October Surprises

Two are most worrisome to me, as an electoral matter. I don’t mean to discount the collateral human suffering, but I’m leaving that for someone else to talk about.

We have already seen how the disruption of supply chains can cause the price level to blow up. Those spikes tend to work themselves out, but it takes time. That’s a virtue of competitive markets. Gaps create opportunities that someone will take advantage of, sooner or later. This is what I taught in Econ 101, and I believe it.

Another one or two disruptions this month could be decisive in handing the election to the bad guys. A supply chain — the sequence of production of a particular good or service — is vulnerable if it is thin at one or more points. That means the withdrawal of a producer from the chain has few or no ready substitutes. Production is curtailed, and prices of the scarcer end-product goes up. A chain can be thin insofar as there is market concentration: few or just one supplier. These days the most energetic, prominent tribune of the case for anti-trust action — market deconcentration — is Matt Stoller and his substack.

The ruptures in national supply chains are imminently threatened from two sides. One is this year’s hurricane season. Stoller provides a number of details. Hurricane Helene has already put some kinks in U.S. manufacturing. Hurricane Milton may top that.

The other source is the burgeoning war in the Mideast. War with Iran threatens to raise oil prices, which by the way would be great for Trump’s pals in Russia and Saudi Arabia. An oil price spike would be quickly transmitted to conspicuous gasoline prices in the U.S. Naturally, U.S. oil and gas producers will take full advantage, even though since the U.S. is a net exporter of oil and gas, our fossil fuel consumption is based mostly on domestic output.

I’m moved to speculate on how the Federal government might be able to put caps on oil and gas prices. On the other side, an unholy coalition of bad actors — Trump, the Russian mafia state, the OPEC cartel, and U.S. oil and gas producers — all have a common interest in elevated prices. Resentment of Arab and Iranian oil producers also plays to the advantage of the Netanyahu government in Israel, which of course is driving the push to war with Iran.

In both cases, price spikes will allow Trump to claim that by imperial, executive authority, he could just wave his hands and make the problems go away, as he already claims regarding conflicts in the Mideast. His most rabid followers believe this nonsense. The less committed may decide, what the hell, since he has no scruples maybe he could do something. Such desperation would be fueled by the Biden Administration’s incapacity to act, perhaps for legitimate reasons.

I’ve also been speculating that the abject lies of Trump and associates, on top of the rubbish about Springfield, Ohio, and Nazi genetic rhetoric, might begin to alienate those small town folks on whom their electoral prospects depend. It’s hella unseemly.

A quick word on “FEMA money going to immigrants.” If Congress has enacted a budget that requires a money stream for that purpose, that is what the Federal government is required to do. It’s the law, not incidentally enacted with the support of the House Republican majority. Trump might like to pretend that he or Biden can simply redirect the money by fiat, but that would be illegal. It would also violate the most basic feature of the U.S. Constitutional system, which vests “the power of the purse” in the U.S. Congress.

There is no trade-off between money for FEMA hurricane operations, and money for immigrants, or anything else. The gigantic Federal government can easily do both. The real constraint is the generalized political unease about higher taxes to pay for higher spending, something to which Democrats of course routine capitulate. There is also the idiotic debt ceiling. The culprits in all this can be seen in the mirror.

What should the Democrats do? It might be inadequate, but telling the truth would help. Lies disrupt rescue and relief efforts and should be hanging offenses. How powerful is shame? I would hate to stake my life on it, but I don’t see what else we would have.