Andrew Sullivan and Robert Wright on Ukraine; Kling advice for young would-be academics; Hanania advice for young would-be academics; Noah Smith on macro;
Yes, the West has a short little span of attention. I pointed this out 3 months ago when I wrote that the Russians would likely succeed in whatever their goal ultimately was, even if it took them more time than most were predicting (including myself) when the invasion started. The character of the Russians includes an astonishing degree of patiences and stubbornness- something Americans used to have, but have no longer as we infantilize our society.
We were attacked at Pearl Harbor. We weren't attacked in Ukraine. There is a world of difference between the two.
Japan and Germany needed a total tear down and rebuild. Ukraine needs some pragmatic horse trading. It will be easier to get peace in Ukraine if the temperature gets turned down a little.
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Over his presidency, Obama had an average deficit of 5.7% of GDP a year. Trump averaged 3.9% a year before COVID. Compared to the 2016 deficit of 3.1% of GDP, Trump had 3.4%, 3.8%, and 4.6% in the three years proceeding COVID, all below the Obama average and not that much higher than what he was left with.
According to COVID spending tracker, there was $7T in federal stimulus and the federal reserve engaged in another $7T of stimulus. $7T is 35% of GDP, more than the entire cumulative non-COVID budget deficit of the Trump administration.
Let's blame the deficits and the inflation on those that disproportionately deserve it. The left.
“Getting back to the low and steady regime is going to take a lot more austerity than the politicians or the markets are prepared for.”
But do the politicians really have a choice? My sense is the electorate will not be enthused about keeping them in office if something effective is not done to get prices down.
The important thing about inflation that is seldom stressed is that we are talking about truly dynamic systems, which appear very "non-linear", if you don't include time and time delays in your thinking. Back to differential and partial differential equations that describe the economy and making the true value of money just another variable, you will see huge effective time delays between when you print money and when the value of money falls (ie inflation). Money flowing into different types of bubbles have different time constants in their response functions.
I was still laughing at your quote from Noah Smith when I was surprised by your two paragraphs on inflation. First, surprised because of your preference to call stimulus the increased spending to compensate people for their income losses in 2020-21 (should we think of insurance payments for losses as stimulus? what about inheritances?). BTW, I've been waiting your appraisal of government policies to deal with the virus, the disease, and the pandemic.
Second, surprised because of your preference to call regimes to different periods of an economy's macro performance. Inflation --including hyperinflation-- is just a symptom we like to watch because it may tell us something about ongoing changes in the forces conditioning that performance (especially in disposable real income). Any serious discussion of that performance should be focused on those forces rather than inflation. The large expansion of income redistribution programs and their financing should be the focus of your concern rather than inflation (and if you think that it will take an extraordinary government intervention to mitigate global warming, including a huge spending, focus on it). Or if you observe a large increase in energy prices --like in 1973, and 2021-22-- the concern should be on how people and governments' responses will condition performance. By assuming inflation is a measure of performance you are joining the macroeconomists you dislike into barking at the wrong tree.
Yes, the West has a short little span of attention. I pointed this out 3 months ago when I wrote that the Russians would likely succeed in whatever their goal ultimately was, even if it took them more time than most were predicting (including myself) when the invasion started. The character of the Russians includes an astonishing degree of patiences and stubbornness- something Americans used to have, but have no longer as we infantilize our society.
We were attacked at Pearl Harbor. We weren't attacked in Ukraine. There is a world of difference between the two.
Japan and Germany needed a total tear down and rebuild. Ukraine needs some pragmatic horse trading. It will be easier to get peace in Ukraine if the temperature gets turned down a little.
---
Over his presidency, Obama had an average deficit of 5.7% of GDP a year. Trump averaged 3.9% a year before COVID. Compared to the 2016 deficit of 3.1% of GDP, Trump had 3.4%, 3.8%, and 4.6% in the three years proceeding COVID, all below the Obama average and not that much higher than what he was left with.
According to COVID spending tracker, there was $7T in federal stimulus and the federal reserve engaged in another $7T of stimulus. $7T is 35% of GDP, more than the entire cumulative non-COVID budget deficit of the Trump administration.
Let's blame the deficits and the inflation on those that disproportionately deserve it. The left.
Hanania is like the anti-Jeffrey Friedman, boldly leaning into the social media panopticon and letting culture war sweep him up.
“Getting back to the low and steady regime is going to take a lot more austerity than the politicians or the markets are prepared for.”
But do the politicians really have a choice? My sense is the electorate will not be enthused about keeping them in office if something effective is not done to get prices down.
The important thing about inflation that is seldom stressed is that we are talking about truly dynamic systems, which appear very "non-linear", if you don't include time and time delays in your thinking. Back to differential and partial differential equations that describe the economy and making the true value of money just another variable, you will see huge effective time delays between when you print money and when the value of money falls (ie inflation). Money flowing into different types of bubbles have different time constants in their response functions.
I was still laughing at your quote from Noah Smith when I was surprised by your two paragraphs on inflation. First, surprised because of your preference to call stimulus the increased spending to compensate people for their income losses in 2020-21 (should we think of insurance payments for losses as stimulus? what about inheritances?). BTW, I've been waiting your appraisal of government policies to deal with the virus, the disease, and the pandemic.
Second, surprised because of your preference to call regimes to different periods of an economy's macro performance. Inflation --including hyperinflation-- is just a symptom we like to watch because it may tell us something about ongoing changes in the forces conditioning that performance (especially in disposable real income). Any serious discussion of that performance should be focused on those forces rather than inflation. The large expansion of income redistribution programs and their financing should be the focus of your concern rather than inflation (and if you think that it will take an extraordinary government intervention to mitigate global warming, including a huge spending, focus on it). Or if you observe a large increase in energy prices --like in 1973, and 2021-22-- the concern should be on how people and governments' responses will condition performance. By assuming inflation is a measure of performance you are joining the macroeconomists you dislike into barking at the wrong tree.