A Useful Background Document from þe Democrats!, &
BRIEFLY NOTED: For 2022-08-08 Mo
I greatly enjoy and am, in fact, driven to write Grasping Reality—but its long-term viability and quality do depend on voluntary subscriptions from paying supporters. I am incredibly grateful that the great bulk of it goes out for free to what is now well over ten-thousand subscribers around the world. If you are enjoying the newsletter enough to wish to join the group receiving it regularly, please press the button below to sign up for a free subscription and get (the bulk of) it in your email inbox. And if you are enjoying the newsletter enough to wish to join the group of supporters, please press the button below and sign up for a paid subscription:
FIRST: Something Useful for Me, & Coordinated!
So Why Doesn’t the Democratic Party Technostructure Send Me Something Like This Every Week?
“A range of resources in discussing the Inflation Reduction Act:
Letter from 126 economists supporting the Inflation Reduction Act
Statement from bipartisan Treasury Secretaries supporting the Inflation Reduction Act
Statement from bipartisan IRS commissioners supporting the Inflation Reduction Act
Congressional Budget Office score or the legislation, showing more than $300 billion in savings over the budget window, including deficit reduction in 2023 and 2024
Analysis by the Committee for a Responsible Federal Budget, showing deficit reduction of up to $2 trillion over two decades
Tweet thread by Chye-Ching Huang on the false claim that the bill raises taxes on the middle-class
Tweet thread by Jean Ross on the false claim that the bill will hurt domestic manufacturing
Tweet thread by David Kamin on the false claim that the tax enforcement funding will be focused on middle-class Americans
HHS analysis finding that the uninsured rate fell to an all-time low in the first part of 2022, in significant part due to the ACA improvements extended in the Inflation Reduction Act (additional graphics here)
As President Biden wrote in his May 2022 Wall Street Journal op-ed: “We will likely see fewer record job-creation numbers, but this won’t be cause for concern. Rather, if average monthly job creation shifts in the next year from current levels of 500,000 to something closer to 150,000, it will be a sign that we are successfully moving into the next phase of recovery—as this kind of job growth is consistent with a low unemployment rate and a healthy economy.”
The economy created an average of 164k jobs per month in 2019 – the year before the pandemic began.
There were 7 months during Donald Trump’s presidency when the economy created fewer than 100k jobs per month. In fact, exactly 3 years ago – in July 2019 – the economy created just 78k jobs.”
When was it back in The Day… 1985? 1987? 1989?… that every morning the fax machine at the NBER (a non-partisan thinktank) would burble out the “Daily Line for Republican Newsmakers” for Marty Feldstein and company. The “everyone talking about the same thing” echo effect was—and still is—effective for the Republicans.
The bold paragraph raises a big question: since we are manifestly not (yet) “successfully moving into the next phase of recovery… [with moderated] job growth is consistent with a low unemployment rate and a healthy economy…”, should we be worried? And I think the answer is clearly no. The inflation gauge you should be watching—the Core PCE—is not very elevated:
We will see how much it comes down as plague- and war-driven supply-chain disruptions come to an end. We will see what effects the remarkable tightening of financial conditions that have taken place over the past six months will have on the economy:
If I were the Federal Reserve, I would be strongly tempted to stand pat, with the yield curve on the point of inversion, until the data becomes clearer and there is some new signal arising out of the Core PCE.
The level of the Core PCE, after all, is only 1/2 x 6/4 x 3% - 3/4% = 1.5%-points above what it would have been had the Federal Reserve hit its 2% inflation target throughout the plague years. I know of no theory about what the neutral rate of inflation ought to be that would suggest that such a level-jump in response to such a series of structural shocks should be thought of as excessive.
One Video:
Noah Smith: Video interview: Olivier Blanchard on Inflation
Very Briefly Noted:
Dan Pfeiffer: Why John Fetterman is So Good at Messaging: ‘John Fetterman talks to his voters the way he talks to his friends. Human to human…. Fetterman also talks directly to voters. His campaign frequently posts videos on Instagram and elsewhere of the candidate talking directly to the camera about the campaign or reacting to the news. These videos are lightly produced and therefore feel more authentic… <https://messagebox.substack.com/p/why-john-fetterman-is-so-good-at>
Jonathan Chait (2018): New Trump Economist Kudlow Has Been Wrong About Everything <https://nymag.com/intelligencer/2018/03/new-trump-economist-kudlow-has-been-wrong-about-everything.html>
Twitter: mDAU FAQ <https://www.sec.gov/Archives/edgar/data/0001418091/000119312522213011/d389634ddefa14a.htm>
Nico Voigtlaender & Hans-Joachim Voth: Persecution Perpetuated: The Medieval Origins of Anti-Semitic Violence in Nazi German: ‘Pogroms during the Black Death are a strong and robust predictor of violence against Jews in the 1920s, and of votes for the Nazi Party… <https://www.nber.org/papers/w17113>
Michael Mignano: The End of Social Media: ‘Last week, Meta announced that the Facebook newsfeed would be shifting towards an algorithmic, recommendation-based model of content distribution… the end of social media as we’ve known it…. Platforms like the massively popular (and still growing) TikTok and YouTube put far less emphasis on friends and social graphs in favor of carefully curated, magical algorithmic experiences that match the perfect content for the right people at the exact right time. This is recommendation media, and it’s the new standard… <https://every.to/p/the-end-of-social-media>
Sam Kim & Chris Anstey: Semiconductor Shortage Seems to Be Easing <https://www.bloomberg.com/news/newsletters/2022–08–06/semiconductor-shortage-seems-to-be-easing-new-economy-saturday?cmpid=BBD080622NEF>
Michael A. Cohen: Arizona Primary Election Results Show Trump’s GOP Destruction: ‘Republicans are clinging to Trump’s election lies in battleground states. They’re about to regret it… <https://www.msnbc.com/opinion/msnbc-opinion/arizona-primary-election-results-show-trump-s-gop-destruction-n1297676>
¶s:
This is, to put it bluntly, exactly right. You can’t steer between Scylla and Charybdis unless you know how to read the currents, and core inflation is the best way to read the currents:
Paul Krugman: Wonking Out: The Meaning of Falling Inflation: ‘The majority of gas stations in the United States are already charging less than $4 a gallon, and declining wholesale prices suggest that retail prices still have further to fall. Food prices are also coming down…. Policymakers… should respond to the good inflation news by keeping calm and carrying on…. The concept of “core” inflation—distinguishing between volatile prices, like food and energy, and slower-moving prices that have a lot of inertia—has been highly successful since the economist Robert Gordon introduced it in the 1970s. Time and again, the Fed has steered through crises by ignoring critics who wanted it to panic over blips in inflation caused by temporary jumps in commodity prices.…
The major reason to fear that Adam is wrong here is that back in the before times better information, technologies, greatly raised the financial value of being close to the information core so that you could have personal contact with those at the heart of the communications network. That suggests that there are important ways in which "remoteness" is very much second class. Until we understand what those ways are, I have to fear that Adam is wrong here:
Adam Ozimek: On Jobs, Remote Work, & Housing: ‘Remote work is a general purpose technology… spillovers throughout industries… indirect impacts. And housing stock is one example, but there are so many types of capital that need to adjust in the long run. There are so many organizational forms that are going to change…. I’m not saying the aggregate economic impact is going to be bigger than or as big as electrification, but it’s that kind of fundamental change…
LINK:
Very nice thing to assign. Put this in the tickler file:
Victor Stango & Jonathan Zinman: We Are All Behavioral, More or Less: A Taxonomy of Consumer Decision Making: ‘We examine how 17 behavioral biases relate to each other, to three standard measures of risk and time preferences, to cognitive skills, personality, and demographics, and to outcomes in household finance, well-being, and health. Most consumers in our nationally representative panel data exhibit multiple biases, with substantial cross-person heterogeneity. Biases are positively correlated within person, especially after adjusting for measurement error. From that correlation structure, we reduce our 20 bias and standard preference measures to four behavioral common factors. Each BCF reflects a group of related biases re: beliefs, decision quality, discounting, or risk/uncertainty attitudes. The first two BCFs also strongly correlate with each other (positively) and cognitive skills (negatively). The first three BCFs and cognitive skills strongly correlate with various outcomes in the expected directions. Our results support processing-based models where basic limitations in cognition and/or attention produce multiple biases, and have several other implications for theory and practice…
WAIT? WHAT? What makes an achievement “bipartisan” when the least-crazy and most-vulnerable 20% of the Republican senators (and fewer house members) peel off? CHIPS, infrastructure, gun safety, indeed BBB—they ought to have passed 80-20, all of them:
Economist: Joe Biden Has Disappointed Everyone: ‘Biden can point to a series of bipartisan accomplishments, now including a bill to subsidise America’s semiconductor industry on top of the first gun-safety legislation in almost 30 years and a $1.2trn infrastructure law…. Mr Biden’s patience for talks and tolerance for compromise, not qualities associated with the previous president, have also yielded breakthroughs (for now, within his party) on fighting climate change and restraining drug costs…
In general, Democrats do well when they convince the working class in the middle class that they have interests in common with minorities in equitable growth. Democrats do badly when the working class in the middle class conclude that growth is not equitable and that they need to stop on minorities.In general, Democrats do well when they convince the working class in the middle class that they have interests in common with minorities in equitable growth. Democrats do badly when the working class in the middle class concluded that growth is not equitable, and that they need to stomp on minorities who are getting more than their fair share—that social democracy seeks to treat people equally, and since people—minorities and such from the perspective of many, and working-class people from the perspective of many others—are unequal, that is a wrong and bad thing to do. Manchin appears to have largely avoided the consequences of that:
Greg Sargent: The Huge, Hidden Bonanza in Getting Joe Manchin to Yes: ‘After insisting that extensive spending would be inflationary, he now takes credit for scrubbing out allegedly inflationary effects, as the deal puts $300 billion into deficit reduction. To counter GOP screams about raising taxes, Manchin says hikes will hit only the wealthy, noting that Wall Street has “been on a hell of a ride.” Manchin, you see, is only for rebalancing an economy badly unbalanced by elite rigging. And on climate, Manchin says he backs investment in the technologies of a greener future, but without an abrupt abandonment of fossil fuels…. This would be our biggest investment in our climate future ever…. If Manchin can sell this package on his own chosen terms in West Virginia, that hints at new possibilities for Democrats…
I think the consensus is that the mythical founding father of “Claremont”, Harry V. Jaffa, would be very unhappy with what those who claim to be his intellectual grandchldren are doing. It is not just a hint of the “dehumanizing rhetoric that fascist propagandists employ”:
Laura K. Field: What the Hell Happened to the Claremont Institute?: ‘“You don’t see this on Fox or any of the other stations” but you can see it in “the data.”… [John] Eastman became very animated, pumping his fists and yelling: “We no longer live in a self-governing republic if we can’t get the answer to this question! This is bigger than President Trump! It is the very essence of our republican form of government, and it has to be done! And anybody that is not willing to stand up to do it does not deserve to be in the office! It is that simple!”…
In the aftermath of January 6, Michael Anton has continued to defend his work hyping the election fraud narrative, albeit in an incredibly awkward and self-denying way… the extent to which his claims about voter fraud rely on alleged “statistical anomalies” and “historical anomalies”… seems a bit at odds with the old one: According to Flight 93 standards, Trump represented something unprecedented, world-historical, and super-risky; but apparently things didn’t get strange enough by 2020 to account for anything weird….
[Glenn] Ellmers offers advice to his readers: “If you are a zombie or a human rodent who wants a shadow-life of timid conformity, then put away this essay and go memorize the poetry of Amanda Gorman.” Gorman is the young black poet who spoke movingly at President Joe Biden’s inauguration. Ellmers’s line here is vicious on its face, and John Ganz rightly describes it as a hint of “the kind of dehumanizing rhetoric that fascist propagandists employ.” But it also ought to be read in the context of Claremont and racism…
LINK: <https://www.thebulwark.com/what-the-hell-happened-to-the-claremont-institute/>
American fascism in 2022:
David Weigel & Isaac Arnsdorf: Hungary Leader Viktor Orban Addresses CPAC Dallas Amid ‘Mixed Race’ Blowback: ‘“The West is at war with itself,” Orban said. “The globalist can all go to hell. I have come to Texas,” he added, stumbling over a famous slogan attributed to Texas legend Davy Crockett…. Orban’s latest controversy: a speech in which he railed against Europe becoming “mixed race,” saying that Europeans did not want to live with people from outside the continent. One of his own close advisers resigned in protest, calling the speech “pure Nazi.” But Orban has found defenders… Donald Trump… Tucker Carlson… J.D. Vance…
LINK: <https://www.washingtonpost.com/nation/2022/08/04/viktor-orban-cpac-dallas-speech/>
I gave up contributing to the Democratic National Committee years ago, right after Howard Dean left. IMO, he was the last chair who understood what needed to be done and every subsequent leader has been woeful. They totally lost the thread when the GOP were organizing to take over statehouses and governors in a lot of states back in 2010 and now are Gerrymandered out of existence in those states. I still get lots of meaningless emails every day but the only one getting money is the Obama/Holder effort that fights for fair elections.
I agree that the update which you received is an example of the useful things which a functional Democratic party ought to be doing. However, I seem to be on every Democratic email list in God's creation. I've been an officer in both the local and state party. I'm also a PhD economist who would have been happy to voice support for IRA. Why the hell didn't I get this mailing? In fairness, you are a nationally prominent public intellectual and I'm a little country professor (retired).