Facebook Twitter LinkedIn 1. Tyler linked to an interesting article on Portugal. This caught my eye: Then, in 2023, the Immigration Control Agency was dissolved, ostensibly in response to an extremely uncharacteristic display of violence where, in March 2020, two officers beat a Ukrainian man to death in the airport of Lisbon. No protests followed the unjust death of this man on Portuguese soil. This makes for an illustrative contrast to when, three months later, the June 2020 Black Lives Matter protests were, just in Lisbon, attended by over 5000 people, decrying the death of an African-Ame ..read more

Facebook Twitter LinkedIn Eventually, I’ll get to price indices. But first, a long boring digression on why I don’t want to be “rich” (but do want to have a billion dollars.) I recently read a WSJ story about how a $200 million St. Louis skyscraper had sold for only $4 million. That got me wondering what house prices looked like in that area. Through the miracle of Zillow, all of our curiosity can be satisfied at the push of a button. On the north side of town, houses sell for less than $50,000. The most expensive homes I could find were in the fashionable area near Forest Park, Washington U ..read more

Facebook Twitter LinkedIn Americans remind me of the old song “Yes, we have no bananas”. They really, really like to agree with the assertions in poll questions. Should pot be legalized? Yes!! Should people selling pot be executed? Yes? Should Roe v. Wade be reversed? Yes? Should abortion be banned? Yes! Should the corporate tax rate be raised? Yes! Should the corporate tax rate be cut? Yes! I’d like to see what happens if the public is asked whether the US government should condemn the violent overthrow of Zemblan president Charles Xavier Vseslav. I bet they’d say “Yes!” PS. For those who do ..read more

Facebook Twitter LinkedIn The future course of the economy always involves a bit of guesswork. But it seems to me that the following two claims are pretty likely to be true: 1. Over the past three years, monetary policy has been far too expansionary. 2. It is likely that monetary policy is still a bit too expansionary, although I have less confidence in that claim. Here are some recent data points, starting with the Financial Times: A “blowout” March retail sales report sparked a sell-off in US government debt and shook global currency markets on Monday, in the latest sign that the world’s ..read more

Facebook Twitter LinkedIn The Financial Times has a story that points to some disturbing features of South African politics: It is the kind of fervent devotion that has driven a wave of support for the former president [Jacob Zuma] ahead of a critical general election on May 29. Yet as recently as January, the 82-year-old African National Congress veteran appeared to have been cast into the political wilderness after he was suspended from the party he once helmed for launching “vitriolic attacks” against the leadership and backing a rival one. So Zuma was a highly corrupt and semi-authoritar ..read more

Facebook Twitter LinkedIn In a recent post, I listed 6 ways that Trump intends to reduce inflation: Trump has a 6-part plan to bring down inflation: 1. Favors NIMBY policies to prevent housing construction in the suburbs. 2. Expel all the illegal workers that pick our food and provide other key services. 3. Put heavy tariffs on imported food and other goods. 4. Have Medicare do less negotiation of drug prices. 5. Run super massive budget deficits. 6. Easy money. Now Politico suggests that his advisors have found another method to add to the list: Economic advisers close ..read more

Facebook Twitter LinkedIn During the golden age of macroeconomics (roughly 1984-2007), many economists understood that interest rates were not monetary policy. After 2008, economists have been drifting back to old-school Keynesianism, with its emphasis on fiscal policy and interest rates. For the umpteenth time, it makes no sense to talk about interest rates causing changes in other macro variables. To do so is to engage in reasoning from a price change. Interest rates can change for multiple reasons, and the effects of the rate change will depend on the underlying factors that caused rates t ..read more

Facebook Twitter LinkedIn Janan Ganesh has an piece in the FT entitled “The Rise of Bleak Chic”. I don’t demand show trials or the ritual egging in public squares of people who were bearish on cities. There is no need for a mea maxima culpa from those who doubted if even the handshake, let alone the restaurant, would return. But let’s imagine that things were reversed: that we optimists were the ones proven wrong. We wouldn’t have been allowed to slink off like Homer Simpson into the hedge. There would have been recriminations.  There is an asymmetry in public life. If you err on the si ..read more

Facebook Twitter LinkedIn I don’t know. But the possibility is greater than I would have wished to see. Inflation data is often noisy and unreliable, for a wide variety of reasons. Wage inflation is the most meaningful for monetary policy. Among all of the various price indices, the service sector inflation ex-housing and energy is probably the most closely tied to wages. Wages aren’t closely linked to housing or gasoline prices, but they are fairly closely linked to the price of haircuts, fast food, and medical care. And while this series is pretty noisy (red line), it does seem to be trendi ..read more

Facebook Twitter LinkedIn There are many different types of superintelligence. Some people understand quantum mechanics. Some people are really good at chess. Some people can read Finnegan’s Wake. [I’m tempted to say, “Some people understand supply and demand Scott Alexander is really, really good at analysis. So good that he’s become famous for engaging in this activity, with a cult following all over the world. (In recent years, the new people I meet in Orange County are largely through Scott Alexander meet-up groups.) Thus it would be interesting to see what would happen if Alexander took ..read more