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Near-term gloom, long-term boom

Opportunities for positive economic reforms could drive sustained growth in the future.

Author

Clint Betts
March 10, 2025

#1

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#2

Near-term gloom, long-term boom

In his recent analysis, Scott Grannis examines the current economic landscape, expressing concerns about potential short-term challenges but maintaining optimism for long-term growth. He highlights the recent surge of executive orders from the Trump administration, noting that while many aim to stimulate growth, certain measures — particularly punitive tariffs — could hinder near-term economic performance. Grannis points to indicators such as the Atlanta Fed’s GDP Now model forecasting a 2.8% contraction in Q1 2025, a fragile housing market characterized by high prices and interest rates, and rising loan delinquencies as signs of potential economic softness.

Despite these concerns, Grannis underscores positive factors that could support the economy over the long run. He observes that liquidity conditions remain healthy, with credit spreads staying low and banks holding substantial reserves, which could act as a buffer against economic shocks. Additionally, a strong U.S. dollar and declining real interest rates on five-year Treasury Inflation-Protected Securities (TIPS) suggest a relaxation of monetary conditions, potentially easing pressures in housing and commodity markets over time. Grannis also notes that the money supply (M2) has returned to its pre-pandemic growth trajectory, indicating that inflationary pressures may be easing.

However, Grannis raises caution regarding the growing cryptocurrency market, which has seen speculative enthusiasm fueled by rumors of government investment in Bitcoin. He warns that the lack of intrinsic value in cryptocurrencies makes them susceptible to volatile speculative cycles, posing potential risks to investors. In conclusion, while acknowledging the possibility of a mild recession in the short term, Grannis remains a “rational optimist,” emphasizing that numerous opportunities for positive economic reforms could drive sustained growth in the future.

#3

The cost of daylight saving time

In the intricate dance of our daily schedules, two seemingly mundane conventions — daylight saving time (DST) and early school start times — cast long shadows over our collective well-being and economic vitality. Recent analyses illuminate the profound implications these practices impose on health, productivity, and the nation’s financial health.

Daylight saving time, originally conceived during World War I to conserve energy, has evolved into a contentious fixture of modern life. Proponents argue that extended evening daylight promotes economic activity and leisure pursuits. For example, the golf industry reportedly gains an additional $200 million to $400 million monthly during DST, as enthusiasts take advantage of longer playtime. However, this perceived benefit is counterbalanced by mounting evidence of adverse effects. The biannual clock shifts disrupt circadian rhythms, leading to increased risks of heart attacks and workplace injuries in the days following the transition. Moreover, the anticipated energy savings have proven negligible; a 2008 study in Indiana revealed a 1% increase in energy consumption post-DST adoption, attributed to heightened use of heating and cooling systems.

Alongside the DST debate is the scrutiny of early school start times, which often require adolescents to begin their academic day before 8:30 a.m. This misalignment with teenage sleep patterns has been linked to widespread sleep deprivation, impairing cognitive function and academic performance. The economic ramifications are equally concerning. A 2017 RAND Corporation report projected that delaying school start times to 8:30 a.m. could inject an additional $83 billion into the U.S. economy over a decade, primarily through improved student outcomes and reduced vehicular accidents involving drowsy teenage drivers. Despite these compelling findings, many school districts struggle with logistical challenges, such as transportation scheduling and after-school activity coordination, preventing the adoption of later start times.

Collectively, the persistence of DST and early school start times exacts a toll that extends beyond individual health and permeates the broader economic landscape. The confluence of disrupted sleep patterns, reduced productivity, and increased healthcare expenditures underscores the urgency for policymakers to reevaluate these entrenched practices. Aligning institutional schedules with human biological rhythms may not only enhance public health but also strengthen the nation’s economic foundation.