GDP Number Is Freaking Anemic
- Government shutdown impacted various sectors, hindering new project approvals.
- US needs to control Strait of Hormuz to prevent oil flow disruptions.
- AI investment is not overblown and will continue to grow.
GDP Number Is Freaking Anemic
In this episode of Tony Katz Today, we’re diving into the latest economic news and trends with Dr. Matt Will, economist at the University of Indianapolis. From the impact of the government shutdown to the future of AI investment, we’re covering it all.
One of the key topics we discussed was the recent GDP revision, which showed a decline of 0.7% in the fourth quarter. Dr. Will explained that this number is “anemic” and that every single component of the GDP was revised in the wrong direction. “It’s like you’re sitting across a table from someone and they draw an inside straight,” he said, “you throw your cards on the table and say, ‘You’ve got to be kidding me’.” This analogy highlights the severity of the situation.
The government shutdown in October and November was a major contributor to this decline, with Dr. Will explaining that government spending can actually expand the GDP and government contraction can reduce it. He noted that the shutdown impacted various sectors, including ports and the permitting process for new projects. “You can’t put up a factory without an approval from the government,” he said. “Even though Trump is expediting those approvals, you couldn’t get the approval because the government was shut down.”
We also discussed the current state of the oil market, which has been affected by the Strait of Hormuz situation. Dr. Will emphasized that the US needs to get control of the strait to prevent disruptions in the flow of oil. “The flow is what’s important, and it’s being disrupted at this very moment,” he said. He suggested that the US could put boots on the ground in Iran to control the strait.
Another topic we touched on was the future of AI investment. Dr. Will firmly believes that AI investment is not overblown and that it’s a foregone conclusion that it will continue to grow. “There is no stopping it,” he said. “That’s like betting against the Internet when it was first invented.” He noted that people like Michael Burry, who have bet against AI investment, are wrong.
Throughout our conversation, Dr. Will provided insightful analysis and expert opinions on the current state of the economy. His explanations and analogies made complex topics more accessible and easier to understand.
If you’re interested in staying up-to-date on the latest economic news and trends, this episode is a must-listen. Dr. Will’s expertise and passion for economics make him a valuable resource for anyone looking to understand the intricacies of the economy. Tune in to hear more of his insights and analysis on the current state of the economy.
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