‘With 100 million Americans under heat advisory, President Biden promises executive action.’
                                                                                                                                A headline at Deseret News

We’ve been following what we believe is the crack-up of US family finance. Real wages are falling. Mortgage rates are rising. House prices are beginning to go down.

The NY Fed Quarterly Report on Household Debt and Credit adds detail, with the headline ‘Household Debt Rises to $16.15 Trillion Amid Growth in Housing and Non-Housing Balances:

‘Mortgage balances — the largest component of household debt — climbed $207 billion and stood at $11.39 trillion as of June 30. Credit card balances saw their largest year-over-year percentage increase in more than twenty years, while aggregate limits on cards marked their largest increase in over ten years.’

And here’s the latest from UPI, ‘Job openings plunge in June to lowest level since 2021: 

‘The biggest drop in available jobs was in retail with 343,000 fewer openings in June. Larger companies also offered fewer jobs, while the number of jobs offered by smaller employers went up.’

Unable to refinance at lower and lower rates, unable to get a ‘cash-out’ mortgage loan, unable to earn enough to keep up with inflation.

How does a family keep its head above water?

It cuts back on spending. Which is why Walmart (WMT) and other retailers are reporting fewer sales, and rising inventories.

Fantasies and foolishness

Normally, the Fed might toss out some life preservers in the form of lower interest rates. But not this time. The Fed is trapped. It’s ‘inflate or die’. And for now, the Fed will let businesses and households die.

Meanwhile, it’s been a hot summer. People are calling on the president to act.

What action can an executive take? Can he command the wind to give us a gentle breeze? Can he order the clouds to shade us from the sun?

No? We didn’t think so.

But maybe he can reduce inflation?

Reading the news is like wading into a swamp, you don’t know what’s under the surface. And soon you are up to your neck in fantasies and foolishness with deadly snakes nipping at your fingers.

We admire bald-faced lying as much as anyone. If we could get away with it, we’d probably do it too.

Will the bill reduce inflation? No. Increase GDP? Not a chance. Reduce deficits? Almost certainly not. Will it add jobs? Not in a meaningful way. (You can always hire people to dig ditches and fill them up again.) Will it save lives? More likely it will cost lives. For all the ‘pollution’ caused by the industrial age, life expectancies have INCREASED from less than 40 years to more than 80 years. Raising the cost of energy will make people live poorer and most likely shorter lives.

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