I think the daily press have been suckers for economics which get both current price increases and future prospects wrong.
As your article says, Covid and Ukraine are salient right now, so we have a price bump and some stringencies. We are not facing Armageddon because the price of a loaf of bread just went up a quarter.
SOTU speeches are a series of lies about the current situation bookended by promises that will never be kept and troublesome things avoided.
From the low expectations one has for Joe Biden, he met the form and did not disappoint.
Inflation is not low. It was 1.4% when Biden came into office and a number of egregious campaign promise actions later skyrocketed to more than 5X.
That inflation is baked into the cake and will never be diminished. Only the RATE OF INFLATION will dampen and that has not yet happened from a substantive perspective.
We are in four wars --
1. The War on Energy - Biden started this one and we are losing it
2. The War at the Border - Biden started this one and we are really losing it
3. The Cold War with China - Biden has done nothing to diminish this one, hasn't even recognized it
4. Ukraine - Biden is probably the reason the Russians pulled the trigger literally. I give Biden fair marks for how he has responded.
None of the above were mentioned in accordance with their importance, instead we got a lecture on insulin and paying your fair share which will also not happen.
Biden continues to be the problem in the US today.
We have such low expectations for this President that we breathe a sigh of relief when he gets most of the names right and does not fall asleep.
How is it possible that increasing unionization won’t increase inflation? All unions do is restrict supply and raise costs, and do it by repugnant hostage-taking. The delicious irony of unionization causing more pain for its members rather than less is difficult to pass up, but I think I’d still rather just skip it. Modern unions also just another vector for DEI and often as not support management against employees when racial or sexual issues are implicated.
Unions used to be illegal conspiracies. We have to go back. Bust them all. We can even start with the police unions.
I am a YIMBY, but we mostly focus on housing, with some consensus locally that transit and bikes are good too. But we need a broader nationwide movement that is pro-building things, especially renewable energy and transit. I would say I am pessimistic, but the rapid growth and increasing political influence of the YIMBY movement in SF and even now nationwide gives me hope.
"The law, as passed, will raise $738 billion and authorize $391 billion in spending on energy and climate change, $238 billion in deficit reduction, three years of Affordable Care Act subsidies, prescription drug reform to lower prices, and tax reform.[2][4] The law represents the largest investment into addressing climate change in United States history.[5] It also includes a large expansion and modernization effort for the Internal Revenue Service (IRS).[6] According to several independent analyses, the law is projected to reduce 2030 U.S. greenhouse gas emissions to 40% below 2005 levels.[7] The projected impact of the bill on inflation is disputed."
> PPPS. New new NGDP figures show 7.3% growth over the past four quarters, which is far too high. I warned you all back in early 2022 not to assume that just because the Fed had embarked on a series of rate increases they were tightening monetary policy. Interest rates are not monetary policy. Money was extremely loose in 2022.
“All these policies are great” 🤣 “inflation reduction act” that increased inflation. “Buy American” rules that discourage investment and raise inflation. Tell petroleum producers they only have a decade left and drain the strategic petroleum reserve and not yet start to refill it. Restrict oil and gas exploration helping to raise prices then belatedly undoing the changes and claiming he brought gas prices down. CHIPS act but no increase in H1A visas or even restart interviews. Pour more money into solar and wind even though the costs have come way down and require an updated grid blocked mainly by NEPA. Refuse to end the Covid emergency so that more money and regulations can stay in effect even though Joe said “Covid is over”. Trump sucks but Joe’s policies are no better.
Given the stable investment levels amidst rising tax rates, could this be evidence of Biden's policies starting to stimulate investment, with the effects perhaps being counterbalanced by the tax increases? Could there be a methodology to separately assess the impacts of these policy changes and the tax increases on investment levels?
What amazing advances in solar and wind energy components have been made in 2022 to decrease the price? All utilities and wind farms have been citing increased component costs...
This is a great analysis (as always!) but there's one blind spot that I haven't seen anyone really address: the positive job creation benefits of extra/excess regulation at all levels of government. After all, there must be good reasons why permitting reform wasn't passed - in spite of tremendous impetus (including from the Joe Manchins of the world) to do so - and I have to believe that the entrenched lobbies that surely includes unions and other core Democratic constituencies is part of the answer/problem here. Has anyone done a real cost/benefit to removing these regulations? Does it turn into a benefit when netted against the positive investment/projects that could move forward? Intuitively, I feel like the answer is yes but fear much of the benefit extends far into the future with diffuse impact, and so is perfectly designed to result in little to no political will to push through, but defer to the experts on what has been written or said on the subject.
GDP growth was negative Q1&2'22, and net real growth in 2022 was quite low. This some disinflation, but certainly no boom.
Much of the remainder ignores that Biden created the problems that are slowly improving, based on his 'centrally planned' economic thoughts. Noah seems t think that more central planning is the cure for bad central planning.
I thought that was a clear analysis of where we stand, now, in 2023. Would have liked to see more discussion on how Biden's actions created many of the problems he was being given credit for solving. I am particularly disappointed in the credit given to Biden for bringing energy prices down when it was mostly his policies that pushed them up in the first place. The biggest driver in bringing them down right now is that the traditional energy companies see that there is a fast buck to be made today without the necessity of investing in infrastructure for the long term which is inadvisable due to regulatory uncertainty. That short term profit opportunity exists due to Russia's war rather than Biden's policies as he is creating more problems and failing to solve existing problems along the way.
The lack of a physical work ethic in American people has essentially disestablished the desire to build a new and innovative infrastructure. Unions protect workers and make physical jobs more attractive. OSHA can protect the workers to make physical occupations safe and desirable. We really don't need any more Kings with slaves.
Why not propose a law that requires a minimum of 20% of dividends be paid as special bonus to workers? There should be broad voter support for it and it will go a long way towards increasing the share of the pie going to labor. And frankly more actionable politically than hoping for a comeback of union power.
Fine article.
I think the daily press have been suckers for economics which get both current price increases and future prospects wrong.
As your article says, Covid and Ukraine are salient right now, so we have a price bump and some stringencies. We are not facing Armageddon because the price of a loaf of bread just went up a quarter.
Very good review.
SOTU speeches are a series of lies about the current situation bookended by promises that will never be kept and troublesome things avoided.
From the low expectations one has for Joe Biden, he met the form and did not disappoint.
Inflation is not low. It was 1.4% when Biden came into office and a number of egregious campaign promise actions later skyrocketed to more than 5X.
That inflation is baked into the cake and will never be diminished. Only the RATE OF INFLATION will dampen and that has not yet happened from a substantive perspective.
We are in four wars --
1. The War on Energy - Biden started this one and we are losing it
2. The War at the Border - Biden started this one and we are really losing it
3. The Cold War with China - Biden has done nothing to diminish this one, hasn't even recognized it
4. Ukraine - Biden is probably the reason the Russians pulled the trigger literally. I give Biden fair marks for how he has responded.
None of the above were mentioned in accordance with their importance, instead we got a lecture on insulin and paying your fair share which will also not happen.
Biden continues to be the problem in the US today.
We have such low expectations for this President that we breathe a sigh of relief when he gets most of the names right and does not fall asleep.
JLM
www.themusingsofthebigredcar.com
How is it possible that increasing unionization won’t increase inflation? All unions do is restrict supply and raise costs, and do it by repugnant hostage-taking. The delicious irony of unionization causing more pain for its members rather than less is difficult to pass up, but I think I’d still rather just skip it. Modern unions also just another vector for DEI and often as not support management against employees when racial or sexual issues are implicated.
Unions used to be illegal conspiracies. We have to go back. Bust them all. We can even start with the police unions.
I am a YIMBY, but we mostly focus on housing, with some consensus locally that transit and bikes are good too. But we need a broader nationwide movement that is pro-building things, especially renewable energy and transit. I would say I am pessimistic, but the rapid growth and increasing political influence of the YIMBY movement in SF and even now nationwide gives me hope.
"Inflation Reduction Act of 2022"
"The law, as passed, will raise $738 billion and authorize $391 billion in spending on energy and climate change, $238 billion in deficit reduction, three years of Affordable Care Act subsidies, prescription drug reform to lower prices, and tax reform.[2][4] The law represents the largest investment into addressing climate change in United States history.[5] It also includes a large expansion and modernization effort for the Internal Revenue Service (IRS).[6] According to several independent analyses, the law is projected to reduce 2030 U.S. greenhouse gas emissions to 40% below 2005 levels.[7] The projected impact of the bill on inflation is disputed."
I like how that last line is in there...
See https://en.wikipedia.org/wiki/Inflation_Reduction_Act_of_2022
Unfortunately, just because inflation is coming down at the moment doesn't mean it's anywhere near low enough. From Scott Sumner (https://www.themoneyillusion.com/john-roberts-on-monetary-reform/#:~:text=PPPS.%20New%20new,loose%20in%202022.):
> PPPS. New new NGDP figures show 7.3% growth over the past four quarters, which is far too high. I warned you all back in early 2022 not to assume that just because the Fed had embarked on a series of rate increases they were tightening monetary policy. Interest rates are not monetary policy. Money was extremely loose in 2022.
For reference, Scott Sumner sees 4% NGDP as a good target - that allows 2% real GDP growth and 2% inflation. In Q4 2022, on the other hand, we're only 1% higher in real GDP than a year ago (https://fred.stlouisfed.org/graph/?g=ZS1O), and 1.2% annualized growth in real GDP from Q3 to Q4 (https://fred.stlouisfed.org/graph/?g=ZS1Ohttps://fred.stlouisfed.org/graph/?g=ZS1L), so inflation appears like it will remain quite high for the foreseeable future.
Permitting reform seems to have evaporated. And fossil fuel needed for a decade? That'll drive investment...
“All these policies are great” 🤣 “inflation reduction act” that increased inflation. “Buy American” rules that discourage investment and raise inflation. Tell petroleum producers they only have a decade left and drain the strategic petroleum reserve and not yet start to refill it. Restrict oil and gas exploration helping to raise prices then belatedly undoing the changes and claiming he brought gas prices down. CHIPS act but no increase in H1A visas or even restart interviews. Pour more money into solar and wind even though the costs have come way down and require an updated grid blocked mainly by NEPA. Refuse to end the Covid emergency so that more money and regulations can stay in effect even though Joe said “Covid is over”. Trump sucks but Joe’s policies are no better.
Thank you for the informative article.
Given the stable investment levels amidst rising tax rates, could this be evidence of Biden's policies starting to stimulate investment, with the effects perhaps being counterbalanced by the tax increases? Could there be a methodology to separately assess the impacts of these policy changes and the tax increases on investment levels?
Your insights would be greatly appreciated.
What amazing advances in solar and wind energy components have been made in 2022 to decrease the price? All utilities and wind farms have been citing increased component costs...
This is a great analysis (as always!) but there's one blind spot that I haven't seen anyone really address: the positive job creation benefits of extra/excess regulation at all levels of government. After all, there must be good reasons why permitting reform wasn't passed - in spite of tremendous impetus (including from the Joe Manchins of the world) to do so - and I have to believe that the entrenched lobbies that surely includes unions and other core Democratic constituencies is part of the answer/problem here. Has anyone done a real cost/benefit to removing these regulations? Does it turn into a benefit when netted against the positive investment/projects that could move forward? Intuitively, I feel like the answer is yes but fear much of the benefit extends far into the future with diffuse impact, and so is perfectly designed to result in little to no political will to push through, but defer to the experts on what has been written or said on the subject.
I don't agree at all, but haven't the time to correct every oversight. Labor Force participation rate is at a 45yr low https://fred.stlouisfed.org/graph/fredgraph.png?g=ZVzC
GDP growth was negative Q1&2'22, and net real growth in 2022 was quite low. This some disinflation, but certainly no boom.
Much of the remainder ignores that Biden created the problems that are slowly improving, based on his 'centrally planned' economic thoughts. Noah seems t think that more central planning is the cure for bad central planning.
I thought that was a clear analysis of where we stand, now, in 2023. Would have liked to see more discussion on how Biden's actions created many of the problems he was being given credit for solving. I am particularly disappointed in the credit given to Biden for bringing energy prices down when it was mostly his policies that pushed them up in the first place. The biggest driver in bringing them down right now is that the traditional energy companies see that there is a fast buck to be made today without the necessity of investing in infrastructure for the long term which is inadvisable due to regulatory uncertainty. That short term profit opportunity exists due to Russia's war rather than Biden's policies as he is creating more problems and failing to solve existing problems along the way.
The lack of a physical work ethic in American people has essentially disestablished the desire to build a new and innovative infrastructure. Unions protect workers and make physical jobs more attractive. OSHA can protect the workers to make physical occupations safe and desirable. We really don't need any more Kings with slaves.
Why not propose a law that requires a minimum of 20% of dividends be paid as special bonus to workers? There should be broad voter support for it and it will go a long way towards increasing the share of the pie going to labor. And frankly more actionable politically than hoping for a comeback of union power.