If two New Hampshire men aren't a match for the Devil, we might as well give the country back to the Indians. -Stephen Vincent Benet (1898-1943)
Fed’s favorite inflation gauge cooled more than expected in November (Megan Henney, 12/22/23, FOXBusiness)
The personal consumption expenditures (PCE) index showed that consumer prices fell 0.1% from the previous month, according to the Labor Department.
Who Gets Credit for No-Recession 2023? Everyone and No One (Elisabeth Dellinger — 12/18/2023, Fisher Investments)
[T]he basic, simple yet powerful story of the past few years appears to be this: It is far easier to turn an economy off, as lockdowns did in 2020, than it is to turn it on again—especially when different countries are firing back up at different times and speeds. The US got going before Europe got going before Japan got going before China. So you had demand boom in one place before supply in another was capable of meeting it. Even in the US, some states and industries reopened before others, creating a mismatch for made-in-the-USA goods and services. For just one example, I was back in the office before I could get my hair cut without crossing state lines.[iii] First-world problem, maybe, but it is mostly a microcosm of the broader picture: Lockdown and reopening caused countless dislocations and disruptions that couldn’t resolve until the whole world, developed and developing, moved beyond lockdowns. Parallel to all of this, the world’s energy markets had to realign after Russia’s Ukraine invasion and the resulting sanctions, which shifted oil and natural gas supply and demand globally. That took a while, too, but at this point it is largely solved.
Furthermore, a lot of the reopening decisions in the US were business-specific, not government-ordained. When the economy was shut down, some companies innovated or otherwise managed through it, quickly returning to normal operations when allowed. Others waited. To each their own—no judgments here! The key is this: It speaks to how decentralized and messy a developed economy really is. In the Western world, as the UK has shown lately, governments can’t even order civil servants back to the office, much less private workers. In the end, businesses respond to conditions—all conditions—as incentives dictate.
Governments can tweak those incentives, but that is about it.
Turns out a gl;obal pandemic was disruptive…briefly.
$750 a month, no questions asked, improved the lives of homeless people (Doug Smith, Dec. 19, 2023, LA Times)
The results were so promising that the researchers decided to publish results after only six months. The answer: food, 36.6%; housing, 19.5%; transportation, 12.7%; clothing, 11.5%; and healthcare, 6.2%, leaving only 13.6% uncategorized.Those who got the stipend were less likely to be unsheltered after six months and able to meet more of their basic needs than a control group that got no money, and half as likely as the control group to have an episode of being unsheltered.
“I felt there was enough interest and the initial findings were compelling enough that it was important to get those results out,” said Benjamin Henwood, director of the Center for Homelessness, Housing and Health Equity Research at the Dworak-Peck School, who led the study.
Trump bemoans record stock market as just making ‘rich people richer’ (Tim Reid, December 17, 2023, Reuters)
The Dow Jones Industrial Average hit a record high last week, topping 37,000 and surpassing the previous record set in 2022. In a 2020 debate with Biden, Trump said that if Biden won the election, “the stock market will crash.”Biden defeated Trump in the 2020 election.
In an attempt to give a populist and anti-Biden twist on the new record stock market high, Trump, a self-described billionaire, told a crowd of supporters in Reno, Nevada: “The stock market is making rich people richer.”
For the Right, the problem is that the better the economy the more attractive we are to, and the greater our need for, immigrants.
More Americans Than Ever Own Stocks (Hannah Miao, Dec. 18, 2023, WSJ)
About 58% of U.S. households owned stocks in 2022, according to the Federal Reserve’s survey of consumer finances released this fall. That is up from 53% in 2019 and marks the highest household stock-ownership rate recorded in the triennial survey. The cohort includes families holding individual shares directly and those owning stocks indirectly through funds, retirement accounts or other managed accounts.
The data provide the most comprehensive snapshot yet of how the Covid-era explosion in investing has reshaped Americans’ personal finances. Stuck at home during the pandemic with extra cash, millions jumped into the stock market for the first time. The elimination of commission fees on stock trading across U.S. brokerages made investing cheaper than ever.
“It created a whole generation of investors,” said Anthony Denier, chief executive of mobile brokerage Webull U.S.
A Soft Landing for the Economy—and Biden? (James Pethokoukis, 12/13/23, AEIdeas)
Analysts at Goldman Sachs find “the strongest statistical relationship with the election result is often with [economic] variables measured in Q2 of the election year.” What’s more, they explain, “Inflation appears to be less predictive of election results than growth and labor market variables.”
Given that inflation, rather than jobs and growth, has been America’s biggest economic problem of late, that’s good news for Biden. This, too, perhaps: First-term incumbents traditionally win reelection, unless there’s a recession.
More good news for Biden: Goldman Sachs economists forecast just a 15 percent change of a recession next year, with the JPMorgan team also upbeat:
Overall the labor market continues to look healthy, albeit with some recent softening in the trends for net hiring and wage growth. While there may be some bending in the economy, we don’t see much evidence of a break into a recession and we continue to believe that the Fed will be successful in engineering a soft landing for the economy.
Twilight of the Floating Idol: On Anthony Galluzzo’s “Against the Vortex”: a review of Against the Vortex: “Zardoz” and Degrowth Utopias in the Seventies and Today by Anthony Galluzzo ( Jordan S. Carroll, December 8, 2023, LA Review of Books)
As Galluzzo persuasively argues, Zardoz allegorizes the Malthusian panics of the late 1960s and ’70s. Paul R. Ehrlich’s 1968 bestseller The Population Bomb suggested that looming environmental catastrophe demanded the intervention of experts who could figure out ways to force people in poorer nations to adopt stringent birth control measures. The Immortals in Zardoz embody this vision of ecological balance achieved through totalitarian technocratic intervention. Indeed, Galluzzo observes that the Immortals live in what turns out to be a grounded interplanetary vessel, a literalization of Buckminster Fuller’s Spaceship Earth. The Immortals’ sustainable world is an enclosed system in which everything is monitored and controlled by an advanced computer.
This “hippie modernist” utopia depends on the violent exclusion and exploitation of the rest of the human population. Here Galluzzo draws a connection to the ecofascism of Garrett Hardin, who argued that well-provisioned First World nations should ride out the coming ecological collapse by hardening their borders against refugees, allowing the rest of the planet to die. This is precisely what the Immortals have done. For their part, the Brutals represent what Ehrlich would term a “death rate solution” to the issue of excess birth rates. The Immortals have invented a false religion to convince the Brutals to do their bidding: one of them pilots a giant floating head called Zardoz that booms, “The gun is good! The penis is evil!” before showering the Brutals with small arms to exterminate the planet’s surplus population.
Wealth never peaks.
The Income Tax Paradox (John Cochrane, December 6, 2023, The Grumpy Economist)
So why does the government tax income? Because, circa 1913, income was easier to measure than sales, value added, consumption, or other economically better concepts. When money changes hands, it’s relatively for the government to see what’s there and take a share. Tariffs really start from the same concept. It’s relatively easy to see what’s going through the port and demand a share, Adam Smith, David Ricardo and free trade be damned. But the government wanted more money than tariffs could provide.
Blue-collar jobs might be the best jobs (ELLE GRIFFIN, DEC 4, 2023, The Elysian)
Technology is ethereal. You might have a feeling that something’s going on behind the scenes, but you can’t see it or touch it. Similarly, the “product” sold by most tech companies is immaterial. You might be able to use it on a phone or computer, it might make work more convenient or life a little easier, but for the most part, it only physically exists on a server out in the ether.That’s exactly the sort of thing that could spur on an existential crisis. “Those of us who sit in an office often feel a lack of connection to the material world, a sense of loss, and find it difficult to say exactly what we do all day,” says Matthew Crawford in his book, Shop Class As Soulcraft: An Inquiry Into The Value of Work.
When we can see the work we’ve done, when we can actually feel the heat of a blast furnace singing the hairs off our skin, we are more invested in what we’re doing. “You’re making something,” says Saskia Duyvesteyn, chief R&D advisor at Rio Tinto Kennecott. “And I think sometimes that’s missing from other jobs. We are actually making a product in the end, and that’s one of the things that’s different about what we do than a lot of other industries.”
Bhavana Mukunda is an electrical engineer at the copper mine, and she actually considered a job in tech before deciding to study power systems instead. “In the tech industries, you have your code, you wrote your code, it may be used, it may not be used, but [at Kennecott], the challenge is there, it’s solved, and I see the effects of it… I got to see a plant go back online because of what I did, which is pretty cool.”
Nikki Haley wants to reform Social Security and Medicare. Donors are paying attention (Fredreka Schouten, 12/05/23, CNN)
Haley has called for several changes to the nation’s safety net programs, including increasing the age at which today’s younger workers would become eligible for Social Security retirement benefits and limiting the growth of benefits the wealthy receive. […]
A March CNN/SSRS poll of Republicans and Republican-leaning independents, for instance, found that 59% said it was “essential” that the GOP nominee for president “pledges to maintain Social Security and Medicare as they are.”
And just 7% of Republicans surveyed in October in an AP/NORC poll said that the government was spending too much on Social Security.
It’s little wonder then that Trump has steadfastly advocated keeping the programs as they are – despite his past support for major changes, including raising the retirement age to 70 and privatizing Social Security.
DeSantis has distanced himself from his votes as a congressman for nonbinding resolutions that would have increased the threshold for seniors to collect Social Security benefits to age 70.