Incredibly, 2026 is here, and we’re in a much different business climate than we were 52 weeks ago. We as business owners and leaders looked for smaller taxes, the lowering of the U.S. debt, smaller government, economic stability and fiscal prudence. Those things have not changed in decades.
I don’t think anyone could prognosticate the sheer volume of change that’s come to the business sectors locally, regionally, nationally and worldwide. Arguably, there is not a sector or business not affected by the new business climate in some way.
As we proceed into 2026 and 2026, all of us potential founders, founders, owners and managing directors (I am actually all of those!) need some knowledgeable and sober prognostication—certainly not my sorry ass telling you how 2026 and 2027 are going to trend.
So, I called upon my buddy Mark Pingle, an oft-quoted, renowned economist; University of Nevada, Reno, professor; and expert in Nevada entrepreneurship and the U.S. and world business trends. In the 15 years of our friendship, he has been pretty darn accurate on his analysis and reasoning for economic trends and forecasts. So, let’s see what insights we can gain from him to better insulate ourselves from all of the affectations of external risks we face in biz.
It was incredibly interesting conversation that went on for three times longer than we’d allocated. Here is Part 1 of our interview.
First, I asked Mark what he was concerned about regarding the economy, on a global, national and local scale.
In terms of wars and things like that, those are hard enough to predict that I wouldn’t. … Of course, it’s possible that some wild thing happens that we don’t expect. But I think it’s more likely that the Ukraine thing, for example—I think that’s the most serious—will wind down. I think the Chinese believe, and maybe rightly so, that Trump is crazy enough that they won’t attack Taiwan. Or something like that, because Trump will just whack them. …
The main national thing … diabetes, arterial sclerosis, those kinds of longer-term health problems—that’s how I would (metaphorically categorize our) economy. It’s mainly because the federal government spends so much more than it takes in. It’s not a little bit. It’s a lot. It’s about $5,500 a person.
So, just to not borrow more, we would have to raise taxes, not just on rich people, but every single child, poor person—$5,500 a person, if we keep spending what we’re taking in. When government’s borrowing that, that, of course, is money that private-sector people could be borrowing to build businesses and things, so that’s part of the … chronic health problem. Is government as productive? … There are things that government does that are critically important for the economy, but that’s not where the money’s going. The money’s going mainly to Medicaid and social programs—that’s where the growth of government is.
He paused. At that point in our chat, I mentioned the national debt was still rising despite all of the Department of Government Efficiency cuts that were supposed to reduce the national debt overall.
It’s crazy that no president has been able to figure that out since the Bill Clinton years. It’s true—that was the last time we did not add to the debt on our kids, grandkids and now great-grandkids!
Mark reminded me of the old spirit of Congress—understanding that they needed to work things out to get shit done. Many of you reading this may not know or remember that left and right had to give and take on behalf of the people.
Back to Dr. Pringle:
Well, he (Clinton) was president, but I would say it’s Newt Gingrich and crew that deserves more credit, but Bill Clinton deserves some credit, because he signed the bills. So, I wouldn’t say no credit, but … and here’s the thing: It’s pretty hard to cut government, because people get dependent on programs. … What happened in the ’90s is we did not cut government, thanks to Gingrich and crew—a little bit by Bill Clinton. We slowed the growth, and the economy did well enough that it caught up.
And that, I think, is the recipe for this (economy). … So, the depth’s one thing. The other big thing: the Federal Reserve accommodates the debt. That’s the language that macroeconomists use. So, in 2008 and ’09, and in COVID, government spent tremendous amounts of money. Huge debt.
Just to give you an idea, if you didn’t know anything about World War II, and you didn’t know anything about COVID, and you just looked at the data, you would say those two were equivalent events in terms of seriousness. … That’s how much debt we accumulated during COVID. We went crazy. Well, the Federal Reserve bought a lot of that debt. You have a different world when the Federal Reserve buys debt, from when the Federal Reserve doesn’t. If the Federal Reserve buys debt, we’re essentially printing money and putting it out there. (These are) things that we’ll deal with for decades now, because there’s so much money out there, so much liquidity put into the economy because of the 2008-2009 recession and COVID. That’s why housing prices are high; the stock market is high; gold is high; and every asset you might put your money into is high. It’s the Federal Reserve accommodation of that debt. So that’s one thing … and so, here’s the second thing.
There’s way more potential for inflation. We had some inflation, but we’re very fortunate that people mostly are leaving that money in their bank accounts, earning only 0.1% interest. There is the stock market, and everything has boomed so much. Inflation is eating up your money in your bank accounts, only earning 0.1% interest, so people don’t want to leave it there. But everybody who knows a little bit about assets looks at what asset is not overvalued (to get in on). Everything is bubbly, and so there are risks. In terms of risks, there will be, for decades, in my opinion, risks of bubble-bursting, like the 2001 tech boom.
So, it could be the stock market (that bursts). I’ll go out on a limb and say I think it will be the real estate market first, and here’s why: The real estate market, when housing prices go up, it’s more profitable to build. Government and other factors have made raw materials and building more expensive, but houses are double what they used to be. I don’t think building materials have gone up double. And so, it’s more profitable to build, and if you look around Reno, there’s been all kinds of stuff built.
So what happened in 2008 and ’09 is there was a bunch of purchases of housing, but once people started building houses, nobody was buying them. That’s when things turned, and they turned very rapidly. … Things will not change, and not change, and not change—but once they change, they can change very rapidly, because people want to get their money out. Think of that Silicon Valley bank, right? How fast people just pulled their money out, and that bank had to be rescued, or it would have crashed. … So, bubbles and potential for inflation are the big macro things.
That’s just the beginning of a wide-ranging overview. Stay tuned for Part 2. Happy New Year, everyone!