Econ News, Religious Views & Is DOGE (mostly) Done? - Driven By Braman Motorcars
Takeaway #1: The GDP was negative...
But no, it also wasn’t what you were likely led to believe. So yes, on Wednesday we were served with what seemed to be a double dose of bad economic news with a weak ADP jobs report, and most of all, a negative 1st quarter GDP Report. A report that as soon as it hit, I had no doubt would be used and abused by your GSS in their unending effort to attempt to destroy Donald Trump, something they’ve failed for a decade to do. Now, to be fair, the headline information with negative GDP growth, of –0.3%, to start the year isn’t the kind of thing you want to hear but what happened is entirely explainable. The way the GDP is calculation a wonky thing and without getting into too much wonkiness it’s like this. Imports are subtracted from GDP growth – meaning the more imports the country has the lower the GDP growth. In other words, if all other things are equal, importing more stuff leads to negative GDP but it doesn’t actually mean that the economy in the real world is shrinking. And that’s almost entirely what’s to blame for what made headlines for a negative first quarter economy. Anticipating future tariffs, businesses imported stuff an unpreceded number of things in the first quarter – year over year imports increased by an incredible 41%. Because of the way the GDP is calculated that led to a greater than 5% subtraction from the reported GDP. In other words, if companies had only imported stuff at the normal rate they do there actually would have been economic growth north of 2%. Consumer spending, which accounts for about 70% of the US economy, rose by 1.8% and business investment was up by close to 4%. Those aren’t numbers that are even close to being recessionary. Plus, with companies having stocked up in advance of tariffs, and fewer imports that will be taking place in the second quarter – the net effect of what happened in the first quarter is likely to balance out in the second quarter. But here’s a thing and it’s an important thing. If the GSS media can scare you into thinking we’re already well into a Trump-led recession, it is the kind of thing that can become a self-fulfilling prophecy if people stop spending out of fear...which is exactly what the Left hopes will happen. Btw, there was good GDP news that also played into yesterday’s DOGE news.
Takeaway #2: Is DOGE Done?
At Wednesday’s cabinet meeting Elon Musk, and his festive collection of hats, essentially said his goodbyes as he announced that he’d be stepping away from the White House and would continue his DOGEing a day or two a week from far away. On the one hand, the DOGEing to date, $160 billion in savings, or $993.79 per federal taxpayer, is being positioned as a failure of sorts as it’s becoming increasingly clear that the majority of what DOGE is likely to do has probably been done. On the other hand, there was already an immediate sign of DOGE’s earliest efforts paying off in the form of government savings – literally. In the aforementioned GDP report the one other area that was a drag on economic growth – is the one area I’m thrilled to see not growing – government. And according to the Bureau of Economic Analysis in reporting the GDP what did we see? A net decrease in government spending. As noted by the BEA: The decrease in government spending reflected a decrease in federal government spending that was partly offset by an increase in state and local government spending. Some of the decline came from less defense spending, some of it came from the initial DOGEing. Approximately 121,000 or close to 7%, of the federal government’s civilian workforce as of now, has been DOGE’d which means there should be continued cost savings at the federal level ongoing – pending the outcome of the BBB. Florida Congressman Andy Bean of the Congressional DOGE Caucus said on Wednesday ... We're ready to take the reins and continue to push no matter who's leading the Department of Government Efficiency. So, while the day was always going to come that Elon Musk, a temporary government employee, who was only able to work for 130 days anyway, was going to go... It may be the case that DOGE is just getting started. Elon got the ball rolling and if Congress can work on the rest – that's actually the best-case outcome because that’s where all federal funding comes from. DOGE showed up in the GDP. And that takes us too...
Takeaway #3: Religious Liberty
The United States Supreme Court heard six cases this week with one that could prove critical to Florida’s Universal School Choice program along with all other choice programs across the country. Yesterday the Supreme Court heard the OK Charter School Board v. Drummond case. In this case, Oklahoma’s Charter School Board executed a contract with a Catholic Virtual School to operate a religious charter school in the state. The state attorney general sued, arguing that the contract violated state prohibitions on religion in public schools. The decision in that case could have implications for whether religious schools are allowed to access public money for school choice programs. Currently in Florida, with our largest Universal School Choice program in the country – we do allow religious school access. On Monday I mentioned that I was confident that at the conclusion of this case, that would still be the case, but it wasn’t something I took for granted. Justice Amy Coney Barrett recused herself in this case – which seemed unnecessary. No reason was given but one of her friends from Notre Dame provided some legal advice in this case so perhaps that’s the reason but nevertheless the oral arguments on Wednesday, seemed to suggest that at least the rest of the so-called conservative court bloc was onboard with the first-in-the nation Catholic charter school. The left is already complaining about this “weakening separation of church and state” (which of course doesn’t actually exist). That’s a good sign.