Invest Effectively, Market Trends

How’s The Economy? It Depends …

The economy is either strong, or very weak, it seems. Like many things in America, it just depends on your political perspective.

According to Gallup, Republicans are +22 points positive about the economy, while Democrats are -80 points negative. If you go back to Biden’s time in office the viewpoints were switched almost perfectly. In Trump’s first term they were flipped again.

I consider myself a true independent, so I pay the most attention to the light dotted line (in the middle) that represents people like me who are frustrated with both parties. That line has stayed pretty consistently negative over the whole period.

There are certainly economic bright spots right now … investments are strong (+10% YTD S&P 500), for instance. Still, the job market looks odd, inflation is higher than I like it, and interest rates are inflated. I guess like other independents, I’d be tipped to the negative, overall.

That doesn’t mean that I’m changing anything in our retirement investment plan. Even if the economy is a little wobbly, I don’t see anything catastrophic that requires us to take a “defensive posture” with our budget or investments. “Stay the course” is usually a good track.

Which way do you view the economy right now?

Image: Pixabay; Chart: Gallup

10 thoughts on “How’s The Economy? It Depends …”

  1. Financially, my annual income which is one of the main numbers I track is growing well above inflation. However, I consider the S&P 500 runup to be mostly a function of the AI bubble, so I am focusing on investing in stocks other than the Magnificent Seven.

    One indicator that I see driving around LA is that traffic seems to be lighter. California has had the double whammy of the blockages of the Strait of Hormuz and our Democrat Uniparty that has regulated oil refiners to the degree that two shut down over the past year and charge the highest gasoline taxes in the country by a lot. Gasoline has reached the price point where it is taking marginal drivers off the road. You ask these people how their economy is and they would surely answer that it’s going badly.

    I see some positives for the United States economic picture. Bringing manufacturing back to the US, tackling illegal immigrants and the government services they consume and stopping the fraud will help our Federal Government balance their books.

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    1. Unfortunately, I don’t see any manufacturing jobs actually coming back. In addition, Trump seems very little interested in actually combating fraud. Their big bloated budget bill last year included record (debt) spending.

      I have been watching the California primary this weekend in the news. The odds are overwhelming that you’re getting a continued Uniparty. Sorry to see that.

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      1. The Democrats once again are being very slow counting the votes. This allows them to cheat. Your preferred candidate is ahead on election night and loses a couple weeks later by a few hundred votes when they find enough ballots.

        We are hearing about a lot of arrests for the fraud in Los Angeles County. Dr. Oz is having a lot of press releases on this. My wife and I are having dinner next weekend for a neighbor who runs Medicaid for a nearby county. He has told me recently that they are really tightening up their controls, just like a business has to do.

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      2. I hope they are getting after the Medicaid fraud, as that is the program where it usually shows up. The states are happy to waste the Federal dollars with little accountability. That said, until they actually reduce spending on these programs, I won’t believe it. Politicians – and Dr Oz is one now – talk a good game, but never follow through.

        My son is in California this weekend. He’s attending a festival / conference in Berkeley. One of the panelists wrote this piece … https://www.bitsaboutmoney.com/archive/fraud-investigation/

        He seems to understand fraud a lot better than the government & media. He references the issues in MN specifically, but I’m sure they are also happening in CA.

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  2. The Governors of Minnesota and California both ignored auditors that warned them about the massive fraud. They went as far as retaliating against whistle blowers. Nick Shirley’s Van Nuys Hospice fraud video lines up with a map that the California’s auditors gave to Gov. Newscum four years ago. The latest from California is that the legislature have passed a law that makes investigative journalism of “Immigrant Services Providers” illegal.

    A couple years ago, former Los Angeles County Sherrif Alex Villanueva described his efforts to give the homeless the option of treatment or arrest under vagrancy laws. The program was successful in cleaning up the Venice Boardwalk area.

    He then described what he described as the Homeless Industrial Complex. Non-Governmental Organizations donate money to politicians. When the politicians get into office the NGOs receive grants from the politicians. The head of the NGO pays themselves a rich $800,000 salary. The NGO doesn’t actually fix the problem of homelessness, because the CEO would lose the $800,000 salary.

    Politicians who ignore the auditors, retaliate against whistle blowers, and interfere with 1st Amendment Rights have gone beyond being useful fools and have become complicit in the fraud. Time to prosecute these bad guys and send them to prison for a long time.

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    1. I agree the politicians are complicit in the corruption. It’s a crime to ignore fraud. That said, it looks like the incumbent party is going to win back the Governorship of both of our states. As George Carlin observed, the root of the problem is with us – the voters.

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      1. Looks like the crooked politicians have been stuffing the mail-in ballot drop boxes again.

        Benny Johnson, another YouTube independent journalist dropped a video yesterday where he compares the votes through the close of the polls on June 2nd and the mail-in ballot results since. Nithya Raman was in third place. Since the close of the polls she has been receiving more votes than both Karen Bass the frontrunner and Spenser Pratt. There was one particularly egregious tranche where Nithya Raman had 80,000 votes with practically none going to Pratt. The DOJ is investigating this.

        Benny Johnson also visited a vacant lot in LA which was registered for and received 26 mail-in ballots.

        James O’Keefe filmed the homeless industrial complex on Skid Row in Downtown LA paying the homeless to forge signatures on ballots.

        The US really needs to pass the Save America Act to clean up our elections nationwide.

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      2. Like a super-majority of Americans, I support voter ID, making Election Day a holiday, requiring votes to be taken in-person, and on a paper ballot. Unfortunately, there is not enough support for this in either of our disappointing major political parties. I understand that 4 GOP Senators recently voted against the Save America Act.

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  3. I view the economy, which differs from my actual personal economic health as being in the midst of a periodic adjustment.

    The combination of demographic shift of last stage Baby Boomer retirements coupled with a lack of labor due to the crackdown on immigration was predictable. What wasn’t was the debacle known as the Iranian War.

    I am however optimistic as the economy does adjust over time and the transformation of Iran from being excluded from the western world to inclusion will be beneficial in the long run.

    I think that the SpaceX IPO will illustrate how valuable it is for companies to issue stock to employees. Allowing employees to participate in the success of a company through stock ownership is good for employees and society. We are a capitalist economy and all should participate. I await notice that I might get an allocation of SpaceX stock from a private market prior to the IPO. This will be a small amount, and I am not looking for an immediate pop, but view this as an investment for the next 20-50 years which will help my children and grandchildren.

    This week was challenging with LITE and AVGO taking a beating, but both are up more than 20 times initial investment with my already taking out my initial investment plus more, so this is not painful as it is a long-term horizon investment.

    My dividend and investment income remains on an annual basis four times what we typically pull from accounts, so I have no worries.

    I have been monitoring a large civil trial which involved the deaths of two boys due to speeding cars driven by a socialite and a former MLB player. The compensatory award was $176M and we have two more days of punitive damages testimony.

    I have found myself working more in 2026 than I prefer, but my workload will lighten considerably this week. I enjoy my project work, but lately it has been too much. In a few years I will have to decide to stop work and start Social Security but for now, I will continue with the part time fun for pay.

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    1. I certainly agree with that assessment of the economy right now. I hope the Iranian war doesn’t stretch out over years, as these sometimes have in the past.

      The SpaceX IPO (and Anthropic & OpenAI) are certainly exciting. I’ve never bought into a big IPO out of the gate, but maybe I should look into it. I read recently that SpaceX makes more from selling “compute” than they do from StarLink. They just signed a big contract with Google to use their data centers for almost $1B a month!

      I was shocked to hear about the Scott Erickson civil case. I hadn’t heard anything about it until a friend mentioned it this week. Erickson won 20 games as a rookie pitcher in 1991 and helped lead our Minnesota Twins to the World Series. I hadn’t heard much about him since he left the Twins 35 years ago. Sad case.

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