1) Inflation outpaced wage growth since 2020, and so real wages fell.
2) The fall in real wages spurred demand for labor.
3) But the people receiving lower real wages, while they had jobs, felt like they were working more for less.
4) Hence you can have low unemployment and poor consumer sentiment at the same time.
5) Whether inflation is moderating and how that will affect real wages going forward we will see, but employers and long term debtors "stole a march" on their counterparties during the pandemic with "surprise" inflation.
6) I get the sinking feeling that there is a lot of low interest rate debt on peoples balance sheets that is unsustainable in a high rate environment, but since whenever it comes to the for there is a bailout its hard to know.
>Some of you may recall a related discussion of “matching” in The Complacent Class.
Indeed!
"Why are elites consolidating? In The Complacent Class, Tyler Cowen describes two distinct groups of people who differ primarily in their approach to matching.
First,
The enthusiasts have niche tastes, and some of their happiness comes from finding other people who share those passions, whatever they may be… [they] are not trying to come out ahead of everyone else; rather, they seek to have some of their niche preferences fulfilled for the sake of their own internally directed happiness.
And second,
The competitive strivers are driven less by their interests than by their drive to win in whatever context they find themselves."
Commercial transport of all kinds depends on oil, not natural gas- a pretty big factor in the prices of goods and even many services. Natural gas has plummeted because the US has enormous oversupply of it still despite the war in Europe, and even there, the Russians and many of their customers have ignored the sanctions and so natural gas is in over-supply lots of places.
There are reasons to be dubious about Amazon for monopoly but the “unsubscribe” thing seems like small ball (that would do well as a bullet point in election season)
Arnold, has anyone done a good job measuring "ungoods"? Not a "bad" where the list price is lower than the inputs, but goods that are like the alarm systems you mention.
“Outbreak of demand” v specialization and trade seem like a false dichotomy. Macroeconomic management need to keep nominal demand growing enough to allow specialization and trade to raise real incomes. The Fed can be doing a reasonable job of macro-management while there is bad regulations (not guided by cost -benefit analysis) and expenditures with negative NPV (and more will HAVE negative NPV when resources are fully employed and borrowing rates are high.)
1) Inflation outpaced wage growth since 2020, and so real wages fell.
2) The fall in real wages spurred demand for labor.
3) But the people receiving lower real wages, while they had jobs, felt like they were working more for less.
4) Hence you can have low unemployment and poor consumer sentiment at the same time.
5) Whether inflation is moderating and how that will affect real wages going forward we will see, but employers and long term debtors "stole a march" on their counterparties during the pandemic with "surprise" inflation.
6) I get the sinking feeling that there is a lot of low interest rate debt on peoples balance sheets that is unsustainable in a high rate environment, but since whenever it comes to the for there is a bailout its hard to know.
Also today:
https://feeds.feedblitz.com/~/750341126/_/marginalrevolution~The-rise-of-niche-consumption.html
>Some of you may recall a related discussion of “matching” in The Complacent Class.
Indeed!
"Why are elites consolidating? In The Complacent Class, Tyler Cowen describes two distinct groups of people who differ primarily in their approach to matching.
First,
The enthusiasts have niche tastes, and some of their happiness comes from finding other people who share those passions, whatever they may be… [they] are not trying to come out ahead of everyone else; rather, they seek to have some of their niche preferences fulfilled for the sake of their own internally directed happiness.
And second,
The competitive strivers are driven less by their interests than by their drive to win in whatever context they find themselves."
https://infovores.substack.com/p/irrational-institutions-2
Commercial transport of all kinds depends on oil, not natural gas- a pretty big factor in the prices of goods and even many services. Natural gas has plummeted because the US has enormous oversupply of it still despite the war in Europe, and even there, the Russians and many of their customers have ignored the sanctions and so natural gas is in over-supply lots of places.
Unless Joe Biden can find another SPR to drain, the energy component of the CPI is probably at a nadir absent a recession.
Worst sign for the economy: the number of compliance personnel in the IS has doubled since 2005. Source: https://www.statista.com/statistics/1086150/compliance-officers-employment-usa/#:~:text=In%202021%2C%20there%20were%20334%2C340,employed%20in%20the%20United%20States.
There are reasons to be dubious about Amazon for monopoly but the “unsubscribe” thing seems like small ball (that would do well as a bullet point in election season)
Arnold, has anyone done a good job measuring "ungoods"? Not a "bad" where the list price is lower than the inputs, but goods that are like the alarm systems you mention.
“Outbreak of demand” v specialization and trade seem like a false dichotomy. Macroeconomic management need to keep nominal demand growing enough to allow specialization and trade to raise real incomes. The Fed can be doing a reasonable job of macro-management while there is bad regulations (not guided by cost -benefit analysis) and expenditures with negative NPV (and more will HAVE negative NPV when resources are fully employed and borrowing rates are high.)