A railway workers’ strike seems to have been avoided. Railroad workers I’ve spoken to who insisted they go on strike tell me they’re OK with their pay. They don’t agree with limited days off that they have to stay on call. They are tired. A strike would cost our economy $2 billion a day. The Biden administration worked through Thursday night to avoid a strike.
Stress levels on the economy, even without a railroad strike, are hurting our economic systems. The other day, as the market plunged more than 1,200 points on inflation news – the worst loss since 2020 – as Democrats celebrated the Cut Inflation Act at the White House. Next week, the Federal Reserve could raise interest rates by three-quarters of a percent, taking rates to their highest levels since 2007.
In anticipation of the railroad strike, the major railroads had already stopped shipping ammonia to fertilizer manufacturers and chlorine to municipal water treatment facilities. They didn’t want these dangerous chemicals in unattended railcars in case the strike happened. Now they will need to ramp up to deliver.
Former Treasury Secretary Larry Summers recently noted that even raising rates to 4% might not be enough to bring inflation down to 2%. Even assuming inflation hits 2%, that just means inflation growth has slowed. This does not mean that we had deflation. Prices will still be much higher than wage increases. High interest rates will push the economy into a recession. Unemployment will rise with people laid off, unable to afford high-priced groceries or gasoline.
In less than two months, Americans will go to the polls. Early voting will be dominated by Democrats. Every day closer to Election Day will likely bring worse economic news. We could see a massive discrepancy between those who vote earlier and those who vote later or on Election Day when the economic winds blow.
Things seem to be getting worse. Even without a railroad strike, nurses are on strike in Minnesota. UPS workers are expected to go on strike in a few months. Stores are trying to stock up for Black Friday and holiday shopping. We are entering the peak period of supply chain operations. A single ripple can cause a hurricane in the economic system.
The Biden administration has no more cards to play. A dysfunctional Congress will have to act. If the railroad workers end up going on strike, Congress can delay the strike, but would progressives really want to stand up to the unions? Would Republicans really want to help Democrats avoid economic disaster? These questions have no easy answers.
Progressives are beholden to unions and unions feel encouraged to strike. Public support for private sector unions has increased. Unions feel like they are leading the conversation. Republicans in Congress feel betrayed by Democrats on the Cut Inflation Act. Democrats themselves called it a climate change bill and largely ignored its impact on inflation.
Both parties are racing towards the midterm elections as the polls turn back in the Republican direction. The Economist/YouGov poll had Democrats with an eight-point lead in the wildcard poll two weeks ago. Last week it was a six-point lead. This week, it’s a four-point lead. In Georgia, the Quinnipiac poll had Sen. Raphael Warnock with a 10-point lead in June. This month, he is six points ahead. Georgia Democrats say the Q poll underestimates the GOP by about 5 points. That means the GOP could take over the Senate. Democrats need something to help them. The light at the end of the tunnel for Democrats could instead be a fast approaching railroad strike. Fate is coming.
— To learn more about Erick Erickson and to read articles by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate webpage at www.creators.com.