You´re looking at things "upside down". Core CPI inflation in Japan at -1.7% the lowest since at least 1960! While US has monetary expansion that "adds" to supply shocks, in Japan contractionary monetary policy "subtracts" from supply shock generated inflation!
I was thinking about the norms with regard to profit seeking, wage demands and having no goods available instead of raising prices. I don't think American firms would ever apologize for raising their prices but there seems to be this hope that inflation is transitory. Also Japan was doing QE, negative interest rates and consistent deficit spending before it was cool. Hence the reference to the Vapors song from the 1997 film "Romy and Michelle Highschool Reunion".
"The highest inflation since my childhood, now at 8.5%. Despite the many excuses you’ve heard, most of this is not temporary supply shocks, but classic core inflation." Not "most", but a "combo". I Europe it´s 100% due to supply shocks, which adequately explains the lower inflation there.
I know a young professional couple who left the bay area due to covid/telecommuting, then found the cost of living much lower in the new area so that one of them could quit their full time job and just be a part-time yoga instructor. Decreasing the scope of an individual's labor force participation wouldn't show up in the labor force participation rate stats. Exiting the big city due to covid restrictions would tend to reduce wages and productivity.
"Powell and other Republican central bankers have been severely alienated by Trumpian populism, just like most educated Republicans. As a result, the Fed is making a bipartisan decision to aid the Democrats by delaying the inflation-cutting recession until right after the 2022 midterm elections."
This basically explains the all policy since 2016.
Ironically, inflation is so unpopular that it might literally make Trump president again in 2024.
4. If, contra your claim, the Fed were not politically motivated at all, how would that change decision-making? You imply that they would raise interest rates a little higher faster. But maybe not. The lower interest rate keeps down drama around international dollars and long term expectations for interest rates still are low. I am not confident the cui bono works here, when so much of the benefit of slow rolling the hikes is international (and not merely going towards the Democratic party).
"While international comparisons of labour markets are challenging due to differences in concepts, comparisons between the labour market situation in Canada and in the United States can be made by adjusting Canadian data to US concepts. For more information, see "Measuring Employment and Unemployment in Canada and the United States – A comparison."
A frequent point of comparison between Canada and the United States is the employment rate, defined as the number of people who are employed as a percentage of the working-age population, which is typically higher in Canada. Adjusted to US concepts, and for the population aged 16 and older, the employment rate was 62.4% in Canada and 60.1% in the United States in March. The rate was unchanged from February 2020 in Canada, compared with a decline of 1.1 percentage points in the United States.
The labour force participation rate, also adjusted to US concepts, was 65.2% in Canada in March, down 0.3 percentage points from February 2020. In the United States, the participation rate was 62.4%, and remained below the February 2020 rate by a full percentage point.
The unemployment rate, adjusted to US concepts, was 4.3% in Canada in March 2022, 0.7 percentage points higher than in the United States (3.6%). The rate in Canada was 0.4 percentage points lower than in February 2020, while in the United States it was little changed from the pre-pandemic rate."
Great post. Brutus and Cassius were convinced Caesar was a mortal threat. Killed him in haste with no sensible plan for what ought to follow. Eventually lead the the convulsions that lead to Octavian becoming sole ruler. Same arrogance of the anti trumpers today pulling the social fire alarm. So much social poison in the air now.
The US economy it's turning Japanese, I think it's turning Japanese, I really think so.
I'm afraid it's turning Argentinian
That´s looking at it with a very strong "magnifying glass"!
You´re looking at things "upside down". Core CPI inflation in Japan at -1.7% the lowest since at least 1960! While US has monetary expansion that "adds" to supply shocks, in Japan contractionary monetary policy "subtracts" from supply shock generated inflation!
I was thinking about the norms with regard to profit seeking, wage demands and having no goods available instead of raising prices. I don't think American firms would ever apologize for raising their prices but there seems to be this hope that inflation is transitory. Also Japan was doing QE, negative interest rates and consistent deficit spending before it was cool. Hence the reference to the Vapors song from the 1997 film "Romy and Michelle Highschool Reunion".
"The highest inflation since my childhood, now at 8.5%. Despite the many excuses you’ve heard, most of this is not temporary supply shocks, but classic core inflation." Not "most", but a "combo". I Europe it´s 100% due to supply shocks, which adequately explains the lower inflation there.
https://marcusnunes.substack.com/p/the-age-of-inflation-again?s=w
I know a young professional couple who left the bay area due to covid/telecommuting, then found the cost of living much lower in the new area so that one of them could quit their full time job and just be a part-time yoga instructor. Decreasing the scope of an individual's labor force participation wouldn't show up in the labor force participation rate stats. Exiting the big city due to covid restrictions would tend to reduce wages and productivity.
"Powell and other Republican central bankers have been severely alienated by Trumpian populism, just like most educated Republicans. As a result, the Fed is making a bipartisan decision to aid the Democrats by delaying the inflation-cutting recession until right after the 2022 midterm elections."
This basically explains the all policy since 2016.
Ironically, inflation is so unpopular that it might literally make Trump president again in 2024.
Policy makers should make policy not politics.
Sources for #4? If a stranger said that I would dismiss them for being a conspiratorial nutjob. Please tell me you have evidence.
4. If, contra your claim, the Fed were not politically motivated at all, how would that change decision-making? You imply that they would raise interest rates a little higher faster. But maybe not. The lower interest rate keeps down drama around international dollars and long term expectations for interest rates still are low. I am not confident the cui bono works here, when so much of the benefit of slow rolling the hikes is international (and not merely going towards the Democratic party).
The Fed didn't really double the money supply. They started counting savings as M1.
https://fredblog.stlouisfed.org/2021/05/savings-are-now-more-liquid-and-part-of-m1-money/
What is it about "Trumpian populism" that should "severely alienate" Republican central bankers? Any more than progressive populism?
Different situation in Canada: https://www150.statcan.gc.ca/n1/daily-quotidien/220408/dq220408a-eng.htm
"While international comparisons of labour markets are challenging due to differences in concepts, comparisons between the labour market situation in Canada and in the United States can be made by adjusting Canadian data to US concepts. For more information, see "Measuring Employment and Unemployment in Canada and the United States – A comparison."
A frequent point of comparison between Canada and the United States is the employment rate, defined as the number of people who are employed as a percentage of the working-age population, which is typically higher in Canada. Adjusted to US concepts, and for the population aged 16 and older, the employment rate was 62.4% in Canada and 60.1% in the United States in March. The rate was unchanged from February 2020 in Canada, compared with a decline of 1.1 percentage points in the United States.
The labour force participation rate, also adjusted to US concepts, was 65.2% in Canada in March, down 0.3 percentage points from February 2020. In the United States, the participation rate was 62.4%, and remained below the February 2020 rate by a full percentage point.
The unemployment rate, adjusted to US concepts, was 4.3% in Canada in March 2022, 0.7 percentage points higher than in the United States (3.6%). The rate in Canada was 0.4 percentage points lower than in February 2020, while in the United States it was little changed from the pre-pandemic rate."
Great post. Brutus and Cassius were convinced Caesar was a mortal threat. Killed him in haste with no sensible plan for what ought to follow. Eventually lead the the convulsions that lead to Octavian becoming sole ruler. Same arrogance of the anti trumpers today pulling the social fire alarm. So much social poison in the air now.