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 …
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.
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.’