ScratchPad 2024-08-27 Tu: Better Living Through Biochemistry!; The Media Village Swamp Needs to Just Go Away; & MOAR...
A scratchpad...
A scratchpad…
Journamalism: We all know that had Kamala Harris spent any significant part of the past month preparing congressional negotiation-ready policy plans, detailing her differences with Biden, that the Media Village Swamp in Washington and elsewhere would then have done to her what they took such enormous glee in doing to Hillary Rodham Clinton and Al Gore: "too much policy", "not likable", "not somebody you can have a beer with", "unable to relate to real Americans because of too much focus on wonky details”.
We know the script by now.
And, of course, now the media village swamp complaint right now is that Kamala Harris is too late on policy. That is a lie. The Media Village Swamp needs to take a good long look in the mirror, and then give all they have to the poor and take up a life of an anonymous service to others:
Richard Tofel: ‘For all the journos saying Harris is “light on policy,” what are you talking about? — on the border, she’s for the Lankford bill; — on abortion, she has been clear and detailed;. — on inflation, it’s subsided; — on Ukraine and Gaza, she’s with Biden; — on taxes, she said no increases for those who make less than $400k (a pledge Biden kept); — she’s for a $500 child tax credit, with an income cap; — she opposes Project 2025 and Trump on the Department of Education: — she’s been detailed on guns; — she would retain the climate legislation Trump would repeal. Can those who see a lack of specificity please specify what they see lacking on issues about which a lot of voters care?… A bit of WSJ reporting and it turns out Harris has indeed made detailed policy proposals: — lower taxes for most Americans — but higher for the richest and large corporations — some lowering of deficits — avoiding Trump’s inflationary tariffs…<https://www.threads.net/@dicktofel/post/C_DPWpIOdF->
Cybergrifters: Elon Musk has reached the age of 53 without learning that the United States government covers its deficit by… borrowing money via issuing Treasury bonds?:
Paul Krugman: ‘Powell’s speech attributing inflation largely to transitory pandemic effects was apolitical, but it implicitly absolved Biden’s policies. So sure enough, tech bros who showed their political acumen by boosting RFK Jr. are declaring that government spending causes inflation: Elon Musk: “inflation is caused by the government spending more money than it earns, because they just print money to make up the difference. To solve inflation, reduce wasteful government spending. Your tax dollars should be spent well, not poorly… <threads.net/@paulkrugman7/post/C_Dk6Tvp…>
Is there any point in saying that Milton Friedman it is most dictatorial never said that the price level was in any sense proportional to the stock of fiat money issued? That in Friedman’s view it was always the combination of Federal Reserve-issued and bank-created money that was the driver of the price level and inflation? And that we have an independent agency called the Federal Reserve—which Trump wants to make not-independent of the president—to decide on how much how large the quantity of fiat money it is going to create by buying Treasury bonds?
Public Reason: For Sam Francis the good society was always racist, patriarchal, hierarchical, gentry-ruled. People who had societal position by virtue of the property they had inherited (or acquired through their social networks, luck, and entrepreneurial drive) were under threat from Negroes, race-mixers, feminists and their male lapdogs, and educated élites whose education consisted in learning how to work the levers of corporate, NGO, government, media, and other bureaucracies. Francis’s desired end-state for coping with this particular one of the many crises of modernity was for a Caesarist leader who would assign the people missions and thus protect them from their enemies on the one hand, and strengthen plutocracy and networks of the wealthy and so solidify gentry predominance on the other. Enough entrepreneurship and enterprise allowing you to join the gentry to keep aggressive young whippersnappers from causing trouble as Robespierres and Lenins. Too little entrepreneurship and enterprise for creative destruction to unseat the gentry on the other. This is not Trumpism, but what Trumpism might be were Trump not incompetent. And this is definitely not the Burnham of The Machiavellians:
The Ghent Zeppelin: On Samuel Francis on Burnham, & what it means to read outside the intellectual Overton window: ‘It’s always odd to write admiring about someone [near-contemporary] whose work has both contemporary valence and seems to fall outside the Overton Window of serious scholarship….Francis treats Burnham’s Managerial Revolution as the diagnosis of a ‘civilizational crisis’… “The liquidation of the middle class and its bourgeois cultural order… by colossal corporate organizations… centralized, executive bureaucratic [governmental] regimes… [and] an eventual extirpation of bourgeois culture… as the product of… ‘capitalist’ oligarchy, and later… [of] a “white, male heterosexual, Christian” ruling class…”. Francis takes from Burnham (and Schumpeter) the idea that capitalism undermines bourgeois culture…. For Burnham qua Machiavellian the rise of Caesareanism and risk of despotism was wholly deplorable…. In Francis there is, however, a clear strain that welcomes Caesereanism as a way to fight and turn back the managerial revolution… <https://digressionsimpressions.substack.com/p/on-samuel-francis-on-burnham-and>
Economics: Adam Posen pledges allegiance to team “r* has risen a lot”. However, the fact that—as of this week’s news about planned revisions to the payroll employment series—it looks as though nearly all of the increases in employment over the past year have come in health care and government gives me substantial pause with respect to Adam’s argument. The argument is basically this: at current interest rates employment and output growth continues, therefore interest rates are close to neutral given financial conditions and fiscal policy. Thus the Fed should not cut interest rates until it sees evidence of consequences that give it new reason to think that interest rates are above r*. It seems to me that a year of next to no employment growth in the sectors of the economy susceptible to being influenced by monetary policy is already such a signal—modulus the state of fiscal policy, of course. And I find it hard to think fiscal policy is having much stimulative effect right now, in spite of being substantially out of balance. Yes, financial conditions are good—but financial conditions are fragile, lags are long and variable, and it seems to me highly imprudent to keep interest rates so high relative to what we know r* was in the 2010s:
Adam Posen: Misreading the Impact of Monetary Policy: ‘Far from being too restrictive, US monetary policy is almost certainly too loose, judging by the robustness of financial markets and broader economic conditions even after 500 basis points of interest-rate hikes…. Financial markets are segmented, and central banks often must intervene directly in particular markets to have an impact…. As a forward indicator, financial conditions are at least as important as the slightly backward-looking signals sent by the labor market. Moreover, financial indicators remain quite accommodative. Equities have returned to high valuations <https://www.vanguard.co.uk/professional/insights-education/insights/us-equities-hit-new-highs-cause-for-caution>, and the decline <https://www.federalreserve.gov/econres/feds/files/2024054pap.pdf> in longer-term Treasury rates has persisted. Interest-rate spreads (such as those between lower-rated corporate bonds and comparable duration Treasuries) have widened <https://www.reuters.com/markets/us-credit-spreads-widen-political-jitters-treasuries-rally-2024-06-21/> somewhat but remain very low by historical standards, let alone for the end of a Fed tightening cycle… <https://www.project-syndicate.org/commentary/federal-reserve-monetary-policy-remains-loose-and-ignoring-key-real-world-indicators-by-adam-posen-2-2024-08>
strangely absent from all his commentary on inflation prospects and the politically feasible fiscal programmes, as if these were two completely separate subjects.
May I bring into the picture the fiscal outlook. I think a recent piece by Brad DeLong on the past and future of US public debt is a good starting point as any:
https://www.milkenreview.org/articles/federal-debt
The practical conclusion, at least in my reading (the author can correct me), is that as long as the US was able to bring its government deficit to 3 percent of GDP (coincidentally corresponding to the much derided EU fiscal rule) in the medium term, there was no reason to worry about the US public debt. If not … well the piece concluded by quoting Stern’s law « If something cannot go on forever, it will stop.»
The question then becomes how the accumulation of public debt would come to a stop, if the US polity is unable to get its act together on targeting the kind of fiscal deficit that Brad DeLong considers sufficient to assuage concerns about the sustainability of public debt.
One need not be a follower of the Fiscal Theory of the Price Level to conclude that the Fed may have problems in controlling inflation.
I think this line of argument is at least implicit in the conclusion of the quoted Brad DeLong’s piece on public debt. It is however strangely absent from all his subsequent commentary on i