs reversed course and net bought US Energy stocks for the first time in 7 weeks, driven almost entirely by short covers.”
As a result, the US Energy long/short ratio increased +5% – the largest weekly increase in nearly 5 months – to 1.36, which is in the 69th percentile vs. the past year and 14th percentile vs. the past five years.”
That said, the short overhang in energy remains staggering, and hints at a far more brutal unwind once the upward momentum persists for another week, and not only in energy stocks where the short flow on Goldman’s Prime Broekrage is just shy of record highs…
… but also in the oil patch, because after oil short interest hit a record two weeks ago as traders turned the most bearish on oil they have ever been, the amount of short covering was virtually non existent, and net managed-money (i.e., hedge fund) exposure across the 4 main oil contracts (Nymex and ICE WTI, Nymex and ICE Brent), is barely above its record lows!
Putting it all together, Goldman Energy specialist Ryan Novak writes that “energy led to the upside on the week after we exited the prior week with aggressive PB selling/short selling that flipped this week, managed money positioning remains short – at all-time lows and tensions across the Middle East escalating with Israel beginning its ground invasion. E&Ps led on the week +7%. All eyes on any incremental news regarding any attack on Iranian energy infrastructure which would pose further upside risk to the commodity and equities.”
Bottom line: with record shorts now painfully squeezed as upward momentum has been ignited across the energy sector, and the risk of a flashing red headline that Israel has leveled Kharg Island looming, unwind of what until a week ago was a record short position in oil and energy stocks is just getting started. And that’s without Israel even doing anything. Should Israel however take the plunge and either take out Iran’s oil infrastructure or, worse, target its nuclear industry, then the coming explosion in oil will make the Volkswagen short squeeze of 2008 seem like quaint amateur hour.
More in the full notes available to pro subscribers here and here.
This title is intentionally a play on the pro-gun faction’s slogan “Guns Don’t Kill People, People Kill People.” At a certain time before my social awakening, I was appalled by all of the gun violence in the US and elsewhere and therefore believed restricting gun sales and use (through more stringent registration regulations) might be a good idea.
However, I never thought that particular NRA slogan was nonsense as so many of my liberal friends did. It actually rings quite true. Yes, you can still argue (as the leftists do) that if there were not as many guns lying about, people wouldn’t use them to kill other people. To me, that is a rather weak argument.
I have known many gun owners, and I must say as a group they are the most responsible people amongst my friends. The people who use guns to kill others indiscriminately are typically mentally deranged and in need of psychological intervention. So, we either reach out and come up with ways to help these people, or we remove access to guns—for everyone. Which way do you think the agenda believes we should go?
That seems to me equivalent to removing all cars so drunk people don’t have access to them to kill other people with. I know, I know…those who would wish to argue with me would say “Cars have a useful value, guns do not.” It isn’t so much taking away the guns as material objects, it is taking away the right to have them.
Until we remove all government corruption, all crime on the streets, all violent mental pathologies, and have created a utopian, all-safe, society—guns, and owning them, and respectfully learning how to use them safely, have a purpose. When that utopian idyllic society happens, we’ll talk. But I won’t hold my breath.
I digress, sorry.
So, along the same logic lines, how will censoring all speech to weed out the “misinformation” stop crimes like what happened in the UK in early August? The authoritarian position seems to be that “misinformation” is causing much of the “insane” criminal activity in the world today.
First of all, that is quite a stretch. How could anyone establish that as fact? And even if it was a fact (that “misinformation” causes violence) how would one go about removing all of it without removing all free speech? And who would be burdened with the task of differentiating “misinformation” from “real information?”
Aha. Easy to see it now, eh? (Of course, anyone reading this knows this already.)
All this misinformation crap is a ruse to give the agenda the power to shut us all up. Any time they link misinformation with a violent crime they are telling us, erroneously, that if they could just have permission to censor the hate speech, then it would take care of the problem.
I have personally never understood all the hoopla around hate speech being so damaging to society. Sure, it is rude, and sure, it can hurt people’s feelings deeply. And yes, there is a possibility it could incite some lunatic to do horrible things. But do we give up one of our fundamental freedoms due to the few whackos who will get a rise out of “hate speech” and uncontrollably wreak havoc as a result?
I say a resounding “no!” And even if that was the initial intent of censorship—to avoid a lunatic from being inspired—it simply would not work. Best to deal with the lunatic first and not trash free speech just because they think he or she (lunatic) will hear it.
But that isn’t the initial intent. We are told it is, but clearly it isn’t. In fact, I would not be surprised if most of these incidents where misinformation is blamed were intentionally set up so the agenda has something to point at (I have to be careful with this statement, I don’t want to be sued as someone else we know was for saying something similar).
Information is information. Whether it is looney or not (or hateful or not) is up to us individually to determine. We are supposed to have the faculty to do such a discernment, and not require mommy or daddy to come to our rescue and tell the big bad bully to stop hurting our feelings. And again, I am all for living in a society that does not condone hate speech, sexually or racially degrading speech, or speech inappropriate for children (within reason of course, and not by censorship!). But, in my humble opinion, we must do this in such a way that we preserve the First Amendment right to free speech. Plain and simple. There is simply no other way.
What we see going on, however, is not in our best interests. Far from it. The fight against misinformation is not a fight against hate speech, sexually degrading speech, or inappropriate speech for children as they want us to believe it is. The fight by the agenda to remove what that agenda decides is offensive, or dangerous, information is pure and simply a fight against our rights in a free society to freely exchange information.
We have been hoodwinked into thinking this fight is a noble pursuit to silence deranged and mentally ill people, who will take this information to support their heinous attack on innocent others. That is not at all what they are doing. And what they are doing is one of the oldest tricks of manipulation in the books—disguise an action as something else, and then create a false flag to justify it. “See what happened? If only that killer did not have access to that misinformation, this would have never happened.”
So, if we don’t do whatever we can to limit hate speech and the like, then what are we to do? Raise our children with character, teach them how to think, and how to discern good from bad.
Teach them to question what they read, see and hear. Raise them with good and loving hearts so hate has no place to grow within them, nor have influence on them. And what about all of us who are already raised? Teach each other.
Make an example for others to follow. Walk the talk. And make love the most important tenet of your life.
Todd Hayen PhD is a registered psychotherapist practicing in Toronto, Ontario, Canada. He holds a PhD in depth psychotherapy and an MA in Consciousness Studies. He specializes in Jungian, archetypal, psychology. Todd also writes for his own substack, which you can read here
‘Black & Indigenous Folx’ Only: Taxpayer-Funded Minneapolis Food Pantry Comes Under Fire For Discrimination
A food pantry in Minneapolis has come under fire for explicitly barring white people from accessing its services.
According to the Daily Mail, Mykela “Keiko” Jackson, the director of the Food Trap Project Bodega, which was set up with a Minnesota State grant and located near the Sanctuary Covenant Church in North Minneapolis, quickly became the subject of intense scrutiny and criticism when it posted a sign stating that the food was intended exclusively for “Black and Indigenous Folx.”
Jackson’s racist policy led to a civil rights complaint after it denied service to several white individuals, including local chaplain Howard Dotson, who filed the complaint with the Minneapolis Civil Rights Commission. He described his experience as deeply divisive, telling Alpha News, “This is not building community, it’s destroying it,” adding “I went over there and confronted her. I told her that I saw the sign and I asked if she really thought she could take grant money from the state and discriminate against poor white people.” Dotson’s frustration was echoed by many in the community who saw the pantry’s policy as a step backward in race relations and community cohesion.
Jackson defended the policy, stating that the pantry was established to serve black and indigenous communitiesaffected by systemic inequalities and that white individuals could find resources elsewhere. Her stance sparked further debate about the role of racial criteria in public service and whether such measures heal or deepen societal divisions.
The backlash grew so intense that the pantry was forced to relocate after the church stated the project’s approach had strayed from the inclusive vision initially proposed.
Jackson, however, claims that the pantry hasn’t turned anyone away.
“There was no one there directly turning them away. They felt entitled to the resources that were not for their demographic – white privilege is real,” she said, accusing Dotson of ‘political violence.’
Jackson said on Instagram that the pantry was forced to move because of a “karen.”
“It has been recently brought to our attention that our partnership with Sanctuary Church may not be fully aligned with our mission due to a recent incident with a “Karen” last week,” she wrote. “Although the church likes our concept they feel our commitment towards directing these resources towards Black & Indigenous families ONLY is exclusionary to other POC & White members of the community that use their establishment.”
According to Jackson’s website, “The Black community consistently faces hunger at higher rates than whites due to racism within social, economic and environmental aspects.”
Sanctuary Covenant Church, meanwhile, said Jackson misled them.
“When Mykela Jackson approached us to set up her Food Trap Project we were excited to support her. This would be a place accessible to anyone 24./7. No demographic [information] necessary. Anyone in need would be welcome.
“Nowhere in her original proposal did she indicate that she would be restricting usage to specific communities. This does not align with the vision and mission of the Sanctuary.
“When we discovered her signage and social media posts, we asked her to abide by her original proposal. Ms. Jackson was unable to do so and decided to move her Food Trap elsewhere. The deadline for moving her trap is 9/30. We’ve already cut power to it.”
The probability that we see oil production targeted as part of the escalating fighting in the Middle East has increased. Academy’s General (ret.) Robeson, Rachel Washburn and Peter Tchir discuss this in a highly viewed webinar – Risk of Further Escalation in the Middle East. The webinar was very much driven by audience Q&A, which reflect the uncertainty managers are facing when dealing with the conflict. We highlight oil as disruptions in oil supply or production would have the largest impact on the global economy.
At its most simple level, there are two main reasons to expect further escalation, which could include targets connected to energy production and distribution.
From a military standpoint, Israel has had a series of successes. The attacks using pagers and walkie talkies seemed to do three things.
The actual injuries and death attributed to those devices exploding.
Forcing more “in person” meetings, which have in turn been attacked.
While not only killing and injuring many with exploding pagers and walkie talkies, the attacks had a massive psychological effect. Enemies of Israel must wonder about how much information Israel has on them. Whether their whereabouts are known at any given time. What other ways has Israel potentially infiltrated their organizations? Are they at risk of some non-conventional attacks? This fear is relatively new and is likely an important part of the calculus for Israel’s next steps.
From a military standpoint, Iran did not seem to accomplish much with their ballistic missile attack. Yes, some got through and hit military targets, but the vast majority were intercepted or landed in areas causing minimal damage to either people or infrastructure.
If the attack was meant to signal to Israel that they were unsafe and subject to retaliation and retribution, it is difficult to see that having been very successful.
If the attack was meant to reassure the proxies that the proxy leader was all-powerful and could easily protect them, that likely failed too.
The combination of those two factors is why escalation is likely, even in the face of pressure from many countries to de-escalate.
Add Inflation Back to the Fed’s Calculations
Friday’s job report was so strong, that the Fed can no longer just look at jobs data (which has been their modus operandi for the past few meetings). As discussed in NFP – WOW!! It was very important that we got the upward revisions we were expecting. Yet another “beat” on the headline data, but with downward revisions would be easy to ignore. If you, like us, believe that the BLS has corrected some of their model errors (primarily in the birth/death model), we should have more balanced revisions going forward. Speaking of that model, it actually came in at -100k jobs, which I think is encouraging. For too many months last year, the birth/death model was too great of a percentage of the entire number for my tastes (I have a natural aversion to data where the “plugged numbers” dominate the overall number). I also didn’t highlight, but we saw a big increase in fulltime jobs in the household part of the survey.
So, with the employment data so much stronger, with chatter about the Sahm “rule” dying down the Fed is likely to be more cautious in terms of their next steps.
While I am not particularly worried about inflation, there are some things that we should be watching for:
The risk of higher energy prices from any major disruption in the Middle East (with Russia and Ukraine also a potential risk on that front).
Rising commodity prices across virtually every commodity. If you pull up GLCO on Bloomberg terminal, and set the time frame to 1 month, all the commodities under energy, metals, and agriculture (which surprised me a bit) are up. The NYMEX Henry Hub natural gas futures contract is up a whopping 33% in one month. Copper (aka “Dr. Copper”) is up 11% along with aluminum and nickel. While rising commodity costs can take time to filter into prices paid by consumers, it is worth watching.
China stimulus. Who knows what impact Chinese stimulus will have on domestic consumption, but if it does, that could put upward pressure on commodities and even finished goods. It is clear that some of the rise we’ve already seen in commodity prices is in anticipation of that stimulus, so the stimulus will really need to work well to continue to put upward pressure on prices, but my base case is that it will work.
It will be very interesting to see how the Chinese stock market behaves when it reopens this week. It has been closed since September 30th to celebrate “Golden Week”. Since then, KWEB and FXI (two ETF proxies I track) are up 12.9% and 12.4% respectively. So we should see the Chinese market open very strongly, but expect some volatility as investors get a better “peek under the hood”. I find myself feeling the need to repeat one of my overriding premises on the current market. A reminder that we live in a world where true depth of liquidity is low and markets moves are amplified in BOTH directions.
My view is that the Fed had tilted to being 90% fixated on jobs and now they have to increase the weighting on inflation risks, of which there are several.
Let’s not forget the expectations for CPI on the 10th are 2.3% for overall, and 3.2% ex food and energy. While comforting (from an ivory tower standpoint) and moving in the right direction, they are still above 2% and are impacting consumers (voters) at levels higher than those consumers are comfortable with.
While the market has tempered Fed cut expectations, down to 4 cuts in next 4 meetings from 6 cuts in next 5 meetings, I think they will come down further.
Right now, and this is all data dependent, I think we need to be thinking 25 in November. No chance right now of another 50 (unless inflation is really low or jobs drop again) and 0 is probably off the table, because optically it makes 50 seem like it wasn’t a mistake (which I don’t think it was) and sets the stage nicely for a pause. Then maybe one more in December, but I would think they start moving at alternative meetings, so the very front end, as much as it has sold off, probably has more room to move to higher yields.
The Neutral Rate
My simple view is that the “neutral rate” should be just that, a level of rates that allows the economy to function “normally”. We cannot measure what this normal rate is, so we rely on all sorts of estimates. What rates are considered “tight” or “loose” from a monetary policy standpoint? It really is difficult to determine what it is, but we will try to do that in any case.
Since the Fed’s goal should be to have “neutral” monetary policy as their desired outcome, the terminal rate (or longer term projections) in the dot plot should reflect what the Fed thinks about the neutral rate. Using that, we will run our little “thought experiment” on why we think the Fed will start talking about leaving longer term rates higher than the market is currently pricing in.
At the last meeting the terminal rate dots were:
A median of 2.875% but with a weighted average of 2.99% (my view is that while markets focus on the median, which might be correct for the next meeting or two, the weighted average provides more information on where the Fed is headed).
There were 4 dots at 3.5% and higher for longer term rates and 7 for 3.25% or higher.
At the meeting back in March, we saw a different picture:
The median was 2.56% and the average was 2.81% (which I think supports my view that weighted average helps understand direction).
There were 3 dots at 3.25% or higher!
There are two reasons I think this shift in neutral rates/terminal rate is occurring:
As the Fed pivots to a new cycle, they can actually think more about the terminal rate. When stuck deciding between more hikes, or when to cut, the terminal rate probably doesn’t come up much in discussions, but as they now think about when it comes time to end, it does, so it is becoming a more thought about and discussed number.
Does the economy feel like 2.875% is “neutral”?
The Atlanta GDPNow GDP forecast has averaged 2.9% during this 2 year period, which is what actual GDP has averaged. From an intuition or “gut feel” standpoint, this economy is not acting like the Fed has been as restrictive as a 2.875% neutral rate would imply. You get me to 3.5% or higher (where some Fed dots are moving to) and you have a believer.
One of the biggest messes of all of this, is every smart corporation and individual who could, locked in long term debt during the era of ZIRP.
So, while those stuck borrowing short term have felt the increase in debt cost, for most companies and probably even more individuals the rates haven’t done much. There is even an argument, which I subscribe to, that the move to higher yields was beneficial to many as it added to their income, particularly through record holdings in money market funds. Also, the full impact of rate cuts didn’t bleed into the longer term yields as 2s vs 10s for example, were at -50 bps on average for the past two years.
Lots of difficulty measuring the neutral rate. Historical analysis is only marginally useful as the starting conditions change (one of the important ones here is average duration of borrowing).
So we might not get a big change in this, but I’m betting that they next hiccup for the bond market is less about how quickly we get rate cuts (market still a touch too aggressive there) but on where the Fed finally gets too (and I think the market needs to be looking to 3.5% or higher).
Bottom Line
Moderately higher yields across the curve.
The two year at 3.92% is probably getting close to reality, but I think closer to 4.1% is more realistic, given the pace I’m expecting based, at how I see data playing out in the coming few months.
With 2s vs 10s back to positive and a target of 25 bps, I think we see 10s push towards 4.25%. We should see yields rise this week as investors set up for the auction, then get a post auction rebound, then we will see where the trend is reall headed.
Equities.
I do think the re-opening of China’s markets this week will impact U.S. markets (especially if it doesn’t hold on to big gains already priced in). I’m 100% convinced that the benefits of stimulus will accrue disproportionately to Chinese companies selling products domestically and commodity producers. Given the “need” for the CCP to ensure stability, expect them to add more and more stimulus until they achieve the desired effect. We will do a larger update on Threat of Made By China later this week. Given that we view the market as “tradable, not investible” I like the idea of taking some profits ahead of the opening, given the parabolic move so far.
I was surprised by how well stocks responded to the 10-year nearing 4% on Friday. Stocks threatened to fade several times, but decided to ignore the move in yields (good news was good) and to downplay risk of escalation in the Middle East – which has not occurred as of Sunday morning). This week will be interesting, but I expect the risk is skewed to bigger downside moves, as many of the issues discussed here (war, inflation and the neutral rate) get coverage and traction.
Credit. Boring!
I continue to believe that at the top of the rating range, already tight spreads can go tighter as investors overweight credit versus government debt (more kick the can on debt ceiling doesn’t do much to shift the narrative that corporate governance is better than government governance).
At the smaller, lower rated end of credit, private credit, is still helping drive credit spreads lower via competition amongst each other, but also with many big banks looking to expand their lending.
Don’t forget to register here if you are in New York for Thursday’s Geopolitical and Credit Roundtable led by General (ret.) Spider Marks at Bobby Van’s GCT location. A brief overview by Spider, but with the primary goal of being to mingle and meet with Academy’s team of credit professionals. Attendees from sales and trading, capital markets and syndicate will be there. Heavy appetizers will be served at this informal event (not table seating).
The Election.
With just over a month to go, we are starting to focus in on possible outcomes. So far, “gridlock” and an “uncontested” election are the base case. That seems right and the market is reasonably priced in for that (though I still think deficits will grow more than expected even under gridlock). So the “shock” or “risk to the market” would be some side “sweeping” and being able to enact much more aggressive policy agendas, or real fears about the aftermath of the election growing. As we near the election expect volatility to increase moderately, just because nothing can be completely discounted at this stage, and the illiquid nature of our markets seem susceptible to noise on the election front, as the date draws near.
Good luck and looking forward to seeing many of you in person at Academy’s events or some of the conferences where we are speaking this month!
Mortgage rates jumped by more than 0.25 percent on Friday after a government report showed that the labor market continued to remain strong.
The average 30-year fixed-rate mortgage rate jumped 27 points from 6.26 percent to 6.53 percent on Friday, according to data from the Mortgage News Daily (MND) mortgage rate index that is updated on a daily basis. This is one of the biggest single-day rate increases MND has ever tracked.
A strong employment situation indicates a more robust customer demand for mortgages, thus potentially keeping rates higher and lowering any chances of a rate decline.
The U.S. Bureau of Labor Statistics (BLS) released its employment situation summary report for September on Oct. 4. The report showed that 254,000 new jobs were added last month, far exceeding the 140,000 jobs estimated by experts. This was also up from the 159,000 jobs added in August. In addition, the unemployment rate fell for the second consecutive month, from 4.2 percent to 4.1 percent. With the jobs report showing persistent strength in the labor market, mortgage rates surged.
Mike Fratantoni, chief economist at the Mortgage Bankers Association (MBA) pointed out that the stronger-than-expected September employment report suggests a “successful slow landing” of the American economy.
However, the report also stokes worries that inflation “may not move in a straight line to the Fed’s 2 percent target,” he said. As such, the report “could certainly slow the expected pace of rate cuts.”
The Federal Reserve had reduced its benchmark interest rates by 50 basis points last month, the first such rate cut since it started pushing up rates in 2022. The agency had also signaled an additional 50-point cut for this year.
Fratantoni noted that the MBA is forecasting longer-term rates, including mortgage rates, to “remain within a relatively narrow range over the next year.”
The positive employment report “will push mortgage rates to the top of that range, but we do expect that mortgage rates will stay close to 6 percent over the next 12 months,” he stated.
Mortgage Rates and Housing Market
If mortgages were to start rising again, it could dampen an already cold housing market. In the first eight months of 2024, only 25 out of every 1,000 homes in the country changed hands, which is the lowest rate in at least three decades, according to a Sept. 30 press release by Redfin.
The real estate brokerage cited high mortgage rates as one of the key reasons for the low home turnover rate. “More than three-quarters of mortgaged U.S. homeowners have secured a rate under 5 percent, well below the rates on offer this year,” it said.
“This has prompted many homeowners to hold off on selling and buying another home using a higher rate, a phenomenon known as the ‘lock-in effect’. Rates fell to the low 6 percent range in August, but the drop has not yet resulted in a significant uptick in sales.”
Almost half of all U.S. homes for sale in August were on the market for at least 60 days, the highest share since August 2019, according to Redfin. Nearly seven out of ten homes sat on the market for at least 30 days.
Redfin senior economist Sheharyar Bokhari pointed out that even though home sales usually tend to pick up when mortgage rates fall, the recent dip in rates has not triggered such a trend.
Instead, “we are seeing the opposite—sales are dropping and homes are sitting longer on the market,” he stated. While the Fed’s rate cut in September will give buyers a confidence boost, “it remains to be seen whether sales will speed up in any meaningful way as we move into the slower Fall season.”
In a July interview with The Epoch Times, Dutch Mendenhall, founder of RAD Diversified, a real estate investment trust, suggested that buyers with the means to purchase a home go ahead with the decision rather than adopt a wait-and-see approach.
“If you wait, the home may be gone or the interest rates could go up again,” he stated. “I believe eventually that loans will become more affordable, and at that point, homeowners can refinance to get the lower rates.”
President Joe Biden urged Congress on Friday to expedite funding for the Small Business Administration’s (SBA) disaster loan program, warning that it will run out of money within weeks amid ongoing recovery efforts in the aftermath of Hurricane Helene.
In a letter to Congress on Oct. 4, Biden warned that the SBA’s disaster loan program will run out of funding “in a matter of weeks and well before the Congress is planning to reconvene.”
“I warned the Congress of this potential shortfall even before Hurricane Helene landed on America’s shores,” the president stated, adding that he had requested more funding for SBA “multiple times” in the past months.
“Small businesses and individuals in affected areas depend on disaster loans as a critical lifeline during difficult times,” he said. “The Congress must act to restore this funding.”
The president did not specify the amount needed to replenish the disaster loan program.
The SBA offers low-interest loans to businesses, homeowners, and renters affected by declared disasters. Its loan program provides affected homeowners with up to $500,000 to repair their primary residence, and up to $2 million for businesses to cover disaster-related losses.
In his letter, Biden stated that while the Federal Emergency Management Agency’s (FEMA) disaster relief fund has sufficient resources to meet its immediate needs for Hurricane Helene response efforts, it could face a shortfall by the end of the year.
FEMA and the Department of Defense have been carrying out “critical life-saving and life-sustaining missions” due to impacts from Hurricane Helene, which made landfall as a Category 4 hurricane on Sept. 26.
Biden said that FEMA will continue to perform its missions “within present funding levels” but urged Congress to provide additional resources.
“Without additional funding, FEMA would be required to forego longer-term recovery activities in favor of meeting urgent needs,” the president stated.
Biden traveled to North Carolina, South Carolina, Florida, and Georgia this week to tour areas severely impacted by the storm, which caused heavy flooding and widespread power outages.
Homeland Security Secretary Alejandro Mayorkas said on Oct. 2 that FEMA does not have enough money to make it through the hurricane season.
“We are meeting the immediate needs with the money that we have,” Mayorkas told reporters aboard Air Force One on Oct. 2.
Hurricane Helene barreled through the Southeast last week, making landfall in Florida’s Big Bend region. The storm hammered Florida’s Gulf Coast with record storm surges and brutal winds before pommeling the rest of the region with historic flooding, wiping out entire towns.
More than 150,000 households have registered for FEMA assistance, according to Frank Matranga, an agency representative. That number is expected to climb as rescue and recovery efforts continue.
Samantha Flom and the Associated Press contributed to this report.
The Supreme Court is expected to start its 2024–2025 term after a blockbuster year of considering contentious cases and challenges to longstanding precedent.
Already, the court has accepted petitions related to hot-button topics including gender, ghost guns, immigration, pornography, and e-cigarettes. The term starts on Oct. 7.
As the session begins, here are some potential developments to look out for. Besides new legal questions, legal issues from the prior term could resurface and help shape decisions on new cases in the 2024–2025 term.
Trump Back at Supreme Court?
Last term, the Supreme Court heard several cases related to former President Donald Trump, resulting in landmark rulings on immunity and the disqualification clause under the 14th Amendment.
The immunity ruling in Trump v. United States held that presidents enjoy different levels of immunity from criminal prosecution. That ruling stemmed from an appeal Trump filed in his election interference case brought by special counsel Jack Smith in the D.C. Circuit.
Both the immunity decision and another related to Jan. 6 defendants could return to the Supreme Court as Trump’s legal team raises their arguments in Washington.
In Fischer v. United States, the Supreme Court restricted the use of an Enron-era obstruction charge in Jan. 6 cases. This obstruction charge was leveled against Trump in the federal election case. On Oct. 3, Trump submitted a brief asking District Judge Tanya Chutkan to remove that portion of the indictment based on Fischer.
So far, Chutkan has set a timeline through the beginning of November with opportunities for Trump’s legal team to make arguments on immunity and the special counsel.
A status conference on Sept. 5 indicated that Trump and Chutkan would disagree about how she should apply the Supreme Court’s decision to Smith’s superseding indictment—making an appeal likely. If the U.S. Court of Appeals for the D.C. Circuit agrees with Chutkan’s eventual decision, Trump will likely appeal the decision to the Supreme Court.
Trump is also expected to file a motion in D.C. court arguing that Special Counsel Jack Smith’s appointment was illegal. District Judge Aileen Cannon found Smith’s appointment was unauthorized and dismissed the classified documents case in Florida, but her ruling is not binding in the D.C. Circuit, where there is a previous ruling to the contrary.
Smith has also filed a large immunity brief, indicating the appeals on that issue could be complex. Trump’s team is set to reply with a very large brief of their own.
Smith has appealed Cannon’s decision. With the appointment question being challenged in two circuits, this could create a circuit split, or differing legal rulings on the same issue in different circuits, which often prompts the Supreme Court to take up the matter to resolve the conflict.
If Trump wins reelection, each of the federal criminal cases will likely be withdrawn.
It’s unclear how the New York case, which involves state charges, will conclude, but Trump has already vowed to appeal. The state-level prosecution in Georgia could also reach the Supreme Court as it’s expected to face immunity-related objections from Trump.
Calls for Reform
Regardless of who wins the presidency, Democrats will likely continue pressing for reform to the nation’s highest court—attracting further scrutiny to the justices and amplifying the tension surrounding hot-button issues like gender.
Recent polling from the University of Pennsylvania indicated that Democrats may be able to gain traction with proposals for term limits and ethics reform. Court-packing, or adding more justices to the court, polled relatively low with just 3 in 10 Americans supporting such a proposal.
Democrats didn’t make much headway on their proposals in recent terms, but that could change depending on who wins Congress and the presidency in the 2024 elections.
Besides court-packing and term limits, a binding ethics code has been floated by Democrats. Whatever passes could come before the Supreme Court itself. The court already implemented its own code of ethics in 2023 but faced criticism for not including an effective enforcement mechanism.
Since then, justices Ketanji Brown Jackson and Elena Kagan have backed some kind of ethics enforcement. It’s unclear, however, how court as a whole might rule on something like this. Justice Samuel Alito, who has been a target of Democrats’ ethical concerns, previously told The Wall Street Journal: “No provision in the Constitution gives [Congress] the authority to regulate the Supreme Court—period.”
Reforming the Supreme Court could prove more difficult than other reforms advanced by Congress. Article III of the Constitution, which allows judges to hold office “during good Behaviour,” has long been interpreted to offer life tenure.
Imposing term limits would likely require an amendment to the Constitution. Besides proposing term limits, both President Joe Biden and Vice President Kamala Harris have advanced the idea of a constitutional amendment that bars presidents from enjoying immunity from criminal prosecution.
Guns
So far, the court has said it will take at least one major firearm-related case called Garland v. VanDerStok, which surrounds the government’s attempt to regulate so-called “ghost guns.” The term refers to firearms that are untraceable, because they lack serial numbers and are made outside of the normal process involving a licensed manufacturer.
Oral argument for that case is set for Oct. 8, months after the Supreme Court issued its decision on bump stocks, which are accessories added to guns to increase the rate of fire.
Both that case (Garland v. Cargill) and the VanDerStok case involve the DOJ, through the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) attempting to interpret decades-old laws to prohibit certain products.
In the bump stocks case, a 6–3 majority held that ATF exceeded its authority in outlawing bump stocks based on statutory phrasing in federal law.
The VanDerStok case focuses on the Gun Control Act of 1968, which contains language about firearms, frames, and receivers that ATF interpreted to cover weapons kits and incomplete frames and receivers. Unlike the court’s decision in prior gun cases, such as a case last term surrounding gun rights for domestic abusers, this case focuses on statutory interpretation rather than judging how a government’s action aligns with the Second Amendment.
The solicitor general’s brief expressed particular concern about how guns constructed from these parts were able to evade law enforcement protection because they didn’t follow the Act’s requirements, including providing serial numbers.
It also expressed concerns over the impact on minors. “Minors in particular ‘have discovered the ease with which they can acquire the parts for a ghost gun’ and ‘have been buying, building[,] and shooting the homemade guns with alarming frequency,’” the brief read, quoting a Washington Post article on the subject.
Two Texas residents—Jennifer VanDerStok and Michael Andren—along with Tactical Machining, a producer and retailer, and the advocacy group Firearms Policy Coalition, sued ATF.
VanDerStok and her co-respondents told the Supreme Court that ATF’s definition isn’t logical and that the agency is attempting to regulate items that aren’t frames or receivers.
The court has just started to announce the cases it’s taking, meaning that there are plenty more—including gun cases—it could decide to hear. It could also take up a challenge to Maryland’s “assault weapons ban,” which the U.S. Court of Appeals for the Fourth Circuit upheld as not violating the Second Amendment.
On Oct. 4, the Supreme Court also agreed to take up the Mexican government’s claims that U.S. gun companies have engaged in business practices, such as failing to impose sales restrictions, that benefitted cartels in Mexico. A district court ruled against Mexico but that decision was later reversed in the First Circuit, prompting the gun companies to appeal to the Supreme Court.
Pornography and E-Cigarettes
Youth public health is coming up in two other major cases—one involving the Food and Drug Administration’s (FDA) refusal to approve flavored e-cigarette products and another challenging Texas’ law requiring age verification on pornographic sites.
Industry groups have brought legal challenges to those decisions with both of their cases reaching the U.S. Court of Appeals for the Fifth Circuit. The Supreme Court said it would take up both cases, although the dates for oral arguments haven’t been announced.
The pornography case is Free Speech Coalition v. Paxton, as in Texas Attorney General Ken Paxton, who has accused the industry of trying “to keep minors in their audience.” The Free Speech Coalition, a trade association for adult entertainment companies, described Texas’ law as “ invasive and burdensome, with significant privacy risks for adult consumers.”
It’s unclear how the two cases will be resolved. Nearly 20 states have passed laws requiring age verification for pornographic platforms. The Supreme Court’s decision could change how lower courts evaluate First Amendment challenges to porn restrictions.
The Coalition is arguing that the Fifth Circuit erred in applying a lower standard of review, or requiring less from the government in showing its restriction on speech was justified.
Erin Hawley, who serves as senior counsel at Alliance Defending Freedom, said the Supreme Court will likely focus on that question.
“Oral argument in this case will be very interesting,” she said during an event at the Heritage Foundation on Oct. 2. “I think it’s really just the tip of the iceberg as well. As we know from the Supreme Court’s decisions in Netchoice and the other cases—how states grapple with social media companies while also protecting First Amendment freedoms is something that … will be on the Supreme Court’s plate in the next few years.”
In the e-cigarette case (FDA v. Wages and White Lion), the Fifth Circuit ruled in favor of the industry. The appeals court reasoned that the Food and Drug Administration’s rule violated the Administrative Procedure Act (APA) by, among other things, not considering the manufacturers’ marketing plans or giving them fair notice before allegedly changing its approach to approval.
On Oct. 4, the court said it would take another e-cigarette case from the Fifth Circuit—this time questioning whether a manufacturer erred in how it filed its lawsuit against the FDA.
Administrative Law
The APA, passed in 1946 after the New Deal era, was critical to one of the court’s most controversial decisions in its prior term that overturned the decades-old Chevron precedent.
Writing for the majority, Chief Justice John Roberts said in Loper Bright Enterprises v. Raimondo that courts had been judging agency decisions based on a misinterpretation of the APA. The Chevron doctrine required courts to defer to agencies’ reasonable interpretations of law when there were ambiguities.
Kagan’s dissent said the majority “disdains restraint, and grasps for power” by overturning the decades-old Chevron precedent.
Dan Greenberg, general counsel at Competitive Enterprise Institute, a libertarian think tank, disagreed.
“Loper Bright really indicates a stronger and stronger desire by the Supreme Court to instruct every other part of government to stay in its lane,” Greenberg told The Epoch Times.
Greenberg said he thought it was “highly likely” the court would grant certiorari, or agree to take on, Consumers’ Research v. Federal Communications Commission (FCC). That case questions whether Congress unconstitutionally delegated its power to raise revenue to the FCC.
Hawley suggested that Loper Bright could also impact a case being heard in October involving the U.S. Environmental Protection Agency’s (EPA) Clean Water Act.
In City and County of San Francisco v. EPA, city officials said the federal agency’s regulations for wastewater discharge permit holders are too vague to follow.
“I would imagine that post-Loper Bright that San Francisco will win this one,” Hawley said.
In the 2023–2024 term, the court took on many hot-button issues but seemed intent on leaving one, in particular, gender, for another term. This summer, the justices took the long-awaited step of taking up a case on gender, which touches on various aspects of federal law.
In that case, U.S. v. Skrmetti, the Biden administration is challenging Tennessee’s ban on gender transition procedures for minors. The administration contends that Tennessee’s ban is a form of discrimination that violates the equal protection clause.
The case is likely to set a major constitutional precedent and be one of the most watched for in the upcoming term.
It will also present an opportunity for the court and its various justices to clarify the stances they took in a similar case, Bostock v. Clayton County, from 2020. In that case, Justice Neil Gorsuch joined a majority of the court in holding that employment discrimination on the basis of sexual orientation and gender identity violated Title VII’s prohibition on sex-based discrimination.
Its decision was rooted in the idea that discrimination based on sexual orientation or gender identity was ultimately based on sex.
That decision has played a role in lower court decisions on gender-related medical procedures, as well as litigation over Title IX, or the civil rights statute prohibiting sex-based discrimination in education.
Earlier this year, the Biden administration prompted a flood of lawsuits when it passed an Education Department rule interpreting Title IX to apply to sexual orientation and preferred gender identity. Conservatives have argued that doing so wrongly forces women to compete with men in athletics and share spaces like locker rooms with them.
The court ultimately declined to take up the issue in August when the justices refused to grant the Biden administration emergency relief from blocks that the Fifth and Sixth circuits placed on the rule. Conservatives have also asked for the court to take up two other Title IX cases originating in Idaho and West Virginia.
Whatever the court decides, it could impact how the American legal system views gender and its implications in a wide range of contexts.
Ah, election season. That festive time when politicians suddenly have new ideas about how to make our lives better. This year the limelight shines brightly on our revered American economy, which is presently either good or bad, depending on whom you ask. But it’s election season, so voters rule and the experts can take a powder. And that’s why today we have both presidential candidates proposing economic policies that make economists wince and voters cheer.
The remarkable gap between experts and ordinary people is nicely illustrated in a recent Wall Street Journal poll targeting economic policy ideas from both campaigns. The Journal asked 750 registered voters what they think. Then they commissioned the University of Chicago’s Clark Center to get a reading from 39 “top academic experts.” The policies in question include things like tax-free tips and Social Security income, tariffs on imported goods, penalties for price gouging, free money for first-time homebuyers or parents of newborns, and caps on various drug prices.
The experts hate much of this because it runs counter to their preferred economic theories. But regular folks, whose frame of reference comes mainly from the realities of daily living, gave an average 63% thumbs-up. The starkest contrast comes with tax elimination, where voters are nearly 80% for and economists are about 90% against. Makes you wonder if we’re not living in parallel universes.
At this point much could be said about economic philosophy and lessons from history. But instead let’s think about this: roughly half of this country votes conservative, which means they typically don’t like big government. But according to this survey, around three quarters of all voters favor economic policies that involve more government spending. That means something like one half of conservative voters are willing to suspend their principles in the interest of helping people get through tough times.
I realize I’m playing fast and loose with the numbers, but it does indeed look like a society in economic distress — where relatively small numbers become meaningful to many households. Perhaps that’s why nearly 8 of 10 American adults live paycheck to paycheck and more than 20 million households are behind on their utility bills. This is where even the staunchest Jeffersonian is tempted to look to Uncle Sam for help.
And yet we have that pesky free lunch myth.Milton Friedman described it as “the belief that somehow or other government can spend money at no one’s expense.” It doesn’t require higher math to know that more government spending brings relief only at the expense of more problems. The piper always gets paid.
But what if there were a way to help people without more government spending? What if we could give something to some people without first taking money from other people? Surely that would bring tears of joy to both the ill-informed voters and the enlightened experts.
If 20 million households are in arrears on their utility bills, and so many are living paycheck to paycheck, then there must be many more who are not behind but still struggling to pay. And we know the average cost of electricity in the U.S. has been rising steadily, up nearly 30% since just 2019. In a society where a few dollars mean a lot, many people each month must decide between the light bill, the rent, and food.
So, here’s an idea: what if we simply bring down the cost of electricity? It helps everyone and it doesn’t require more government (i.e., taxpayer) money. It only requires the government stop forcing a premature “transition” that has only served to make energy more expensive and less reliable.
If we want to get crazy, then Uncle Sam could take some of the big money he throws at wind and solar (which come up short) and invest in something with a better pay-off, like responsibly sourced natural gas, which is cheap, reliable, and reasonably clean. Or maybe put a few chips on nuclear, which is safer and cleaner than you might think. If Uncle Sam were really concerned about return on investment, he’d realign his portfolio. At least that wouldn’t be new spending — and it would bring down energy costs more quickly.
Imagine if a presidential candidate stood up and said, “Listen folks — here’s what we’re going to do. We’re going to put a couple hundred bucks in everyone’s pocket. Every month. Forever.”
Point me to the nearest voting booth.
Michael O’Sullivan is Program Director and COO for Blue Energy Nation, a non-profit committed to educating young people on energy realities. He is also a popular podcast host and an advocate for smart energy choices.
