Authored by Jeffrey A. Tucker via the Brownstone Institute (emphasis ours),

The latest of the Twitter Files is reported by Alex Berenson, who was granted access to messaging systems from the times before Elon Musk took over. His first round of reporting concerns the role of Scott Gottlieb, who is a perfect example of an influencer who is technically outside of government but might as well be a powerful official within it. 

Gottlieb’s main gig now is as a senior fellow of the American Enterprise Institute in Washington, DC, but he also serves as a board member of Pfizer. Before joining AEI and Pfizer, he headed the Food and Drug Administration under Trump from 2017 to 2019. Before that, he was at Health and Human Services as a member of its Federal Health IT Policy Committee from 2013 to 2017. 

You probably know him from TV because he has been a ubiquitous presence since the beginning of the pandemic lockdowns, defending the government’s actions and pushing the vaccines from the company whose board he serves. 

In August 2021, he wrote Twitter to complain about a tweet from his successor at the FDA, Brett Giroir. Giroir wrote to report the results of a study in Israel that clearly demonstrated what most anyone could have known even without the study: natural immunity is superior to vaccinated immunity. 

Gottlieb complained that the tweet is “corrosive” and might “go viral.” Twitter acted by slapping a “misleading” tag on the tweet, one that still remains to this day. 

It’s now clear #COVID19 natural immunity is superior to #vaccine immunity, by ALOT. There’s no science justification for #vax proof if a person had prior infection. @CDCDirector @POTUS must follow the science. If no previous infection? Get vaccinated! https://t.co/jFc0yHpF2f

— Brett Giroir (@DrGiroir) August 28, 2021

Here is the email. 

Now, one might observe that Gottlieb is merely a private person and that it was certainly his right to object to anyone’s opinions. Maybe that’s true, except that he served Pfizer at the time and his company enjoyed billions in subsidies to make its product which not only gained a patent but benefitted from product-liability protection that is conventional with such vaccines. In addition, the product was only distributed thanks to an Emergency Use Authorization that bypassed the usual federal standards. 

“I’ve raised concerns about social media and the threats that are being made on these platforms,” says @ScottGottliebMD on Alex Berenson being kicked off Twitter. “I’m unconcerned about debate being made. I’m concerned about physical threats being made for people’s safety.” pic.twitter.com/hxpALiT6dZ

— Squawk Box (@SquawkCNBC) October 14, 2022

That aside, he had been massively influential on lockdown policies from the very beginning, urging the Trump administration to be as extreme as possible in its attack on civil liberties and freedoms. 

We know this because Jared Kushner’s book reports every detail. He led the effort to present the guidelines for lockdowns that occurred on March 16, 2022, and he did it with the help of two tech executives he tapped to hang around the White House. Kushner reports:

As we dealt with the shortage of cotton swabs and other supplies, we faced another problem: the need to develop public health guidelines. Given that people across the country were confused and concerned, Birx and Fauci had been discussing the need for a unified set of federal standards to help Americans understand what they should do to keep themselves safe and slow the spread of the virus. They insisted that these guidelines would help prevent hospitals from becoming overwhelmed. Despite all the talk over the past week, no one had taken steps to produce a document. When Nat Turner flagged the issue, I asked him to coordinate with Derek Lyons to produce a draft and encouraged him to call Dr. Scott Gottlieb, the former head of the FDA and a renowned public health expert. I had been trying to persuade Gottlieb to come back into government for a short-term stint to help us better organize our response and support our effort to develop a vaccine. 

When we called Gottlieb, he was grateful that we were preparing guidelines. “They should go a little bit further than you are comfortable with,” he said. “When you feel like you are doing more than you should, that is a sign that you are doing them right.”

So here we have a former government official now working as a board member for one of the companies chosen to produce and distribute vaccines who was directly involved and hugely influential in crafting a policy for the Trump administration that ended up not only dooming the Trump presidency but setting the entire country on the course to recession and a public health crisis. Still Pfizer benefited, obviously. 

Sure enough, he got his way and the Trump administration issued the draconian guidance: “bars, restaurants, food courts, gyms, and other indoor and outdoor venues where groups of people congregate should be closed.”

And why call out Gottlieb alone when many thousands of serious scientists and medical professionals would have strongly advised against locking down?

This is why what Berenson reports here is so significant. Gottlieb was anxious not only to lock down the entire country but also to censor any report on what used to be common-sense observations about natural immunity, even when it comes from credentialed experts and cites peer-reviewed studies. 

After his lockdown advocacy, and before his intervention to pull down a tweet celebrating natural immunity, but only after the vaccine came to market, he took to the pages of the Wall Street Journal to say that the CDC had gone too far, especially with its enforcement of social distancing: “The reliance on a flu model caused public-health authorities to underestimate and overestimate Covid in important ways.”

The person and role of Gottlieb is a paradigmatic case of why and how unraveling the mysteries of the lockdowns and vaccine mandates is such a complicated undertaking. It’s not just about government intervention and it’s not just about private corruption. It’s about a complicated relationship between the two, involving a range of public and private actors in and out of government who seized control of the policy machinery to achieve private ends at enormous public expense. 

Russian Security Council Secretary Nikolay Patrushev has issued ultra-provocative words claiming that it’s not fundamentally Ukraine that Russia is at war with, but that the Russian military is facing all of NATO inside Ukraine.

“The events in Ukraine aren’t a clash between Moscow and Kiev. It’s a military confrontation of NATO, first of all the US and Britain, with Russia. Fearing a direct engagement, NATO instructors push Ukrainian men to certain death,” he said in a fresh interview with state-owned newspaper aif.ru.

Patrushev continued by describing Russia’s military as geared toward seeking to “free its regions from occupation and must put an end to the West’s bloody experiment to destroy the fraternal people of Ukraine.”

“We are not at war with Ukraine because we can’t have hatred for ordinary Ukrainians by default,” he stressed. He then presented Russian and Ukrainian heritage and closely bound up together, according to state media: 

“Get this: the Ukrainian language is one of the official languages in Crimea. Ukrainian cultural centers, Ukrainian folk song and dance groups continue to exist in many cities. A considerable number of people in the south of the Far East regard Ukrainian culture as their own, given a large proportion of migrants from the times of Stolypin,” he said, referring to Pyotr Stolypin, a prime minister of the Russian Empire in the early 1900s, who oversaw a resettlement policy.

“The sooner the people of Ukraine realize that the West is using them to wage a war on Russia, the more lives will be saved,” Patrushev added. “Many have realized that long ago, but they are afraid to say that publicly out of fear of reprisals. It’s not a part of the West’s plans to save someone’s life to the detriment of its enrichment and other ambitions. Even so, the Americans, the British and other Europeans often create an illusion that they protect civilization from barbarians.”

He then referenced the ongoing Western backed attempts of Kiev to make Russian language and culture illegal, which directly impacts millions in the region: “all this story with Ukraine was engineered by Washington to rehearse the technologies of dividing a people that’s one and sow discord,” he said.

Meanwhile, there’s a growing move among leading NATO countries to begin transferring Western tanks and troop carriers to the Ukrainian battlefield. Starting last week, France began leading the way, resulting in a fierce response from the Kremlin…

French President Emmanuel Macron, by agreeing to send AMX-10 RC wheeled tanks to Ukraine, has crossed a red line and broke a military taboo, becoming the first Western leader to make the step, the Daily Telegraph reported:https://t.co/0fSr32AjrR pic.twitter.com/6lFh1xsMa3

— TASS (@tassagency_en) January 7, 2023

But following this warning that a “red line” has been crossed, the Biden administration approved sending Bradley Fighting Vehicles, and now Britain is the next to be mulling tanks for Ukrainian forces, as Sky News reports Monday:

The UK is considering supplying Ukraine with British tanks for the first time to fight Russia’s invading forces, Sky News understands.

Discussions have been taking place “for a few weeks” about delivering a number of the British Army’s Challenger 2 main battle tank to the Ukrainian armed forces, a Western source with knowledge of the conversations said.

A Ukrainian official was cited in the report as saying that the UK sending tanks would in turn “encourage others to give tanks.” President Zelensky during his December in-person address to US Congress mentioned that his country is in dire need of tanks, and he’s specifically multiple times asked Washington for M1 Abrams tanks.

The US has still remained reluctant, however, largely on fears that to much heavy weaponry too fast would lead to direct NATO-Russia confrontation, ostensibly at least.

⚡️Possible use of FAB-500 in Bakhmut. pic.twitter.com/vfv2JvrFeD

— War Monitor (@WarMonitors) January 9, 2023

But based on the words of Russian Security Council Secretary Patrushev, it seems Russia increasingly sees military confrontation with NATO as already happening. After all, the massive loss of Russian troops in the Makiivka barracks attack was reportedly accomplished with US-supplied HIMARS missile systems.

By Mark Cudmore, Bloomberg Markets Live reporter and analyst

US stocks are trading positively since Friday’s US data due to raised hopes for rate cuts, not on some Goldilocks narrative. It’s important the driver is clear as there are different implications.

The NFP jobs data was indeed a so-called Goldilocks report: an increase in the labor force and lots of new jobs added, particularly in the private sector. Wage inflation not only fell sharply, but with the bonus of revisions lower to prior wage increases. For those who believe that the US can bring inflation back down to target without a hard landing, it was about as good as you could get. It suggests that the economy can cope with the policy-tightening seen, so it should have resulted in curve-steepening and equities getting a bid. And that’s exactly what we got… BOOM! All makes sense.

But wait… We then got the big bad wolf of the ISM report. It was horrible data. The headline came in at 49.6 (recession territory) versus 55 forecast, and 56.6 prior. The new orders component was even more traumatic at 45.2 versus 56 prior. Not helped by the fact that the more backward-looking factory orders data released at the same time missed expectations and revised the prior figures lower too. Oh, and the final durable good print was slightly softer, as well. Recession alarm bells blaring loudly. The bit of the ISM report that stayed very high was the prices paid component — uh-oh, stagflation sounds?

So you’d think that stocks would hate that? No! Quite to the contrary, S&P 500 e-minis only rallied 0.6% on the Goldilocks NFP jobs data, but then managed a further 1.8% before Friday’s close on the stagflationary ISM report, while the dollar slumped.

What gives? Well, US 2-year yields collapsed by a further 16 basis points after the ISM report, and it was that hope for easier monetary policy that fueled stocks. Which is fine in isolation, but does undermine any suggestion that Friday’s moves were about a Goldilocks scenario.

It also means that, if you’re wondering what would upset stocks most in the short-term, it’s anything that undermines the prospect of easier policy, more so than data that confirms a US recession. Personally, I think they probably should fear a recession too, but that’s a story for another month.

Update (1445ET): There’s word of a ‘much-fabled 3-page House rules addendum’ circulating throughout certain GOP offices in which McCarthy reportedly agrees on everything from the 20-holdout demands on everything from strategy on the debt ceiling, to committee assignments.

Via Axios‘ Andrew Solender:

At least one GOP office apparently has the much-fabled 3-page House rules addendum.

“We’re taking a look at it … we’re just going through it,” Rep. Ken Calvert, a Steering Committee member, tells @Axios

Asked if members have received a copy: “I don’t know if everybody has.”

— Andrew Solender (@AndrewSolender) January 9, 2023

According to Punchbowl News,

there’s also a secret three-page addendum that McCarthy and his allies hashed out during several days of grueling negotiations with the House Freedom Caucus. This pact includes the most controversial concessions McCarthy made in order to become speaker – three seats on the Rules Committee for conservatives, freezing spending at FY2022 levels, a debt-ceiling strategy, coveted committee assignments and more.

*  *  *

How that Rep. Kevin McCarthy (R-CA) has been elected Speaker of the House, his first order of business is presiding over the Republican rules package for the 118th Congress.

That said, in order to finally win the gavel after 14 failed votes, McCarthy had to make massive concessions to a group of 20 holdout Republicans, including the ability for just one member to vote to vacate the speaker’s chair.

In a Sunday night tweet, Rep. Matt Gaetz (R-FL) tweeted “This is what we’ve been fighting for,” in relation to seven bills that the holdouts were able to include in the rules package, which is expected to be put to a vote on Monday.

1) A bill to cut some of the additional funding that was made available to the Internal Revenue Service (IRS).

2) A bill to authorize the secretary of Homeland Security to turn away people crossing the border illegally.

3) A bill that includes prohibiting the secretary of energy from sending petroleum products from the Strategic Petroleum Reserve to China.

4) A tough-on-crime bill that includes amending the Omnibus Crime Control and Safe Streets Act to direct the district attorney and prosecutor’s office to report to the attorney general.

5) A bill to require a national instant crime background check system to notify U.S. Immigration and Customs Enforcement and other law enforcement agencies when information surfaces that a person present in the United States illegally may be trying to obtain a firearm.

6) A bill to prohibit taxpayer funded abortions.

7) A bill to amend Title 18, United States Code, to prohibit a health care practitioner from failing to exercise the proper degree of care in case of a child who survives an abortion or attempted abortion. –Epoch Times

“When we come back, our very first bill will repeal the funding for 87,000 new IRS agents,” McCarthy said on Jan. 7, shortly after being elected Speaker, adding that Republicans “believe government should be to help you, not go after you.”

In a recent letter, House Majority Leader Steve Scalise (R-LA), said that legislation is “ready to go” which will be brought to the House floor over the next two weeks. According to the Epoch Times, the House rules package largely mirrors Scalise’s list.

More via The Epoch Times‘ Tom Ozimek:

According to Scalise’s letter, the first bill, dubbed the Family and Small Business Taxpayer Protection Act (pdf), aims to revoke some of the additional IRS funding that Democrats passed as part of their Inflation Reduction Act that the agency plans to use for tax enforcement.

With the first bill, Republicans are targeting what Scalise said was “tens of billions of dollars allocated to the IRS for 87,000 new IRS agents.” That figure is in dispute, with the Biden administration saying much of the money would go to non-enforcement staff like customer service.

Another bill Scalise put in the schedule is the Strategic Production Response Act (pdf), which would prohibit non-emergency drawdowns of the Strategic Petroleum Reserve without a parallel plan to boost energy production on federal lands.

Republicans have been highly critical of President Joe Biden for ordering the release of oil from the strategic reserve, arguing that it was a ploy to win votes ahead of the midterms by trying to lower pump prices.

Biden, for his part, has insisted the release was meant to stabilize global oil markets amid Russia’s invasion of Ukraine and the ensuing energy price shock, as well as trying to lower prices for Americans amid decades-high inflation, of which a major component is the cost of energy.

Scalise has scheduled another related bill, called Protecting America’s Strategic Petroleum Reserve from China Act (pdf), which would restrict the energy secretary from selling oil from the strategic reserve to China.

Another bill is the Prosecutors Need to Prosecute Act (pdf), which would allow the public to see how many cases prosecutors are declining to prosecute, along with the number of criminals released onto the streets and the number of offenses committed by career criminals.

On border security, Scalise put forward a bill called the Border Safety and Security Act (pdf), which would give the Department of Homeland Security (DHS) the power to turn away people crossing the border illegally in order to gain “operational control” of the border.

Another bill, called the Illegal Alien NICS Alert Act (pdf) would require the National Instant Criminal Background Check system (NICS) to notify U.S. Immigration and Customs Enforcement and relevant local law enforcement if someone trying to buy a firearm is an illegal immigrant.

One bill, called the No Taxpayer Funding for Abortion and Abortion Insurance Full Disclosure Act (pdf), seeks to make the Hyde Amendment permanent and prohibit federal funding for abortions as well as funding for any insurance plans that include on-demand abortion.

Another bill, called Born-Alive Abortion Survivors Protection Act (pdf), would ensure that infants born alive after a failed abortion would receive the same legal protection and health care as a newborn.

McCarthy’s Concessions

Besides the bills, McCarthy had to make numerous concessions to win over the holdout Republicans, including giving the Freedom Caucus members seats on the powerful House Rules Committee, taking a hard line on the debt limit, and reducing spending.

McCarthy was elected as the 55th House Speaker in the early hours of Jan. 7 by a vote of 216–212.

While it normally takes 218 votes—a majority of the House—to become speaker, that threshold can be reduced if members are absent or merely vote present.

It’s precisely this maneuver that gave McCarthy his coveted win, as six Republicans voted “present” instead of “yea” in the final vote: Reps. Andy Biggs (R-Ariz.), Lauren Boebert (R-Colo.), Eli Crane (R-Ariz.), Matt Gaetz (R-Fla.), Bob Good (R-Va.), and Matt Rosendale (R-Mont.).

In a 20-minute speech following the vote, McCarthy laid out his priorities for the 118th Congress, including securing the southern border, combating “woke” indoctrination in American schools, and unleashing domestic energy production.

“We must get America back on track,” he said. “We’ll hold the swamp accountable.”

Cox Automotive reported that its Manheim Used Vehicle Value Index (MUVVI), which tracks the auction prices of used cars, plunged the most on record in December from a year ago as the auto market cools. 

MUVVI increased 0.8% in December from November and rose slightly to 219.3, but was down 14.9% from a year ago. “This was the largest annualized decline in the series’ history,” Manheim wrote in a statement. 

Despite the most significant yearly decline on record, used car prices at auction houses remain 14% below record highs. 

The Manheim Used Vehicle Value Index was down 14.9% from a year ago. This was the largest annualized decline in the series’ history. The non-adjusted price change in December was a decline of 1.9% compared to November pic.twitter.com/cB3X1N8jAY

— zerohedge (@zerohedge) January 9, 2023

Manheim wrote that all eight segments of the used car market recorded lower seasonally adjusted prices year over year in December. They noted, “vans had the smallest decline at 12.0%, followed by pickups, sports cars, and compact cars at 12.2%, 12.6%, and 13.5%, respectively.” 

December’s plunge surpassed November’s decline of 14.2%, which was the largest decline at the time. 

Cox chief economist Jonathan Smoke recently explained, “new inventory is finally starting to build, and that’s producing momentum in new retail sales, but that momentum appears to be at the expense of used retail. Especially it’s the traditionally used car buyer that’s most impacted by payment affordability.” 

Cooling of the used car market comes as the interest rate paid for used car loans hits the highest rate in more than a decade, sparking a price affordability crisis for buyers. 

During the virus pandemic, Americans used the most debt to fund record car prices — fast-forwarding to today, used car prices have dropped, and the economy is weakening, which might signal recession. We outlined last month the US could be on the cusp of a crushing auto loan crisis, unleashing a wave of repossessions and loan defaults. 

The good news is that runaway inflation in 2021 and 2022 is cooling. Remember when soaring car prices were the leading indicator of red-hot inflation prints? Now the opposite is happening. 

Authored by Rita Li via The Epoch Times,

Rep. Mike Rogers (R-Ala.) offered his regrets to Rep. Matt Gaetz (R-Fla.) on Jan. 8 for a tense confrontation during the heated House speaker vote on Friday evening.

“I regret that I briefly lost my temper on the House Floor Friday evening and appreciate Matt’s kind understanding,” Roger, the incoming chairman of the House Armed Services Committee, wrote via Twitter on Sunday.

“@RepMattGaetz and I have a long and productive working relationship, that I am sure will continue,” his post reads.

It came after Gaetz said that the Alabama congressman “has my forgiveness” in an interview, adding that he looks forward to their future collaboration.

“Of course in a late night moment of high drama, people can have moments of frustration,” Gaetz told Fox News earlier that day. “Mike Rogers and I have a six-year productive, working relationship. We’re going to work together wonderfully going forward.”

“I don’t think there should be any punishment or reprisal just because he had an animated moment,” Gaetz added. “He has my forgiveness.”

.@RepMattGaetz and I have a long and productive working relationship, that I am sure will continue. I regret that I briefly lost my temper on the House Floor Friday evening and appreciate Matt’s kind understanding. https://t.co/8GmbJHO3cK

— Mike Rogers (@RepMikeRogersAL) January 8, 2023

The confrontation occurred shortly after the 14th failed vote, during which Gaetz, one of the remaining GOP holdouts, switched his vote to “present.”

Rogers, a supporter of Rep. Kevin McCarthy (R-Calif.), came over to Gaetz before jabbing his finger at the leading rebel. Videos and photos captured show Rogers was physically restrained from behind and pulled back by Rep. Richard Hudson (R-N.C.).

“I was just exasperated that Matt was treating McCarthy so badly,” Rogers told the New York Post on Saturday, saying that he was about to turn away when Hudson grabbed him.

Rogers added that the whole thing was “really a big nothing burger.”

During the next and final round of voting, Gaetz along with five other holdouts voted “present,” allowing McCarthy to secure the speakership by a 216-212 vote.

Not ‘About Me or Kevin’

Like other GOP holdouts, Gaetz said his opposition to McCarthy was nothing personal.

“[T]his has never been about me or Kevin McCarthy. It’s about the American people. And the American people want to know that the rules of the House of Representatives would never allow something like this terrible, horrendous omnibus bill to ever pass ever again,” the Florida Republican told Fox News on Friday.

“It’s been about draining the swamp; making this a more honest, transparent, open place,” Gaetz said.

The lawmaker expressed his appreciation for McCarthy’s good faith to meet the demands that the 20 conservative holdouts pushed for. He said: “We’re at the stage right now where I’m running out of stuff to ask for—read the bills, have a balanced budget, have a broader plan. Kevin McCarthy is agreeing to all these things.”

McCarthy made numerous concessions to rebels who blamed him for not being conservative or tough enough to counter President Joe Biden’s agenda, including lowering the threshold for a lawmaker to issue a motion to vacate to allow members to oust the House speaker, allowing a vote to impose term limits on members of the chamber, and restricting a debt limit increase.

Following the final vote, McCarthy wrote on Twitter, “I hope one thing is clear after this week: I will never give up. And I will never give up for you, the American people.”

I hope one thing is clear after this week: I will never give up. And I will never give up for you, the American people. https://t.co/uLqPKa1maZ

— Kevin McCarthy (@SpeakerMcCarthy) January 7, 2023

The House now plans to vote on a hefty rules package, which was subject to negotiations with holdout Republicans.

The two-year-long White House coverup of the ongoing illegal immigration crisis is perhaps one of the biggest political frauds of the decade.  After Joe Biden recently dared to blame Republicans for the chaos at the southern border rather than his own reckless amnesty policies and his attempts to end Title 42, he embarked on his very first visit to the region since entering the Oval Office.  His primary destination?  El Paso. 

El Paso has become an epicenter of illegal immigration in the past few months, likely because it is a Democrat run border city which engages in sanctuary policies.  The El Paso Mayor, Oscar Leeser, kept the door wide open for supposed amnesty seekers until the city ran out of money for welfare provisions and finally declared an emergency despite pressure from the White House not to.  

Biden has long ignored the state of affairs on the border, forcing conservative governors to bus thousands of migrants to Democrat cities like New York and Washington DC in order to make a point.  Though the White House has pretended to be oblivious to the plight of border states, it is becoming clear that the administration has been well aware of the crisis for some time.  In preparation for Biden’s visit, El Paso has undergone a miraculous transformation from humanitarian disaster zone to squeaky clean and secure.  

Below, we can see before and after examples of how much can be accomplished to stop illegal immigration when Joe Biden’s image is on the line – El Paso has become a completely different city in the span of two weeks:

The city streets have been cleared of most migrants and their makeshift sidewalk beds.

A border wall has been quickly built from cargo containers and barbed wire to deter migrant caravans.  Local reports note that the new wall has been very effective in stopping the flow of illegals.  Also, national guard and border patrol units have been deployed in a show of force.

The expedited removal of illegal immigrants in preparation for Biden’s visit showcases the reality that the border situation can be dealt with and that it would be far easier than the White House claims. The only rational conclusion that can be made at this stage is that Biden simply doesn’t want to secure the border.  Biden walked the existing wall with border agents before quickly jetting to Mexico City, and briefly met with Texas Governor Greg Abbott, who only received notice of Biden’s plans a day before his arrival.

Biden continues to claim that he has been working to solve the illegal immigration issue “from day one” and blames congress for refusing to “take action.”  In reality, illegal immigrant encounters plummeted after the enforcement of Title 42 in 2020, and then exploded again right after Biden took office.  Biden’s insistence on amnesty benefits and far easier citizenship for illegals has encouraged an endless rush of over 5 million migrants in the past two years.  The sterilization of El Paso before his visit suggests that Biden has no intention of ever being honest about the terrible state of affairs and will maintain his open border policies regardless.     

With long-term inflation expectations (those 3-Years ahead or more) peaking more than a year ago, and even shorter inflation expectations – at least according to the NY Fed Survey of consumers – now sliding after hitting a record high 6.8% in June and dropping alongside 2Y breakevens which recently hit the lowest level in 2 years, wiping out two years of gains…

… it is hardly a surprise that the latest just released NY Fed survey showed a continued drop in inflation expectations, as median one-, three-year-ahead inflation expectations decreased to 4.99% from 5.23% – one month after plunging more than 0.7% from October’s 5.94% print – the lowest since July 2021, while 3-Years dipped to 2.99% from 3.00%; 5-year inflation expectations, which the NY Fed tracks only periodically, posted a modest increase from 2.32% to 2.42%. In August, this ad hoc series hit its lowest level yet, dropping to just 2.0%.

Median inflation uncertainty—or the uncertainty expressed regarding future inflation outcomes—was unchanged at the short-term horizon and decreased at the medium-term horizon to the lowest level since April 2021.

Separately, the median home price growth expectation increased fractionally to 1.3% after dropping to 1.0% from 2.0%, the lowest reading since May 2020 a decrease which was “driven by those in the South census region.” Despite this increase, home price growth expectations remain subdued relative to their pre-pandemic levels. Also, a 1% increase which is laughable when 30Y mortgages are about 5-6%…

… while labor market expectations paradoxically remaining very strong (apparently no tech workers were surveyed)…

… although a sliver of concern about the labor market could be found in the survey’s job separation expectations, which rose to 12.6%, the highest since Nov 2021, even as the probability of voluntarily leaving one’s job was unchanged.

Yet nowhere was the self-delusion more evident than in household income growth expectations, which jumped to a new record high of 4.6% from 4.5%. Not surprisingly, the increase was driven exclusively by respondents with no more than a high school education.

On the other hand, while households expect a spike in income, there are less sanguine about spending, and median household spending growth expectations fell sharply to 5.9% from 6.9% in November: “The decline was broad based across age and income groups .”

Remarkably, despite the worst bear market in a generation, 34.9% of respondents, modestly lower from 35.7% last month, expect stocks to rise in the next 12 months. Then again, 38.9% expected higher stock prices one year ago: that didn’t work out too well.

Looking at various prices, over the next year consumers expect gasoline prices to rise 4.1% from 4.7%; food prices to rise 7.6% (from 8.3)%; medical costs to rise 9.7% (up from 9.6%); the price of a college education to rise 9.2% (down from 9.4)%; rent prices to rise 9.6% (down modestly from 9.8%).

Here are some more findings from the report:

Inflation

• Median home price growth expectations increased by 0.3 percentage point to 1.3%. The increase was driven by those in the South census region. Despite this increase, home price growth expectations remain subdued relative to their pre-pandemic levels.
• Expectations about year-ahead price changes declined by 0.7 percentage point for both gas (to 4.1%) and food (to 7.6%), and 0.2 percentage point for both college education (to 9.2%) and rent (to 9.6%). The median expected change in the cost of medical care, on the other hand, rose by 0.1 percentage point (to 9.7%).

Labor Market

• Median one-year-ahead expected earnings growth rose by 0.2 percentage point to 3.0% in December. The increase was most pronounced for respondents over the age of 60 and those with a high-school education or less.
• Mean unemployment expectations—or the mean probability that the U.S. unemployment rate will be higher one year from now—decreased by 1.4 percentage points to 40.8%.
• The mean perceived probability of losing one’s job in the next 12 months increased by 0.9 percentage point to 12.6%, its highest reading since November 2021. Similarly, the mean probability of leaving one’s job voluntarily in the next 12 months increased by 0.7 percentage point to 19.3%. Both increases were most pronounced for respondents over the age of 60.
• The mean perceived probability of finding a job (if one’s current job was lost) decreased to 57.5% from 58.2% in November.

Household Finance

• The median expected growth in household income rose by 0.1 percentage point to 4.6% in December, a new series high.
• Median household spending growth expectations fell sharply to 5.9% from 6.9% in November. The decline was broad based across age and income groups.
• Perceptions of credit access compared to a year ago improved slightly in December, but the share of households reporting it is harder to obtain credit than one year ago remains near its series high. Similarly, expectations for future credit availability improved in December, with the share of respondents expecting it will be harder to obtain credit in the year ahead falling.
• The average perceived probability of missing a minimum debt payment over the next three months fell by 0.4 percentage point to 11.4%.
• The median expectation regarding a year-ahead change in taxes (at current income level) declined by 0.5 percentage point to 4.1%.
• Median year-ahead expected growth in government debt was unchanged at 10.1%, its lowest reading since March 2020.
• The mean perceived probability that the average interest rate on saving accounts will be higher in 12 months decreased by 0.5 percentage point to 31.9%. The decrease was more pronounced for those with a college degree or higher.
• Perceptions about households’ current financial situations compared to a year ago improved in December, with the share of households reporting a worse situation compared to a year ago declining. Similarly, year-ahead expectations about households’ financial situations also improved in December.
• The mean perceived probability that U.S. stock prices will be higher 12 months from now decreased by 0.8 percentage point to 34.9%.

More in the full NY Fed survey which can be found here.
 

A moisture conveyor belt of atmospheric rivers continues to pound storm-battered California as the latest system could be the most severe yet. Power outages plague Northern California, as a dozen people have died across the Golden State in the last two weeks after. At least 3,000 people were evacuated on Sunday. 

The National Weather Service described the bomb cyclone, a hurricane-force low-pressure system, and an atmospheric river as the “most potent” yet. Forecasters said the “relentless parade” of “atmospheric rivers” will peak Monday into Tuesday. 

There is an #AtmosphericRiver family in the Pacific pic.twitter.com/WEJNnsselR

— Jen Carfagno (@JenCarfagno) January 9, 2023i

NWS said, “two major episodes of heavy precipitation” impacting the Golden State “in quick succession,” along with “two of the more energetic and moisture-laden parade of cyclones that are aiming directly for” the West Coast. 

A direct threat to life and property is expected in California on Monday as an extremely impactful and dangerous atmospheric river lashes the state. @JaneMinarWX has the latest on the forecast. pic.twitter.com/ZS2ADeBbxy

— FOX Weather (@foxweather) January 9, 2023

“We expect to see the worst of it still in front of us,” Gov. Gavin Newsom warned Sunday. Newsom sent a request to the Biden administration for an emergency declaration to support recovery efforts which was approved this morning. 

More than 130,000 homes and businesses across California had no power on early Monday, according to PowerOutage.us – down from over 400,000 on Sunday after heavy rains and high winds toppled trees and telephone poles. 

“We are in the middle of a deadly barrage of winter storms – and California is using every resource at its disposal to protect lives and limit damage,” Newsom said. He added: “We are taking the threat from these storms seriously, and want to make sure that Californians stay vigilant as more storms head our way.”

By Sunday evening, nearly 3,000 people were evacuated from Northern California, with 200 staying in shelters. At least 12 people have died from weather-related incidents across the state in the last two weeks, Newsom said. 

The latest forecast shows some areas in Northern California could receive upwards of 10 inches of rain through mid-month. For high elevations, that could mean feet of snow. 

Since New Year’s Eve, the state has been swamped with rain. San Francisco has picked up 11 inches of rain in the last 13 days, the most rainfall documented in almost two weeks in records dating back to 1871. 

One silver lining to this deluge of rain is that it might help alleviate the state’s drought crisis. 

This is also great news for some reservoirs with water levels at dangerously low levels. 

And there’s more good news: “Snowpack levels in California’s mountains were at the highest level in 40 years.” 

Global warming alarmists (Greta Thunberg) and progressive media outlets might have trouble explaining California’s wettest few weeks since at least the 1800s. They will blame climate change, but the climate has been changing for hundreds of millions of years. So explain that one… 

Authored by Jonathan Turley,

Below is my column in the Hill on the new rules that came out of the negotiations leading to the election of Kevin McCarthy as the 55th Speaker of the United States. As noted below, I did not support the standoff and I do not support some of the changes that came out of the negotiations. Some of these changes were already in the works with McCarthy’s support. Moreover, some of these changes will make it more challenging for the Speaker by returning to prior rules allowing greater opportunity for amendments and floor fights. However, the holdouts were right that things have to change in Congress, particularly in allowing greater deliberation and debate over legislation. Some of these changes could achieve that worthy goal.

Here is the column:

The ascendance of Rep. Kevin McCarthy (R-Calif.) as the 55th Speaker of the United States House of Representatives may have come with all of the spontaneity of a shotgun wedding — but it finally came. McCarthy deserved better than a tortuous three-day floor fight but, then again, he is now second in line to the presidency.

Many of us have great sympathy for McCarthy, who looked like a guy caught in a feedback loop stepping on the same rake over and over again. (For the record, I opposed the floor fight, given the overwhelming support for McCarthy.) However, as is often the case in Washington, the narrative opposing these holdouts allowed for little recognition of what they achieved in McCarthy’s concessions. Indeed, the Washington Post’s Dana Milbank ran a column titled “McCarthy’s fate is irrelevant. The terrorists have already won.”

Moreover, many in the media were honest about what they consider his greatest shortcoming: “Kevin McCarthy is no Nancy Pelosi.”

Some of us sincerely hope so.

While Pelosi (D-Calif.) remains the ideal of many in the media, she tolerated little public debate or dissent. She thrilled her base with such infamous performative acts as tearing up a State of the Union Address of then-President Trump. As an all-powerful speaker, she oversaw a series of party-line votes with little opportunity for amendments or even to read some bills.

Many Republicans did not want the Pelosi model of an all-powerful speaker. For these members, the agreement with McCarthy is a type of Magna Carta.

The original Magna Carta, of course, was honored primarily in the breach by King John, who immediately asked the pope to annul it. Yet it was an impressive statement of rights.

No one is seriously suggesting that the GOP agreement is the new Magna Carta, but it is meant to redefine legislative rights — and it could have tangible improvements for the House.

I have worked in the House in various roles since I was a House leadership page in the 1970s and, much later, represented the House in litigation. I’ve watched the body become less transparent, less deliberative, with every passing year.

The Framers saw the House as a powerful forum to address factions in society, a legislative crucible where different interests could be expressed and resolved in majoritarian compromise. The legislative process can inform citizens while exposing legislative proposals to public scrutiny. But that process has been largely replaced with a series of robotic, preordained votes.

Some of these concessions may change that status quo. There are provisions I do not support — yet, we should acknowledge that these changes could also improve the process to allow greater dissent and debate.

Many in the media counter that such changes reduce the speaker’s power, as if the status quo under Pelosi was the optimal legislative model. Yet some changes would empower rank-and-file members to allow for greater diversity of views — not necessarily a bad thing.

Restoring the ‘Vacate the Chair’ rule

Nancy Pelosi consolidated her power by eliminating a rule that allowed any member to make a motion to vacate the chair, a type of legislative no-confidence vote. Pelosi eliminated the one-member rule and, instead, required a majority of either party to make such a motion. Some Republicans wanted that check on the speaker to be reinstated.

Notably, what has unnerved so many in Washington is that this speakership debate was not just largely public but also unscripted. It was an actual deliberation, conducted in front of the American people. While repellent to many, it just might be something that voters could get accustomed to.

Restoring legislative review and deliberation

The GOP holdouts sought to end massive spending bills moved forward with little time to read the legislation. They want a minimum 72-hour review period and a reduction of massive omnibus bills, to allow members and the public to better understand what is being passed.

The concessions reportedly include “open rules” on all major rules bills, such as appropriations, to allow lawmakers to offer amendments on the floor. It would restore an amendment process that was gutted in recent sessions, benefiting Democrats and Republicans alike.

They would reinstate “Calendar Wednesday,” which permits committee chairs “to bring reported bills directly to the House floor for consideration under an open amendment process, and reform the process by ensuring the same 72-hour notice that is required on all other measures is provided.”

For years, some of us have called for smaller bills and more deliberation. Massive bills are a way to hide personal perks and pork projects under fraudulent packaging like the “Inflation Reduction Act” that had little to do with inflation. The omnibus bill recently pushed through the House and Senate is an example of this abusive, opaque process. It was a collection of 7,200 earmarks and pork projects, including tens of millions for libraries for the papers of a couple retiring senators; five senators grabbed half a billion dollars for their favorite colleges. You had to swallow it whole or kill any spending bill.

Reinstate budget and tax procedures

Members want to restore the ability to reduce runaway spending and control increasing budgets and taxes. While one can disagree with some of the provisions, these members are clearly serious about gaining control over the budget. They would reinstate the “three-fifths supermajority in the House to approve any increases in tax rates” and require the Congressional Budget Office to analyze bills’ impacts on inflation.

They also would restore the “cut-as-you-go” (CUTGO) rule, which requires spending increases to be offset by equal or greater cuts in mandatory spending.

They would repeal the “Gephardt Rule,” which treats the debt limit as increased upon passage of a budget resolution. That rule allows members to avoid public debate over increasing a national debt that now stands at over $31 trillion. And they would restore the “Holman Rule” from 1876, permitting members to make targeted cuts impacting federal agency functions and salaries.

These are measures designed to control federal spending — a shock to a system that has abandoned any semblance of fiscal responsibility under both parties.

Committee reforms

Rebelling members pushed for a committee to investigate the FBI and its continuing scandals. I previously called for the creation of a new “Church Committee,” which will be established under Speaker McCarthy.

They also demand commitment to oversight in areas long ignored by Democrats, including the threats posed by China. The House Ethics Committee would have a new process allowing complaints from the public.

All of this challenges a status quo which seems inviolate to many in the media.

Yes, there are demands in the concessions that some of us do not favor. However, we should be honest about the status quo: Today’s legislative system is a mockery of the deliberative process, characterized by runaway spending, blind voting and perfunctory debates. You can dislike or denounce the holdouts while still admitting they have a point — Congress has got to change.