By Peter Morici
The Republicans desperately need a new generation to step up, challenge Donald Trump for the party nomination, and craft a new party agenda.
The odds are decent that Republicans will capture the House in November and the Senate remains in play . Even if they prevail, however, they won’t gain veto-proof majorities necessary to significantly alter the path of public policy before the next presidential election.
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With the Senate they could hold up many of President Joe Biden’s more woke judicial and administrative appointments, but he already has much of what he needs to pursue an expansion of the administrative state.
The Federal Reserve will slow the economy to moderate inflation . Likely a soft landing—only two quarters of negative growth without a big surge in unemployment—or a recession— two quarters of negative growth with unemployment reaching about 5%—and then a rebound.
Stagflation —lethargic growth, the paradox of falling real wages with a nonplus overall jobs market and inflation above 4%—is likely.
Labor markets in many activities will remain tight because the skill mix of the labor force does not match well with the postpandemic economy .
Food and energy inflation won’t fully abate without reopening Ukrainian seaborne grain /zigman2/quotes/210389638/delayed W00 +1.62% exports and reintegrating Russia into Western petroleum /zigman2/quotes/209723049/delayed CL00 -1.43% markets.
Those won’t happen without the United States breaking the Russian embargo of Black Sea ports with naval convoys and some kind of military confrontation that forces Russian President Vladimir Putin to sue for peace.
All of that is in the hands of the president—not the Congress—and Americans have little appetite for risking war with Russia .
European political leaders have acute domestic challenges too . If America aggressively confronted Putin, it’s questionable whether they would follow.
The GOP will bloviate about inflation and the president’s energy policies, but boosting U.S. oil and gas /zigman2/quotes/210189548/delayed NG00 +0.26% production by perhaps 10% would add 1.5 million barrels a day to global supplies . That’s not enough to compensate for the West losing access to Russian production .
Europe’s drive to end dependence on Russian gas , while shutting down Netherland’s Groningen gas field , will drive up prices everywhere .
Beyond Republican orthodoxy
The answer lies in prudently planning more growth in wind, solar and electric vehicle production. And reassuring oil companies they can invest—without vengeance from Washington—to meet demand from internal combustion engines, which will remain substantial until the end of the 2030s , and the needs of the petrochemical and other industries that use petroleum as raw material.