Are We Seeing the Economic Tide Begin to Turn?

Perspective Matters

KEY TAKAWAYS

• The job market is showing serious cracks - We just had our first month of actual job losses since the pandemic, and recent data keeps getting revised downward.

• Wealth concentration has reached a tipping point - We're at the end of a 40-year cycle where money has flowed upward to fewer people, and history shows this always corrects itself.

• Corporate profit tricks are masking real problems - Companies are using stock buybacks instead of investing in growth, artificially inflating their numbers while the underlying economy weakens.

• Political desperation is increasing - With midterm elections approaching, both the administration and Congress are making increasingly aggressive moves to maintain power as public frustration grows.

• Watch your local indicators - Pay attention to job numbers, how your representatives vote, and whether companies in your area are investing in workers or just enriching shareholders.

I've been telling you since December that September and October 2025 would be crucial months. Here's why: politicians are already thinking about the 2026 midterm elections. And when politicians start worrying about their jobs, everything changes. 

Right now, we're getting some troubling economic data. The job market is weakening. Courts are blocking the administration's trade policies. And members of Congress? They're scrambling to figure out how to get reelected. 

Here's what I think is really happening: We're watching the end of a 40-year cycle where wealth has been flowing upward to fewer and fewer people. And like every time before in American history, that pendulum is about to swing back. 

WHY POLITICIANS ARE PANICKING

You know that old saying about midterm elections? The party in power almost always loses seats in the House. It's like clockwork. 

Think about it this way: You vote for a president expecting change. When that change doesn't happen fast enough, you take it out on Congress two years later. Every House member has to run again every two years, so they feel your anger first. 

Smart presidents know they have until Labor Day of their first year to pass their big agenda. After that? Every House member starts thinking about their own reelection instead of the president's wishes. 

This August, lawmakers went home to face you during their break. And boy, did they hear it. Town halls were packed with angry voters from both parties. People are fed up, and their representatives know it. 

Remember when Speaker Mike Johnson ended the House session early in July? He was trying to avoid a vote that might force the release of Jeffrey Epstein documents. Rather than risk losing, he just sent everyone home. 

Now here's where things get concerning. Some worry this administration might try extreme measures to stay in power. They're already testing how much military presence in cities Americans will tolerate. A court said sending troops to Los Angeles was illegal, but they seem determined to keep pushing. 

Could they actually try to suspend elections? It sounds crazy, but desperate politicians sometimes do desperate things. 

THE ECONOMY IS FLASHING WARNING SIGNS

Let me break down what's really happening with the economy, because the picture they're painting isn't the whole story. 

YOUR BENEFITS VS. THEIR TAX CUTS

The administration passed a law that sounds good on paper. But here's the catch: it takes away food stamps and Medicaid funding for millions of people. The twist? Those cuts don't hit until after the election. 

Meanwhile, tax breaks for the wealthy started back in January. See the pattern? Rich people get immediate relief. Everyone else gets the bill later. 

THE JOB MARKET IS CRACKING

Last month's jobs report was so bad, they claimed the person in charge of collecting the data was lying and fired her. But here's the thing: the new numbers are even worse. June 2025 numbers were just revised to a negative number - the first month of actual job losses since December 2020, when we were in the middle of the pandemic.

That should worry you. 

CORPORATE TACTICS YOU SHOULD KNOW ABOUT

Companies are reporting good earnings, but they continue to use "financial engineering" to get there." Let me explain one that should make you angry, even if you’ve benefited from it over the years. 

Back in 1934, Congress said companies couldn't buy back their own stock because it was cheating. It artificially pumped up prices without actually improving the business. 

In 1982, they changed the rules and allowed it again. Now companies routinely take their profits and buy their own stock instead of investing in growth or workers. 

Here's why this matters to you: When a company buys back stock, it makes their earnings per share look better even though they're not making more money. Stock prices go up. Executives get bonuses. But the company isn't actually doing better. 

Want a really infuriating example? BAE Systems took $35 million in taxpayer money through the CHIPS Act. That money was supposed to create American jobs and manufacturing. Instead, they’re accused of using it to buy back their own stock and enrich shareholders. 

TRADE WARS ARE HURTING REGULAR PEOPLE

Courts have ruled many of the administration's tariffs illegal, but the damage is done. Package deliveries from overseas are down 80%. Small businesses that relied on affordable international shipping are getting crushed. 

People are starting to hold onto cash because inflation is still high and job security is declining. 

THIS HAS ALL HAPPENED BEFORE

Here's what I want you to understand: America has gone through these cycles for centuries, and we hit extremes (and reverse directions) every 40-50 years.

We had the Industrial Revolution, which created massive wealth for a few people. That led to the Gilded Age, where inequality got so bad it caused the Great Depression. The Depression led to the New Deal, which spread wealth around more fairly. Then came "trickle-down economics" in the 1980s, which brought us back to extreme inequality. 

Sound familiar? 

Each time, the cycle follows the same pattern. Capitalism creates opportunity, but unchecked greed eventually creates a two-class society that can't sustain itself. The wealthy squeeze out every last bit of wealth and power they can. Then regular people say "enough" and demand change. 

Our government was designed to prevent too much power from concentrating in too few hands. It was supposed to be government of the people, by the people, for the people. Not government of the rich, by the rich, for the rich. 

WHAT YOU SHOULD WATCH FOR

The good news? Americans are resilient. You're already speaking up. You're demanding change. And history shows that when enough people demand change, they get it. 

Here's what to keep an eye on: 

Jobs numbers: Are they getting worse or better? Pay attention to the revisions, not just the headlines. 

How your representatives act: Are they listening to you or their donors? Watch how they vote as the election gets closer. 

Corporate behavior: Are companies investing in workers and growth, or just enriching shareholders? 

Your community: Are people around you struggling more or less than before? 

Political overreach: How far will this administration push before enough Americans push back hard enough so that politicians believe their jobs are at risk? 

THE BOTTOM LINE

The economic tide is turning. The question isn't whether change is coming—it's what kind of change we'll get and whether we'll have a say in shaping it. 

History tells us that periods of extreme wealth concentration always correct themselves. The American people have never tolerated it forever. When we've had enough, we've always demanded our government work for us again. 

All the signs suggest that moment is approaching. The question is: Are you prepared financially to get through the next couple of years? 

• Do you have enough money set aside to cover anything you expect to spend in the next two years? 

• Do you have an emergency fund? 

• Are you spending less than you earn? 

As concerning as the current economic and political environment is, the fundamental rules of planning for your financial security haven’t changed. 

Certified Financial Planner™ professionals are fiduciaries, putting your interests first at all times. We can help you look at your entire financial life holistically and help you build a plan flexible enough to withstand what the next few years will bring.  

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Neither Prism Planning and Solutions Group nor Insight Advisors provides tax or legal advice, and nothing in this communication should be treated as such. This communication should not be interpreted as a recommendation for a specific investment, legal or tax-planning strategy. We provide this material for informational purposes only. We have made every attempt to verify that the information contained in this communication is accurate as of the date published but make no warranties. Before making any decisions related to your own tax, legal and/or investment situation you should consult the appropriate professionals.    

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