I am more than a little puzzled by Mona's insistence on blaming Democratic Party gridlock on Progressives. Last I checked it was 2 moderate-to-conservative Senators and 9ish moderate-to-conservative House members who were gumming up the works. That's 11 people. Am I seriously to believe that when the entire rest of the Democratic Party in DC is for this bill and these 11 people are holding it up, that it's somehow someone else's fault other than those 11 people? Are you kidding me? Is there no one on staff at the Bulwark that can point this stuff out?
Not a single one of the "2 moderate-to-conservative Senators and 9ish moderate-to-conservative House members" would have hesitated (in fact the latter group practically begged) to vote promptly on the "bipartisan infrastructure bill", delivering to Biden a most desperately needed win - the delay of which has now cost him and his party dearly.
They (the 2+9) would have loved to get that vital piece of business done without utterly unnecessary and damaging delay. They would have then been glad to take up sober negotiations on the "BBB" package, with a needed sense of calm and rational discourse - which is to say, absent threats from the Progressives (whom Mona rightly chastises) to "kill the puppy" (in this particular case, taking hostage the infrastructure bill already passed by the Senate, a tactic aimed at forcing the hands of the "2 moderate-to-conservative Senators and 9ish moderate-to-conservative House members", who, it turned out, did not particularly care for being bullied like that).
So yes: it is "someone else's fault" that the strong-arm tactics employed by the Progressive wing (some of whom ended up voting against the infrastructure bill despite obviously supporting it - a surly gesture befitting today's GOP) turned into one of the major factors in the shared misfortunes of Terry McAuliffe, Joe Biden and all who wish to keep the barking mad Republicans as far as possible from the levers of power.
"So they're … willing to get in bed with the devil if they have a chance at power." It is a given that no one sleeps with the Devil without getting burned. Republicans who want a positive future should be warned.
Anybody else seeing the similarity between the names National Conservatism and National Socialism? And it is entirely on purpose because the NatCons absolutely know who their real audience is.
But yeah, let's keep wringing our hands and worry about how bad the democrats messaging is, all the while not-helpfully piling on to make it as difficult as possible for the democrats to push back and win against the NatCons.
It's just stupid to me that while the GOP is quickly becoming the fascist party (let's get real though, they've completed the transformation) we have Mona writing whole articles moaning about how bad the democrats are screwing it up (hint: they're not) and an almost daily hit on democratic wokeness by Charlie and others.
Democrats in power will mean some extra government spending on programs for people.
Republicans in power will mean real-life people will be killed and political violence and intimidation will accepted as good.
Let's get a grip already and concentrate fire until the fascist party is gone and then we can go back to having all the arguments in the world about government policies.
Oh, just saw that Biden negotiated a deal where the US and China will both release millions of barrels of oil from their strategic reserves, the US is upping domestic oil production, OPEC has started to raise production and oil prices are at a 6-week low.
Do Democrats not understand what there current reputation is for the casual observer? I'll limit myself to public perception around the BBB and BIL bills. The idea that has taken hold that almost the entire Democratic side of the Congress wants nothing more than to spend gobsmacking amounts of money and the only thing holding them back are two moderate Senators. This is a toxic reputation among swing voters. The Republicans scream "Tax and Spenders!" at the Democrats and the Democrats seem to answer, "Yes, that's us."
Mona cites poll results showing much higher numbers for Republicans over Democrats on economic management. I've written about this before, but why aren't Democrats making sure that every American knows this one statistic: The last three Democratic administrations plus Biden's ten months produced over 50 million new jobs. The last three Republican administrations produced 1 million.
Shifting the focus away from "socialism" and "spending" towards management of our capitalist economy is all to the Democrats benefit. Plus this focus fits much better the reasons Biden was elected.
The Democrats have always been crap at messaging. They allow the GoP to control the messaging because the Democrats will not "stoop" to use the proper rhetoric and slogans to get their message across--they either try to explain things too much, get lost in the technocratic weeds, or come up with slogans like "defund the police."
There is apparently not a competent rhetorician among them (and yes, I have a grad degree in rhetoric).
For people like Goldberg who needlessly lose all sense regarding Schiff while there's a guy by the name of Devin Nunes on that committee, and Schoenfeld, who has to nitpick and willfully exaggerate to confect flaws, can we all just take a second to acknowledge that Schiff has been right about basically everything? Over five years, two impeachments, and predictions made that have come to pass, the man has been as close to perfect as anyone. Maybe people should stop trying to attack the guy and listen to him instead, because he's brilliant, and has a lot to teach us. It's like people are threatened by him.
I'm very glad he made it to Charlie's pod and I look forward to listening to it.
And good lord Josh Mandel is going to end up in the Senate. Ohio will have Josh Mandel... and Sherrod Brown. One guy who is either a racist lunatic or is pretending to be one for political gain, and the other guy who was my preferred candidate for president in 2020, the only problem being that he failed to run for the nomination.
I'm glad you brought up Steve King's punishment just two years ago. People don't realize how radicalized the GOP has become in such a short time. King's offenses which got him booted two years ago by the GOP caucus wouldn't even merit criticism by today's Republican congressional leadership.
Okay, two things. First, Mona's critique. "With inflation at a 30-year high, the virus still not defeated, Afghanistan abandoned in shambolic fashion, the border in chaos, the murder rate high, Democrats insisting that concern over teaching CRT is a “racist dogwhistle,” and Biden unable to exert authority over his own disputatious party in Congress, the voters are souring on Democrats."
We're really acting like any of this matters or this exists? Really? Inflation is not at a 30 year high. It isn't. It's not 1975. There was a six percent increase. The economy has literally, never been better. The stock market is at an all time high. The reason there is inflation is that, as people get vaccinated, they have money and are spending it faster than producers can keep up with demand. That raises prices. Inflation isn't due to any government policy. It's due to capitalism. It's a success, not a failure. People are literally spending money more than ever before. Both retail sales and restaurant sales are now at pre-pandemic levels. There's inflation because we went from 'pandemic levels' to 'pre-pandemic levels' in four months. Much in the same way that there was rapid deflation in the beginning of the pandemic, there is now transitory inflation.
No one is even thinking about Afghanistan. No one. People wanted to be gone for twenty years, now we are, and it's a non-issue. How do we know? Because the GOP isn't talking about it to harm democrats. CRT IS a racist dogwhistle, and we know that because in all the places where they pass things to fight it, they start banning and burning books. Funny how that works. The border is not in crisis, aside from the fact that the GOP has been saying the border is in crisis for 20 years. They were playing that tune in 2001. It's now 2021. If it's a crisis, no one is acting like it when they're in power.
'The virus is not defeated.' Gee, wonder why that is? Could it be all the people refusing to get vaccinated? Who also hate mandates? Who are spreading the virus that we could have beaten months ago if they just took the shot? Also, the murder rate is not 'high.' It's not 1990 anymore. The murder rate spiked during the pandemic because, surprise, people panicking causes more violent crime. This isn't a democrat issue. Why not? Because it's spiking in 'red' states as well as 'blue' states. Amazing that Florida or Texas aren't peaceful utopias.
None of this is to say that these aren't issues. It's that they're not 'democrat' issues that have anything to do with what democrats are doing. The truth is, voters are low information people, don't pay attention, and are constantly certain that no matter who is in charge, that everything is terrible. People think the economy is always bad, that everything is chaos, and that neither party is actually any good. This in turn creates the situation where voters are like 'maybe Trump and the GOP aren't bad.' Because they literally can't tell the difference between the parties. That's an issue! But it's not an issue about issues.
The core issue is messaging. By which I mean, voters do not care about policies. Voters that think parties are the same, that think that it doesn't matter who is in charge, are not going to be swayed by policies. Why? Because they don't think such things matter. The GOP has entirely given itself over to the idea that politics isn't a realm where you get things done; it's 'post-scarcity' as JVL says. When people don't think government can do anything, they no longer look for it to do things.
Liberals should entirely stop trying to 'convince' voters and take the entire GOP playbook. Take clips of Boebert and Gosar ranting about jihad squads, and then put their candidates in the ad going 'this is who wants to take your freedom. They want to indoctrinate your children, and they want to flood your communities with weapons of war and kill you.' Fearmongering works!
But this isn't to say Biden is off the hook. It's true Biden was elected to get back to 'normal' but no one elected Biden to be boring. It's clear now that most people see politics as entertainment. So some idea of what Biden should do is stop trying to be peaceful, zen Biden. Return to the Biden of the primaries.
Bring back the Biden who said he wanted to take Trump out back and beat him up. Biden should be showing up to press conferences in a sports car and wearing aviators and being like 'cmon man.' The FOX outrage machine got at Obama for wearing a tan suit. You know why voters still like Obama? Because he was A. cool but B. could paint conservatives as being a bunch of whiny losers. Biden should absolutely laugh in people like Carlson's face.
Because no one goes along with the geeks because they're right. No one joins movements over who has better policies. They join movements to feel things, to feel important and self satisfied and confident. Liberals need to walk with all the confidence that their conservative counterparts do, and learn to be cool again.
One last bit. There's a lot of armed guys walking around these days trying to intimidate people. No reason liberals can't do the same. Not saying armed confrontation is a good idea. What I am saying is that in places where open carry is entirely legal, there's no reason school board members can't also carry weapons. There's no reason election officials can't carry weapons. The only reason all these far right guys feel confident as bullies is because they assume they're the only one carrying. And you need to take that power away from them. Not by trying to take their weapons, but by matching them, to show they're impotent. And if they escalate, you run scare ads going 'the GOP wants to flood your communities with violent criminals.'
Dems have one job: flood the zone with stuff and scare the hell out of people about the GOP.
Wow. First, on the length of this comment: Do we need comments longer than the article being commented on? Second, there is so much in this comment to disagree with that it would take a comment three times its length to begin to refute all I disagree with. I'll limit myself to one paragraph:
"We're really acting like any of this matters or this exists? Really? Inflation is not at a 30 year high. It isn't. It's not 1975. There was a six percent increase. The economy has literally, never been better. The stock market is at an all time high. The reason there is inflation is that, as people get vaccinated, they have money and are spending it faster than producers can keep up with demand. That raises prices. Inflation isn't due to any government policy. It's due to capitalism. It's a success, not a failure. People are literally spending money more than ever before. Both retail sales and restaurant sales are now at pre-pandemic levels. There's inflation because we went from 'pandemic levels' to 'pre-pandemic levels' in four months. Much in the same way that there was rapid deflation in the beginning of the pandemic, there is now transitory inflation."
2021-1975=46. 46>30.
Asserting that the economy has never been better is just silly Trump style propaganda.
The reason the stock market is at an all time high is that our policies since the Great Recession have been designed to produce asset inflation. The money supply was increased before the pandemic in a very specific way to not produce inflation in consumer goods, but to raise asset prices so those with assets would feel wealthy, which means that this class would increase economic activity. During the pandemic, the government put money in the hands of consumers under the theory that demand needed to be strengthened to prevent economic collapse. It's still an open question whether this stimulus was overdone. But 6% inflation is not healthy capitalism. If it persists, it is a massive problem that probably will cause a recession. This inflation may yet prove transitory as pandemic related problems
work themselves out. We'll see. But the inflation we are experiencing now is clearly caused by the policy of increasing the amount of money in consumer hands.
No, the inflation isn't clearly caused by the policy of increasing the amount of money in consumer hands. It IS a contributing factor, though.
Demand for durable goods is way up (higher than the trendline demand according to FRED data). Demand is way up because: 1) yes, the USG handed out money; and 2) demand (and availability) of services is down (for obvious reasons).
People are buying things rather than services, because there are fewer services to buy and/or people are not taking the risk of exposing themselves to get services.
Supply of durable goods is down. This is because: 1) Demand is higher than expected or predicted (and it takes time to ramp up to meet increased demand); and 2) even if goods are theoretically available, supply chain issues are creating perceived scarcity.
When the money supply outstrips the supply of goods/services, inflation naturally occurs--until the two come back into balance. If the supply of goods outstrips the supply, the prices (theoretically) should go down.
Inflation has been incredibly low for years, to the advantage (in combination with low interest rates) to people playing the market. This has inflated values in the market. Policy shifted inflation from durable goods and consumer services to the financial market.
Doing this increased wealth inequality but also created the impression that the economy was good because prices that people encountered in their daily lives remained fairly constant.
In economics perception is actually more important than the reality. You can convince people that things are bad even if they aren't actually bad (and vice versa).
I'm a regular reader of Krugman's columns and the one you link to gives clear evidence of how political tribalism trumps rationality.
I agree on your correctives about current inflation. Sometimes completeness suffers from the desire to be brief. (Especially since I was just complaining about a lack of brevity.)
I think the reality of asset inflation is little understood. I live in a rural area where the value of a good acre of irrigated farm ground went from $2000/acre to $10000/acre over a few years. (Side note on the intersection of economics of government policy: Those 160 acre parcels given out under the Homestead Act are now worth over $1,000,000.) So why this big increase in value? It's still the same piece of dirt that can produce the same number of bushels of corn or soybeans. There are other factors, but I believe the biggest factor is the availability of money at extremely low rates. Compare what this asset inflation means for the farmer who, say, owns 500 acres and his hired man who makes $15/hour. The farmer now feels wealthy, having seen his farm land value go from $1 million to $5 million. So he feels comfortable vacationing in Hawaii or buying a new pickup. Meanwhile the hired man's wages have been stagnant.
It might lead to the same sort of wake up call that Kent State provided 50 years ago even though none of the 4 who died there and neither of the 2 who were killed at Jackson State were carrying.
Today is the sad, and almost unnoticed, anniversary of the assassination of JFK. Camelot ended -- look what we have become since.
Doesn't Rittenhouse at least have to finish high school, or is that not a thing for Right Wing Heroes?
I am more than a little puzzled by Mona's insistence on blaming Democratic Party gridlock on Progressives. Last I checked it was 2 moderate-to-conservative Senators and 9ish moderate-to-conservative House members who were gumming up the works. That's 11 people. Am I seriously to believe that when the entire rest of the Democratic Party in DC is for this bill and these 11 people are holding it up, that it's somehow someone else's fault other than those 11 people? Are you kidding me? Is there no one on staff at the Bulwark that can point this stuff out?
Not a single one of the "2 moderate-to-conservative Senators and 9ish moderate-to-conservative House members" would have hesitated (in fact the latter group practically begged) to vote promptly on the "bipartisan infrastructure bill", delivering to Biden a most desperately needed win - the delay of which has now cost him and his party dearly.
They (the 2+9) would have loved to get that vital piece of business done without utterly unnecessary and damaging delay. They would have then been glad to take up sober negotiations on the "BBB" package, with a needed sense of calm and rational discourse - which is to say, absent threats from the Progressives (whom Mona rightly chastises) to "kill the puppy" (in this particular case, taking hostage the infrastructure bill already passed by the Senate, a tactic aimed at forcing the hands of the "2 moderate-to-conservative Senators and 9ish moderate-to-conservative House members", who, it turned out, did not particularly care for being bullied like that).
So yes: it is "someone else's fault" that the strong-arm tactics employed by the Progressive wing (some of whom ended up voting against the infrastructure bill despite obviously supporting it - a surly gesture befitting today's GOP) turned into one of the major factors in the shared misfortunes of Terry McAuliffe, Joe Biden and all who wish to keep the barking mad Republicans as far as possible from the levers of power.
"So they're … willing to get in bed with the devil if they have a chance at power." It is a given that no one sleeps with the Devil without getting burned. Republicans who want a positive future should be warned.
Anybody else seeing the similarity between the names National Conservatism and National Socialism? And it is entirely on purpose because the NatCons absolutely know who their real audience is.
But yeah, let's keep wringing our hands and worry about how bad the democrats messaging is, all the while not-helpfully piling on to make it as difficult as possible for the democrats to push back and win against the NatCons.
It's just stupid to me that while the GOP is quickly becoming the fascist party (let's get real though, they've completed the transformation) we have Mona writing whole articles moaning about how bad the democrats are screwing it up (hint: they're not) and an almost daily hit on democratic wokeness by Charlie and others.
Democrats in power will mean some extra government spending on programs for people.
Republicans in power will mean real-life people will be killed and political violence and intimidation will accepted as good.
Let's get a grip already and concentrate fire until the fascist party is gone and then we can go back to having all the arguments in the world about government policies.
Oh, just saw that Biden negotiated a deal where the US and China will both release millions of barrels of oil from their strategic reserves, the US is upping domestic oil production, OPEC has started to raise production and oil prices are at a 6-week low.
https://www.cnn.com/2021/11/18/investing/premarket-stocks-trading/index.html
As gas prices go down I think we'll see Biden's poll numbers start going back up as well.
Do Democrats not understand what there current reputation is for the casual observer? I'll limit myself to public perception around the BBB and BIL bills. The idea that has taken hold that almost the entire Democratic side of the Congress wants nothing more than to spend gobsmacking amounts of money and the only thing holding them back are two moderate Senators. This is a toxic reputation among swing voters. The Republicans scream "Tax and Spenders!" at the Democrats and the Democrats seem to answer, "Yes, that's us."
Mona cites poll results showing much higher numbers for Republicans over Democrats on economic management. I've written about this before, but why aren't Democrats making sure that every American knows this one statistic: The last three Democratic administrations plus Biden's ten months produced over 50 million new jobs. The last three Republican administrations produced 1 million.
Shifting the focus away from "socialism" and "spending" towards management of our capitalist economy is all to the Democrats benefit. Plus this focus fits much better the reasons Biden was elected.
The Democrats have always been crap at messaging. They allow the GoP to control the messaging because the Democrats will not "stoop" to use the proper rhetoric and slogans to get their message across--they either try to explain things too much, get lost in the technocratic weeds, or come up with slogans like "defund the police."
There is apparently not a competent rhetorician among them (and yes, I have a grad degree in rhetoric).
For people like Goldberg who needlessly lose all sense regarding Schiff while there's a guy by the name of Devin Nunes on that committee, and Schoenfeld, who has to nitpick and willfully exaggerate to confect flaws, can we all just take a second to acknowledge that Schiff has been right about basically everything? Over five years, two impeachments, and predictions made that have come to pass, the man has been as close to perfect as anyone. Maybe people should stop trying to attack the guy and listen to him instead, because he's brilliant, and has a lot to teach us. It's like people are threatened by him.
I'm very glad he made it to Charlie's pod and I look forward to listening to it.
And good lord Josh Mandel is going to end up in the Senate. Ohio will have Josh Mandel... and Sherrod Brown. One guy who is either a racist lunatic or is pretending to be one for political gain, and the other guy who was my preferred candidate for president in 2020, the only problem being that he failed to run for the nomination.
I think you meant to write that Tim Ryan is going to end up in the Senate. Ryan will mop the floor with Mandel.
I really hope you're right and I'm wrong.
I'm glad you brought up Steve King's punishment just two years ago. People don't realize how radicalized the GOP has become in such a short time. King's offenses which got him booted two years ago by the GOP caucus wouldn't even merit criticism by today's Republican congressional leadership.
Okay, two things. First, Mona's critique. "With inflation at a 30-year high, the virus still not defeated, Afghanistan abandoned in shambolic fashion, the border in chaos, the murder rate high, Democrats insisting that concern over teaching CRT is a “racist dogwhistle,” and Biden unable to exert authority over his own disputatious party in Congress, the voters are souring on Democrats."
We're really acting like any of this matters or this exists? Really? Inflation is not at a 30 year high. It isn't. It's not 1975. There was a six percent increase. The economy has literally, never been better. The stock market is at an all time high. The reason there is inflation is that, as people get vaccinated, they have money and are spending it faster than producers can keep up with demand. That raises prices. Inflation isn't due to any government policy. It's due to capitalism. It's a success, not a failure. People are literally spending money more than ever before. Both retail sales and restaurant sales are now at pre-pandemic levels. There's inflation because we went from 'pandemic levels' to 'pre-pandemic levels' in four months. Much in the same way that there was rapid deflation in the beginning of the pandemic, there is now transitory inflation.
No one is even thinking about Afghanistan. No one. People wanted to be gone for twenty years, now we are, and it's a non-issue. How do we know? Because the GOP isn't talking about it to harm democrats. CRT IS a racist dogwhistle, and we know that because in all the places where they pass things to fight it, they start banning and burning books. Funny how that works. The border is not in crisis, aside from the fact that the GOP has been saying the border is in crisis for 20 years. They were playing that tune in 2001. It's now 2021. If it's a crisis, no one is acting like it when they're in power.
'The virus is not defeated.' Gee, wonder why that is? Could it be all the people refusing to get vaccinated? Who also hate mandates? Who are spreading the virus that we could have beaten months ago if they just took the shot? Also, the murder rate is not 'high.' It's not 1990 anymore. The murder rate spiked during the pandemic because, surprise, people panicking causes more violent crime. This isn't a democrat issue. Why not? Because it's spiking in 'red' states as well as 'blue' states. Amazing that Florida or Texas aren't peaceful utopias.
None of this is to say that these aren't issues. It's that they're not 'democrat' issues that have anything to do with what democrats are doing. The truth is, voters are low information people, don't pay attention, and are constantly certain that no matter who is in charge, that everything is terrible. People think the economy is always bad, that everything is chaos, and that neither party is actually any good. This in turn creates the situation where voters are like 'maybe Trump and the GOP aren't bad.' Because they literally can't tell the difference between the parties. That's an issue! But it's not an issue about issues.
The core issue is messaging. By which I mean, voters do not care about policies. Voters that think parties are the same, that think that it doesn't matter who is in charge, are not going to be swayed by policies. Why? Because they don't think such things matter. The GOP has entirely given itself over to the idea that politics isn't a realm where you get things done; it's 'post-scarcity' as JVL says. When people don't think government can do anything, they no longer look for it to do things.
Liberals should entirely stop trying to 'convince' voters and take the entire GOP playbook. Take clips of Boebert and Gosar ranting about jihad squads, and then put their candidates in the ad going 'this is who wants to take your freedom. They want to indoctrinate your children, and they want to flood your communities with weapons of war and kill you.' Fearmongering works!
But this isn't to say Biden is off the hook. It's true Biden was elected to get back to 'normal' but no one elected Biden to be boring. It's clear now that most people see politics as entertainment. So some idea of what Biden should do is stop trying to be peaceful, zen Biden. Return to the Biden of the primaries.
Bring back the Biden who said he wanted to take Trump out back and beat him up. Biden should be showing up to press conferences in a sports car and wearing aviators and being like 'cmon man.' The FOX outrage machine got at Obama for wearing a tan suit. You know why voters still like Obama? Because he was A. cool but B. could paint conservatives as being a bunch of whiny losers. Biden should absolutely laugh in people like Carlson's face.
Because no one goes along with the geeks because they're right. No one joins movements over who has better policies. They join movements to feel things, to feel important and self satisfied and confident. Liberals need to walk with all the confidence that their conservative counterparts do, and learn to be cool again.
One last bit. There's a lot of armed guys walking around these days trying to intimidate people. No reason liberals can't do the same. Not saying armed confrontation is a good idea. What I am saying is that in places where open carry is entirely legal, there's no reason school board members can't also carry weapons. There's no reason election officials can't carry weapons. The only reason all these far right guys feel confident as bullies is because they assume they're the only one carrying. And you need to take that power away from them. Not by trying to take their weapons, but by matching them, to show they're impotent. And if they escalate, you run scare ads going 'the GOP wants to flood your communities with violent criminals.'
Dems have one job: flood the zone with stuff and scare the hell out of people about the GOP.
Wow. First, on the length of this comment: Do we need comments longer than the article being commented on? Second, there is so much in this comment to disagree with that it would take a comment three times its length to begin to refute all I disagree with. I'll limit myself to one paragraph:
"We're really acting like any of this matters or this exists? Really? Inflation is not at a 30 year high. It isn't. It's not 1975. There was a six percent increase. The economy has literally, never been better. The stock market is at an all time high. The reason there is inflation is that, as people get vaccinated, they have money and are spending it faster than producers can keep up with demand. That raises prices. Inflation isn't due to any government policy. It's due to capitalism. It's a success, not a failure. People are literally spending money more than ever before. Both retail sales and restaurant sales are now at pre-pandemic levels. There's inflation because we went from 'pandemic levels' to 'pre-pandemic levels' in four months. Much in the same way that there was rapid deflation in the beginning of the pandemic, there is now transitory inflation."
2021-1975=46. 46>30.
Asserting that the economy has never been better is just silly Trump style propaganda.
The reason the stock market is at an all time high is that our policies since the Great Recession have been designed to produce asset inflation. The money supply was increased before the pandemic in a very specific way to not produce inflation in consumer goods, but to raise asset prices so those with assets would feel wealthy, which means that this class would increase economic activity. During the pandemic, the government put money in the hands of consumers under the theory that demand needed to be strengthened to prevent economic collapse. It's still an open question whether this stimulus was overdone. But 6% inflation is not healthy capitalism. If it persists, it is a massive problem that probably will cause a recession. This inflation may yet prove transitory as pandemic related problems
work themselves out. We'll see. But the inflation we are experiencing now is clearly caused by the policy of increasing the amount of money in consumer hands.
No, the inflation isn't clearly caused by the policy of increasing the amount of money in consumer hands. It IS a contributing factor, though.
Demand for durable goods is way up (higher than the trendline demand according to FRED data). Demand is way up because: 1) yes, the USG handed out money; and 2) demand (and availability) of services is down (for obvious reasons).
People are buying things rather than services, because there are fewer services to buy and/or people are not taking the risk of exposing themselves to get services.
Supply of durable goods is down. This is because: 1) Demand is higher than expected or predicted (and it takes time to ramp up to meet increased demand); and 2) even if goods are theoretically available, supply chain issues are creating perceived scarcity.
When the money supply outstrips the supply of goods/services, inflation naturally occurs--until the two come back into balance. If the supply of goods outstrips the supply, the prices (theoretically) should go down.
Inflation has been incredibly low for years, to the advantage (in combination with low interest rates) to people playing the market. This has inflated values in the market. Policy shifted inflation from durable goods and consumer services to the financial market.
Doing this increased wealth inequality but also created the impression that the economy was good because prices that people encountered in their daily lives remained fairly constant.
In economics perception is actually more important than the reality. You can convince people that things are bad even if they aren't actually bad (and vice versa).
Interesting article:
https://www.nytimes.com/2021/11/16/opinion/gas-prices-economy.html
I'm a regular reader of Krugman's columns and the one you link to gives clear evidence of how political tribalism trumps rationality.
I agree on your correctives about current inflation. Sometimes completeness suffers from the desire to be brief. (Especially since I was just complaining about a lack of brevity.)
I think the reality of asset inflation is little understood. I live in a rural area where the value of a good acre of irrigated farm ground went from $2000/acre to $10000/acre over a few years. (Side note on the intersection of economics of government policy: Those 160 acre parcels given out under the Homestead Act are now worth over $1,000,000.) So why this big increase in value? It's still the same piece of dirt that can produce the same number of bushels of corn or soybeans. There are other factors, but I believe the biggest factor is the availability of money at extremely low rates. Compare what this asset inflation means for the farmer who, say, owns 500 acres and his hired man who makes $15/hour. The farmer now feels wealthy, having seen his farm land value go from $1 million to $5 million. So he feels comfortable vacationing in Hawaii or buying a new pickup. Meanwhile the hired man's wages have been stagnant.
:)
Well, if deficits don't matter, let's put Saint Ronnie's picture on a $1,000,000 bill and drop them from planes. We're all rich!
Snark aside, under some economic conditions, deficit spending is inflationary and sometimes it is not.
Well said.
Agree, except that last paragraph and matching guns with more guns. That is not smart and will lead nowhere good.
It might lead to the same sort of wake up call that Kent State provided 50 years ago even though none of the 4 who died there and neither of the 2 who were killed at Jackson State were carrying.
There are 46 years between 1975 and 2021, so perhaps what you meant to say is ‘inflation is not at a 46-year high.’