ICYMI: Going by the ‘two quarters’ rule, U.S. GDP data from the first two quarters of 2022 may show that the economy is in recession. But there has never been a recession declared without a loss of employment, and thousands of jobs are being added monthly https://t.co/MFnvp9gx1s pic.twitter.com/uAXVdA9RBl
— Reuters (@Reuters) July 10, 2022
… June’s job numbers were stronger than expected, with 372,000 jobs added and the unemployment rate steady at 3.6 percent. That means the country has recovered virtually all the jobs lost during the pandemic. As President Biden said last Friday, “We have more Americans working today in the private sector than any day under my predecessor, more today than any time in American history — today. In the second quarter of this year, we created more jobs than any quarter under any of my predecessors in nearly 40 years before the pandemic.”
While that might produce angst that the economy is still too “hot,” the flip side is that the United States so far does not seem to be on the verge of a recession. And on the inflation front, gas prices have been steadily declining for almost a month, even without gimmicks such as the proposed gas tax holiday.
Things could be even better if Senate Minority Leader Mitch McConnell (Ky.) stopped holding hostage the popular bipartisan bill that would make the United States more competitive against China in semiconductor manufacturing. The Republican leader has refused to support the bill unless Democrats drop their reconciliation bill that would cut the deficit, contain drug prices and extend Medicare solvency…
The administration readily agrees that inflation remains its top concern. The Fed will need to continue raising interest rates, thereby increasing the chance of recession. But there seems to be more optimism about a “soft landing,” which UBS Global Wealth Management now puts as the most likely scenario (40 percent), rather than recession or stagflation. Citi pegs the chances of a soft landing at 55 percent…
yes! yes!!!! https://t.co/kqH1R2DFaO
— torment nexus ethics engineer (@Theophite) July 8, 2022
But we must have serfs! How can we be happy if we aren’t making others miserable?!?
It’s pretty remarkable that such a patently stupid statement can be taken seriously.
It’s explaining away real economic issues by invoking a demonology of shirkers, moochers, and welfare queens that need to be disciplined, impoverished, and put back in their place. https://t.co/5xDCvUlDRx
— Peter Wolf (@peterawolf) July 5, 2022
Lest we forget…
Local Races Open Thread: Murphy the Trickster God Bless John Fetterman
Baud
I really hope workers don’t throw away this opportunity because of some temporary inflation pain.
Ken
@Baud: Sounds like the McConnell plan to fight inflation is to suppress demand by making sure no one has any money. Well, except people who will spend it properly, on megayachts and Senators.
piratedan
if you can understand higher costs due to increased oil prices (true, but not at the rate the oil companies chose to profit from) thanks to both the current war and the recent pandemic. Couple that with the Dems floating cash to keep as many families as possible employed and off the streets and those folks that work that side of the economy reflexively raising their prices because they can… we’re pretty much where we were, the lower classes can’t get a break because of the greed of those above them in the financial food chain.
Couple that with the GOP protecting those with the highest incomes and scuttling any additional relief for anyone not rich and then relying on the media to not report who fucked over whom, but simply to say it’s Biden’s fault because he’s in charge…
It seems to me that the issues are somewhat temporary, as Joe plays whack-a-mole with the issues left in TFG’s wake and the Media doing their best to let the GOP run amok without offering any solutions other than Culture War for everyone and a side of Handmaid’s Tale. It’s like we have massive societal memory loss over the last 2.5 years and now that a Dem is in charge, how come everything isn’t fixed yet to my satisfaction and I need to speak to the manager….
gaaaaaaaaaaahhhhhhhhhhh
debbie
Show me one goddamn flush worker.
Baud
It’d be cool if outrage over the semiconductor bill is what put Dems over the top in November.
Ruckus
@Ken:
It’s difficult to govern realistically with one’s head up their ass and both hands in someone else’s pockets.
Baud
I’m glad Jen Rubin stayed on our side. She’s a good advocate.
Another Scott
When I’ve caught snippets of ATC and Marketplace and PlanetMoney on NPR talking about inflation the hosts and reporters almost invariably use hyperbolic words like “all time high” and “stratospheric” and so forth. It’s ridiculous.
Steve Inskeep’s interview today with AFL-CIO economist William Spriggs about inflation and the Fed was an amazingly clear and welcome counterpoint.
Something something but I need a majority…
Cheers,
Scott.
SFAW
Mitch, you treasonous mofo, you and your treasonous pals in the Rethuglican Partei have been using that lie for over a year now. It wasn’t true then, it’s certainly less true now. How does the fantastic employment/job growth translate to people not working? Oh, right, it doesn’t.
There are times when I wished a Just God existed, because He/She would turn that mofo into instant turtle soup.
debbie
@Baud:
It very well could around here.
The Moar You Know
Fuck Mitch McConnell
Major Major Major Major
@Baud: last I heard the House had larded it full of bullshit and they were having trouble in conference. Did I miss something?
Baud
@Major Major Major Major:
I have no idea. The only news I’ve heard is that McConnell is blocking it because he’s mad about reconciliation negotiations.
Major Major Major Major
@Baud: passed the senate last summer. Looks like the house decided on passing a new, smaller, shittier version today, which Mitch is threatening to block, but of course the house could have just passed the better bill any time this last year… now we get something worse and hand him a veto point.
Another Scott
@Major Major Major Major:
I think this RollCall story has the latest.
Both the House and Senate had been making progress on their bills until Moscow Mitch threw his fit to try to stop the Reconciliation bill.
It sounds like something will pass.
Cheers,
Scott.
Baud
@Major Major Major Major:
Ah, that’s too bad. I guess abortion will have to be a fallback.
It’s unusual for a House bill to be worse than the Senate bill. Usually it’s the opposite.
Major Major Major Major
@Baud: last I read about it I got the impression they thought it was must-pass and got greedy.
Ohio Mom
Food is definitely more expensive. I don’t like that. I only bought cherries once this summer because at my local market, they are as much per pound as a good steak (which I also don’t buy very often).
And yet I am able to separate my frustration from my view of the larger picture. I’m thrilled to have Biden as president, I think he is doing everything he can for us.
Baud
@Major Major Major Major:
The Hill article AS linked to says both parties in the House didn’t like the Senate bill.
¯_(ツ)_/¯
I just want more positive news. I’m more interested in the reconciliation bill if we can get that done.
Major Major Major Major
@Another Scott: that article is just sad. Pelosi said they’d been “working constantly” on it. Since June 2021? Uh huh. This is something we need as much lead time as possible on. Such a shame.
@Baud: yes, both parties got greedy, in a chamber where republicans enjoy no procedural rights.
Baud
@Major Major Major Major:
Is it about procedure though? Dems can’t afford to lose very many members of their caucus without needing GOP votes.
ETA: I guess we’ll find out Tuesday whether the Senate will move forward.
Doc Sardonic
The main driver of this “inflationary” time is that every business out there, despite their protestations to the contrary, is trying to make up all at once what they lost over fiscal 2020-21. The oil companies are following the same playbook they used during the “oil shortage” years of the Carter administration by slow rolling production to goose the price at the pump. There was no oil shortage the tankers were piled up in the middle of the Gulf of Mexico like traffic on the DC beltway at rush hour.
Sister Golden Bear
Why is it that working folks are always told to stop buying lattes and avocado toast if they need to have more money, but the billionaire owners are never told to buy fewer yachts and rockets so they can pay their employees more? Tis a mystery.
Bill
Major Major Major Major
@Bill: it’s a bipartisan bill, but it sounds like the house dems are willing to hand Mitch a veto point instead of passing the senate version.
JaySinWA
Plumbers /s
But you miss the point, Mitch’s argument is that the economy is in the toilet because people aren’t working because they are “flush”
Of course the people who are flush are the well off folks, and they are sitting on the sidelines not raising wages waiting for the tide to turn back to a buyers market for labor. So McConnell is technically correct.
catclub
When the inflation rate is high there are suddenly plenty of tools for the fed to apply to bring it down.
When unemployment is high they suddenly have no tools to lower it. Dual mandate indeed.
Inflation tends to harm those who have assets, in the form of loans to others. AKA rich people. High unemployment hurts poor people. Hence Germany hyperinflation in 1923 was a disaster never to be repeated.
Unemployment rate of 47% in 1933 in germany, and Hitler coming to power is not a worry.
They also say that the 1923 hyperinflation was what led to Hitler. Yeah. right.
Major Major Major Major
@catclub: I mean, they really don’t have very good tools for lowering unemployment. Cutting rates can help somewhat but not when you keep them at zero.
James E Powell
Don’t know how many people here are regular CNBC watchers. I got in the habit because I was teaching a class in financial literacy this year. It is strange & unsettling to hear them talk about the need for unemployment to go up, to see how disappointed they are when a jobs report comes in looking good.
TS
If ever the news was worth reading – it sure isn’t now. I have a very cheap subscription to the Washington Post & am loath to cancel it – because I doubt I will get that again but the top headlines this morning (my time) when I looked were
Texas sues Biden administration for requiring abortions in emergencies
Trump looks to fall launch for 2024, potentially upending midterms
Ivana Trump, former wife of Donald Trump, dies at 73
The GOP own the media, all of it and any of it
As well I look for US news at BJ
Jim, Foolish Literalist
Sorry, I have no good news to give
James E Powell
I’m afraid Democrats are being uncivil again.
Brachiator
I don’t know. Former LA or Secretary Robert Reich has an interesting economics/progressive politics YouTube channel which is kinda interesting. He doesn’t think the Fed should be raising interest rates. He favors, among other things, a windfall profits tax on oil companies and raising taxes on corporations and the rich.
I am not entirely persuaded by all his arguments, but I think that economists are falling back on conventional wisdom when evaluating the economy. The pandemic was atypical, and recovery has been atypical as well. Jobs are being added, unemployment is down, but there are still entire sectors of the economy that have not fully recovered.
And inflation is a global problem, and is a persistent challenge. But I read economists saying that demand is high, but I don’t see evidence of buying surges or shortages at the supermarket. I see that there have been shifts in types of purchases as people go back to the office and get back into social gatherings. And I see businesses that had been shut down raise prices as they try to make up for lost revenues during the pandemic.
There are still supply chain issues and possible increases in beef prices because of droughts and feed shortages. A lot of issues that contribute to inflation, but not a general problem related to demand.
McConnell is a fool. He and other right wing politicians believe that people got gazillion of dollars in stimulus checks and are just sitting on piles of money. Most economists agree that those dollars were spent a long time ago, and even people who were able to save some of that money are working. And the boost in unemployment stopped a long time ago.
But McConnell and his goons believe that people should be reduced to abject poverty so that they can take whatever job is offered at the lowest possible wage. But they have no problem with the mountains of cash made available to big businesses to help them get through the pandemic.
Major Major Major Major
@Brachiator: I saw an interesting paper the other day on Jason Furman (Obama CEA)’s twitter. It estimated that headline inflation is like 70% random supply shocks, but core inflation is the opposite, so there’s sort of a couple different things going on. The Fed has limited control on the demand side by raising rates obviously but can’t do squat about the oil supply.
They can definitely affect real estate though… not looking forward to taking out a mortgage…
Brachiator
@James E Powell:
Can you share any of this? A pdf of outlines, summary info. Just curious as what the course was all about.
I noted previously that I think a lot of economics conventional wisdom is wrong, but that’s easy for me to say because I am not an economist. But I do not understand why rising profits are not inflationary at all, but rising wages can be a bad thing. I also do not understand how anyone can say that the economy is strong if millions of people are not making a living wage.
This gets more crazy when economists and pundits say we have a consumer oriented economy. So, how are people supposed to spend more if they don’t have money in their pockets?
Another Scott
@Major Major Major Major: I’m not understanding your comment about Pelosi’s statement.
Pelosi’s been trying to pass Biden’s agenda from the get-go.
WH.gov from 2/24/2021:
This Chips bill stuff is part of the over-arching BBB plan. They’ve been working on it a long time, doing everything they can to find ways to get it – and all the other stuff – passed even with all the procedural delays and all the pouting and grandstanding by Moscow Mitch and S&M and all the rest.
Politics is slow and messy.
My $0.02.
Cheers,
Scott.
James E Powell
@Brachiator:
Yes, I can. Do you want me to put it in a comment?
Another Scott
@Brachiator: McConnell is punching down on people outside his tribe. It’s what he does.
Cheers,
Scott.
Brachiator
@Major Major Major Major:
In Southern California and elsewhere, the middle class seems to be shrinking. People with money are still bidding up the price of homes and are able to pay high rents if they can’t buy a house. Doesn’t matter if interest rates go up. Meanwhile, lower income people are priced out of the housing market entirely. This increases the homeless population and also drives people out of the state.
Major Major Major Major
@Another Scott:
This bill passed the senate 13 months ago.
Brachiator
@James E Powell:
RE: Can you share any of this? A pdf of outlines, summary info. Just curious as what the course was all about.
That would be very cool and greatly appreciated! Thanks very much.
Another Scott
@Major Major Major Major: And yet it couldn’t pass the House, so it went to Conference.
From the RollCall story:
Bloomberg (from January):
I’m having trouble seeing the House and Pelosi as being unreasonable here.
Thanks.
Cheers,
Scott.
David ☘The Establishment☘ Koch
@catclub: Yup. Hitler got 2% of the vote in 1928. It wasn’t until mass unemployment in 1932 when he got 37% of the vote and the most seats in the Reichstag.
Major Major Major Major
@Another Scott: I’ve been following the bill, I know the story. And what’s happening right now is that the democratic caucus has decided they would like to pass a smaller and worse bill, and hand Mitch a veto point, instead of passing the senate bill in the house.
ETA and this is after the senate already half wrecked it. Now we get a quarter loaf. If we’re lucky. It’s like watching Obamacare turn into health savings accounts.
Soprano2
@Another Scott: I didn’t hear that interview. Every damn day NPR runs at least one story about how awful inflation and gas prices are, as if they’re afraid people will forget if they aren’t reminded every day.
Another Scott
@Major Major Major Major: Such is life in a closely divided legislature.
Do you think that Pelosi and Schumer didn’t know how to count votes on an easy win? I don’t. They’re not stupid. There must be decent reasons why it has unfolded this way in the House.
tl;dr – Something something simple easy and wrong.
We’ll see.
Cheers,
Scott.
David ☘The Establishment☘ Koch
How dare Dems ask corps to pay for the bill.
Major Major Major Major
@Another Scott:
So what, I can’t criticize them for overseeing the wasting of a huge opportunity to advance American science and engineering? https://www.vox.com/platform/amp/2021/6/4/22518923/endless-frontier-act-innovation-competition-act-china-congress
David ☘The Establishment☘ Koch
If Dems proposed 52 billion dollars in direct subsidies to lower the cost of food, drugs, gas Cocaine Mitch would demanding the Dems pay for the bill.
Simultaneously, Turtle would be screaming subsidies are wrong and distort the invisible hand and free markets, while demanding takers pull themselves up by their boot straps.
Another Scott
@Major Major Major Major: Your Vox link says that the GQP threw gravel in the gears – not Pelosi and Schumer.
There’s lots of thoughtful reasons to be careful about turning the NSF into a new DARPA-like outfit. And even a 30% jump in a budget is huge. Bills are almost always changed during the process – especially big bills.
I’m an optimistic sort. I’m often wrong, but we’ll see what happens.
Cheers,
Scott.
Major Major Major Major
@Another Scott:
After everybody who’d gotten their hands on it got their pound of flesh, yes. And now it’s the house democrats who have chosen to pursue something even more disappointing, instead of passing the senate bill.
Will this new bill have any? I guess we’ll find out.
James E Powell
@Brachiator:
There were three main components:
1) NextGen Personal Finance was my base curriculum, the closest thing to a textbook. I pretty much stayed with it, though I adapted, cut, & added where I felt it appropriate.
For example, there is a lesson on comparison shopping where the students shop online for a sweatshirt. It was good but I had them repeat the exercise at intervals in the semester for other items so that they got more opportunities with more different sorts of purchases.
2) The Stock Market Game – run by the Securities Industry and Financial Markets Association. Students form teams & invest $100K on a website that looks like an online brokerage account. There are video lessons and class activities most of which we did.
We played two rounds. The team in each class that improved the most each week got chips. (They will do just about anything for a bag of chips) . The teams that won each round in each class got prizes. We competed against a large number of other schools in the region, state, and nation. One of my teams won the region for the second round.
3) Careers. Students had to choose two or three careers not for the “what do you want to do when you grow up?” angle but so that they could explore the likely financial situation of a person in that career. It was enlightening.
The students put together a powerpoint of their financial life at age 25 – assuming everything works out – with residence, car, etc., that a person in their chosen career would be able to afford.
It was a blast. Students were mostly engaged most of the time. I hope they remember what they learned.
Brachiator
@James E Powell:
Very interesting.
Thanks very much.
lowtechcyclist
@Jim, Foolish Literalist:
Yeah, I saw that Joe ‘Lucy’ Manchin had pulled the football away yet again.
Baud
@Jim, Foolish Literalist:
Ah, well. That sucks.
Geminid
@Another Scott: The U.S. and Israel have very different political systems, but there are commonalities. McConnell’s actions on this and other matters reminds of an essay I ran into on Dr. Einat Wilf’s Twitter account. The author described opposition leader Benjamin Netanyahu’s strategy that succeeded in bringing down Israel’s coalition government last month. Basically, the strategy was: “If we can’t govern, no one can.”
JAFD
IMHO, this is an interesting opinion essay – mayhaps you will find it so, too:
https://hartmannreport.com/p/dear-republicans-we-tried-your-way
catclub
@James E Powell: Financial literacy course may help. parts 1 and three I like. The lesson one might learn from a 3 month stock market contest is: “if you want to win, make the most outrageous bets you can find in the casino.” This might lose, but it might get lucky and win. An index fund will never win over 3 months.