Change is in the wind. Local events and national information suggest trouble for our economy - which is another word for people. Will we call this the “ripple effect” of careless governance? Of self inflicted pain?
We live in a much desired townhouse condominium association. Not super fancy, but nice. Units have doubled in the selling price over the last 10 years. Typically, only one or two units would come on the market in a given year. The realtor would host an open house over the weekend and ask that all offers be received by Sunday afternoon. There would be multiple offers and by Monday or Tuesday night the owners would have accepted an offer over the asking price. We had considered this scenario to be the norm.
In early November of last year, a unit across the street from us was listed. The owner had the floors refinished. All the walls were repainted. The home was like new. Ready. But no sale. The unit did eventually sell for close to the asking price. So no harm done. But what had invariably taken four days had just taken four months. This was just repeated at a similar unit nearby.
A third unit is still available after multiple open houses. The condo was “staged” beautifully and priced right. This week the seller announced a significant “price drop”. It is no longer a sellers market. Something has changed.
Last year our small New England town voted with a 2/3 majority to override state budget laws in order to provide additional funding for our school system. The primary drivers of a bigger budget request was a hike in the costs of special needs kids programs and a huge increase in town employee health insurance premiums. The budget was growing despite small decreases in enrollment. But the town voted overwhelmingly to spend more money.
This year, the Select Board unanimously recommended another override vote to fund a new Public Works facility. The current building is old and has deficiencies. This is an affluent town that almost always says yes to spending to improve the community and its services. Not in 2025. The town voted it down. We said: “Not now.” Something has changed.
Let’s jump to the national level.
CBS News:
“U.S. economy went into reverse in the first quarter, new GDP data shows”
“U.S. economic growth slowed sharply in the first quarter of 2025 as businesses rushed to stockpile goods ahead of President Trump's sweeping tariff policies.
The nation's gross domestic product — the total value of products and services — shrank at a 0.3% annual rate, down from growth of 2.4% in the final three months of 2024, the Commerce Department reported Wednesday in its initial GDP estimate. It's the worst quarterly performance for the U.S. economy since early 2022, when the economy was in recovery after cratering during the COVID pandemic.”
Port Of Los Angeles Warns 'Difficult Decisions' Ahead As Shipments From China Cease - Investors Business Daily
”President Donald Trump's trade war policies are expected to bring about a 35% decline in cargo arriving at the Port of Los Angeles by next week as "essentially all shipments out of China for major retailers and manufacturers have ceased," according to Port of Los Angeles Executive Director Gene Seroka.”
USA Today:
”UPS cutting around 20,000 jobs amid 'new or increased tariffs'; 164 buildings closing”
”Consolidation efforts for UPS come as President Donald Trump's looming tariffs continue to impact U.S. and global trade, as companies across the country are reducing costs in preparation for a possible economic fallout.”
Business leaders make decisions based on their vision of the future. Should I make capital investments to grow my enterprise and hire up? Or should I scale back?
Or am I just frozen with worry about the future of my industry?
Consumers are the same. When optimistic, they spend more and take on a little more debt to buy a new car or home. But when they see people around them being fired arbitrarily, they wonder if they are to be next.
Chaos and uncertainty are not the friends of an economy. The next few months may see a surge of panic buying as Americans learn of the shortages to come for back to school supplies and holiday gifts. But in the aggregate, fear does not encourage spending. Consumer spending represents two thirds of the economy. A reduction in spending means a reduction in jobs which means a reduction in spending…
Product shortages and random trade retaliations may frighten the public. And some politicians.
All of which sounds like a recipe for a recession and possibly something called “stagflation” - a stalling of the economy with stubbornly high prices. Some of us lived through that when the song below was on the airwaves.
It was not a happy time. But we came through it intact and we will again - with lessons learned about who should captain the ship of state. Maybe it shouldn’t be a convicted crook who enriches himself with “crypto cons” and openly sells access to himself while impoverishing the people who elected him.
The current administration has found a recipe for collapsing an economy and hurting tens of millions of people in record time. In January of this year, America had an economy that was the envy of the world.
True, too many didn't share in that success. Could that have been because the oligarchs don’t pay their fair share? Because they hoard wealth, pay their workers crap wages and provide lousy benefits? Why are so many full time workers eligible for “food stamps”?
Perhaps someday we’ll elect a leader with a steady hand on the rudder - who has OUR interests in her heart?
https://www.cbsnews.com/news/gdp-report-today-trump-tariffs-economy-first-quarter-2025/
https://www.investors.com/news/trump-trade-war-difficult-decisions-as-china-shipments-cease/
https://www.usatoday.com/story/money/2025/04/29/ups-job-cuts-building-closures-2025/83343016007/
I'm in the same kind of town. Voters at town meeting voted to spend the money on schools and a new fire station (which, so far, is significantly under budget - tariffs may change that) but when it came to borrowing a million for downtown beautification, they shut the door. Property taxes are expected to go up this year by $1000 for the average house. There is a school renovation/rebuild on the agenda for next year - I have my doubts. We've got a rising retired (fixed income) population, and we're still paying on $30mil in bonds for the high school, and facing another $25mil for the fire station. The future isn't looking rosy, at all.
Outstanding Bill. Thanks. When I saw the title of the tune, I thought first of the Scorpions tune from 1990 but this relatively rare Starship tune with Grace and Marty Balin sharing leads is excellent. Another of theirs that is appropriate for our time is: https://youtu.be/IsoqRvYqWDg?si=CPn0Y5rHbHbPk7G_
We need to keep up the pressure on our legislators of both parties and the public pressure on Sleepy Don. At some point he'll crack so completely even those who are drowning in the Kool-Aid won't be able to ignore it. In the meantime, as long as we support each other and help whenever and wherever we can, we'll get through with a little help from our friends (might be a song there too, come to think about it).