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What a ing dumass
GD right and we never forget....or, shy away from the children, scan the watch. I want you all to look at this in' animal. This piece of ...
What a ing dumass
Biden said he is considering a pause on the federal gas tax, which some lawmakers in his party have pushed as a way to reduce prices at the pump for Americans.
"Well, I hope I have a decision based on the data I'm looking for ... by the end of the week," Biden said Monday on vacation in Rehoboth Beach, Delaware.
The gas tax adds 18.4 cents total per gallon of gasoline – 18.3 cents in excise tax plus 0.1 cent in a storage fee. For diesel, it is 24.3 cents plus the 0.1 cent fee. The national average price for a gallon was $4.981 on Monday, according to AAA.
he stuttered as usual. in context (at 15:26):
muh stutter
im not the one who keeps posting clips of him stuttering and making a big deal of them
But he hasn't got the power. It will have to go thru Congress.
BDS is real.
Why is Larry Summers credible?
The evidence we're in a wage-price spiral is iffy at best.
most economists will agree that unemployment around 4-5% is optimal. unemployment at 0 sounds great but is completely impractical as it leaves no ability for companies to hire/expand. you need some job fluidity. the actual number is still contested (can look into NAIRU or read into it... some now think the 5% estimate is too high)
the more concerning part would be his suggestion that "we need two years of 7.5%" etc.
Last edited by spurraider21; 06-20-2022 at 08:45 PM.
4% was theoretical full employment when I was in college, current u-3 is 3.6%. U-6 is 7.1%
the background assumption that the problem is an overheated economy doesn't jibe with falling GDP, falling real wages and gaps on retail shelves. but even if we were to grant that the problem is purely demand and greedy workers, solving it on the backs of workers isn't the only possible solution, raising taxes never gets mentioned.
I found this reply to Summers persuasive. The whole piece is long and fairly wonky, but written clearly enough for non-technical readers like myself to understand.
https://www.ineteconomics.org/perspe...corona-and-warIn Section 6of the Working Paper, I identify various reasons why the evidentiary base of Domash and Summers’ (2022a) claim is not robust enough to substantiate their claim that the US is experiencing a wage-price spiral. A key point is that Domash and Summers assume that higher inflation is pushing up nominal wage growth. However, their own regression results show that inflation indexation is far from perfect: in 14 out of 21 regressions, the coefficient of lagged inflation on nominal wage growth in the US is notstatistically significant. This means that in two-thirds of their regressions, higher prices are found to reduce real wage one-for-one. In the remaining 7 regressions, the coefficient of lagged inflation on nominal wage growth takes an average value of 0.35. Hence, even when US labor markets are extremely tight, US workers are unable to protect their real wages—as their nominal wages grow only one-third as fast as the general price level. Higher inflation is extremely costly to workers, therefore. To single out higher nominal wages as a main causeof the increase in US inflation is not just incorrect, because wage growth barely manages to partially follow(not leading) inflation, but it is quite a stark example of blaming the victim.
Finally, I estimate a more complete econometric model which also includes supply-side constraints (in addition to the vacancy ratio). The estimation results suggest that, on average, 20.5% of (rising) PCE inflation can be attributed to the (rising) vacancy ratio (as a proxy of labor market tightness). However, global commodity prices and capacity utilization play more prominent roles and account for 67% and 35% of PCE inflation. Hence, labor market tightness does contribute to US inflation indeed, but supply-side constraints play a more important role. Besides, the labor market tightness itself is caused by the fact that labor demand has recovered more quickly than the effective labor force (as I discuss below).
Last edited by Winehole23; 06-20-2022 at 11:44 PM.
Market power in consolidated sectors is real.
US inflation is also being driven by the pricing power and higher profits of corporations—a claim that Lawrence Summers rejected on Twitter as a form of ‘science denial’. But there is more than just anecdotal evidence that corporations with pricing power are using the current inflationary environment as a pretext to raise prices more than necessary because they do not have compe ors to drive them to keep prices down. For instance, Fed economists Amiti et al. (2021) highlight the importance of (what they call) the strategic complementarity channel, which captures how much US firms adjust their prices in response to changes in the prices charged by their foreign compe ors. To illustrate, if the price of imported cars increases, domestic car producers can also increase their prices. The strategic complementarity channel has been estimated to account for circa 30 percent of the effect of higher import prices on US inflation (Amiti et al. 2021).
The strategic complementarity channel does help to explain the profiteering by large US corporations which have been able to raise their profit margins to the highest level in 70 years. Nominal growth of corporate profits (by 35%) during 2021 has vastly outstripped nominal increases in the compensation of employees (10%) as well as the PCE inflation rate (6.1%). Using inflation as an excuse and helped by algorithmic pricing and AI, mega-corporations are choosing to raise prices to increase their profit margins – and they hold enough market power to do so without fear of losing customers to other compe ors.
Corporate profiteering is contributing to the inflation problem. According to The Wall Street Journal, nearly two out of three of the biggest US publicly traded companies had larger profit margins this year than they did in 2019, prior to the pandemic (Broughton and Francis 2021). Nearly 100 of these corporations did report profits in 2021 that are 50 percent above profit margins from 2019. Evidence from corporate earnings calls shows that CEOs are boasting about their “pricing power,” meaning the ability to raise prices without losing customers (Groundwork Collaborative 2022; Perkins 2022). Even the Chair of the Federal Reserve, Jerome Powell, has weighed in on this issue, stating that large corporations with near-monopolistic market power are “raising prices because they can.”
Essentially, Summers and the wise mandarins who agree with him are saying that the most prudent course of action is to drive the economy over a cliff on purpose.
When the economy needs to be stimulated, we make the rich richer, and when we need to slow it down, we make the poor poorer. Seems not sustainable in the long run.
Last time the economy needed stimulation we gave stimulus checks and much increased UI
A very unusual instance, good thing, too. But that wasn't the Fed doing macro, which was what we were discussing. It was the US Congress keeping peoples lives from falling apart.
The PPP dwarfed stimulus checks and UI assistance 4-1 iirc, but you hear hardly anyone complaining about the inflationary effects of giving rich people money hand over fist, or of the Fed accelerating QE, or buying corporate bonds. Greedy, undeserving poor people are always to blame.
Last edited by Winehole23; 06-21-2022 at 12:46 AM.
Where you getting those numbers from? From what i can see PPP was 800b. 3 stimulus checks totaled about 800b and unemployment benefits totaled 795b
China is the greatest trade partner the US ever had
my fuzzy memory cedes to your cite, but my broader point might still stand, UI and stimulus checks are routinely blamed for inflation, PPP generally isn't mentioned
(Disappointing that you seem to prefer nitpicking me to addressing policies and arguments)
Lol nitpicking. It’s your central point. In tough times we bailout the rich. No. Majority of pandemic relief was directly provided to workers. Even PPP was only forgiven to the extent the funds went to pay workers.
I’ve already said it’s ghoulish to suggest that getting unemployment north of 5 or 7 or 10 for extended periods of time.
I’m generally in favor of increasing taxes on the wealthy but i don’t see that as being anti inflationary for much outside of housing. Groceries aren’t getting expensive because richie rich is using his wealth to buy tons of cabbage and avocados
Last edited by spurraider21; 06-21-2022 at 02:42 AM.
...or, shy away from the children, scan the watch. I want you all to look at this in' animal. This piece of ...
Now you're just free associating, I suggested nothing of the sort, I mentioned (pandemic and war related) supply chain problems as well as market power and greed related to price hikes, even cited support for it. Besides, It's the Fed's dual mandate -- not Congress's -- to keep a lid on inflation while promoting full employment, hardly seems impertinent to point out it takes one of those mandates much more seriously than the other.
Last edited by Winehole23; 06-21-2022 at 08:15 AM.
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