Ukrainian Democracy at Risk: Why the ongoing conflict with Russia matters to the entire world.

How should President Jimmy Carter be Remembered?

Here is what we will be getting into today:

1. Ukraine War Update: Russian economy crippled by sanctions.

2. Jimmy Carter’s Presidency.

3. Consumer Spending Data Review.

Let's Dive In!

Newsletter: Apricitas Economics

Title: Russia's New Friends.
Link: https://www.apricitas.io/p/russias-new-friends

Here are the key highlights:

• The international response to Russia's invasion of Ukraine in late February of last year was a combination of economic and military sanctions. The economic sanctions were designed to hit the Russian economy hard while preserving their oil and gas exports.

• The high-income democracies leveraged their economic strength to cut Russia off from critical imports and sources of credit/liquidity. Russian industrial output has suffered after being cut off from critical imports, but they are recovering by making new trading partners, particularly China and Turkey.

• China has seen a significant increase in exports to Russia, including vehicles, phones, computers, machinery, electronics, and semiconductors. Turkey is also increasing its trade with Russia despite international sanctions due to their close ties and similar proclivities for authoritarianism and military aggression.

• The war in Ukraine has bogged down into an extended conflict, with the cost of the war weighing heavily on Russia and ongoing sanctions. Allied policymakers are looking for ways to end the conflict while preserving Ukrainian democratic sovereignty, intensifying restrictions on imports from Russia, including nonmonetary gold.

• Turkey is becoming a diplomatic battleground due to its increasing relationship with Russia, with concerns among Allied policymakers due to their close ties with both the US and European Union. Global trade is becoming another battlefield in this ongoing conflict, with Turkey playing a vital role in it.

• Allied policymakers may need to leverage further sanctions against both Russia and China to cut them off from their new allies if they are serious about achieving a just peace that preserves Ukrainian democratic sovereignty while ending the death and destruction caused by the war.

Newsletter: Noahpinion

Title: Repost: Much of what you've heard about Carter and Reagan is wrong.
Link: https://noahpinion.substack.com/p/repost-much-of-what-youve-heard-about

Here are the key highlights:

• Former President Jimmy Carter, who is currently in hospice care, is often remembered for a narrative of his presidency being a disaster, with Ronald Reagan coming in to fix the nation's course. In reality, Carter initiated the solutions to many of the challenges of the 1970s including inflation, over-regulation, and a resurgent USSR.

• Inflation was one of the biggest issues facing America during Carter’s presidency. Contrary to popular belief, it was not due to fiscal deficits but rather loose monetary policy. It was Carter who appointed Paul Volcker as Chairman of the Federal Reserve in 1979 with a mission to beat inflation – even though it came at a great cost – two sharp recessions. Volcker eventually succeeded in his mission and managed to bring inflation under control.

• Carter also took an active role in deregulating certain industries such as airlines, energy and trucking, something that Reagan gets credit for but did not actually do much of himself. In fact, it was Carter who proposed a regulatory budget which would set limits on government regulations and make tradeoffs within those limits. Furthermore, he passed seven major pieces of legislation that contributed to deregulation.

• The most significant deregulatory efforts during Carter’s tenure were two pieces of legislation - The Germain Depository Institutions Act 1982 and The Bus Regulatory Reform Act - which aimed to reduce government control over banks and bus transportation respectively. Unfortunately for Carter, these deregulatory efforts did not take effect until after he left office so Americans didn't feel their effects until Reagan was in office.

• Most importantly, while Reagan is often credited with ending the Cold War through increased defense spending and forcing the USSR to bankrupt itself, this narrative is not completely accurate In reality, defense spending did not increase significantly under Reagan as a percentage of GDP; nor did it cause the USSR to fall apart, it had been crumbling since its inception due to economic stagnation caused by its centralized economic system. It can be argued that both President Carter and President Reagan contributed significantly towards ending the Cold War through their respective economic and military policies but neither can be credited with ending it alone.

Newsletter: Prometheus Research

Title: The Observatory.
Link: https://prometheusresearch.substack.com/p/the-observatory-9ed

Here are the key highlights:

• Recent consumer spending data has been encouraging, with a significant rebound in consumer spending conditions. This strength is being driven by an acceleration in labor market dynamics, with employment growth concentrated in non-cyclical sectors such as professional and business services. This employment growth, combined with an increase in hours worked and wage inflation, has resulted in a nominal income rise.

• This increase in income has fueled spending, pushing nominal retail sales up by 3%. Inflation came in largely in line with demand pressures coming from spending, however automobile prices actually declined. This deflation is not uncommon for the automobile sector and could be consistent with an incremental reversion to pre-pandemic norms.

• The question for businesses now is whether consumer spending increases alongside offsetting weakness in business investment. If this occurs, GDP growth will remain flat but profits will likely suffer due to an already deteriorating trend in earnings.

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