Something, something, eye of a needle, camel, something
Ok, this is increasing my interest in groups that want to tax churches. The line between a charity and a political action or lobbying group has been blurred too often. I wish the tax revenue that could be generated through a stronger ban (as well as fines and penalties) was enough of an incentive to get changes passed by Congress.
Interesting, accessible take on the wild things happening to Western economies over the past several years.
The authorities are panicking. Corporate chieftains are demanding that their employees return to the way things were, in-person, in-office, full time. The federal government is hiring 87,000 new IRS employees to see about all that money out there. The Federal Reserve is trying to put the toothpaste back into the tube – the fastest pace of interest rate hikes in four decades and the concurrent unwind of their massive balance sheet. Everyone is scrambling to undo the post-pandemic jubilee. It was too much wealth in too many hands. Too much flexibility for too many people. Too many options. Too much economic liberation. “Companies can’t find workers!” the media screams but what they really mean is that companies can’t find workers who will accept the pay they are currently offering. This is a problem, we are told. After decades of stagnating wages, the bottom half of American workers finally found themselves in a position of bargaining power – and the whole system is now imploding because of it. Only took a year or so.
The War on Inflation™ is the new War on Drugs. In the 1980’s they were willing to sacrifice entire cities and communities to the War on Drugs. A million brothers and sons behind bars, a million children in fatherless homes in service to some nebulous goal of a drug-free society that’s never actually existed at any time in human history. We figured out how to ferment barley to get intoxicated more than 13,000 years ago, which predates the invention of the wheel for god’s sake. The War on Drugs had less of a chance of working than Prohibition did. We went ahead and destroyed countless lives with it anyway.
Now we have a new war.
On the topic of these wild things, there’s a paper that’s really changed my thinking. It’s paywalled, but s-c i cough h u -b
Thompson’s paper has a super explanation for why raising interest rates will do little against inflation.
He starts with the growth, in developed economies, of “stagnant services” (e.g. health care, education, restaurants, personal services) to over half the jobs. These are “stagnant” because (1) their prices cannot be raised, due to competition or public policy, (2) profit margins are slim, and (3) they are “hands on”, so no automation works. A feedback loop starts in the industries which do benefit from automation; high productivity has, over time, greatly reduced their need for labour. Stagnant services have picked up the employment slack since the 80’s, but these have little room for wage growth because of (1-3). Workers can move between jobs, but higher wages don’t happen because industrial jobs are more scarce, and service work is not as productive.
I’ll refer you to Thompson for the details (and feel quite free to skip the math in sections 6 and 7: he does a really good job, if you’ll take it from me). He shows that all of the usual reasons given for long-run low inflation (lower union membership, globalization, a slack labour market, monetary policy, etc.) do not reliably explain it. The increase in stagnant services turns out to be the best explanation for the low wage growth and, with that, low inflation of the last 40 years.
This also means that raising interest rates to fight inflation is an idea based on assumptions from a 1950’s to 1970’s economy that no longer exists. In turn, we are left to rely on spending and tax policy to fix our economic problems.
That fix, of course, needs politicians with talent and good will… leading to our next problem…
I found Thompson’s paper through a link in:
Very cool story. Thanks @anon15383236
Tentatively “interesting” pending further details. Hopefully great; take that copper mines!
Then there’s this:
It’s not a long story, but an interesting one:
The interesting part is WHY they paid a white family’s medical bills.
Always look for the helpers.
We need to overhaul our “justice” system completely… This is not justice. This is racism and classism.
I hope they’re making online access to the issue free.
There is online access, but one would have to subscribe (something I haven’t done yet).
This would require that lawmakers make changes that, in addressing their own even worse infractions, would eliminate their “stay out of jail” cards.
I know. I don’t care if it makes them unhappy or uncomfortable. We need to elect representatives who will make these changes, because they know it’s what’s best for all of us.
Yes, I know it’s difficult, etc, doesn’t mean it should not be said or that we should not keep pushing for these changes. But as a historian, I know that these kind of changes are possible, because instead of some inbred weirdo as my leader, I have voted for them instead.
I earlier added – then deleted – VOTE BLUE at the end of the post, but so obvious, like “Duh.”
