James Nowakowski

I read a lot of market commentary. Different voices. Different tones. Different politics.

But most of it falls into one of three camps.

And none of them quite describe the economy the way someone running a business actually experiences it.

1. The Cycle Thinkers

(“The engine still runs.”)

This group believes the economy is a machine.

Growth slows. Growth speeds up. Inflation rises. Inflation falls. The Fed tightens. The Fed eases. Markets wobble but keep moving forward.

These analysts focus on:

• Interest rates
• Money supply
• Employment data
• GDP trends

If liquidity is adequate and the numbers don’t break, their conclusion is usually some version of:

“The economy is fundamentally healthy, and markets should grind higher.”

They see cycles, not structural shifts.
The system bends, but it doesn’t change shape.

2. The Shock Absorber Thinkers

(“The system can take more hits than people think.”)

This group doesn’t deny stress. In fact, they highlight it:

• Tariffs
• Higher rates
• Geopolitical tension
• Slower hiring
• Commodity volatility

But they argue the modern economy has built-in shock absorbers:

• High corporate profit margins
• Strong consumer balance sheets
• Flexible supply chains
• Large, resilient firms

Their message:

“Yes, there are shocks — but the system absorbs them. It doesn’t collapse.”

Markets may move erratically. Volatility rises. But the base case is endurance, not breakdown.

3. The Regime-Change Thinkers

(“The road itself has changed.”)

This group believes we’re not just in a cycle — we’re in a shift.

Globalization isn’t expanding; it’s fragmenting.
Cheap inputs aren’t the norm; higher cost floors are.
Labor isn’t just tight; technology is changing how much labor is needed at all.

In this view, the rules that guided the last few decades are fading. Volatility isn’t temporary. Inflation pressures don’t fully disappear. Policy responses create new distortions.

The focus moves from short-term growth to long-term preservation.

What All Three Get Right — and Miss

Each framework explains something real.

The cycle thinkers are right that the economy doesn’t break easily.
The shock-absorber thinkers are right that large parts of the system can take hits and keep moving.
The regime-change thinkers are right that some deeper shifts are underway.

But from the perspective of someone actually running a business, there’s a missing layer.

Friction.

Not crisis. Not collapse. Not boom.

Just constant friction.

Costs go up and rarely come back.
Customers feel squeezed.
Hiring decisions get harder.
Technology changes how much work one person can do.
Margins are always under pressure from somewhere.

That’s not a phase. That’s the environment.

The Only Leverage That Really Matters

Economists talk about leverage in terms of credit, capital flows, and asset allocation.

Operators experience leverage differently.

Leverage is:

• Cash in the bank
• Tools that increase output per person
• Judgment about where to apply both

Without cash, you don’t have options. You can’t invest. You can’t experiment. You can’t ride out slow periods. You can’t take advantage of opportunity when it shows up.

Without tools, you can’t compete with larger players.

And without judgment, neither cash nor tools help very much.

That’s where new technologies fit in — not as magic, not as revolutions that erase all jobs, but as tools in a long line that increase the output of a capable person.

The pattern is old. The tools change.

The Economy Doesn’t Have to Break for Life to Feel Harder

Markets can rise. GDP can grow. Employment can look stable.

And yet:

• Prices stay higher than they used to be
• Hiring feels riskier
• Workloads consolidate into fewer people
• Small businesses feel pressure from both sides

That’s not a contradiction. It’s the result of a system that keeps running while friction quietly increases.

Wall Street debates cycles, shocks, and regimes.

On the ground, it feels like this:

The machine keeps going.
The pressure never really leaves.
And survival depends less on predictions and more on how well you use the leverage you actually control.

Cash.
Tools.
Judgment.

The rest is commentary.

Let me know your thoughts, and thanks for reading.

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This perspective was shaped in part by recent outlook presentations and commentary from market cycle strategists, monetary economists, and structural macro analysts representing differing schools of thought. Any synthesis, interpretation, or conclusions are my own, formed through the lens of running a business inside the environment they describe.