Last week I predicted that the U.S. government would shut down, and fortunately I was wrong, as I hoped I would be. There was a last-minute deal to keep the government running for another 45 days; we will see what happens after that.
But behind all of that, there is so much bubbling up in the political and economic world. Let me share with you a few of those that give me the most concern. They are: a barely avoided government shutdown, the continued war in Ukraine, the UAW strike, COVID continuing to rear its ugly head, border control, high interest rates and inflation.
We just barely avoided a shutdown of the US. government and we have another 40 days or so before that comes to haunt us yet again. How do we keep from returning to this scenario over and over again? It would behoove the politicians to begin bargaining now so we are not at this point again in November. Key sticking points are funding for the war in Ukraine and border control. It’s politics but really economics.
About the war in Ukraine, it continues to rage on. When the war began several months ago, I thought that the Russians would run over the Ukrainians in no time. Well, I was wrong! Again! This war has raged on for over 18 months and there have been hundreds of thousands of lives lost on both sides. Billions of dollars have been spent by both countries and their allies such as the United States, which alone has committed over $43 billion in security assistance. It’s caused more supply-chain issues, shortage of certain goods and services, and upward pressures on prices (inflation). At the rate at which things are going, this war is not likely to end anytime soon. Whatever be the case, there will be a win, loss or a draw. A draw essentially amounts to a loss for the Russians since they will not have achieved their goal of conquering Ukraine.
The United Auto Workers (UAW) strike continues, with expansions to more sites after three weeks. As the strike expands, more workers are not working and are only receiving $500 a week. This impacts their families and the communities in which they live. The strikers and the companies are still far apart as they continue to negotiate. Whether the companies can afford to give them what they want is a major bone of contention. Been there, done that!
COVID-19 is still lurking around and is not likely to ever go away. It continues to be the fifth highest killer of people in the U.S. Vaccinations continue, and reports are that the Nobel Prize in medicine was just won by two scientists for “groundbreaking findings” on mRNA COVID-19 vaccines. The scientists are Katalin Kariko and Drew Weissman, both professors at the University of Pennsylvania. They published a paper in 2005 that laid the foundation for the vaccines that have saved millions of lives. According to the Nobel Prize Committee, their research “fundamentally changed our understanding of how mRNA interacts with our immune system.”
As we all know COVID-19 had a tremendous negative effect on world economies.
On our southern border, we are deluged by migrants. And they are coming from all over the world, as far as Saudi Arabia, not just Mexico and Latin America. It is a humanitarian crisis as declared by San Diego County. According to USA TODAY, there are 8,000 migrants daily. As political as this issue is, it is mostly about economics, as these migrants are seeking economic succor.
The Fed hiked interest rates 11 times since last year but did not at their last meeting. Inflation appears to have abated a bit but is still above the Fed’s target. Prices seem to be easing, as I purchased a carton of large eggs for 99 cents for the first time in a couple of years. So, from concerns of war to the price of eggs, all have economic consequences that we live with daily.
Kojo Quartey, Ph.D., is president of Monroe County Community College and an economist. He may be reached at kquartey@monroeccc.edu.
This article originally appeared on The Daily Telegram: Kojo Quartey: Political and economic intersections behind the scenes