Daniel’s Digest: Stagflation from Hell

So much to begin the busy work week

Happy Monday!

It’s been a terrific first week of 2026 with the new video component of our show (subscribe on YouTube @HorowitzShow). Yet, despite over five hours of podcasting last week, there are still so many important stories I haven’t delved into.

Here are some quick hits, along with my analysis of the December jobs numbers that were posted on Friday.

Economy

-Recessionary job numbers: -Just 37k private sector jobs were created in December, even though the working age population grew by 183k, according to the latest release from BLS. However, the reality is worse than what is reflected in the topline. Here are some points to consider about the December numbers but also the full picture now that we have all the jobs data for 2025:

· The labor force shrunk by 46k. October’s numbers were revised down by 68,000 and November was revised down by 8,000, which means that every single month of 2025 wound up being revised in one direction – downward.

· The entirety of the dismal net 37k private sector job increase was from...health care (a 41k increase)!

· All goods-producing jobs, such as construction and manufacturing, continue to bleed. In total, goods producing jobs were down 70k, with manufacturing specifically down 68k. Of the 72 different types of manufacturing tracked by the BLS, just 38.2% are still adding jobs.

· All professional business services are down nearly 100k for the year, with computer jobs getting crushed. Even the financial sector is up just 38k for the entire year. So the jobs recession is hitting both blue-collar and white-collar industries – both in services and goods-producing sectors. For an economy built upon data centers, where is that reflected in the jobs numbers?

· For all of 2025, the economy averaged just 49,000 jobs per month compared to 168,000 in 2024. That’s a 71% drop in job creation. Put another way, the employment-age population grew by 5.2 million in 2025, yet just 584k new jobs were created. Oh, and a net 733k jobs were created in…you guessed it…education and health care, meaning everything else actually contracted in absolute terms (not just relative to population growth).

-Georgia farmer drops 3,000 acres of farmland: This is a gut-wrenching, yet important, article demonstrating how we are losing farmers and farmland to the inflation that is making inputs so expensive. This is going to lead to further consolidation into the corporate monopoly just like with health care. We need to cut spending to end inflation, and we need more farmland, not data center land.

-Trump announces 10% cap for credit card interest: In yet another announcement that will either never be implemented or will be mowed down by the courts, Trump announced he will impose a 10% cap on credit card interest rates. The problem is this is another example of Trump treating a symptom of a problem created by his Covid debt spending, which induced inflation and made life unaffordable. That is why credit card debt is soaring.

If you treat the symptom without addressing the cause, all it will accomplish is lock lower-income people out of credit.

Red States

-Texas, Florida top U-Haul’s index for in-migration: U-Haul’s data shows Texas and Florida were the biggest recipients of in-migration from other states last year, while California was the biggest loser. People are already voting with their feet and fleeing blue states. But this is why EVERY red state must follow the Florida model instead of simply being slightly better than blue states. The public wants Noah’s ark to flee for safety.

Technocracy

- The enshitifinancial crisis of generative AI: This is an amazing article on how the generative AI model is not only “enshitifying” the internet but our financial system as well. It’s a perfect primer for those seeking to understand the circuitous, insolvent, circle jerk of data center finance.

-LLM chatbots engage in rampant copyright theft: A new Stanford study shows production LLMs can leak near verbatim text of private books, with Claude 3.7 Sonnet hitting 95.8%. As government marvels at LLM chatbots, they need to acknowledge that so much of its output comes from theft. Viable technology must work within the framework of basic law and morals.

-Google AI offers wrong health information: Google wrongly advised people with pancreatic cancer to avoid high-fat foods. We all know that the stupid Google AI at the top of a search actually degrades the good old Google search to the point that it often gets things wrong. We’ve all experienced it, yet so many young folks are being raised to believe that anything with the name “AI” is imperviously authoritative.

- Data center load accounted for 40% of power capacity auction: Even as utility rates soar, tech bros continue to tell us data centers won’t cost us a penny. The problem is that in December alone, data center load accounted for 40% of PJM capacity actions. PJM is the largest grid operator, servicing the Mid-Atlantic and Midwest.

State Legislation to Support

As the legislative sessions progress throughout the winter, I will try to spotlight legislation that is worthy of mimicking nationwide.

-FL SB1134: This proposed Florida bill, which has the support of the governor, prohibits all DEI among LOCAL governments. It also provides a private cause of action to sue against such policies. All too often, red states allow their large cities to violate the Constitution. When we control a state government, we should create a political kill zone against bad policies in all corners. Stop ceding the big cities!

- FL HB 1007: The bill would establish, as state policy, that local governments are encouraged and empowered to protect residents against the negative effects of data centers. The legislation would prohibit utilities from passing along any fees to recover costs related to new and different power sources for data centers to existing customers.

The bill would also prohibit local governments from allowing data centers in mixed land use categories. Data center approvals by local governments would require concurrence by the governor and Cabinet after public hearings. And data centers would be subject to 500-foot setbacks and vegetative buffering. So this creates the greatest common factor threshold for approval – in that both local and state governments have to be onboard.

-FLSB 1380: Among other enforcement provisions, such as tougher penalties for E-Verify non-compliance and banning foreign remittances of illegals, it establishes a legal “presumption of fault” in motor vehicle accidents involving illegal alien drivers from out of state. This presumption can only be rebutted by clear and convincing evidence.

-NH HB360: This bill curbs the trend of building health clinics in public schools. It bans prescriptions and school-based health clinics. Outside of a school nurse, schools are for education, not for government-forced health clinics.

Education

-Trump allowing Iowa 100% flexibility with education funds: Iowa became the first state to get a waiver to consolidate and manage 100% of its federal “state activities” education funding through a single block grant. This is a solid and transformational reform that makes it harder, although not impossible, for a future Dem president to grab back power from the states.

Judicial Supremacism

-Trump backs down on barring Medicaid for castration: Following yet another judicial injunction, the Trump HHS agreed not to suspend Medicare and Medicaid funding for castration.

Welfare

-Indiana pays $75,000 from Medicaid funds for autism playtime: Alex Berenson reports, Indiana Medicaid grew its “autism behavioral therapy” expenditures 30-fold in just six years. This demonstrates the point I made about Somali welfare being systemic of an open-ended federal spigot, and not just in blue states. These programs must be devolved to the states.

Foreign Policy

-Tucker cheers Qatari funding of U.S. education: Hey, one thing you won’t find in this newsletter is reporting on Qatari funding of education as if it’s a positive development. Yet, that is what the most listened-to talk show host on “the right” is preaching.

Oh, and last week, Tucker was invited to the White House to wine and dine with the oil executives and JD Vance. He then sent out a message insinuating that Florida and DeSantis are controlled by Netanyahu. I’m not sure why the heck he would suddenly attack DeSantis and what the Florida governor has to do with his crusade against Israel, but it’s not surprising that an Islamic apologist would attack America’s best governor.

To add insult to injury, Tucker is now comparing the killing of the lesbian anti-ICE protester to the assassination of Charlie Kirk. What does it say about our “movement” that he is one of the most listened-to show on “the right?”

-ExxonMobil CEO says No to oil operations in Venezuela: With the ExxonMobil CEO saying he has no interest in opening up shop in Venezuela, it further accentuates my point that Trump’s sudden obsession with the region is not about drugs or oil.

-U.S. military used sound weapons against Venezuela’s troops. Assuming this testimony from a Venezuelan solider is true, our military used brutally effective sound energy weapons to discombobulate their forces. You see that when we want to get something done, we suddenly have the capabilities. We should be using these weapons against the anti-ICE assassins from ANTIFA rather than the paintball guns you see agents deploying.

-Trump-backed Syrian Jihadi leader attacking the Kurds: Look, we don’t need to fight for the Kurds, but they are certainly better allies than al-Jilani. Yet, we continue to assist his regime with airstrikes against their other Islamic enemies as they liquidate the Kurds, the same way they did with the Christians and Druze. I wish we would stay out of Syria altogether, but the nature of our intervention is as backwards as it gets.

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Thanks for reading!

In Liberty,

Daniel

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