Midwest loses trust in system, American Dream evaporates

video

Fed’s trying to tighten financial conditions in order to slow the economy, reign in inflation: Jurrien Timmer

Fidelity Investments Global Macro Director Jurrien Timmer weighs in on how the Federal Reserve will further respond to record-high inflation on ‘Making Money.’

FIRST ON FOX BUSINESS: The Midwest, the center of America, is in a bad way when it comes to sentiment on jobs, income and the American Dream, but big business could hold the key to reversing the bad juju. 

The findings, released today in the 2022 Edelman Trust Barometer Special Analysis: The Changing Role of the Corporation in Society, show the Midwest is the most skeptical of all U.S. regions and a record gap between high- and low-income earners. It was developed in collaboration with Harvard Business School’s Institute for the Study of Business in Global Society.

  (2022 Edelman Trust Barometer Special Analysis: The Changing Role of the Corporation )

"It’s a cry for help. When the U.S. Midwest says, you know, please support our local communities, please train or reskill our employees, that’s a cry because government isn't," Richard Edelman, CEO of global communications firm Edelman, told FOX Business exclusively. 

  (2022 Edelman Trust Barometer Special Analysis: The Changing Role of the Corporation )

While business is trusted, government and media are not, the survey found.

Debora Spar, who is launching Harvard Business School’s Institute for the Study of Business in Global Society in Detroit, noted the Midwest’s stance towards business is a surprising ask for America’s corporations. 

"There are expectations/hope that business can come in and really play an active role in solving community level issues," she said. 

  (2022 Edelman Trust Barometer Special Analysis: The Changing Role of the Corporation )

GDP SINKS FOR 1Q, 2Q CONFIRMS TECHNICAL RECESSION

Gross Domestic Product growth across all Midwest states, Illinois, Indiana, Iowa, Michigan, Minnesota, Missouri, Nebraska, North and South Dakota, Ohio and Wisconsin, is contracting as tracked by the Bureau of Economic Analysis. This is in tandem with national GDP which sank 0.6% in the second quarter, and 1.6% in the first, confirming a recession. 

Real GDP 1Q-2Q 2022  (Bureau of Economic Analysis)

"They've had a really hard period, deindustrialization and a real decline in incomes, especially in the classic blue-collar jobs and a loss of belief in my family's going to do better in the next phase," Edelman explained. 

“They’ve had a really hard period, deindustrialization and a real decline in incomes, especially in the classic blue-collar jobs and a loss of belief in my family’s going to do better in the next phase”…

"They're being deeply affected by inflation because that's something that hits lower class people more because it's food, mortgage costs and gas," he added. Consumer inflation rose 8.2% annually last month. 

INFLATION SOARED AGAIN IN SEPTEMBER

Where the Midwest is seeing some green shoots, or rays of hope, is with business, which remains the only trusted institution and a handful of corporations are leading by example. 

  (2022 Edelman Trust Barometer Special Analysis: The Changing Role of the Corporation )

"I really appreciate what Google's done to upskill small business in both Detroit and in Pittsburgh and I think JPMorgan investing especially in Detroit and also in Philadelphia," Edelman detailed.  

In the Motor City, for example, JPMorgan expects to have invested $200 million by the end of 2022. "Our new investment in Detroit will help the system work for more people – giving more Detroiters access to the tools they need to succeed, stay and benefit from Detroit’s continued recovery," said CEO Jamie Dimon in the 2019 announcement. 

  (Photo by Jean Catuffe/GC Images)

Additionally, Discover Financial recently announced hiring plans for 150 workers in downtown Chicago "instead of outsourcing to India," Edelman pointed out. 

Source: Read Full Article