Tag: economy

IMF Cuts Growth Outlook, Warns Iran War Could Push Global Economy to Brink

The International Monetary Fund (IMF) on Tuesday cut its growth outlook and warned the global economy could edge toward recession if the Iran war intensifies, as energy disruptions ripple through inflation, financial markets, and trade.

In its latest World Economic Outlook and accompanying analysis, the IMF said the Middle East conflict—now disrupting a key share of global oil and gas flows—sent previously positive growth momentum to an unexpected halt and introduced unusually high uncertainty for policymakers and investors.

“Downside risks dominate,” IMF analysts wrote in the executive summary. “Geopolitical tensions could worsen even more than they already have—turning the situation into the largest energy crisis in modern times—or domestic political strains could erupt.”

The fund outlined three scenarios—reference, adverse, and severe—depending on how long the war lasts and how deeply energy markets are affected. Under the most severe case, global growth could fall to around 2 percent, a level historically associated with recession-like conditions that has occurred only four times since the 1980s.

“This shock is large. … It is global. Everybody uses energy. Everybody feels the pinch,” IMF Managing Director Kristalina Georgieva said in a recent interview with CBS, noting that up to 13 percent of global oil and 20 percent of gas flows have been disrupted.

“People are hurting.”

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DEI Practices Reduce Productivity, Cost $94 Billion Annually: White House Economic Report

Diversity, equity, and inclusion practices negatively impacted the U.S. economy, according to the 2026 White House Economic Report released April 13. 

Researchers calculated that DEI policies reduced output and lowered the country’s gross domestic product by about $94 billion each year, amounting to approximately $1,160 per year for families with two working adults. 

“These estimates imply that DEI promotion has led to inefficient management, raising the cost of doing business,” the report reads.

“These costs lead the companies practicing DEI to hire fewer people and pay their workers less.” 

President Donald Trump commissioned the report, released by the White House Council of Economic Advisers. 

DEI policies “actively encouraged” employment discrimination, according to the report, which cited fourfold growth in the percentage of minorities holding management positions between 2016 and 2023. 

During the same period, industries that adopted DEI protocols were 2.7 percent less productive than industries that avoided the cultural shift. 

The president announced soon after taking office for a second time that his administration was targeting what he said are discriminatory hiring practices. 

“We’ve ended the tyranny of so-called diversity, equity, and inclusion policies all across the entire federal government and indeed the private sector and our military, and our country will be woke no longer,” Trump said when he addressed a joint session of Congress in March 2025. 

“We believe that whether you are a doctor, an accountant, a lawyer, or an air traffic controller, you should be hired and promoted based on skill and competence, not race or gender.” 

President Lyndon B. Johnson signed the Civil Rights Act into law in 1964, thus outlawing employment discrimination based on race, color, gender, religion, or national origin. 

Human resources departments across the country generally abided by the laws to avoid legal action, but things began to change approximately 10 years ago when corporate offices began adopting new diversity-related hiring agendas. 

President Joe Biden accelerated DEI practices with executive orders implementing the programs in the military and across the federal government’s various agencies and departments. 

Biden directed government agencies to “seek opportunities to establish a position of chief diversity officer or diversity and inclusion officer, … [and] ensure that all Federal employees have their respective gender identities accurately reflected and identified in the workplace,” among other changes. 

Agencies were required to submit “Equity Action Plans” outlining steps to further diversify staff. 

Treasury Secretary Janet Yellen oversaw the establishment of an Equity Hub and Advisory Committee on Racial Equality, spending millions of dollars on DEI consulting services in the process and redirecting billions of dollars in federal funding to “benefit specific racial groups,” according to the report. 

Studies show references to DEI programs exploded during the 2020s, with many corporations mentioning the policies during earnings calls, which cited analyses showing the number of DEI-related jobs quadrupled between 2017 and 2022. 

Trump rescinded the orders with a series of executive actions in January 2025. 

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The Strait Of Hormuz Crisis Exposes A Fatal Flaw In Economic Thinking

A priest, an engineer, and an economist are stranded on a desert island. The first order of business is to get some food. The priest suggests that they all pray. The practical-minded engineer suggests that the three men make a net to catch some fish. But where will they find the necessary materials? The priest and the engineer turn to the economist and ask him if he has any ideas. The economist replies, “Assume a fish.”

This well-worn economist joke summarizes one of the chief flaws in contemporary economic theory.

That theory almost completely ignores the role of physical resources, assuming they will always be available in the quantities we need at prices we can afford at the time we need them. When those resources aren’t available, that theory begrudgingly accepts that there will be some damage to economic activity, but tends to greatly underestimate the impact.

This conceptual flaw explains why economists in most financial institutions and governments, and thus investors, are not especially alarmed at the loss of energy resources, as stock market indices remain not too far from their recent highs.

For a good summary of how contemporary economic theory goes off the rails, Australian economist Steve Keen offers a mercifully brief and comprehensible explanation. Here I will relate one critical part of that explanation. About 5.7 percent of U.S. GDP is devoted to procuring and distributing energy. Most economists will tell you that a 10 percent decline in energy availability would have a small effect on the U.S. economy. They would take the percentage of the economy devoted to energy, in this case 5.7 percent, and multiply it by 10 percent to arrive at a 0.57 percent reduction in economic activity.

This conclusion is utter nonsense and not even close to what the effects would be.

The reason is that energy is the master resource. It cannot be treated like other resources. Energy is the resource that makes all other resources available. Nothing gets done without energy. The correlation between economic activity and energy use is 0.9 (where 1.0 represents a perfect correlation). This should come as no surprise. When the economy is growing, energy use grows with it as energy fuels the economic activity that pushes growth.

What this implies is that a 10 percent reduction in energy availability is much more likely to result in a decline in economic activity closer to 10 percent than to one-half percent.  For comparison, the real GDP of the United States fell 4.3 percent during the Great Recession, which lasted from December 2007 through June 2009.

So, how much energy is currently being denied to the global economy by the closure of the Strait of Hormuz? No one knows for certain. We do know that liquefied natural gas (LNG) exports from Qatar were previously transiting through the strait. And, close to 20 percent of the world’s oil supply was also passing through the strait on a daily basis.

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Widespread Rationing And Global Energy Shortages Are Baked In No Matter When The War Ends Now

It is difficult to believe the pace at which global events are now moving. Apocalyptic threats are being thrown around recklessly and severe damage is being done to the global economic system every single day. A lot of people still seem to think that economic conditions will snap back to normal once the war ends, and that is because they don’t understand the level of destruction that has already taken place. Even if the war ends tomorrow and commercial traffic starts flowing freely through the Strait of Hormuz once again, the world won’t be getting nearly as much energy from the Middle East because dozens of oil and natural gas facilities have either been damaged or destroyed. That means that widespread rationing and global energy shortages are baked in no matter what happens next.

According to the executive director of the IEA, 75 energy sites in the Persian Gulf region have been attacked, and approximately a third of those sites have experienced severe damage…

It is going to take years to rebuild the damage that has already been done by this war.

So what will things look like if this war stretches on for many more months?

Tankers that traveled through the Strait of Hormuz before the war began have still been arriving at their destinations.

But this month that is going to stop happening, and Birol is warning that we are entering a “black April”…

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Another Red State, Fully Californicated

“20 years ago Colorado was a Red state and thriving,” the State Leadership Initiative posted late last week. “10 years ago liberals were writing pieces about how Colorado was the next Silicon Valley.” And now CBS News reports that “Colorado is losing businesses and jobs at an alarming rate.”

This was the hope, according to Denver-based 5280 magazine in 2020: “With another tech company setting up an office in Denver, the state could become a magnet for Silicon Valley firms and other prestigious businesses during the worst economic climate in nearly a century.”

Instead of Silicon Mountain, Colorado is quickly becoming “an economic backwater,” as SLI put it, “an omen for what happens when Red states go blue.”

It seems like only last week [It was just last week, Steve —Editor] I shared the schadenfreudelicious tale of how one TDS-suffering Delaware judge launched an exodus of big-name firms led by Elon Musk. Today, I must share similar news about my once-beloved home state of Colorado.

“The Colorado Chamber of Commerce has been sounding an alarm for years about excessive regulation,” CBS reported, and “the Chamber also said that companies are also relocating out-of-state.” According to the story, “since 2019, 98 companies have either left the state, expanded elsewhere, or scrapped plans to move here.” In the last four years, we’ve lost a total of 34 corporate headquarters, too. 

The most recent big name to leave is Palantir, the AI firm recently touted by President Donald Trump for its invaluable contributions to Operation Epic Fury. With basically zero fanfare, the company announced last week that it’s moved its HQ to Miami. 

“We are going to be hurting Colordans not just now, but the next generation, the next generation after that. And we just want to course correct,” tech entrepreneur and investor Dan Caruso wrote to Democrat Gov. Jared Polis in a letter signed by more than 200 business and civic leaders.

Polis and the Democrat-dominated statehouse made some polite noises about maybe looking into something resembling deregulation someday soonish, but Colorado requires so much more.

Let’s go back to something I wrote almost exactly one year ago, when we looked at what Colorado was like before and after 2018, the year Democrats took full control of the state government.

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We spend (borrow) $22 billion every week to pay interest on National Debt — just the freaking interest. National Debt grows by $6 billion every day.

The problem with an increasing debt burden is that it costs more to maintain it: This is precisely the issue with which the U.S. Treasury is wrangling at present. As total U.S. national debt ticks over $39 trillion, the interest payments on that value are eye-watering: $529 billion for the first six months of the current fiscal year.

A new budget update from the Congressional Budget Office (CBO) released yesterday highlights that the government—according to preliminary estimates—paid out the near $530 billion between October 2025, when the fiscal year starts, and March 2026. This equates to more than $88 billion in interest payments a month, or more than $22 billion a week.

That means the service payments on public debt are roughly equal to spending for the same period on both the Department of Defense’s military budget and the Department of Education. These two outlays contribute costs of $461 billion and $70 billion respectively.

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Coming Soon – Federal Red Ink Barfing Skyward Like You’ve Never Seen

Self-evidently, the news has been overwhelmingly focused on Washington’s current endeavor to unload $200 billion of imperial destruction upon Iran and its neighbors around the Persian Gulf. Well, and also upon all other users of petroleum products, LNG, LPGs, nitrogen fertilizer, food, helium, semiconductors, manufactured goods and most everything else anywhere on the planet.

Accordingly, comparatively scant attention has been given to another recent milestone on America’s headlong dash to fiscal disaster. To wit, the public debt crossed the $39 trillion mark and nearly in the blink of an eye, too. Just four years ago, we were at the $29 trillion level and nine years ago at the $19 trillion mark.

Needless to say, the “peacemaker” in the Oval Office has played no small role in this skyward ascent of the public debt. During his first term, the public debt grew by a staggering $8 trillion and already another $3 trillion has been racked-up during his second go-round.

Stated differently, the King of Debt has surely earned his place in the history books. The $11 trillion of new debt on his watch to date already accounts for 28% of all the public debt incurred in America since George Washington!

Then again, he still has got nearly three years to go, and the debt impact of both the OBBBA and the impending financial and human bloodbath in the Persian Gulf are just getting started.

Indeed, as to the latter it’s as clear as the orange glow around his cranium that the Donald is doing another round of fake rope-a-dope negotiations with the Iranians. That’s to buy time to get the 82nd Airborne, various amphibious landing ships and other invasionary forces in place for his next “win”.

That’s right.The fool in the Oval Office is actually going to attempt to seize the Alamo Kharg Island. That will mean military chaos in the Gulf, unprecedented turmoil in the global economy and soaring military expenditures, which will make the pending $200 billion DOD supplemental look like a mere down-payment.

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Shoppers face surge in ‘dynamic pricing’ as supermarkets adopt digital technology to change grocery prices based on demand

Shoppers may face higher prices as retailers look set to use digital labels that could change the cost of products based on demand.

The Bank of England warned that these ‘market-responsive pricing tools’ will be adopted by one in three companies in the coming year, up from one in five in the year before.

These ‘dynamic prices’ will change based on algorithms and AI, with the labels adjusting to ‘demand, capacity or competitors’ prices’, according to a business survey commissioned by the Bank.

Factors that could affect these prices may take into account the weather, the time of day, and how busy the shop is. For example, if it is a hot day, then the price of sunglasses may be increased.

This is something that online retailers, like Amazon, have already adopted. Hospitality and travel businesses do much the same, with prices changing based on popularity or times of the year. 

The study then suggests that electronic labels in supermarkets could be the next frontier – something which is ‘already widespread in Europe’.

UK retail food prices are already 38 per cent higher than pre-Covid levels and experts fear further significant increases if disruption caused by the war in Iran continues.

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Patronizing Democrat MA Governor Maura Healey Uses Donuts to Explain Soaring Energy Costs to Suffering Constituents

Fresh off being booed on Red Sox opening day alongside radical Boston Mayor Michelle Wu, leftist Massachusetts Governor Maura Healey thinks the suffering her constituents are facing with rising energy costs is a joke.

She appears to think voters are too dumb to understand economics and, instead of talking to residents like adults, she pulled out donuts to dumb down her patronizing explanation.

“Energy bills are high. Everyone can see that. So lowering your energy bills is my top priority. Now, how does that happen? That’s a little more complicated,” Healey began.

“So let’s talk about energy in a way that everyone understands— with munchkins.”

“Picture this: you’re at work or school, wherever. It’s 9 AM, and no one’s eaten breakfast. Someone shows up with one of these. Demand is high.”

“Everyone wants a munchkin or two or three, but we’ve only got 25. That’s where we’re headed with energy. So how do we fix that? See this glazed munchkin? That’s wind.”

“Massachusetts already has an offshore wind project lowering our energy bills as we speak. And we need more. It’s affordable, homegrown energy, and it’ll create thousands of jobs.”

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NBC Report Drops Truth Bomb: Newsom’s Lies About Gas Prices Are Pure Gaslighting

Rising tensions tied to the war in Iran and its impact on global oil shipping routes are contributing to higher gas prices across the United States, with California drivers facing some of the steepest costs in the country.

The national average price for gasoline has now surpassed $4 per gallon, while California’s statewide average is hovering just below $6.

In several locations across the state, prices have climbed even higher, widening the gap between California and the rest of the nation.

As consumers question why California continues to pay significantly more at the pump, analysts point to a combination of long-standing state policies and factors that remain less clearly understood.

Dr. Severin Borenstein, faculty director of the Energy Institute at Haas at the University of California, Berkeley, said California’s higher fuel taxes, environmental fees, and unique gasoline blend account for roughly half of the price difference compared to the national average.

However, he said those factors alone do not fully explain the current price gap.

“The difference is what I call the mystery gasoline surcharge,” Borenstein said.

According to Borenstein, prior to 2015, California gas prices generally tracked closer to the national average, with an additional 90 cents to $1 per gallon attributed to the state’s taxes and environmental requirements.

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