Breaking: Fed Finds Cause Of Soaring Inflation
The Fed knows who to blame for the highest US inflation in a generation. Spoiler alert: They don't think it's their fault.
In a new economic letter, the San Francisco Fed set about answering the most pressing economic question of our time. "Why Is US inflation higher than in other countries?", Òscar Jordà, Celeste Liu, Fernanda Nechio and Fabián Rivera-Reyes wondered, in the title of a summary released Monday.
If it's a simple answer you're looking for, you might point to one (or both) of t
economy reopened from a standing start 2. consumption bucket abruptly changed which misallocated production 3. fiscal and monetary policy was highly stimulative 4. oil and gas financing was constrained from esg demands 5. ukraine damaged agricultural production and oil and gas exports 6 pandemic continued to damage production through additional waves
The Fed is saying it’s the poors’ fault. My take on their study is that for inflation to remain tamed, someone’s children must have food insecurity.
They could have studied how the shuttering of schools and childcare centers contributed to the low labor participation, or how free pre-K could alleviate inflation. But no, they only looked at what they already knew was correlated to inflation.
It’s not ironic that rich Fed bankers always find ways to blame the people they can never understand or empathize with for the problems they help create. There is a simple solution to giving people a free lunch, stop driving monetary policy through rich people to trickle down to the poor so that you can blame them for getting the smallest of benefit from the policy you created that grew the rich’s wealth more than at any other time in history.
Here is another great moment in Ironic History:
“Scapegoat [coined by William Tyndale (English translator of the Bible) to designate the goat on which the high priest of the ancient Jews confessed the sins of the people on the Day of Atonement, after which it was allowed to escape into the wilderness bearing those sins (Lev. 16:7-26)]”
Tyndale was condemned to death for the translation.
I think he was scapegoated at the stake. Oxidized to death. Ironic chemistry?
Another account has the coiner of scapegoat being strangled before (or during? like a twofer, a real crowd pleaser back in the day) the immolation, but, I guess that would be scapegarroting, something else entirely.
I have been subjected to bullshit from economists since the 11th grade. I like that Krugman calls it political economy. I don’t think it is a hard science. It’s more like a religion….
I love that the error band is so wide it runs from -2% up to higher than current inflation.
I’ve haven’t visited heisenbergreport in a week. So I probably missed when @H or someone pointed this out already, but, on the offhand chance it was missed in the slow-news week just past I’ll drop this quote from bloomberg.com that keeps raining on my brain-parade when I watch the New York markets sleepwalking up the wall-of-worry,
“More than a million containers set to ride 6,000-plus miles of railway linking Western Europe to Eastern China via Russia are now having to find new routes by sea, adding to costs and threatening to worsen the global supply chain chaos.
With Moscow’s war raging in Ukraine, exporters and logistics firms transporting auto parts, cars, laptops and smartphones are now looking to avoid land routes passing through Russia or the combat zone. Security risks and payment hurdles stemming from sanctions are mounting, as is wariness that customers in Europe could boycott products that used Russian rail.”
One million additional shipping containers to be sent by sea to Chinese cities in lockdown mode? A few weeks ago I’d read how the lower Mississippi River being in flood stage (happens in the spring sometimes 😉 ) was complicating shipments of soybeans to China, but, what really set the costs of barge shipments to quadruple in a matter of weeks was the simultaneous demand spike for American coal shipments to overseas. Apparently this combination has not happened in a long while. Anyway, that got me wondering about immense forces outside our control, such as typhoons, and vast armadas of supertankers over-stacked with containers log-jamming in the south Pacific or China Sea. How many supertankers lost or badly damaged would it take to really gum up the global supply chain? … “When it rains it pours.”