Scott Galloway Says People Are Still Spending, Shopping At Whole Foods, And Vacationing Despite 'Irrational Economic Policy.' Why Is That?
On a recent episode of 'Prof G Markets,' marketing professor and investor Scott Galloway noted that Americans are still eating out, booking trips, and shopping at places like Whole Foods, even though the economy feels increasingly uncertain. In his view, consumer spending habits haven't yet reflected what he calls 'irrational economic policy.'
'If you didn't know all of this was going on, I'm not sure you would know what's going on,' Galloway said, referring to President Donald Trump's policies and global instability. Markets remain near record highs. People are spending. Unemployment is still low. On the surface, the economy looks fine.
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But podcast guest, economist Kathryn Anne Edwards, warned it's more complicated than it seems. 'We are witnessing... a slow slowing of the U.S. economy,' she said. Job growth has been revised downward in recent months, and more people are quietly dropping out of the labor force. For job seekers, it's already feeling like a recession.
One key reason for the economy's resilience, according to Edwards, is that the threats haven't fully materialized yet. 'Trump has more bark than bite,' she said. 'Were he to pursue [his policies] fully... we'd start to see declines in the labor force, massive shortages, and reductions in government spending.'
In short, the damage hasn't kicked in because many of the policies are still just talk. Businesses are holding back but not retreating, waiting to see what happens. 'They're terrible, but they're also not in full practice,' she said.
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Beneath the headline numbers, there are warning signs. Healthcare jobs are growing, but Edwards said that's due to an aging population, not economic strength. Podcast co-host Ed Elson cited LinkedIn data that says entry-level hiring is down 23% from March 2020, with recent college grads facing some of the highest unemployment rates in years.
'The unemployment rate for young people is always higher,' she said, with Elson adding that it's the highest in years.
The conversation also turned to long-term economic policy and the ongoing push for more tax cuts.
'37% of the increase in the federal debt [since 2001] comes from tax cuts,' Edwards explained. 'That's a pretty large number for what I would struggle to point to a single clear accomplishment.'
She argued that policymakers have done little to reduce inequality and that tax cuts are more political than economic. Galloway agreed: 'We've been pursuing a strategy of tax cuts for several decades and it isn't working.'
As for raising the minimum wage, Edwards said it's more reasonable to link it to average or median wages in the economy instead of productivity growth, which can be distorted by factors like corporate profits or automation.Galloway acknowledged the difficulty younger workers face but suggested part of the issue may be expectations. 'I don't believe they can't get jobs,' he said, referring to recent college grads. 'I just don't think they're willing to take the jobs that are available.'
He argued that high salary expectations, especially among elite college graduates, may not match the current hiring climate. 'The average compensation at [New York University] Stern is $212,000. I think there's an absence of $212,000 a year jobs at Salesforce being product managers.'
Elson pointed a finger at universities. 'The colleges should be on the hook for a low employment rate if you graduate at that time and can't find a job,' he said. Maybe it's not just the market or the student—maybe it's the college, too.
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This article Scott Galloway Says People Are Still Spending, Shopping At Whole Foods, And Vacationing Despite 'Irrational Economic Policy.' Why Is That? originally appeared on Benzinga.com
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