Ghosts of Economic Predictions Past And How DeJoy Stole Christmas
2023 was a year of meltdowns, outlandish forecasts, and failed economic prophecy – let's take a moment to remember some of our favorites. Plus, the Grinchmaster General’s plan to stop Christmas from c
Ghosts Of Economic Predictions Past
By Henry Burke:
The end of 2022 came with dire predictions about the economy in the year ahead. In December of last year, the Financial Times reported that 85% of economists polled expected a recession this year, while prominent neoliberal economists continued to call for intentionally creating a recession in the hopes of quashing the tight labor market that they blamed for inflation. Tragically for Summers, Furman, and others hoping to see a Fed-induced recession (and good for literally everyone else in America), their hopes did not come to pass. The past year has shown increasing evidence that transitory conditions and sellers' inflation were driving price hikes, while the (blameless) job market has remained stable. As a result, we at Hackwatch wanted to relive three of the worst economic predictions of the past year.
Yes, this is us gloating, but reflecting on these forecasts also allows us to reflect on some of the insane economic events that transpired over the past 12 months. More importantly, it allows us to point out, yet again, that despite how they portray themselves, neoliberal economists don’t have all the answers. Much like Ebenezer Scrooge, we’re hoping the ghosts of economic predictions past can help some of our media’s worst economic hacks–and the journalists and editors who elevate them as neutral, esteemed experts–learn from their mistakes.
Larry Summers Says There’s A 70% Chance Of A Recession In The Next Year
In April, Larry Summers predicted a 70% chance of a recession in the next 12 months during his weekly segment on Bloomberg TV’s Wall Street Week. Summers would continue his predictions (and calls for) a recession throughout the year. However, just last week, Summers seemingly accidentally admitted he had been wrong, by first claiming that inflation had not been transitory, only to later state that “first of all, one should always have been aware that a substantial part of the increase in inflation was transitory.” While Summers is unwilling to concede his prediction was wrong (just like his many other incorrect predictions), the Fed and Wall Street have since abandoned their recession predictions.
Honorable Mention: Elon Musk Disagrees With Summers’ Recession Prediction — Because He Thinks We Are Already In A Recession
In April, Elon Musk replied to Larry Summers’ tweet about his recession prediction, disagreeing with the economist’s outlook. According to Musk, there was not a 70% chance of a recession beginning in the next 12 months because the recession had, in fact, already begun, and was going to quickly get worse. (The May jobs report showed the economy added 339,000 jobs and the economy has continued to see substantial job growth numbers every month since.)
CNBC’s Jim Cramer Recommends Buying Silicon Valley Bank Stock Just A Month Before Its Collapse
CNBC’s fast-talking stock picker has been making headlines all year for his bombastic remarks, including claiming UAW President Sean Fain “studied Trotsky,” that if the UAW won contract concessions the big three auto manufacturers would be the “least competitive companies on earth,” and for comparing FTC commissioner Lina Khan to Karl Marx. But nothing could top Cramer’s earliest contender for “bad economic prediction of the year” — advising his viewers to purchase stock in Silicon Valley Bank just a month before it collapsed in spectacular fashion.
The SVB collapse not only embarrassed Cramer enough that he called for better regulation, but it also introduced many of us to the All In podcast crew of Jason Calacanis and David Sachs (who may have helped start the bank run). Sadly Calcanis and Sachs have become unwanted fixtures of mine (and everyone else's) Twitter timeline since the Musk takeover. Since the SVB collapse, the Twitter prominence of the podcast hosts has allowed them to become something approaching unofficial economic pundits, representing the dumbest takes Silicon Valley can pump out. From claiming the US is in a “rolling” recession to whining about remote work to then also claiming the economy is amazing, the All In Podcast have overcome stiff competition to become the worst addition to the economic media of the past year.
Venture Capitalist Loses $1 Million In A Bet To Pro-Tax Twitter Account Because His Prediction Of Hyperinflation Doesn’t Pan Out
Making perhaps the only economic prediction that would result in any consequences for the individual doing the prediction, Silicon Valley venture capitalist Balaji Srinivasan bet a Twitter user with the pseudonym of “James Medlock” 1 million dollars in March that a single bitcoin would be worth $1 million USD in 90 days, as a result of the dollar entering hyperinflation (something that is not, and never was, happening). In May, 45 days into the 90-day bet, Srinivasan gave in, conceding the bet and paying out the money he owed as inflation had not worsened, let alone entered hyperinflation, and the bitcoin he claimed would be worth $1 million was worth approximately $28,000. While the bet was unbelievably stupid, Srinivasan was perhaps the only soothsayer of economic destruction who had tangible ramifications for his predictions being wildly off base, and, to be fair, he showed more contrition for his incorrect predictions than someone like Summers who has yet to concede his own predictions were anything short of prophetic. (claiming to be wrong only because your prophecy persuaded the Federal Reserve acted on your sage advice isn’t admitting to be wrong… and the Federal Reserve’s actions did not actually have much impact on inflation)
What will our Hacks learn from the ghosts of their economic predictions past? If history is any indication, likely nothing (though Summers may return to using ⅓ probabilities of something happening, which he has studiously avoided since I wrote about his habit of doing so). As the media continually seeks out inflammatory predictions from the likes of Summers without regard to the veracity of his previous predictions, we are likely stuck in a purgatory of unyielding prognoses of doom. But at least we can take a moment to point out that they were wrong, we were right, and at some point, policymakers will have to reckon with that fact.
How DeJoy Stole Christmas
By Vishal Shankar:
It’s the most wonderful time of the year – unless you’re a postal worker.
Thanks to chronic understaffing and Amazon’s increasing use of the agency’s last-mile delivery service, the mail is piling up at post offices across the country and overwhelming already-overworked USPS employees. And that’s just the stocking stuffer: these Christmastime delays will become the year-round norm, from Janesville to Nashville to Whoville, if real-life Grinch Louis DeJoy gets his way*.
As The Guardian’s Michael Sainato reported last week, the Postmaster General is currently implementing a “10-year austerity plan” that would slash working hours at hundreds of post offices and shutter vital postal sorting facilities. DeJoy’s scheme has all the tender sweetness of a seasick crocodile: an average of 25 jobs would be lost per sorting facility, while DeJoy has called for shedding 50,000 jobs from the postal service over the next decade. Postal advocates and lawmakers from both parties have blasted the plan, warning that DeJoy’s service cuts and repeated price hikes will destroy a treasured public institution. All the while, DeJoy has remained a crooked jerky-jockey by cashing lucrative rental payments from USPS contractor XPO Logistics, for whom he previously served as a top executive.
Cuddly as a cactus and as charming as an eel, Louis DeJoy has openly taunted his detractors by boasting that he’ll be around for “a long time, get used to me.” President Biden has lent credence to this claim, botching multiple opportunities to return DeJoy to sender. Last year, he filled two seats on the Postal Board of Governors (which has the power to fire DeJoy) with DeJoy-supporting bad bananas, including a close ally of Mitch McConnell. And more recently, when postal advocates urged Biden to replace two termed-out Trump appointees on the board with anti-DeJoy reformers, the President wouldn’t even touch the subject with a thirty-nine-and-a-half-foot pole! Instead, Biden allowed DeJoy supporters Lee Moak and William Zollars to stay on the board an entire extra year after their terms expired, ensuring DeJoy’s continued job security (the three words that best describe this decision are as follows: stink, stank, stunk).
But Biden still has time to make things right and put DeJoy on his naughty list. The one year holdover terms of Moak and Zollars came to an end two weeks ago, and the Board is currently two seats too small. Biden must fill these vacant posts with candidates who will fire DeJoy. If he doesn’t, all we can do is hope DeJoy’s heart will grow three sizes (and I don’t like those odds). The Save The Post Office Coalition currently has a sign-on petition asking Biden to nominate postal policy expert Sarah Anderson and former postal worker and Congresswoman Brenda Lawrence –two anti-DeJoy reformers– to the Postal Board.
If I could make one Christmas wish of you, dear readers, it’s to join me in signing it. Together, we can make 2024 the year we save the Postal Service from the Grinchmaster General.
ADD YOUR NAME: Tell Biden to Save the USPS And Appoint Rep. Brenda Lawrence and Sarah Anderson to the USPS Board of Governors Now
READ MORE: Revolving Door Project on the Postal Service
RDP's Vishal Shankar Talks DeJoy, USPS On The Ralph Nader Radio Hour
The Public Has a Right to Know Every Detail of Louis DeJoy's Destructive Agenda
Biden’s USPS Nominees Seem Fine With Letting DeJoy Wreck The Post Office
*Tip of the Santa hat to my mentor Robert Reich for this Seussian comparison.