Twitter Take-Over, the Economy Continues to Weaken, and Nuclear Chit-Chat: Last Week in Liberty 10/30/22
Ladies and Gentlemen, welcome to another edition of Last Week in Liberty! Every week we review the news from the past week from a Liberty-minded perspective. We have lots to discuss, so let’s jump into it:
Elon’s Twitter-Takeover
After months of will-they/won’t-they, Elon Musk finally closed his deal on buying Twitter and taking the company public. After a painfully on-brand joke, he entered Twitter headquarters for the first time on Wednesday and met with staff and personnel there. Shortly afterwards, the firings began. The CEO, Parag Aragwal, got the pink slip, as well as CFO Ned Segal and numerous other members of upper management. Musk seems serious about a real shake-up at Twitter, so we will see what other kinds of changes he makes in the upcoming days and weeks.
One of the most impactful changes that Musk could make is the restoring of previously banned accounts - most importantly - Donald Trump’s. Trump has claimed in the past that he will stay on his Truth Social and doesn’t want to come back to Twitter, but in a recent statement seemed to express at least some desire to have his account again. Trump’s Twitter account was a huge part of the success of his presidential run, and having it back could be incredibly beneficial for him if he is serious about running in 2024. My bet is that he won’t stay on the sinking ship of Truth Social and will migrate back to to his old @realDonaldTrump handle soon.
Will Elon make Twitter better? Hopefully, but at least he can’t possibly make it any worse.
Ukraine Is Using All the West’s Weapons
As the War in Ukraine continues to drag on month-after-month, stockpiles of weapons that NATO countries have built up over time have started to dry up. The AP reports that "Norway has provided more than 45% of its stock of howitzers, Slovenia has committed nearly 40% of its tanks and the Czech Republic had sent about 33% of its multiple launch rocket systems”. Not to be outdone, the U.S. has sent almost one-third of all its Javelin anti-tank missiles and one-fourth of all its Stinger missiles.
Will Ukraine’s allies start to withdraw support as these stockpiles continue to dry up? Probably not, but it will mean that these countries will have to increase military spending both to continue supporting Ukraine and maintain their own stocks for national defense purposes. Estonia is one country who has already done so, who recently passed a 42.5% increase in its military budget for the next year. As military spending increases, so does the pocketbooks of defense contractors. Lloyd Austin, who is the current Secretary of Defense, is a former board member of Raytheon. Don’t be surprised if you see very lucrative contracts for them and other Pentagon favorites in the upcoming months. Hey man, Raytheon board members have kids that need to eat too!
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Nukes, Nukes, Nukes
As the war between Russia and Ukraine has drawn on and on and on, talk about the potential for a nuclear exchange is at a fever pitch not seen since the Cuban Missile Crisis. Specifically, there were two interesting developments over the discussion of the use of nuclear weapons that occurred over the past week:
First, Putin stated on Thursday that Russia has no plans to use nuclear weapons in Ukraine. He said that “We see no need for that” and “There is no point in that, neither political, or military.” He also remarked that the world is facing the most dangerous decade since World War II. On that point, he may very well be correct (although he has certainly done his part in fomenting that danger!), but should we believe him when he says that Russia won’t use nukes in Ukraine? In geopolitics, you should never believe what anyone says at face value, but we can surmise that Putin is probably being honest here. Why would he want to use nuclear weapons in the first place? It would represent an unprecedented escalation, and he will probably achieve his war goals in Ukraine whether or uses nukes or not. It just doesn’t make sense for him to, but it is good to see that he is at least publicly saying as much.
The second development was the Pentagon’s release of the new National Defense Strategy, wherein the Pentagon rejects a “No First Use” policy concerning nuclear weapons. They stated that holding to such principles "would result in an unacceptable level of risk in light of the range of non-nuclear capabilities being developed and fielded by competitors that could inflict strategic-level damage”. Essentially, the Pentagon is stating that because they will be in a cold war with two superpowers this time instead of one, they can’t rule out the possibility of an aggressive nuclear strike. Does this mean that the U.S. is going to have their finger constantly hovering over the “BLOW UP THE WORLD WITH NUKES MWAH HAH HAH HAH” button? Of course not, but the fact that their official policy has shifted is concerning in and of itself. The usage of nuclear weapons is one thing that everyone on Earth has an interest in avoiding, so this change in policy from the Pentagon should concern everyone, not just U.S. citizens.
Economic Struggles Abound
Lots of signs that the U.S. - and by extension, world economy - is further weakening showed up last week. The first is that the cost of transporting goods is falling rapidly. Falling prices is not necessarily a bad thing, but considering that this price decrease is almost certainly a result of decreased demand - specifically, the demand for goods to be moved to sell to consumers - it bodes ill for the underlying state of the economy. The same picture can be seen in trucking rates, where prices are hovering just above break-even. If businesses are stocking fewer goods, it means they expect consumers to buy fewer goods. If consumers aren’t consuming, its probably because they can’t afford to. Why can’t they afford goods? One reason could be inflation, but a much more impending cause could be that we are entering (if we haven’t entered it already) a recession, where people will be forced to cut back on their consumption because of bad investments, lost jobs, and hard times.
Another sign of the impoverished state of the American consumer is a decrease in consumer confidence levels. The headline number fell from 107.8 to 102.5 from September to October, the weakest its been since April of 2021. While there is an inordinate amount of attention often placed on the notion of consumer confidence, it is telling of a rising tide of pessimism over the prospects for the economy in the short-term.
Additionally, a large percentage of Americans are living paycheck-to-paycheck. According to a recent LendingClub report, 63% of Americans reported living paycheck-to-paycheck, and even 49% of six-figure income earners fell under that category as well. Again, part of this is due to inflation, but it is also a product of years of low interest rates incentivizing spending over saving. The COVID-19 Pandemic also drained households of much of their savings as well, which has led more and more households without a financial safety net to fall back on. If another economic crisis comes - such as the aforementioned recession - then these savings will be even further drained as millions of Americans are thrust out of their jobs and forced to rely on ever-dwindling bank accounts. Don’t forget to check the couch cushions.
Sunak Sneaks into Prime Minister Office
With the unceremonious ouster of Liz Truss, someone has to be the Prime Minister now. After throwing out a few names and those names withdrawing themselves, it appears that Rishi Sunak is up in line to be the next Prime Minister of the U.K. Sunak had previously worked as an analyst for Goldman Sachs and Hedge Fund Manager, and later married into a tech family fortune, which has led to his near-billionaire net worth. Of course, Sunak is WEF approved, which is very reassuring to me personally.
The past few weeks have been the most turbulent in recent memory for the U.K. Can Sunak get the ship of state steady? Perhaps, but he has his work cut out for him. The entire Liz Truss economic plan fiasco was enough excitement for one fiscal year, so Sunak might not be interested in proposing any landmark legislation anytime in the near future.
The Midterms Continue to Heat Up
The 2022 midterms loom close on the horizon, and it looks to be very entertaining indeed (especially if you don’t really have a dog in the fight). As we discussed in last week’s LWIL, the Republicans are almost certain to take the house, but the Senate seems very up-in-the-air and could remain so all the way up until election day. However, another interesting aspect of the election that we haven’t yet discussed are the governor’s races. One that we will highlight today is the New York governor’s race.
The two combatants: Kathy Hochul and Lee Zeldin. Hochul is the gal who took over as governor after Andrew Cuomo was “voluntold” to resign after embracing a little too much of his Italian heritage. Lee Zeldin is a representative of New York’s first congressional district, and is challenging Hochul for the champion belt. Given that this is New York, you would expect Hochul, the incumbent and Democratic candidate, to be the clear favorite. That was the case earlier in the year, but the race has progressively heated up in the past several weeks. A poll from The Hill found that 50% of voters support Hochul, with 44% supporting Zeldin. While Hochul is still firmly in the lead, Zeldin was polling at just 35% last month. If he continues to attract support into election day, the Republicans might be able to steal the governor’s seat in New York. Quite the prize that would be, if they can pull it off. It all comes down to election night, so all questions will be answered then.
Some Links from this Past Week you Might Like:
COVID killed test scores for American students.
Meta’s bet on the Metaverse isn’t quite working out as planned.
An explanation for “the death of comedy” over the last decade.
The latest Call of Duty game has a mission strikingly similar to the U.S. assassination of Iranian general Qassam Solemani.
Quote of the Week
“There is no reason to assume that a compulsory monopoly of violence, once acquired…by any State rulers, will remain ‘limited’ to protection of person and property. Certainly, historically no government has long remained ‘limited’ in this way.” - Murray Rothbard
That’s all for this week, folks. Make sure to stay hydrated this upcoming week, and I’ll see you all next time. Bye for now.
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