I was around as an adult for the last inflationary spiral. This one was mercifully short. The target of 2% is an ideal but historically it never happened. That is, we never really had stable inflation that low. So to say that inflaction was hot... begs the question, what is your base line. I say this as someone who was in financial servi…
I was around as an adult for the last inflationary spiral. This one was mercifully short. The target of 2% is an ideal but historically it never happened. That is, we never really had stable inflation that low. So to say that inflaction was hot... begs the question, what is your base line. I say this as someone who was in financial services till retirement and even had 2 investment licenses.
I understand the pols just want to score points. But an intelligent headline would be that the Feds are still unable to get us to their goal.
It is a laudible goal. But a recovery without a recession is a miracle. To have done that and face screaming headlines as if we have a major failure is galling.
This is nothing if you lived through the ‘80’s. I also worked in financial services and spent my career wondering when we’d swing back to high inflation—honestly it took a lot longer than I ever thought it would. I don’t think these rates are the worst—people can actually earn a little bit on their savings now.
Yes, it is nice to live in a world where you can get %5.2 APY on your savings without risking it all in the stock market.
Sure it would be better if inflation was closer to 2%, but at least Powell has not driven us into a recession and he seems to be on track to get inflation lower, all in good time.
Would everyone honestly prefer stagflation? Remember that? I do.
This makes me wonder if corporations aren't a bigger reason for the slowdown than I thought. Hiding behind inflation to gouge consumers isn't exactly new.
If corporations could "gouge" customers whenever they wanted, why would they need the excuse of inflation? The fact is supply and demand are what drives prices.
I agree this seems to have been a fairly short period of heightened inflation. I remember the 70s and 80s, too. But between then and now, two percent inflation did happen (plus or minus 1% at worst), and it held over an extraordinarily long period, between 1994 and 2020. That doesn't mean that it was the best level for Fed policy to aim for, but it was achieved.
My takeaway for decades has been that Americans would happily put their fellows out of work so that they could pay less for things.
And that is what happened--which is why manufacturing went offshore.
And Americans are still unwilling to pay more for stuff. Which is why manufacturing is not coming back, unless it is subsidized by the US government for defense/strategic reasons.
I wouldn't put that all on American consumers. The big business types want mega profits and they couldn't get them without moving manufacturing off shore. They managed to kill off union labor in the clothing manufacturing industry and by moving their manufacturing plants of hard goods to Southeastern states they were able to get non union labor. But even that was not cheap enough. So moving offshore was the way to go.
Exactly. Try telling Joe Sixpack that he can have US manufacturing back stateside but that means he can no longer buy a TV at Walmart for $300. There are trade-offs for everything. Americans always vote with their wallets.
Remember when Trump allowed the Arabs to flood the market with oil to drive the cost of Oil down ? meanwhile driving almost 500 American oil and Gas companies out of buisness ? American only cared about sub $3 oil a gallon while destroying 100s of thousands of American jobs.
The thing is American manufacturing hasn’t gone anywhere. Our manufacturing output is higher now than it has EVER been. The jobs weren’t lost to other countries, they were lost to automation.
Did they know that's what they were doing to their fellow Americans, buying cheap Chinese products? Didn't manufacturing go offshore because of financial markets' pressure on big companies in the 1980s to "get rid of their [US] workers and plants and move away from being vertically integrated companies in which everything took place within the company itself”? (https://www.investmentmonitor.ai/manufacturing/who-killed-us-manufacturing/?cf-view).
Agree what things cost is the most important thing to American consumers, not the health of the national economy or the prosperity of their neighbors.
I remember getting a government check in the mail after Bush Jr & Co started the Shock and Awe War. The clear massage - go spend while young Americans are dying, loosing their limbs and health, Iraqi civilians are dying, sacrifice at home is for suckers, your real duty as an American is to spend.
You are most welcome for the article, Mr. Pants (should I just call you "Cranky"?), and thank you for the Bernays link.
I was first introduced to the notion of "conspicuous consumption" during the anti-Viet Nam War years where my generation rejected the norms of the 50s and early 60s and that included the materialism recounted in Galbreath's "The Affluent Society" (1958).
In my later years, I learned about journalist Samuel Strauss who said in the mid 1920s, "Formerly the task was to supply the things men wanted; the new necessity is to make men want the things which machinery must turn out if this civilization is not to perish" (https://www.theatlantic.com/magazine/archive/1924/11/things-are-in-the-saddle/648025/). Apparently, Bernays was influenced by Strauss.
As to your last paragraph, I think the desire for status, that the consumer economy exploits, exists in the un-self-reflective human being. Advertisers figured that out. It drives more of our behavior than relationships.
Good point re software, Ms. P. Tell me more about "the aware and self-reflective are manipulated by the digital economy". I'm curious as to how you know this? Two of my friends got their enlightenment training with me in the 1970s. It stuck for me, but I've seen them falling for the manipulation in the last few decades.
Plenty of low-income people are enduring seriously hard times right now, and making light of their troubles is not a winning strategy. Also, it's hard to square with the oft-touted left/D values of compassion and respect.
Try to imagine a world where "gas and grocery prices" absolutely define and determine your life. Many of us live there. (I live about a block away myself, and have for most of my life.) There was a time when progressives would have bit off their own noses before making light of that.
You can't eat statistics, they won't fuel the car that gets you to your crappy part-time job, and they won't keep the rain off your head when you're priced out of housing. You have to be in a very privileged place before you can forget that. /That's/ a disgrace, and if we're not careful it will lose us the election.
I agree, but I also worry that our addiction to low interest rates is crippling our economy, most especially with investors insisting on constant rates of growth from companies to make their investments worthwhile. This has just about broken us.
Meanwhile, people are getting deep into debt and not stopping to think that interest rates can't stay low forever. They have to rise. And then when they do rise, instead of being taken as "this is how numbers work," people want to cosplay riot. It wasn't poor people who showed up on January 6. It was realtors and car dealers who are impacted by the migration from zero interest rates. Then again, I believe half of the Q cult are people who feel that their debt is overwhelming and they don't see a way out. And meanwhile meanwhile, venture capitalists who can't make money in a zero-interest-rate world are buying up private homes, and now people can't buy homes at any interest rate.
In short, perpetual low interest rates are bad for America.
Our consumer culture trained people to live above their means, by using credit--because economic growth and profit are the Holy Grail of America.
My parents had a hard time getting credit when I was young... not just them, everybody had a hard time. It was rare for people to have credit cards and atms and electronic currency were not things.
I had a hard time getting credit, but not as hard as my parents. I abused it and got in trouble, but got myself out. Lesson learned. I have one card that is for emergencies. Actual emergencies.
Now my dog can get credit and they give credit to college and even HS students o.O. Or did, anyway.
A lof of people are living on borrowed money--especially in the "middle class."
And living on credit drives costs and prices up for everybody (including the people who can't get credit). And the ultra low interest rates bred a lot of bad corporate practices that people are now paying for.
But the corps profits are higher than ever, from I have seen/heard. So its all good, amiright?
Easy credit is bad.. and expensive for all involved (except the people giving the credit).
This gave me a chuckle: " . . . instead of being taken as 'this is how numbers work,' people want to cosplay riot." Another sign of our societal decadence.
I too have been there, and frankly, they need to vote. Because most of them won't vote against their self interest, some of them will. And when they vote D...the vast majority of the policies that are fucking them over will get better. Not perfect,but better.
League of Women Voters might could use some help on that! If you look on their website their membership fee looks steep but they will waive or even discount it. They seem to have all sorts of useful things you can do to encourage voter registration. I just joined last week so I can't report on how it works IRL, but it certainly looks good.
You're right. It is foolish to paint with a broad brush on an issue where far too many folks are struggling with the rising costs of food and fuel, neither of which we can do without.
I don't hear much about these folks in my news sources and I don't personally know anyone who is really struggling. I'd like The Bulwark to do more in informing us of these Americans.
This is all very logical but it still presents a public-facing image of elite out-of-touchness which we cannot afford. And volunteering is a good thing but it's not a get-out-of-jail-free card on this.
There are more poor people than rich people. I wouldn't be too quick to bet who decides this election.
And it's not up to us to tell other people what's good for them.
Or, \_(**)_/ we can try but if we say elitist things like making light of a $2 increase in the price of a hamburger, they will not listen to us, and I for one can't blame them. And a quick pivot to "oh no I just meant to go after the bosses" won't be convincing.
For the majority of people in this country, THIS IS NOT THEORETICAL.
Such a bittersweet story. That you held it together to care for them speaks volumes about your character. On the positive side, in spite of it all, your parents created a wonderful person. Kudos to them. Peace be with you.
I don't know how you possibly could estimate that. You'd have to know how much they'd raise the minimum wage too. Then you'd have to know whether economic conditions are such that the increase could be passed along. Right now, raising the minimum wage from $7.25 an hour to, say, $13 an hour wouldn't make a difference because the job market is forcing employers to pay more than that for employees. The current minimum wage has been rendered irrelevant b/c of the demand for workers and that's a very good thing.
Yep, complaining about food costs sounds silly when you know that delivery services have taken off. It is beyond ludicrous that a number of voters want the criminal back because of what a dozen eggs cost two years before the election,
I was around as an adult for the last inflationary spiral. This one was mercifully short. The target of 2% is an ideal but historically it never happened. That is, we never really had stable inflation that low. So to say that inflaction was hot... begs the question, what is your base line. I say this as someone who was in financial services till retirement and even had 2 investment licenses.
I understand the pols just want to score points. But an intelligent headline would be that the Feds are still unable to get us to their goal.
It is a laudible goal. But a recovery without a recession is a miracle. To have done that and face screaming headlines as if we have a major failure is galling.
This is nothing if you lived through the ‘80’s. I also worked in financial services and spent my career wondering when we’d swing back to high inflation—honestly it took a lot longer than I ever thought it would. I don’t think these rates are the worst—people can actually earn a little bit on their savings now.
Yes, it is nice to live in a world where you can get %5.2 APY on your savings without risking it all in the stock market.
Sure it would be better if inflation was closer to 2%, but at least Powell has not driven us into a recession and he seems to be on track to get inflation lower, all in good time.
Would everyone honestly prefer stagflation? Remember that? I do.
And earn that little bit more in a less risky, less volatile way.
I bought a new car in 1981. The interest rate was nearly 18%.
"Things aren't near as catastrophic as they could have been. Here's why that is bad for Biden..."
I bought my first home in 88 and got a mortgage at 8.5% fixed, which I was thrilled about. I said "it's never going lower than this.
"Perspective" unfortunately, is a big driver in people's "lived experiences"
in 1993 I wanted to assume someone's mortgsge but it was 12%. They rented it out. instead.
I bought mine in 1981..bad timing...13.75%...
The one I own now was at 10.12% in 2002..in 2005 I re-fied for 6%, that is the lowest I have ever had
This makes me wonder if corporations aren't a bigger reason for the slowdown than I thought. Hiding behind inflation to gouge consumers isn't exactly new.
If corporations could "gouge" customers whenever they wanted, why would they need the excuse of inflation? The fact is supply and demand are what drives prices.
What about supply chains that are interrupted?
"...an intelligent headline would be that the Feds are still unable to get us to their goal. "
Here's my headline: "Near term rate cuts unlikely as inflation still above Fed target"
Just the facts, please. The reader is free to add their own political spin. That's not the job of the journalist (or at least it didn't used to be).
It is now. Because throwing in that bit of political spice generates clicks.
An incentive we can really do without.
I agree this seems to have been a fairly short period of heightened inflation. I remember the 70s and 80s, too. But between then and now, two percent inflation did happen (plus or minus 1% at worst), and it held over an extraordinarily long period, between 1994 and 2020. That doesn't mean that it was the best level for Fed policy to aim for, but it was achieved.
My takeaway for decades has been that Americans would happily put their fellows out of work so that they could pay less for things.
And that is what happened--which is why manufacturing went offshore.
And Americans are still unwilling to pay more for stuff. Which is why manufacturing is not coming back, unless it is subsidized by the US government for defense/strategic reasons.
I wouldn't put that all on American consumers. The big business types want mega profits and they couldn't get them without moving manufacturing off shore. They managed to kill off union labor in the clothing manufacturing industry and by moving their manufacturing plants of hard goods to Southeastern states they were able to get non union labor. But even that was not cheap enough. So moving offshore was the way to go.
It's very encouraging to see unions coming back.
Agree.
Exactly. Try telling Joe Sixpack that he can have US manufacturing back stateside but that means he can no longer buy a TV at Walmart for $300. There are trade-offs for everything. Americans always vote with their wallets.
Remember when Trump allowed the Arabs to flood the market with oil to drive the cost of Oil down ? meanwhile driving almost 500 American oil and Gas companies out of buisness ? American only cared about sub $3 oil a gallon while destroying 100s of thousands of American jobs.
The thing is American manufacturing hasn’t gone anywhere. Our manufacturing output is higher now than it has EVER been. The jobs weren’t lost to other countries, they were lost to automation.
What we actually manufacture has also changed.
And automation is about to extend to non-manufacturing jobs, through AI.
Okay, maybe. But again claiming that jobs went off shore is simply not true.
LKet me then rephrase nd say that the US jobs were eliminated in favor of cheaper alternatives.
Did they know that's what they were doing to their fellow Americans, buying cheap Chinese products? Didn't manufacturing go offshore because of financial markets' pressure on big companies in the 1980s to "get rid of their [US] workers and plants and move away from being vertically integrated companies in which everything took place within the company itself”? (https://www.investmentmonitor.ai/manufacturing/who-killed-us-manufacturing/?cf-view).
Agree what things cost is the most important thing to American consumers, not the health of the national economy or the prosperity of their neighbors.
Which tells you pretty much everything you need to know about American culture/society.
I remember getting a government check in the mail after Bush Jr & Co started the Shock and Awe War. The clear massage - go spend while young Americans are dying, loosing their limbs and health, Iraqi civilians are dying, sacrifice at home is for suckers, your real duty as an American is to spend.
In a consumption-based economy, if you don't spend, you hurt the economy and we all depend on a good economy.
And remember when we got COVID checks and Trump held them up for weeks because he wanted his signature printed on them?
In the 90’s the saying was, “Japanese (Chinese) are Producers, Germans are Savers, and Americans are Consumers.”
We've been a consumption-based economy since the 1920s. "Over the course of the 20th century, capitalism preserved its momentum by molding the ordinary person into a consumer with an unquenchable thirst for more stuff" (https://thereader.mitpress.mit.edu/a-brief-history-of-consumer-culture/#:~:text=The%20notion%20of%20human%20beings,principal%20role%20in%20the%20world).
Shopping runs our economy, so of course they said that. Not to show the world our freedom, but to assure we didn't have an economic collapse.
You are most welcome for the article, Mr. Pants (should I just call you "Cranky"?), and thank you for the Bernays link.
I was first introduced to the notion of "conspicuous consumption" during the anti-Viet Nam War years where my generation rejected the norms of the 50s and early 60s and that included the materialism recounted in Galbreath's "The Affluent Society" (1958).
In my later years, I learned about journalist Samuel Strauss who said in the mid 1920s, "Formerly the task was to supply the things men wanted; the new necessity is to make men want the things which machinery must turn out if this civilization is not to perish" (https://www.theatlantic.com/magazine/archive/1924/11/things-are-in-the-saddle/648025/). Apparently, Bernays was influenced by Strauss.
As to your last paragraph, I think the desire for status, that the consumer economy exploits, exists in the un-self-reflective human being. Advertisers figured that out. It drives more of our behavior than relationships.
Good point re software, Ms. P. Tell me more about "the aware and self-reflective are manipulated by the digital economy". I'm curious as to how you know this? Two of my friends got their enlightenment training with me in the 1970s. It stuck for me, but I've seen them falling for the manipulation in the last few decades.
Looks fabulous, thank you, Ms. Pants.
Plenty of low-income people are enduring seriously hard times right now, and making light of their troubles is not a winning strategy. Also, it's hard to square with the oft-touted left/D values of compassion and respect.
Try to imagine a world where "gas and grocery prices" absolutely define and determine your life. Many of us live there. (I live about a block away myself, and have for most of my life.) There was a time when progressives would have bit off their own noses before making light of that.
You can't eat statistics, they won't fuel the car that gets you to your crappy part-time job, and they won't keep the rain off your head when you're priced out of housing. You have to be in a very privileged place before you can forget that. /That's/ a disgrace, and if we're not careful it will lose us the election.
I agree, but I also worry that our addiction to low interest rates is crippling our economy, most especially with investors insisting on constant rates of growth from companies to make their investments worthwhile. This has just about broken us.
Meanwhile, people are getting deep into debt and not stopping to think that interest rates can't stay low forever. They have to rise. And then when they do rise, instead of being taken as "this is how numbers work," people want to cosplay riot. It wasn't poor people who showed up on January 6. It was realtors and car dealers who are impacted by the migration from zero interest rates. Then again, I believe half of the Q cult are people who feel that their debt is overwhelming and they don't see a way out. And meanwhile meanwhile, venture capitalists who can't make money in a zero-interest-rate world are buying up private homes, and now people can't buy homes at any interest rate.
In short, perpetual low interest rates are bad for America.
Our consumer culture trained people to live above their means, by using credit--because economic growth and profit are the Holy Grail of America.
My parents had a hard time getting credit when I was young... not just them, everybody had a hard time. It was rare for people to have credit cards and atms and electronic currency were not things.
I had a hard time getting credit, but not as hard as my parents. I abused it and got in trouble, but got myself out. Lesson learned. I have one card that is for emergencies. Actual emergencies.
Now my dog can get credit and they give credit to college and even HS students o.O. Or did, anyway.
A lof of people are living on borrowed money--especially in the "middle class."
And living on credit drives costs and prices up for everybody (including the people who can't get credit). And the ultra low interest rates bred a lot of bad corporate practices that people are now paying for.
But the corps profits are higher than ever, from I have seen/heard. So its all good, amiright?
Easy credit is bad.. and expensive for all involved (except the people giving the credit).
Yeah 25+ years ago when my youngest was a newborn, he received an offer of a credit card in the mail. He didn't take it.
I remember the first time I saw a friend use a credit card to pay at a restaurant. I was shocked. This was the early 1980s.
And back in the late 70s - early 80s, the interest paid on credit cards could be written off your taxes. It's how we got trained to use them.
Ugh. Welcome to housing crisis 2.0
This gave me a chuckle: " . . . instead of being taken as 'this is how numbers work,' people want to cosplay riot." Another sign of our societal decadence.
I too have been there, and frankly, they need to vote. Because most of them won't vote against their self interest, some of them will. And when they vote D...the vast majority of the policies that are fucking them over will get better. Not perfect,but better.
League of Women Voters might could use some help on that! If you look on their website their membership fee looks steep but they will waive or even discount it. They seem to have all sorts of useful things you can do to encourage voter registration. I just joined last week so I can't report on how it works IRL, but it certainly looks good.
You're right. It is foolish to paint with a broad brush on an issue where far too many folks are struggling with the rising costs of food and fuel, neither of which we can do without.
I don't hear much about these folks in my news sources and I don't personally know anyone who is really struggling. I'd like The Bulwark to do more in informing us of these Americans.
This is all very logical but it still presents a public-facing image of elite out-of-touchness which we cannot afford. And volunteering is a good thing but it's not a get-out-of-jail-free card on this.
There are more poor people than rich people. I wouldn't be too quick to bet who decides this election.
And it's not up to us to tell other people what's good for them.
Or, \_(**)_/ we can try but if we say elitist things like making light of a $2 increase in the price of a hamburger, they will not listen to us, and I for one can't blame them. And a quick pivot to "oh no I just meant to go after the bosses" won't be convincing.
For the majority of people in this country, THIS IS NOT THEORETICAL.
Speaking of who decides this election, it will be those who turn out and cast a vote. Rich people do so in droves. The poor not so much.
Y'all do realize that for the next 6.5 months there is something you can do about that, right?
Might be a good idea to get more interested in that "something something" if we want to change their minds.
People deviate from their parents' voting patterns in both directions so I'm not sure there's really a progress narrative there.
Such a bittersweet story. That you held it together to care for them speaks volumes about your character. On the positive side, in spite of it all, your parents created a wonderful person. Kudos to them. Peace be with you.
Thx for details from your experience.
Racist and religious. Seems they go together.
I don't remember where but I remember reading that minimum wage would increase the price of a hamburger by a mere 17 cents.
I don't know how you possibly could estimate that. You'd have to know how much they'd raise the minimum wage too. Then you'd have to know whether economic conditions are such that the increase could be passed along. Right now, raising the minimum wage from $7.25 an hour to, say, $13 an hour wouldn't make a difference because the job market is forcing employers to pay more than that for employees. The current minimum wage has been rendered irrelevant b/c of the demand for workers and that's a very good thing.
Not my estimate, but it some economist's estimate.
Yep, complaining about food costs sounds silly when you know that delivery services have taken off. It is beyond ludicrous that a number of voters want the criminal back because of what a dozen eggs cost two years before the election,
I share your cynicism.