Inflation, #2 Guys & NATO – Top 3 Takeaways – July 13th, 2023
- Inflation nation. No, South Florida’s inflation rate isn’t anywhere near 3%. Yes, the rate for the country is. And 3% inflation is still a full percentage point higher than the Federal Reserve’s target inflation rate (which means the Fed will almost certainly raise interest rates later this month once again), but it is the lowest it’s been since the March towards 40+ year high inflation began over two years ago. And that’s great news for two reasons. The obvious one but also the contextual one. For right at two years the average American’s financial situation had been going in one direction. Backwards. Inflation wasn’t just the highest it had been in over forty years, it had also been that long since the average full-time employed person had fallen behind for at least two consecutive years. We now know that as of June that was no longer the case. While the rate of inflation fell to 3% year-over-year, the average income has risen by 4.4% over the past year. And that’s the best news of all. Most folks are no longer falling behind. Now, the coast isn’t all clear going forward on the inflation and standard of living front, the CORE inflation rate – which excludes food and energy – was still 4.8%, which means that had it not been for largely declining energy prices last month, most people would still be falling behind today. And if they rise back up, as they’ve started to do recently, there’s the potential for inflation to bounce right back up next month. That’s one of at least a few reasons as to why interest rates will continue to head higher from here for now. But as for South Florida, what’s our new inflation rate? 6.9%. Driven almost entirely by lower food and energy prices, the Miami-Fort Lauderdale-West Palm Beach metro’s inflation rate is currently 6.9%. It’s super high for sure, at a rate that’s more than double the national average, and it also means most South Floridians are still falling behind, though it is the lowest since December of ‘21. Most recently the only aspect of our lives which has continued to rise in cost is housing. And that’ll be the key to our local inflation situation as we head down the back half of this year. If housing costs begin to moderate, our inflation rate will moderate providing us with the potential to come closer in line with the rest of the country.
- I’m not a number 2 guy. In a Wisconsin interview Governor DeSantis not only stated once again that he has no interest in being Donald Trump’s running mate, he clarified his position. This time around when he was asked if he’d consider being Donald Trump’s running mate he said: I don’t think so. I don’t think I’m a number two guy. And in addition to not being a number two guy he said this which is a bit more revealing than perhaps just saying what he feels he needs to say to remain a credible presidential candidate... I’m a leader, Governor of Florida, I’ve accomplished a lot, I think I could do more staying there rather than being VP. Now, if at the end of the primary process, should Trump emerge victorious and he were to come to DeSantis and ask him to run...would his tune change? Only he knows and it’s possible, right? But it’s the first time DeSantis has answered the question while also providing a concrete reason as to why he feels that way. And doing the job he was already elected to do is a pretty good reason. So, now you have Trump saying he’s unlikely to ask DeSantis to run with him, should he win the nomination, you have DeSantis saying that remaining Florida’s Governor is a better gig than being Trump’s Vice President. Do with that what you will. But if you take DeSantis at face value, he’ll never be the number two who will work for Trump.
- Action vs inaction. The United States was officially brought into World War II by surprise. And the reason the Japanese were able to surprise the United States at Pearl Harbor was because of inaction. First it was the inaction of President Franklin Delano Roosevelt as he failed to heed Prime Minister Winston Churchill's pleas for help and his promise that the war would find the United States if we didn’t. That inaction didn’t just provide Hitler with added opportunity to operate freely within Europe, it gave rise to another bad actor in Japan. But the theme of inaction didn’t end there. After months of advances in China, and the Indo Pacific Islands by Japan, our response – despite the US controlling the Philippines - which were directly in the crosshairs of the expansionist Japanese...there was inaction. Actually, not entirely inaction. First, we moved our Pacific Navel fleet to Pearl Harbor because we thought that would serve to intimidate, and then we did nothing. And then during the ten days in which the Japanese fleet was enroute to Pearl Harbor, every Japanese official at every allied embassy around the world burned all their documents, destroyed their equipment, and shut down their embassies but still we did nothing. And then, literally the day before the attack on Pearl Harbor, the commanding officer said I can promise you, we’ll not be surprised. And that Sunday morning, December 7th, 1941, the commanding officer’s plan was to play golf. The morning started off with a US naval vessel on patrol detecting an invading submarine just offshore. They fired discharges at it destroying it (yes, the first official attack at Pearl Harbor was actually taken by the US). But when the incident was radioed in. There was inaction. Thirty minutes prior to the attack commencing on Pearl Harbor two servicemen monitoring radar detected a huge grouping of aircraft heading in their direction. They radioed it in. Remarkably there was still inaction. The fact of the matter is that “The Day of Infamy”, as FDR called it in his famous speech, was preventable because it was first predicted by Churchill, and because it was literally detected by servicemen, but it happened because of inaction. NATO’s big get together just concluded. It’s always full of a lot of talk. Know who wasn’t talking? China. Instead, they’ve been especially active the past couple of days. What have they been doing? Sending 68 warplanes, and 9 naval vessels into the Taiwanese straight and according to Microsoft hacked into the accounts of 25 US organizations including government agencies. History has a way of repeating itself. Especially when you combine highly motivated bad actors with feckless leadership. The real international news isn’t what took place at the NATO summit (which was very little as usual), it’s what the active bad actors with the new Axis powers were doing.