Three businessmen are in prison, discussing why they're there. The first says, "I raised my prices, so I was charged with price gouging." Next guy says "They told me my prices were too low, I'm in for predatory pricing." Last guy says "I was charging the same price as everyone else. I'm in for collusion."
So, you're telling me that the SF housing left NIMBY take on housing (ala "no more market rate baby formula, only affordable baby formula allowed") isn't the solution to getting more baby formula?
Jeez, I used to do takes like that as parody. But I shouldn't be surprised.
There are warehouses full of baby formula just sitting around not being sold. And lots of it is being bought up by investors (BlackRock!) who then just sit on it. And anyway, baby formula is a human right and shouldn't be provided by the market (alternative plan TBD).
But then us Westerners will have to spend more time playing catch up! Unless by "earlier" it turns into something like primetime Sunday evening, which I could get on board with...
I'm glad to finally see someone besides me point out that "companies suddenly became greedy in late 2021" makes absolutely no sense from any sort of historical perspective!
I think Krugman's "companies have found an effective time in which to conceal greed" thinking makes perfect sense, but that's an edge contributor, not the main show.
In support of that notion, witness Dollar Tree's recent rebranding to be the $1.25 store.
Obviously a 25% increase in prices is wildly in excess of the additional costs they face, but it was an easy round number from a low base, so why *not* use inflation as a justification for padding profits this year?
For Dollar tree, it makes sense that eventually they'd have to raise prices to reflect inflation in their supply costs. Total inflation is way over 25% since they first opened.
That has manifested in a continual reduction in quality/size and steadily cheaper sourcing for a long time, but those angles are both played out entirely.
That seems to assume that none of their inputs have increased at a greater rate than overall inflation—I wouldn’t be so sure. Between supply chain issues, difficulty getting workers, increased crime, their costs may justify that kind of increase.
I'm relatively well plugged in to the supply chain side of things thanks to old contacts from China and the outsourcing community, and while things are a pain in a lot of industries, the market for ultra-cheap crap isn't suffering much because the suppliers are so diversified.
The biggest challenge for them has probably been labor cost structures, since they operate at the absolute lowest end of the market and that's risen the fastest.
I think it'll be pretty apparent in their Q1 results later this week, one way or the other.
Again, as a business decision it was likely a reasonable one. But it will, if executed well, leave them with higher profits than they had in 2019 for a while.
Really, they were scraping the bottom of the barrel anyway; holding the line at a dollar had already brought them to the very lowest tier of quality and size as it was, and wouldn't have been sustainable even in a low-inflation environment for more than another few years anyway.
April consumer price inflation was 8.3%. Producer price inflation was 11.0%. It's not a perfect measure of the gap, but clearly many firms are reacting to rising input prices.
I'm fascinated by your pejorative use of "padding profits". Who do you think these people are who are making this decision, and why do you think they're making it?
The corporate leadership saw the degree to which $1 pricing backed them into a corner over the coming years and took action to break that branding associating at a time when they had a great excuse to do it.
But $0.25 is still clearly not just a response to inflation, it’s designed to enhance short-term profits in real terms and to buy breathing room for the future.
Sure, reallocating income from A to B could have downstream effects which are disinflationary or inflationary, but we're not talking about how a second-order factor might cause inflation, we're literally talking about the very act of raising prices.
What the hell happened to Elizabeth Warren? She’s obviously a smart person, but this bill was just completely ludicrous.
I’m glad people are pushing back so hard against this; the experience of 2021 has taught me that pointless messaging bills have a tendency to get thrown into the Break In Case Of Majority Democratic grab back of unrelated policies if not actively opposed. This idea should spend few more decades getting refined/reimagined.
I think what happened to her is that she spent years being grouped together with Sanders as representing the "progressive" wing of the Democratic Party despite them having different policy approaches, so when it came time for them to actually compete directly with one other in the 2020 primary, she felt she had to out-Sanders Sanders in order to prove her "progressive" cred, and that sent her into a feedback loop she is unwilling to break out of.
The thing that united Warren and Sanders during the Obama era was their vocal critiques of some of the Democratic Party's more pro-corporate tendencies. But as a result of Sanders' 2016 campaign and the whole cult of personality that arose out of that, the word "progressive" was basically redefined overnight to mean "supports the same set of policies as Bernie Sanders".** So instead of trying to carve out her own ideological niche, Warren decided she had to live up to her "progressive" label and not let Sanders get to her left. She instead tried to marry Sanders' blunt left-wing populism with her more technocratic policy-oriented approach, and the result is a style of politics that is neither good policy nor effective populism.
** I recently saw some people arguing over whether Sherrod Brown counted as a "progressive", where one of the respondents said "he is the pre-2016 definition of a progressive".
As someone who voted for Warren in California's 2020 primary, I wince every time I see her or read about her now. What happened? Is she the inverse of people's parents/grandparents that lose touch with reality by marinating in Fox News, only for her it's Twitter or being surrounded by activists?
I gave up on trying to find nuggets of gold in the logorrhea of Moldbug back during the Sotomayor confirmation hearings. His objection to her was just racism in the most boring possible way. And then Kagan was nominated, and he said nothing about her, despite her being more of an Obama crony than Sotomayor. He’s really just a racist who can type quickly.
This place has been really good to learn that there are more blogs out there other than SSC/ACT where the bloggers write extremely long and tedious essays that I'll likely never read--and unlike SSC/ACT, judging by the comments here it looks like I'm not missing much with this one.
Curtis Yarvin used to go by the nom de plume “Mencius Moldbug”. He’s one of the “dark enlightenment” crowd who believes that monarchy is the ideal form of government. I don’t quite understand why MY linked to his blog here, but that’s the reference.
Monarchism? Holy cow! Which dynasty do they want? I’ll take Yul Brynner from “The King and I.” Love the way he says “etc, etc., etc.” [edited because autocorrect changed Yul to Atul]
The monarchism/authoritarianism is less objectionable to me than the bog standard racism. I think democracy is better than the alternatives, but I'm willing to read someone making a case for something else. The problem is he believes that non-whites, and specifically Blacks and Hispanics, are inferior in a totally boring and dumb way, and then uses his logorrhea to pretend like "oh it's not racism if I think that races are blah blah blah". Trump's racism is better than Yarvin's because when he pretends he's not racist, it's by saying Kanye voted for him, not by blathering on for 30,000 words without saying anything.
Monarchism will always devolve into discrimination (of which racism can be one form) by declaring that some people are inherently more worthy--or noble, as it were--than others of holding power.
Probably, but in theory you could say "it doesn't matter who the monarch is and actually being the monarch sucks and is undesirable but it's socially necessary to have someone able to resolve disputes in a pinch." As a practical matter though, people defer to the monarch because the monarch has an aura of authority, and that aura requires a certain amount of aggrandizement to be effective. I think one issue for the US is that we end up aggrandizing the President, when really the President should be a servant of the people and not the other way around. It's a difficult psychological problem.
I was reading about the Taliban last night, and apparently there was a several year period in which Mullah Omar was the Supreme Leader in spite of being quite dead. I think that's a pretty ideal form of government—all power is invested in someone who cannot possibly abuse it. ;-)
I assume MY linked him because he wanted to attack an influential intellectual-flavored right-populist as well as a left one
and lest you doubt his influence (as I once did) Tucker Carlson has cited him as a favorite author and had him on the show, and that's quite the audience
Why? Many people find purpose in their work and the ability to provide for themselves. Access to work is considered a major political goal. Excessive work is bad, but work that respects human dignity is net positive for the person and society. Why did you find this moronic? I find this to be the least controversial Moldbug claim.
Reason (1) is because the vast vast majority of human beings work not to find purpose, but to find food for themselves and their families. But reason (2) which is probably more important is because this whole argument falls apart on those terms. No one finds meaning in work that is wasteful. No one finds meaning in work that someone else in China could and would do more efficiently and effectively.
Finding food is purpose. As a father, my children often do tasks that I would do with much more efficiency. They are upset when I suggest that I do the task and extremely proud when they accomplish the task. As an adult people do many unproductive things that others would do better at (play sports, run a marathon, garden). Many people find joy in their work. Others are simply proud to be able to provide our accomplish something independently. I think there is plenty of evidence that people will work well beyond when it is economically necessary. This tells me that many people really want to work, independent of necessity.
I don't know anything at all about this Moldbug guy we're referencing but "Work is good for the soul" is hardly a complete moron opinion in and of itself. You might reasonably agree or disagree; in my opinion it's too general of a statement to be wholly right or wrong. But some of the time, for some people, some work can be good for your mental health, self-esteem and sense of purpose and belonging.
Seems like throwing out the baby with the bathwater to trash that part of whatever the larger essay was.
How do you define white and non-white countries? Because there's certainly other reasons to be more concerned with trade with Mexico (which has plenty of white people) than trade with Germany (which has plenty of non-white people).
I would love for the US to trade off (pun intended) some of our trade with Germany to Mexico - especially since I think Mexico going from 1/5 gdp per capita to 2/3 gpd per capita of the US would be one the best things to happen to the US.
Perhaps the worst thing Matt has ever done in a Slow Boring post is to provide a link to an article by this Curtis Yarvin fellow and one of the worst things I've ever done is to click on it.
This is . . . thinking? This is argument? I should have stopped reading after a while, but it had a passing by a highway accident fascination. It reminded me mostly of those very satisfied with themselves professors (mostly liberal, actually) that I had in grad school who understood the universe in its entirety and if you couldn't grok their profound profundity, then obviously you weren't a member of the Elect.
But, sheesh Curtis, was it really necessary when making some impenetrable point about the Constitution to throw off that weird "Hier ist kein warum" riff? You know (without explaining it to your readers) the thing that the brutal SS guard said to Primo Levi in his first moments at Auschwitz: "Here there is no why"? Yeah, that's the ticket.
And *this* is one of the best thinkers on the new populist right?
Years ago when I was working at a high end department store, I had a customer who was absolutely outraged that our store did not sell expensive clothes at cost. “I’m really upset you’re making money off of me,” is a direct quote. The isdea that things are more expensive than you want them to be becaue someone is too greedy is a very tempting explanation. It’s even more appealing when you’re talking about essential items.
I told her I was sorry we had disappointed her. Once I got home I wished I’d explained that markup paid our salaries but she was welcome to fly out to the factory and buy her clothes factory direct without the middleman.
You’re admirably restrained. Back when I was a bureaucrat someone called to complain rather energetically, adding that great killer line ”I’m a taxpayer.” In a rare moment of eloquence I replied, “I’m a taxpayer too. How is that relevant?” Luckily the letter of complaint for rudeness was directed to me for a reply.
Not every product or service that has raised their prices has had choke points or demand increases. Surely at least some of the increases are occurring because in a high inflation environment there’s more room than normal for a company to increase prices without backlash. Greed is at least a partial factor given the record profits companies are making
"given the record profits companies are making" are these in real dollars or nominal dollars? If you aren't recording an increase in wages/profits of at least 8% from the beginning of 2021, you're lower in real income. That's true for workers, and also true for companies profits!
This looks like a jump of over 25% from previous records over the past 10 years from the FRED site; even if it’s unadjusted that’s well over the inflation rate.
Wouldn’t it also help to appoint a few credible inflation hawks to prominent positions? Personnel is policy and the administration needs to make its inclinations clear both internally and externally.
Isn’t the point of all of this that this is the message that polls the best for dems? It’s weird coming out of the whole popularism debate to suddenly make a stink about democrats popular framing of why prices are going up—especially since Matt alludes to the argument when mentioning baby formula that it’s better if some necessities are rationed by time and nuisance factor than price.
It also seems like more shadow inflation and less real inflation is better long term to avoid inflation spirals.
Is this messaging bill that won’t pass the best policy? No? But it’s Dems best framing, and it’s wrong in ways that I don’t think risk a lot of backlash. As far as Dems messaging the wrong thing for political reasons, this seems fine.
If popularism only means do good popular things it really means nothing and is just normal arguing about the merits of policies.
I think this is a perfectly reasonable messaging bill because: a) to understand why it's bad you have to understand enough to not buy dumb Republican table slamming and that the actual solutions (make people less well off to reduce demand) sound worse, b) the net outcome were it magically comes to pass (more shadow inflation, less actual inflation) probably wouldn't be that bad right now.
I'd be more down if it seemed like the economic cost was actually worse because it stopped raising prices to increase supply, but as far as I understand it, the cost clause would actually make it economically quite toothless, because basically any investment in capital or hiring people would let you raise prices.
I'm really baffled if your takeaway from Matt's writing on the subject of popularism has been that politicians should do popular things with zero regard to whether there's also objective evidence that they are beneficial or without any sort of cost-benefit analysis.
But the bill is a messaging bill that wont pass, so I think floating bad policies that poll well as a messaging strategy is perfectly consistent with popularism.
I don't understand how you can look at Republican internal politics over the last 20 years and think this is a good idea. Keep promising your base that this will fix something if only you could pass it and eventually they will believe you and demand you pass it.
This has nothing to do with the popularism debate. The popularism debate is about focusing on popular issues in proactive messaging. This is about politicians straight up lying about the cause of a problem because it fits their narrative. I thought the left liked experts and didn't like politicians who spewed lies that made people good?
Does it poll the best? My sense is most Americans don’t have the same view of corporate “greed” as the left wing of the Democratic Party, but I haven’t seen recent polling on this. My priors would be blaming Trump protectionism / anti-immigration, Putin’s war, and effects of Covid recovery would be a better political strategy.
Misremembered, but number 3 best message on inflation is
President Biden says corporations are recording record profits while Americans are paying higher prices. He says we need a fairer economy where workers and consumers, not CEOs and shareholders, come out ahead.
FWIW, solutions 1 and 2 aren't super sound anti-inflation either (More US manufacturing and the bipartisan infrastructure bill )
I’m a little confused by that chart because they also tested “corporate greed” which does way worse and is more in line I think with what Matt critiques above.
They also don’t test any messages about free trade / tariffs or immigration which I find confusing.
I can believe that polls well, but it's only tangentially related to the greed-flation narrative, which is a much more specifically defined version of "make corporation play fair, reward workers"
I lack understanding of basic economics. But I should be able to get this point.
Demand for tables goes up - table maker hires more people, buys more materials (at higher prices), tries to meet higher demand. Wouldn’t profits generally remain fairly constant as a percentage of increased revenue, if all you are doing is adjusting your expenses to circumstances? Why do profits go up so much?
Because (1) manufacturers weren't necessarily convinced that demand was going to go up in a sustained way and (2) various forces have limited manufacturers' ability to ramp up production in an efficient way, therefore they increase prices as a combination of a rationing mechanism, demand testing mechanism, and generating retained earnings to finance growth.
Sellers are always calibrating themselves to demand. No one thinks, "I can make this table for $90 and I'm going to sell it for $100 because 11.1% profit margin makes good sense to me." They sell it for $100 because people will buy it for $100. And they'll sell it for $125 or $150 if people will buy it for that amount.
So if people will buy the whole production run for $100 a year ago, they sell it for that. And if this year they can sell for $125, all the better. There might be a few actors that will artificially restrict their own profits because it's "fair" (although it just favors people who can buy your stuff quicker), but while they do that, their competitors are making more profit, and can use that capital advantage later to exert market pressure. Requiring literally all sellers in a marketplace to not tune themselves to the supply and demand curve is incredibly difficult, and almost certainly futile.
Prices will always rise to meet demand. That can occur by producers raising prices (and earning higher profits) or it can happen through arbitrage. But it will happen.
Also, _some_ table makers will expand (and they'll hope that's a good bet) and others will worry about the risk. So capacity _will_ rise somewhat, just not as much as the spike in demand.
Three businessmen are in prison, discussing why they're there. The first says, "I raised my prices, so I was charged with price gouging." Next guy says "They told me my prices were too low, I'm in for predatory pricing." Last guy says "I was charging the same price as everyone else. I'm in for collusion."
So, you're telling me that the SF housing left NIMBY take on housing (ala "no more market rate baby formula, only affordable baby formula allowed") isn't the solution to getting more baby formula?
Jeez, I used to do takes like that as parody. But I shouldn't be surprised.
There are warehouses full of baby formula just sitting around not being sold. And lots of it is being bought up by investors (BlackRock!) who then just sit on it. And anyway, baby formula is a human right and shouldn't be provided by the market (alternative plan TBD).
Yeah, no new market rate baby formula until The Revolution, when every baby has access to free baby formula from the state!
You gotta start sending that email out earlier than Noah Smith...
But then us Westerners will have to spend more time playing catch up! Unless by "earlier" it turns into something like primetime Sunday evening, which I could get on board with...
I'm glad to finally see someone besides me point out that "companies suddenly became greedy in late 2021" makes absolutely no sense from any sort of historical perspective!
I think Krugman's "companies have found an effective time in which to conceal greed" thinking makes perfect sense, but that's an edge contributor, not the main show.
In support of that notion, witness Dollar Tree's recent rebranding to be the $1.25 store.
Obviously a 25% increase in prices is wildly in excess of the additional costs they face, but it was an easy round number from a low base, so why *not* use inflation as a justification for padding profits this year?
For Dollar tree, it makes sense that eventually they'd have to raise prices to reflect inflation in their supply costs. Total inflation is way over 25% since they first opened.
That has manifested in a continual reduction in quality/size and steadily cheaper sourcing for a long time, but those angles are both played out entirely.
That seems to assume that none of their inputs have increased at a greater rate than overall inflation—I wouldn’t be so sure. Between supply chain issues, difficulty getting workers, increased crime, their costs may justify that kind of increase.
I'm relatively well plugged in to the supply chain side of things thanks to old contacts from China and the outsourcing community, and while things are a pain in a lot of industries, the market for ultra-cheap crap isn't suffering much because the suppliers are so diversified.
The biggest challenge for them has probably been labor cost structures, since they operate at the absolute lowest end of the market and that's risen the fastest.
I think it'll be pretty apparent in their Q1 results later this week, one way or the other.
Again, as a business decision it was likely a reasonable one. But it will, if executed well, leave them with higher profits than they had in 2019 for a while.
Really, they were scraping the bottom of the barrel anyway; holding the line at a dollar had already brought them to the very lowest tier of quality and size as it was, and wouldn't have been sustainable even in a low-inflation environment for more than another few years anyway.
Doesn't higher profits contradict the idea of it being 100% higher input costs?
April consumer price inflation was 8.3%. Producer price inflation was 11.0%. It's not a perfect measure of the gap, but clearly many firms are reacting to rising input prices.
I'm fascinated by your pejorative use of "padding profits". Who do you think these people are who are making this decision, and why do you think they're making it?
I don’t think it was particularly pejorative.
The corporate leadership saw the degree to which $1 pricing backed them into a corner over the coming years and took action to break that branding associating at a time when they had a great excuse to do it.
But $0.25 is still clearly not just a response to inflation, it’s designed to enhance short-term profits in real terms and to buy breathing room for the future.
How would it affect aggregate demand? The shareholders and management *are consumers too*.
I'm unsure of the relevance here.
Sure, reallocating income from A to B could have downstream effects which are disinflationary or inflationary, but we're not talking about how a second-order factor might cause inflation, we're literally talking about the very act of raising prices.
Catherine Rampell and Megan McArdle at the Washington Post have been writing about this exact thing for a couple of months now.
What the hell happened to Elizabeth Warren? She’s obviously a smart person, but this bill was just completely ludicrous.
I’m glad people are pushing back so hard against this; the experience of 2021 has taught me that pointless messaging bills have a tendency to get thrown into the Break In Case Of Majority Democratic grab back of unrelated policies if not actively opposed. This idea should spend few more decades getting refined/reimagined.
I think what happened to her is that she spent years being grouped together with Sanders as representing the "progressive" wing of the Democratic Party despite them having different policy approaches, so when it came time for them to actually compete directly with one other in the 2020 primary, she felt she had to out-Sanders Sanders in order to prove her "progressive" cred, and that sent her into a feedback loop she is unwilling to break out of.
The thing that united Warren and Sanders during the Obama era was their vocal critiques of some of the Democratic Party's more pro-corporate tendencies. But as a result of Sanders' 2016 campaign and the whole cult of personality that arose out of that, the word "progressive" was basically redefined overnight to mean "supports the same set of policies as Bernie Sanders".** So instead of trying to carve out her own ideological niche, Warren decided she had to live up to her "progressive" label and not let Sanders get to her left. She instead tried to marry Sanders' blunt left-wing populism with her more technocratic policy-oriented approach, and the result is a style of politics that is neither good policy nor effective populism.
** I recently saw some people arguing over whether Sherrod Brown counted as a "progressive", where one of the respondents said "he is the pre-2016 definition of a progressive".
High on her own supply after reading the entire liberal commentariat proclaim her the smartest person in the world during her 2020 campaign?
Same thing that happened to a lot of Republicans.
They say stupid shit because they think it's popular
As someone who voted for Warren in California's 2020 primary, I wince every time I see her or read about her now. What happened? Is she the inverse of people's parents/grandparents that lose touch with reality by marinating in Fox News, only for her it's Twitter or being surrounded by activists?
If only it were just her...Chuck Schumer is not so different and he's Majority Leader.
The difference is that I never had any respect for Schumer.
I think Schumer is terrified of getting primaried by AOC.
Too late for that, he's safe until 2028.
I gave up on trying to find nuggets of gold in the logorrhea of Moldbug back during the Sotomayor confirmation hearings. His objection to her was just racism in the most boring possible way. And then Kagan was nominated, and he said nothing about her, despite her being more of an Obama crony than Sotomayor. He’s really just a racist who can type quickly.
If you haven't tried to read Yarvin/Moldbug- he writes extremely long and tedious essays. Like "reading this is a two day exercise" long.
This place has been really good to learn that there are more blogs out there other than SSC/ACT where the bloggers write extremely long and tedious essays that I'll likely never read--and unlike SSC/ACT, judging by the comments here it looks like I'm not missing much with this one.
What are you talking about? Perhaps this was meant for some other substack?
Curtis Yarvin used to go by the nom de plume “Mencius Moldbug”. He’s one of the “dark enlightenment” crowd who believes that monarchy is the ideal form of government. I don’t quite understand why MY linked to his blog here, but that’s the reference.
Monarchism? Holy cow! Which dynasty do they want? I’ll take Yul Brynner from “The King and I.” Love the way he says “etc, etc., etc.” [edited because autocorrect changed Yul to Atul]
The monarchism/authoritarianism is less objectionable to me than the bog standard racism. I think democracy is better than the alternatives, but I'm willing to read someone making a case for something else. The problem is he believes that non-whites, and specifically Blacks and Hispanics, are inferior in a totally boring and dumb way, and then uses his logorrhea to pretend like "oh it's not racism if I think that races are blah blah blah". Trump's racism is better than Yarvin's because when he pretends he's not racist, it's by saying Kanye voted for him, not by blathering on for 30,000 words without saying anything.
Monarchism will always devolve into discrimination (of which racism can be one form) by declaring that some people are inherently more worthy--or noble, as it were--than others of holding power.
Probably, but in theory you could say "it doesn't matter who the monarch is and actually being the monarch sucks and is undesirable but it's socially necessary to have someone able to resolve disputes in a pinch." As a practical matter though, people defer to the monarch because the monarch has an aura of authority, and that aura requires a certain amount of aggrandizement to be effective. I think one issue for the US is that we end up aggrandizing the President, when really the President should be a servant of the people and not the other way around. It's a difficult psychological problem.
I was reading about the Taliban last night, and apparently there was a several year period in which Mullah Omar was the Supreme Leader in spite of being quite dead. I think that's a pretty ideal form of government—all power is invested in someone who cannot possibly abuse it. ;-)
The House of Trump, obvs.
I assume MY linked him because he wanted to attack an influential intellectual-flavored right-populist as well as a left one
and lest you doubt his influence (as I once did) Tucker Carlson has cited him as a favorite author and had him on the show, and that's quite the audience
Sure, I just didn't see any connection to the piece in this case.
His true calling was in creating insomnia relief aids.
“Work is good for the soul” was the immediate giveaway “I am a complete fucking moron and this proves it”.
In fact, Work makes us free.
Why? Many people find purpose in their work and the ability to provide for themselves. Access to work is considered a major political goal. Excessive work is bad, but work that respects human dignity is net positive for the person and society. Why did you find this moronic? I find this to be the least controversial Moldbug claim.
Reason (1) is because the vast vast majority of human beings work not to find purpose, but to find food for themselves and their families. But reason (2) which is probably more important is because this whole argument falls apart on those terms. No one finds meaning in work that is wasteful. No one finds meaning in work that someone else in China could and would do more efficiently and effectively.
Finding food is purpose. As a father, my children often do tasks that I would do with much more efficiency. They are upset when I suggest that I do the task and extremely proud when they accomplish the task. As an adult people do many unproductive things that others would do better at (play sports, run a marathon, garden). Many people find joy in their work. Others are simply proud to be able to provide our accomplish something independently. I think there is plenty of evidence that people will work well beyond when it is economically necessary. This tells me that many people really want to work, independent of necessity.
I don't know anything at all about this Moldbug guy we're referencing but "Work is good for the soul" is hardly a complete moron opinion in and of itself. You might reasonably agree or disagree; in my opinion it's too general of a statement to be wholly right or wrong. But some of the time, for some people, some work can be good for your mental health, self-esteem and sense of purpose and belonging.
Seems like throwing out the baby with the bathwater to trash that part of whatever the larger essay was.
How do you define white and non-white countries? Because there's certainly other reasons to be more concerned with trade with Mexico (which has plenty of white people) than trade with Germany (which has plenty of non-white people).
I would love for the US to trade off (pun intended) some of our trade with Germany to Mexico - especially since I think Mexico going from 1/5 gdp per capita to 2/3 gpd per capita of the US would be one the best things to happen to the US.
I think it's a more realistic goal to say we should support Mexico in siphoning off a goodly fraction of China's export business to the US.
Unfortunately neither government is run by the sort of forward-thinking people who could put such a plan together and enact it.
Perhaps the worst thing Matt has ever done in a Slow Boring post is to provide a link to an article by this Curtis Yarvin fellow and one of the worst things I've ever done is to click on it.
This is . . . thinking? This is argument? I should have stopped reading after a while, but it had a passing by a highway accident fascination. It reminded me mostly of those very satisfied with themselves professors (mostly liberal, actually) that I had in grad school who understood the universe in its entirety and if you couldn't grok their profound profundity, then obviously you weren't a member of the Elect.
But, sheesh Curtis, was it really necessary when making some impenetrable point about the Constitution to throw off that weird "Hier ist kein warum" riff? You know (without explaining it to your readers) the thing that the brutal SS guard said to Primo Levi in his first moments at Auschwitz: "Here there is no why"? Yeah, that's the ticket.
And *this* is one of the best thinkers on the new populist right?
Win win!
Years ago when I was working at a high end department store, I had a customer who was absolutely outraged that our store did not sell expensive clothes at cost. “I’m really upset you’re making money off of me,” is a direct quote. The isdea that things are more expensive than you want them to be becaue someone is too greedy is a very tempting explanation. It’s even more appealing when you’re talking about essential items.
What did you say to this person? (Or what did you think of saying after you got home?)
I told her I was sorry we had disappointed her. Once I got home I wished I’d explained that markup paid our salaries but she was welcome to fly out to the factory and buy her clothes factory direct without the middleman.
You’re admirably restrained. Back when I was a bureaucrat someone called to complain rather energetically, adding that great killer line ”I’m a taxpayer.” In a rare moment of eloquence I replied, “I’m a taxpayer too. How is that relevant?” Luckily the letter of complaint for rudeness was directed to me for a reply.
That is hilarious!
Lol'ed at the anecdote about your two grandfathers. It somehow had a very Classic Simpsons vibe to it.
Just needs something about pictures of bees on nickels, and the style of tying an onion to one's belt.
Southern Cracker factory!
It feels like there's a good case for getting back into the TPP about now. Helps address inflation, helps contain China, etc.
We all need WIN cards from the Ford era.
Punch it if you car pooled.
Punch it if you went to zoning board and said, "Yimby."
Punch it if you put more into savings.
etc.
Not every product or service that has raised their prices has had choke points or demand increases. Surely at least some of the increases are occurring because in a high inflation environment there’s more room than normal for a company to increase prices without backlash. Greed is at least a partial factor given the record profits companies are making
"given the record profits companies are making" are these in real dollars or nominal dollars? If you aren't recording an increase in wages/profits of at least 8% from the beginning of 2021, you're lower in real income. That's true for workers, and also true for companies profits!
This looks like a jump of over 25% from previous records over the past 10 years from the FRED site; even if it’s unadjusted that’s well over the inflation rate.
https://fred.stlouisfed.org/series/A053RC1Q027SBEA
Someone elsewhere here mentioned Krugman saying the same thing, here's a relevant tweet from that thread:
https://twitter.com/paulkrugman/status/1525838267916091395
Wouldn’t it also help to appoint a few credible inflation hawks to prominent positions? Personnel is policy and the administration needs to make its inclinations clear both internally and externally.
Isn’t the point of all of this that this is the message that polls the best for dems? It’s weird coming out of the whole popularism debate to suddenly make a stink about democrats popular framing of why prices are going up—especially since Matt alludes to the argument when mentioning baby formula that it’s better if some necessities are rationed by time and nuisance factor than price.
It also seems like more shadow inflation and less real inflation is better long term to avoid inflation spirals.
Is this messaging bill that won’t pass the best policy? No? But it’s Dems best framing, and it’s wrong in ways that I don’t think risk a lot of backlash. As far as Dems messaging the wrong thing for political reasons, this seems fine.
I think popularism endorses prioritizing popular things that are actually good rather than things that will cripple the economy....
If popularism only means do good popular things it really means nothing and is just normal arguing about the merits of policies.
I think this is a perfectly reasonable messaging bill because: a) to understand why it's bad you have to understand enough to not buy dumb Republican table slamming and that the actual solutions (make people less well off to reduce demand) sound worse, b) the net outcome were it magically comes to pass (more shadow inflation, less actual inflation) probably wouldn't be that bad right now.
I'd be more down if it seemed like the economic cost was actually worse because it stopped raising prices to increase supply, but as far as I understand it, the cost clause would actually make it economically quite toothless, because basically any investment in capital or hiring people would let you raise prices.
I'm really baffled if your takeaway from Matt's writing on the subject of popularism has been that politicians should do popular things with zero regard to whether there's also objective evidence that they are beneficial or without any sort of cost-benefit analysis.
But the bill is a messaging bill that wont pass, so I think floating bad policies that poll well as a messaging strategy is perfectly consistent with popularism.
I don't understand how you can look at Republican internal politics over the last 20 years and think this is a good idea. Keep promising your base that this will fix something if only you could pass it and eventually they will believe you and demand you pass it.
No. Shadow inflation is a normal term for decreases in quality/longer wait times rather than increases in prices
This has nothing to do with the popularism debate. The popularism debate is about focusing on popular issues in proactive messaging. This is about politicians straight up lying about the cause of a problem because it fits their narrative. I thought the left liked experts and didn't like politicians who spewed lies that made people good?
Does it poll the best? My sense is most Americans don’t have the same view of corporate “greed” as the left wing of the Democratic Party, but I haven’t seen recent polling on this. My priors would be blaming Trump protectionism / anti-immigration, Putin’s war, and effects of Covid recovery would be a better political strategy.
https://www.dataforprogress.org/blog/2022/1/6/the-most-effective-messages-on-inflation-emphasize-policy-solutions-that-tackle-inflation-concerns-head-on
Misremembered, but number 3 best message on inflation is
President Biden says corporations are recording record profits while Americans are paying higher prices. He says we need a fairer economy where workers and consumers, not CEOs and shareholders, come out ahead.
FWIW, solutions 1 and 2 aren't super sound anti-inflation either (More US manufacturing and the bipartisan infrastructure bill )
I’m a little confused by that chart because they also tested “corporate greed” which does way worse and is more in line I think with what Matt critiques above.
They also don’t test any messages about free trade / tariffs or immigration which I find confusing.
I can believe that polls well, but it's only tangentially related to the greed-flation narrative, which is a much more specifically defined version of "make corporation play fair, reward workers"
Speaking as a Partisan Hack, if it's what polls well, go ahead and talk about it. Just don't, you know, believe it.
Might be good for Q&A to ask if popularism includes lying in Matt's view
I lack understanding of basic economics. But I should be able to get this point.
Demand for tables goes up - table maker hires more people, buys more materials (at higher prices), tries to meet higher demand. Wouldn’t profits generally remain fairly constant as a percentage of increased revenue, if all you are doing is adjusting your expenses to circumstances? Why do profits go up so much?
Because (1) manufacturers weren't necessarily convinced that demand was going to go up in a sustained way and (2) various forces have limited manufacturers' ability to ramp up production in an efficient way, therefore they increase prices as a combination of a rationing mechanism, demand testing mechanism, and generating retained earnings to finance growth.
Sellers are always calibrating themselves to demand. No one thinks, "I can make this table for $90 and I'm going to sell it for $100 because 11.1% profit margin makes good sense to me." They sell it for $100 because people will buy it for $100. And they'll sell it for $125 or $150 if people will buy it for that amount.
So if people will buy the whole production run for $100 a year ago, they sell it for that. And if this year they can sell for $125, all the better. There might be a few actors that will artificially restrict their own profits because it's "fair" (although it just favors people who can buy your stuff quicker), but while they do that, their competitors are making more profit, and can use that capital advantage later to exert market pressure. Requiring literally all sellers in a marketplace to not tune themselves to the supply and demand curve is incredibly difficult, and almost certainly futile.
Prices will always rise to meet demand. That can occur by producers raising prices (and earning higher profits) or it can happen through arbitrage. But it will happen.
Also, _some_ table makers will expand (and they'll hope that's a good bet) and others will worry about the risk. So capacity _will_ rise somewhat, just not as much as the spike in demand.