Come for the politics, stay for the snark.

“The defense has a certain level of trust in defendant that the government does not.”

It’s easy to sit in safety and prescribe what other people should be doing.

You cannot shame the shameless.

Pessimism assures that nothing of any importance will change.

But frankly mr. cole, I’ll be happier when you get back to telling us to go fuck ourselves.

We’re not going back!

Come on, man.

JFC, are there no editors left at that goddamn rag?

Some judge needs to shut this circus down soon.

We are aware of all internet traditions.

Conservatism: there are some people the law protects but does not bind and others who the law binds but does not protect.

Too often we confuse noise with substance. too often we confuse setbacks with defeat.

“I never thought they’d lock HIM up,” sobbed a distraught member of the Lock Her Up Party.

Whatever happens next week, the fight doesn’t end.

We’ll be taking my thoughts and prayers to the ballot box.

Fani Willis claps back at Trump chihuahua, Jim Jordan.

“Cheese and Kraken paired together for the appetizer trial.”

Today’s GOP: why go just far enough when too far is right there?

Historically it was a little unusual for the president to be an incoherent babbling moron.

Take hopelessness and turn it into resilience.

… pundit janitors mopping up after the GOP

I like you, you’re my kind of trouble.

In short, I come down firmly on all sides of the issue.

DeSantis transforms Florida into 1930s Germany with gators and theme parks.

You are here: Home / Economics / C.R.E.A.M. / Tuesday Evening Open Thread: Jobs vs. the Inflation Bugaboo

Tuesday Evening Open Thread: Jobs vs. the Inflation Bugaboo

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Possibly connected to the spate of OH NOOO! INFLATION! articles?…

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94Comments

  2. 2.

    KrackenJack

    So the fed will keep mashing the brakes until the job market craters…in pursuit of the dual mandate, of course.

    Sorry. I’m real ray of sunshine today.

  7. 7.

    Baud

    @SpaceUnit:

    The daily inflation stories over the past yeat are overdone, but at least reflect reality.

    The daily stories over the past year about the upcoming recession are just straight up propaganda.

  8. 8.

    Brachiator

    Per Paul Krugman

    Yes, we have troublingly high inflation.

    This is what bothers people. They don’t care about the GDP or the Dow Jones. Not are they concerned (yet) about the prospects of a recession.

    People all over the world have been punishing the government in office for inflation. It is irrational, but that’s how people think.

    The Biden Administration has been pretty good at talking about what they can do to help. The Fed policy of increasing interest rates may be wrong, but they are independent of the administration.

    Bernie Sanders and some other progressives want to solely blame evil corporations for jacking up profits as the cause of inflation. This is reductive and not helpful.

     

    ETA. Trump used to slobber over a big Dow Jones number as the sole or primary measure of the health of the economy. Bunch of bullshit.

    Also, some progressive UK commentators are certain that the UK is heading for a recession even though the right wing media keep predicting BREXIT benefits. There is no clear data there predicting a recession. There is goofy punditry in many places.

  9. 9.

    indycat32

    Black cats update: since last I vented about momma and her 4 kittens, I offered to cover all vet bills and make a donation to whoever would take the kittens, with zero response. A tech at my vet’s office took pity and let me include momma cat (Millie) in a“spay-a-palooza” on Monday even though I live in a different county. When I trapped Millie on Saturday instead of going nuts, she sat calmly in the trap and stared at me. When I moved her to the large dog crate I purchased to have room for litter, food, water (and hopefully kittens), instead of going nuts, whenever I visited to tell her it would be OK, she sat calmly and stared at me. Early Monday morning when I tried to put her in the cat carrier, she went absolutely berserk and tried to kill me. Obviously the staring wasn’t calmness, she was plotting my demise. I did finally succeed but with bite marks on my arm, and a possibly infected thumb. So, she may have killed me after all. I now call her Hell-Cat. Kittens are still running free. Cute little buggers. The low-cost spay/neuter sites are booked until next year. Probably will have to go to my regular vet to get them fixed. Maybe I can get a volume discount. But, that doesn’t solve the problem of too many cats!

    Sorry for the long post; at this point all I can do is laugh at the entire situation.

  11. 11.

    Frank Wilhoit

    The Federal Reserve does not see its charter as controlling inflation.  It sees its charter as creating a labor surplus, ruat cælum.  The business take on the “good” news that we have been seeing lately is that the economy is “overheating”.

  13. 13.

    Martin

    There’s a real failure of educating the public here. After WWII inflation jumped to 20%. Nobody took it as a sign that the country was going to devolve into inflation – it was simply an increase in demand after a major event that any rational person could see would happen, and which was universally desirable.

    The problem is that we take the presence of inflation as the problem to focus on politically, rather than the methods being used to manage inflation, and we are doing a (surprisingly) good job of bringing good methods here. Pushing unemployment down to as low as you can feasibly go is a good part of that strategy because it means that at least can at least assume everyone is participating to some degree in the ability to respond – hard to do that when people are also out of work. But guess what – making sure everyone has a job pushes inflation up because now you have people with jobs buying stuff they previously couldn’t do.

    And every economist will tell you that the balancing to inflation come at the back end, so even in the best case you gotta suck it up at least for a few months until those balancing measures kick in. Plus, you always want some inflation. Without some inflation, everyone goes underwater on their mortgage.

    But nobody gives a shit about that. This is politics as blood sport and it’ll remain politics as blood sport. Nobody talking about inflation has any investment in actually solving it.

  15. 15.

    Matt McIrvin

    @Brachiator: A bear stock market–which we’ve had for about the past year, more or less–is probably really, really effective for getting traditional media types to hate you and try to get you booted from office, though. That’s probably a major element of the news media’s current hate-on for Democrats.

    In the short term, electing Republicans is good for stocks simply because stock traders tend to be Republicans and electing their favorite guys makes them happy. (Longer-term is another story, but this isn’t how anyone thinks. You can always get in some Democrats to clean the mess up before you kick them to the curb.)

  16. 16.

    Martin

    @KrackenJack: The Fed has a hammer, and pound in every nail is what they do. Congress can (and has been) doing things that eliminate the need for the Fed to do that. But if we leave the entire problem to the Fed, nobody should complain that the Fed solves it using the only tools at their disposal. Besides, higher interest rates addresses a whole different set of problems and isn’t inherently problematic provided they back off here.

  18. 18.

    kindness

    The MSM does not read Paul Krugman and these tweets just reinforce the Village Elites’ desire to never do so.  They want things the way they want things….with Republican Daddies.

  19. 19.

    bbleh

    @Frank Wilhoit: it is, ahem, interesting that the Fed appears to think that the way to balance their dual mandate is to increase unemployment regardless of the causes of any inflation.

  20. 20.

    sab

    @indycat32: Get that cat bite looked at immediately. I had to have hand surgery and a few days in the hospital when I ignored a cat bite for a work day.

  21. 21.

    trollhattan

    Reagan’s landslide was far more about unemployment than inflation, per exit polls. Does not mean inflation is not concerning, but it’s not foremost in people’s heads either.

    Do we have wage stagnation at a time of inflation and high employment? I sense an unexplored path.

  22. 22.

    mrmoshpotato

    @Brachiator:

    Bernie Sanders and some other progressives want to solely blame evil corporations for jacking up profits as the cause of inflation. This is reductive and not helpful.

    Well, he’s a one-trick pony who should’ve fucked off after fucking the country in 2016.

    Also, some progressive UK commentators are certain that the UK is heading for a recession even though the right wing media keep predicting BREXIT benefits. There is no clear data there predicting a recession. There is goofy punditry in many places.

    Save money on dog food.  Roast Nigel Farage and BoJo.  (More useful than just burning the fuckers at the stake.)

     

  23. 23.

    billcinsd

    @bbleh: Yes, it is rarely mentioned that corporate profits are at record highs indicating that at least some portion of inflation is due to profit taking

  24. 24.

    MazeDancer

    Not sure how some Blue Checks on Twitter have jobs.

    Many of them are busily taking screenshots of their name with their current blue check verification. They turn that screenshot into their banner.

    They are so proud of their cleverness. They can, thus, prove their verification after their blue check is no more.

    Apparently, none of them have heard of Photoshop.

  25. 25.

    billcinsd

    @Brachiator:want to solely blame evil corporations for jacking up profits as the cause of inflation. This is reductive and not helpful

    While I would not solely blame corporations, it is not wrong to blame them some

  26. 26.

    Brachiator

    @Matt McIrvin:

    A bear stock market–which we’ve had for about the past year, more or less–is probably really, really effective for getting traditional media types to hate you and try to get you booted from office, though.

    The economy is still reacting to the pandemic. Pundits and some economists insist on talking about the economy in conventional terms. This is wrongheaded, but difficult to change. Here the media simply reflect consumer frustration. However, the best business reporting and more specialized business journalism is more nuanced, but is typically ignored.

    In the short term, electing Republicans is good for stocks simply because stock traders tend to be Republicans and electing their favorite guys makes them happy.

    Ha! Maybe good in the short term, but things quickly get more complicated, as you note.

  28. 28.

    schrodingers_cat

    @indycat32: @sab:  What sab said, cat bites are nasty. I didn’t have to get surgery but was put on antibiotic injections after a cat bite (I got in between two warring cats: Bad idea) on my that finger got infected.

    And the doctor said good I came when I did otherwise I would have lost my finger. ( I went on a Monday, got bit on a Saturday)

  32. 32.

    Princess

    @indycat32: I agree with sab. I spent two nights in hospital after a cat bite that broke the skin. They are dangerous. Get it checked out asap.

  33. 33.

    Josie

    @indycat32: ​
     You might want to look into getting some antibiotics. Some years ago I got torn up by a semi-feral and needed two rounds of antibiotics to cure an infection from the scratches that made me sick with chills and fever.

  35. 35.

    James E Powell

    @trollhattan:

    Reagan’s landslide was far more about unemployment than inflation, per exit polls.

    Reagan’s landslide was also about the Republican takeover of the political press/media. A big part of that resulted from the assassination attempt & his recovery.

  36. 36.

    Geminid

    @Frank Wilhoit: That may be so. But I think that the Fed takes fhe dual mandate imposed by Congress in the 1970s seriously. They just dropped the ball last year when they kept rates low even as inflation broke out of its 10 year slump. The Fed slammed on the brakes this year, but some tightening earlier could have kept them from overdoing it now, which I believe they have.

  39. 39.

    Martin

    @Brachiator: It is reductive, but it’s not wrong. Corporate profits are 55% of the inflation component, non-labor input is 38%, and labor input is 7%.

    So while upstream component/material costs are higher, it’s still profits doing more than half of the work. It would be more tolerable if labor input was higher because that’d suggest that wages were growing to keep pace, and the low contribution from wages suggests either that wages aren’t climbing or that productivity is (as usual) through the fucking roof (or more likely, both).

    Historical contributions to inflation are 62% labor, 27% non-labor, and 11% profits. So this is a VERY ahistorical pattern we’re in with profits being 5x the normal component and wages 1/9th the normal component. I think a part of that is that industry got a bit in front of their skis in terms or raising prices in anticipation of higher costs, and then some of those costs never materialized (you see a LOT of this related to European energy costs where LNG prices are now at $0 because the US opened the spigot so significantly that Europe ran out of storage space.)

    Supply chain issues are there, but not *that* much more than they normally would. We may dislike the appearance of a reductive explanation, but that doesn’t mean it’s a wrong explanation. Yes, it dismisses water shortages in the west for high produce prices, but you can’t really deny that we’ve had a few months of serious price gouging here in CA on gas prices with crude prices falling and gas prices spiking because companies took some refineries offline. Yes, that creates a supply imbalance, but one the industries had agency over. ‘We didn’t feel like making gasoline today’ isn’t a valid defense of inflation when your profits just quadruped due to that decision.

  40. 40.

    Cameron

    I think the Biden administration is handling things pretty well.  Hopefully we’ll be spared a rail strike, which is the biggest economic problem I see on the horizon.

  42. 42.

    indycat32

    @EmbraceYourInnerCrone: that’s very kind of you to offer, but the problem isn’t money, it’s too many cats!.  I was caring for a family of 3, earlier this year two neutered (black) males showed up.  With this latest addition I’m up to 10, 8 of which are black.  Obviously I am the black cat whisperer.

  43. 43.

    Roger Moore

    @Martin:

    A huge part of the problem is that people get fixated on a specific past problem and start assuming they’re going to have the same problem in the future.  People who experienced stagflation in the 1970s have a hard time letting it go.  There’s a whole school of economics devoted to understanding it, much of which, as far as I can tell, blithely ignores the extent to which it was a response to exogenous oil shocks.  There are other people who are fixated on hyperinflation and are sure we’re going to experience that any day now.

    Of course this isn’t restricted to economics.  There are tons of historians who are fixated on a particular political environment and interpret everything today in terms of that. It’s a real problem with any kind of historically-based study.  It’s always easy to draw parallels between the period you care about and today and assume everything will turn out the same.

  44. 44.

    Chris T.

    @Princess: Yeah, any animal bite should be treated carefully. For that matter, any deep puncture wound (stepping on a roofing nail, for instance) should get an immediate clean-and-antibiotic if possible.

  45. 45.

    Martin

    @Geminid: It would be helpful if we had a consistently cooperative congress that was invested in improving the economy and didn’t often leave the fed as the only functional economic lever.

    Elections have also turned into great mechanisms to make sure absolute dick gets done for 4 months, even with a fairly cooperative congress.

  46. 46.

    bbleh

    @billcinsd: And it is far from clear that reducing employment will have the slightest effect on supply chain problems, most of which at this point are either overseas or due to uncontrollable phenomena like, y’know, the weather.

    I guess if all you have is a hammer, then everything’s a nail, but inducing a recession to deal with inflation that is almost entirely supply-side is … indirect at best.

  47. 47.

    Hoodie

    @Martin:  You’re right about the failure of education, but part of the problem is that it almost impossible to educate the public with 24/7 cable news and the internet churning out metric tons of ever-evolving bullshit.  Moreover, the internet has enabled every schmuck to think they’re capable of understanding economic data and, thus, they become really vulnerable to disinformation, wild conspiracy theories, etc.

    The “Inflation is going to eat us all!” phenomenon is not that much different from all the other hysteria that gets pumped out on a daily basis, like the current bullshit about cash bail reform that is saturating GOP ads right now.  The average American is too ignorant of these issues to really understand them and doesn’t really have the time and lacks basic skills in information processing that enables them to separate fact from nonsense.  Again, this falls to the corruption of a good portion of the elites that is simply acting in bad faith.

  48. 48.

    Martin

    @Roger Moore: Yep. My mom is still convinced that Democrats have the exact same priorities they did in 1979. It’s pretty fucking strange trying to have a conversation with her.

  49. 49.

    bbleh

    @indycat32: go get a damn antibiotic.  Cost of doing so: a certain bit of hassle.  Cost of not doing so: a material risk of infection leading at a minimum to some nasty local symptoms and at worse even to loss of a big chunk of tissue or a digit, plus a great deal more hassle.

    It’s like option A costs $1 for sure and option B has a 90% chance of costing nothing and a 10% chance of costing $1000.  Which option do you take?

  51. 51.

    Chacal Charles Calthrop

    @Martin: Thanks; I find your posts always interesting!

    Inflation helps debtors, not creditors, and in a world where for the past twenty years we have seen massive inflation only of the price of assets that rich people own  (real estate in certain select locations plus stocks) the owners of the media could not be more upset over the loss of value in what they own (i.e., real estate in certain select location plus stocks) so of course any general prosperity in terms of jobs must be shut down by a massive recession right now…..

  53. 53.

    James E Powell

    @Roger Moore:

    There’s a whole school of economics devoted to understanding it, much of which, as far as I can tell, blithely ignores the extent to which it was a response to exogenous oil shocks.

    Right. Price increases are not the same thing as inflation.

    And all that happened right as jobs were being shipped overseas, helping put the stag in stagflation.

  54. 54.

    Dan B

    @indycat32: Good!  I had IV antibiotics in hospital on two occasions for cat bites.  My arm started to turn reddish purple up nearly my shoulder.  Five days in a row each time.

  55. 55.

    indycat32

    @bbleh: I’ll take option A since all my money goes to buying cat food. :)  I’m calling first thing tomorrow morning.

  56. 56.

    Martin

    @Baud: Except that Roe is the one fucking thing that she’s clearly in support of. Literally everything else is some magnitude of bananas.

  57. 57.

    Another Scott

    @bbleh: The housing market was overheated (+20% price rises for 2 years, huge rent increases), and housing responds to interest rates, so that’s the hammer they used.  Of course, interest rates don’t have anything to do with fixing TFG’s steel and aluminum and timber and … tariffs and all the rest of the damage he did to the economy that still needs to be fully unwound.

    Lumber prices are mostly back to pre-pandemic levels.  Wholesale used car price indexes are down a lot from the peak.  Rent increases have slowed.  The housing market is cooling off rapidly.  Etc.  Inflation is coming down, and I hope that the upcoming 3/4 point Fed rate increase is the last one that big.

    Powell understands the numbers and the dual mandate, but he also understands human psychology.  If he doesn’t convince the traders, and the squakers in Congress, that he’s serious about crushing inflation, then it will cause problems in the future.  We had a pretty good economy when mortgage rates were 5-6-7% and rates on savings have been far, far too low for far too long.  Some rebalancing is good for us, but it is painful during the transition.

    The MSM is wired for the GQP.  They’re going to push their economic views even when reality is different – it’s what they do.

    However, the most important number in the October report will be wage growth. There is no plausible story where the economy sustains a high rate of inflation, if wages are only growing at a moderate pace.

    We’ll see.

    Eyes on the prizes.

    Cheers,
    Scott.

  58. 58.

    Baud

    @Chacal Charles Calthrop:

    The heyday of the American worker.

    In January of 1966 the Dow Jones Industrial Average hit a level of 990. It would continue trading in a range of roughly 600 to 1,000 over the following 17 years. It once again reached 990 in December of 1982 before finally breaking out and heading higher

  59. 59.

    Martin

    @Chacal Charles Calthrop: Yeah, I mean, rent seeking is an incredibly attractive way to make money because it’s so fucking easy. You can often do negative work and make money (see California’s temporarily dip in refining capacity and the corresponding 20% increase in price for every other gallon of gas sold). They did less work and made more money – who the fuck wouldn’t lean into that?

  60. 60.

    Matt McIrvin

    @Roger Moore: I had libertarian friends who were convinced the response to the 2008 recession was going to produce hyperinflation any minute now. Any time they had evidence of a price of something going up, they’d say, look, it’s coming. It’s the inevitable Kyklos that ruins civilizations when the people discover they can vote themselves the treasury!

  61. 61.

    Dan B

    A friend who works at the Army Corps of Engineers says they’re not doing projects except for navigation in this region because so many project managers have left.  Low unemployment seems to be having an impact.

  62. 62.

    Another Scott

    @Roger Moore: +1

    I heard a bit of the SCOTUS affirmative action arguments yesterday and the comments about O’Connor’s opinion that affirmative action maybe could end in 25 years.  And the RWNJs are sagely asking why 25 years isn’t enough.

    It’s a shame that nobody answered that changing human behavior and lingering systemic racism has nothing to do with how long it takes the Earth to go 25 times around the Sun!  It’s a category error.

    (sigh)

    Cheers,
    Scott.

  63. 63.

    Chris T.

    @Another Scott:

    … Wholesale used car price indexes are down a lot from the peak. …

    Yes, although (anecdata) my local Toyota dealer has pestered me twice now to find out if I have a used car they could sell for me. Most recent one was in mid-Oct.

  65. 65.

    Another Scott

    @bbleh: +1

    A former colleague got bit on the hand by a cat and didn’t get it treated quickly and ended up having to have hand surgery to replace a ligament or something that got infected.

    Cat bites that are punctures can be very dangerous.

    Cheers,
    Scott.

  66. 66.

    Roger Moore

    @Chacal Charles Calthrop: ​
     
    You can see some of this in the standard media tendency to treat a rise in the stock market as an unabashed good. It’s great if you own stock, but not so much if you don’t own stock and are interested in investing. That the media never, ever gets this point is a sign of just how much pro-wealth bias is baked into the system.

  67. 67.

    sab

    @Chris T.: Same with my Honda. Every time it goes in for an oil change they ask if I want to sell it. And it has been in a wreck and they know that because they fixed it.

  68. 68.

    Roger Moore

    @Chris T.:

    IMO, this is another reason we should tax capital gains the same as wages.  The current system of taxing capital gains less discourages dividends in favor of stock buybacks.  This feeds into the whole thing about compensating management with stock options, since they can goose prices through buybacks* whenever they think it will benefit them personally.  It’s just a really terrible corner of our tax policy.

    *Not that this should work.  If buying stocks using the company’s cash holdings increases the share price, there’s something deeply wrong with the market.

  69. 69.

    Jackie

    @sab: Agreed! My Dad got bit by my cat😢 and his hand ballooned up a few days later. We had immediately washed and disinfected the bite and thought nothing more about it. About a week later Dad called me and said his hand was swollen and he was having a difficult time driving. I went to check it out; I was NOT prepared for his grotesquely swollen purple/black hand! I called his VA dr and was told to take him straight to the ER. Dad had outpatient surgery the next day to drain all the poison out and put on mega-dose antibiotics.

    Dad felt so bad for me as I was consumed with guilt; it was MY cat… he kept saying it wasn’t my fault, he must have pet her wrong or something 🤦🏼‍♀️

  71. 71.

    Old School

    @Matt McIrvin:

    Trump’s stock rally started the day he was elected, not the day he took office.

    As I recall, Trump was also responsible for the increase before the election because he was going to win. (Or so he claimed.)

  72. 72.

    sab

    @Jackie: I was bitten by my own cat, who was a bit brain-damaged and had managed to fall out of the dog door and couldn’t figure out how to get back in, so she spent however long it was outside in the dark utterly terrified. And next morning I found her and picked her up to take her inside. She was so panicked that she had no idea who I was. So CHOMP!

  73. 73.

    Chacal Charles Calthrop

    @Baud: how much good music was written & recorded 1966-1982?

    see what people can do when living in NYC & London is cheap?

  74. 74.

    Ken

    @MazeDancer: The important blue checks, like Stephen King, just tweet “hell no I won’t pay you 20 bucks a month”.  Hilarity ensued when Musk tweeted back “How about 8 bucks?”

    (Additional hilarity was provided by the Musk fanboyz, who are sure that Stephen King would fade into obscurity if he leaves twitter.)

  75. 75.

    Sure Lurkalot

    The market has been upside down for so long that some of the “pain” is necessary to get back to a more stable footing. When I was in my 20’s, the unspoken rule was to use your age to determine what percentage of your total investment portfolio should be in fixed income instruments, with the idea that you should take risk when young, build up a nest egg and slowly move to less and less risk as you get to retirement age. All thrown out the window in the last 20 years. There’s a downside to never ending cheap money. Hope the Fed gets the balance right (h/t Depeche Mode), but I wouldn’t bet on it.

  76. 76.

    Jackie

    @sab: Cinder was one of those cats who loved being petted, but when she’d have enough she’d nip at the hand petting her. I was in the kitchen cooking TG dinner, so I wasn’t aware she had come out from hiding from all the company commotion…

  77. 77.

    ColoradoGuy

    The GOP is desperately hoping they can make Biden into Jimmy Carter, when both inflation and the Fed interest rate were over 15% (and rising), capped by the spectacular failure of the Iran hostage-rescue mission.

    Those events, that led to election of Saint Reagan, are what created the standard media narrative that Democrats are bad for the economy as well as weak on national defense. That’s when the GOP realized that deficits-don’t-matter so long as *they* create the deficit, and military Keynesianism was a solid vote getter, because “those people” never got the Federal money.

  78. 78.

    Ohio Mom

    @Dan B: A good idea is to draw a line around such a bruise with a ball point pen to track whether it is growing. Also, indycat32, if you see a red line growing away from the bite, go to the ER. That is celluitis and it can kill you.

    What’s that cliche, No good deed goes  unpunished.

  79. 79.

    bbleh

    @Another Scott: and yet the stock market talked itself into a material contraction based solely on FEARS of a recession caused by … the Fed!  Hell, they’re STILL at it!

    Part of the problem is that the discourse has become so ridiculously simplistic (thanks in large part to near-total economic illiteracy/innumeracy on the parts of both our political and  “journalist” classes) that it has been reduced to “uh-oh, inflation, Fed must raise interest rates!”  No analysis of either causes or the effects of the Fed doing so, only a knee-jerk response.

    This ain’t no way to run the largest economy in the world…

  81. 81.

    New Deal democrat

    Sorry to be the party pooper again, but while Krugman is correct vis-a-vis the starting point of February 2020, real, inflation adjusted wages for non-supervisory works have been falling almost relentlessly since the end of last year. You can see for yourself here: https://fred.stlouisfed.org/graph/?g=VtIB

    There are two primary reasons: (1) the spike in gas prices earlier this year due mainly to the Russian invasion of Ukraine; and (2) the way that housing inflation is counted officially lags what “really” happens in the housing market by a year. So although house prices rose 20% last year, it was only this year that the surge got “officially” reported.

    The Fed failed to act last year, and is horribly overreacting this year.

  82. 82.

    New Deal democrat

    @Geminid: “the Fed takes fhe dual mandate imposed by Congress in the 1970s seriously. They just dropped the ball last year when they kept rates low even as inflation broke out of its 10 year slump. The Fed slammed on the brakes this year, but some tightening earlier could have kept them from overdoing it now, which I believe they have.”

    Exactly. Well said.

  84. 84.

    New Deal democrat

    @Baud: “The daily stories over the past year about the upcoming recession are just straight up propaganda.”

    Not quite. The stories that recession is already here that have been pushed by the DOOOMers are, as usual, wrong.

    But almost every signal that portends an upcoming recession focused on *next* year has, well, signaled.

    Much of this is due to the Fed’s panicky overreaction this year.

  85. 85.

    Iron City

    @indycat32: Crab Net – an excellent tool for catching the uncooperative cat.  Heavy coat, leather gloves and into the carrier.  Mostly works with only minor injury to the human.

  86. 86.

    Geminid

    @Martin: I think this Congress has done well, but much of the legislation passed will have positive effects only.in the medium and long terms.

    We live in an age of impatience, though. Many people think about these matters in the short term, and media actors exploit and aggravate this thinking.

  87. 87.

    Baud

    @New Deal democrat:

    All I can say is that I remember hearing at the start of the year that the recession would be upon us well before now. I guess if we wait long enough the prediction will come true.

  88. 88.

    bbleh

    @New Deal democrat: but had the Fed “acted” last year, would it really have had a material effect on either supply bottlenecks (notably logistical ones) or overt corporate profiteering (gas prices)?  Certainly it might have reduced hiring, which would have meant that not only would prices still have gone up but wage-earners would have been squeezed even more!  That might have been just fine with the financial industry, but I question both whether it would have reduced prices materially and whether it would have been a better outcome overall.

  90. 90.

    New Deal democrat

    @bbleh: Had the Fed gradually raised rates last year, house prices (1/3rd of the entire inflation index) wouldn’t have gotten so out of hand. The economy could have slowed without courting an actual downturn.

    You are correct that the Fed raising rates does not address supply bottlenecks.

  91. 91.

    Mr. Bemused Senior

    @schrodingers_cat:

    I am surprised that libertarians have friends!

    “Good afternoon, ladies and gentlemen [long pause]
    and others. [laugh] Oh, of course I know all our members are ladies and gentlemen. What I mean is that some of you have brought friends.”  –Anna Russell

  92. 92.

    J R in WV

    @sab:

    Same with my Honda. Every time it goes in for an oil change they ask if I want to sell it. And it has been in a wreck and they know that because they fixed it.

    Our Mazda SUV !!

    I was on their lot, and the sun was in my eyes, and I hit a concrete light pole, trashed the front end.There’s a radar brake warning gadget, didn’t work on their lot, I didn’t say anything…

    So I asked them to tighten the loose body parts to allow me to drive it home. They asked right then if I wanted to sell it. Still a trashed front end, should work on it in a couple of weeks… They were really helpful, actually.

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