As the beginning of this post notes, I’ll be a bit less active in the comment section this week. I’m traveling around vietnam! If anyone has any recs for Saigon and Hanoi lemme know. I’ll also be around vinh hy
If you have a couple days in Hanoi, go out to Ha Long Bay and take a small cruise, or even private charter, and spend one night on the water (sunrise among the karst islands is spectacular), with some kayaking thru caves and climbing to the top of an island for the view. Possibly a visit to a floating village if you can do it while avoiding the crowds.
In Hanoi proper, if you feel like treating yourself, I recommend the Hotel Metropole ($300-$500 per night); expensive but it has understated French colonial luxury, with plenty of rosewood, mahogany, and white marble, in the center of Hanoi next to B-52 Lake and lots of great restaurants, plus the daily Jane Fonda bunker tour is only for guests.
The Hanoi Hilton tour is interesting for how small the US focus is, plus both John McCain and Kerry visited and commemorated their reconciliation with the Vietnamese people. The Vietnamese Military History Museum was fascinating and comprehensive in 2015; apparently it moved to a new home in Hanoi last year, so hopefully the presentation has improved somewhat.
ETA: Despite the unfortunate sounding name,"kem cốm" (green rice ice cream) is worth trying at least once; I think it's fantastic and you've now reminded me that I have to make a trip to Eden Center here in the DMV soon.
Go get yourself some bespoke tailored suits. You'll save a fortune, it'll almost be like the trip is paying for itself. You can bring in some photos from a magazine or printed from the internet if you want, and they'll copy them to a T.
In Hanoi, Loading T Café was a neat little spot (and there's a great pastry place on the ground floor). The train street is gimmicky but mostly lives up to the hype (I didn't do as much in Hanoi since my partner had a stomach bug).
The Cafe Apartment in Saigon is neat, and the War Remnants Museum is worthwhile. If you like vegetarian food there's a great little spot called TuLi KuSu.
I don’t know if it was classical food poisoning, or something like norovirus that you can pick up from a surface and that alcohol-based hand sanitizer is unfortunately not great at killing. Despite super paranoid handwashing I got the same thing a couple of days later.
Absolutely drink many, many Hanoi egg coffees (cà phê trứng). Utterly delicious (and I'm a tea drinker!), and nowhere else in my opinion (even other parts of Vietnam) makes them quite the same.
Oh, and be careful crossing the street anywhere in that country. The scooter/moped culture is off the charts.
Anyway, you're in for a treat. Vietnam is a super cool destination. Hanoi in particular retains this amazingly intense, old world ambience, and this time of the year it's perfect for extensive urban hiking because the weather has cooled off. (Saigon AFAIK is pretty much always hot and muggy).
Can I note that the three things Americans probably have the most complaints about are items Dems can actually bring down prices “day 1”. I would say in order they are groceries, cost of mortgages and cost of car loans. Groceries is the item that if you get rid of tariffs cost of a lot goods should actually possibly come down. Furthermore, housing and cars are Americans two biggest purchases. Policies that actually meaningfully bring down the 10-year would actually lower prices.
Back to the tariffs though. It pains me to no end that Democrats seems to be rhetorically supportive of tariffs. That somehow the only issue is Trump is implementing them stupidly. Which at least as the virtue of being true. But my god is there a “horse shoe” theory going on with tariffs. Maybe a reminder that Trump was once a Democrat and this issue might be a reason why. Basically it’s the absurd utterly out of date mental model of “blue collar workers” as somehow all “lunch pail” steel workers. For Trump he wants to bring back these jobs because they somehow bring some fake time when “men were men, grrrr”. But for Dems it seems to be all about bringing back old school unions.
And to piggyback off that last point. I’m not even particularly anti Union. I actually have a decent amount of sympathy for SEIU or workers trying to unionize Starbucks. But these older unions? These relics of an economy that doesn’t exist? I will repeat to Dems; These aren’t your friends! Even the ones who endorsed Harris. The membership of Teamsters, Dockworkers, etc voted for Trump. For the love of god Dems can you please also update your mental model of the modern economy. And to bring it back to the post at hand. You know what can bring down prices? Automating ports! The dockworkers had no greater friend than Biden and it did square root of f**k all. So why are we trying to protect their jobs decades after any time they could deliver votes?
Lowering mortgage rates will allow people to pay more for a house for the same monthly payment. Thus, in the absence of a huge increase in housing supply, lower rates won’t lower house prices, they’ll raise prices and leave payments the same. People will just be allowed to be even more in debt.
Long-term we have much bigger problems in the housing market. If anything, today’s interest rates are helping stop the skyrocketing price trend of the last 10+ years.
High mortgage rates have impacts well beyond the downstream effect of people willing to bid more for a house (which is undoubtedly true and almost certainly a big part of the story of why 2020-2021 house prices went up so much*). In general, I agree, if you long term want housing costs to go down, you need to build more housing.
But you know what helps a lot with building housing? Lower interest rates. We're in for a weird ride over the next 12-16 months when it comes to CPI and shelter costs. Because a big part of the inflation rise in 2022 and the subsequent fall is shelter. And a big part of why CPI came down is shelter costs plummeted in large measure due to the huge glut of new construction that came to market in the sunbelt. And since shelter is based on spot rents from 12 months prior, shelter is actually going to have a pretty big downward impact on CPI for the next 12 months going forward (underrated reason the tariffs haven't been as impactful on CPI as one might expect as shelter costs keep coming down).
But you know why all that new construction was delivered? Low interest rates. Those deals penciled out in 2021-2022. And given realities of how long it takes to build an apartment complex, there was a huge number of deliveries from 2023 to basically today. Guess what, those deliveries are starting to dry up which means the downward pressure on shelter costs is about to really abate in 2026 (I'd guess mid 2026). Here's the thing, the drop in shelter costs are are going to continue to exert downward pressure on inflation throughout 2026. If there was ever a time to focus more on core CPI than CPI it's going to be next year.
So what happens in 2027 when rents are increasing again? Especially an environment where construction costs have increased for reasons beyond interest rates because of ICE raids (that's the other one, should be pretty easy for a Dem President to be pro border enforcement but anti internal ICE raids. Or at least not nearly as Fascistic about it).
So yeah, I'll maintain my stance that lowering interest rates in 2028 should have real impact on housing costs.
Right - while I could have taken my down payment and invested in the stock market for better returns, A) I can’t live in my brokerage account, and B) I can’t buy stocks on 80% margin, so the best place to put that money was in the housing market. I’ve seen less than 100% increase in my home’s value (especially when you factor in the maintenance/improvements), but I’ve seen a several-hundred-percent return on my actual down payment because I only invested the down payment. The bank lent me most of it.
In a perfect world, it’s illogical, but I operated rationally, given the market distortions that existed. There are millions of Americans like me, and anyone that runs on upsetting that apple cart is facing a real uphill battle. As more current homeowners die off, many of those houses will go back into the supply on their own, but sensible property tax policies that don’t tilt so far into favoring older homeowners could accelerate that process. But that’s not a lever accessible at the federal level.
Count me among the many who find special carveouts just for older Americans for property taxes indefensible. I mean I think on a limited scale, narrowly targeted, I think that are at least defensible as a sort of safety net measure for lower income people who bought houses in neighborhoods before they gentrified (I brought this up a little while ago, but a seeming source of tension on a lot NYC coop boards is that a lot of coops are in neighborhoods that have changed dramatically just in the past 10-15 years. So you have a lot of older residents who really can't afford major increases in carrying charges to fund CapEx projects and younger owners who are likelier to be high paid white collar workers who want said upgrades and think their building should reflect its new "luxury" status).
But yeah some of the current careveouts and some of the proposed carveouts are just give aways for mostly well off Boomers.
One thing you touched on that I think is worth unpacking "but I’ve seen a several-hundred-percent return on my actual down payment because I only invested the down payment. The bank lent me most of it." Can't emphasize enough how different this dynamic plays out if you had an actual free market in housing. First, the 30-year fixed rate mortgage shouldn't exist. It can only exist because lenders can sell their mortgages to FNMA and FHLMC. Reality is home loans should have some sort of "floating rate" component if banks were really to lend based on free market risk without the Agency backstop. Second, the mortgage interest tax deduction really has to be factored in to any sort of ROI calculation. Especially since it has the distortionary impact of resulting in much larger homes being built.
Huge ROI on your "down payment" is definitely still possible without these distortionary effects. See UK and Canada as examples, especially the former given unbelievable strong NIMBY is there (Though that might change with the recent Labour announcement in Parliament). But just wanted to note that so much of the ROI on down payment is result of government policy putting their thumb on the scale.
I don’t know, Joe. Your analysis should be taking to a present value the down payment and all of the monthly payments. That should be compared to the present value of the home (less real estate fees) plus the PV of any tax savings from mortgage deductions. This leaves aside property taxes and maintenance. This might mitigate the return on your downpayment.
Very true, but the flip side is what I’d have to spend for housing otherwise. Here in SoCal, a home fit for four adults* would cost a lot to rent; probably about the same as my mortgage payment.
*I moved my parents here with me from PA because I’m their only child, and my work is here.
* Meant to note this. Think we underrate the "wealth effect" of rising home values. As Matt noted for most Americans this is the most valuable "investment" most Americans have. Now the problem is it shouldn't be an "investment", it should be a "consumption". Unfortunately, 40 years of housing policy has meant especially for people in "superstar" cities a house is basically seen as akin to a stock. It's a huge part of the story of why housing politics is so difficult is you have an entire generation of Boomers who have seen their houses sky rocket in value and who are extremely protective of that "investment". Add in Boomers vote way more in local elections than other voters and talk about a toxic housing policy stew.
Point being, while I'm all in favor of finding ways long term for people to not see their house as equivalent of a tech stock, if we're talking about short term political impacts for Dems, lower interest rates leading to people at least feeling wealthier due to house appreciation is still a "win".
Since I have to live in my house, the value increasing only drives up the cost of my insurance and taxes. Assuming my wife and I don't have to sell it and move into a nursing home, the big winner will be our heirs when we die.
Prop 13 in California is a big part of why houses here are so valuable. My house has nearly doubled in value over the past 8 years, but my property taxes have increased by perhaps 15% or so. Maybe 20%, I’d have to look, because refinancing in 2021 would dropped my interest rate by more than half, due to lower rates overall and hitting the 20% equity threshold, so there are a lot of variables that make it so I can’t just say for sure how much my property taxes changed without actually looking.
Agree. I think that most people don't get the idea that some relationships are counterintuitive. Bond prices and rates. Interest rates and affordability. The low rate for so long allowed so many people to move their house payments down. It will take a long time of normalish rates for that to work its way out of the system.
We just had lower rates a few years ago and monthly payments were half of what they were today. This theory has been completely disproven IMO. While lower interest rates might cause some increase in price it is a tiny fraction of the decrease in monthly payments.
Some of that also had to do with remote work allowing a lot of the housing shortage in superstar cities getting exported all over the country. A lot of more exurban and rural places that hadn’t seen real housing price growth in my lifetime got a surge of it during COVID.
Median monthly payments only started going up in 2022 when interest rates started going up; it’s a very clear break in the data: https://www.mba.org/images/default-source/advocacy/papi3.png?sfvrsn=cf975af9_1. When prices were going up in 2020-21, monthly payments actually went down because the interest rates effect exceeded the price effect.
But this is exactly my point. Rates dropped, which meant that for a moment payments went down. People used that leverage to offer higher prices to win bidding wars. Prices went up dramatically. Then rates went up, but all the homeowners remember what that house down the street went for during COVID and are very reluctant to lower their asking price. Plus they all refinanced at abnormally low rates and are less willing to move because they’d lose their crazy deal.
In other words the pain in the market today is not caused by the historically normal rates we have today, but by the recent episode of ultra-low rates + high demand that really broke the housing market. (Keep in mind that ultra low rates would normally only happen in a severe recession, which would temper demand).
People saying we need to drive rates down to fix affordability just misunderstands how fast house prices rise and how sticky they are once they do. Also — we can’t go lower than 0 Fed Funds rate, and that’s what it would take to substantially lower rates. ZIRP causes all kinds of other problems … the fact that we got used to it for an extended period post 2008 and again during COVID is a bug, not a feature.
Yes, but that leaves more well-off buyers moving up the ladder in terms of the quality of housing stock, opening up the homes that are currently what THEY can afford for people who, right now, can’t afford them.
Also, there are a lot of folks - like me - who would be open to downsizing if the delta between the mortgage rate they have now and the rate they’d get on a new mortgage weren’t so large. But that might offset some of the effect of the first change.
So I think it’s more nuanced than you’re implying.
I think you're right with the implication that mortgage rates should fall out of sound macro economic policy, and shouldn't be a specific target.
But keep in mind that the composition of principle/interest even when they leave mortgage payments the same matter significantly on how much they incentivize new home building. If interest rates dropped down to 2% but mortgage rates remained the same, profit for home builders would go way up. This would incentivize new home building. Although I agree that we are way too NIMBY, in the recent past there was lots of home building when development was highly profitable and I expect, even leaving constant the level of NIMBYism, with low interest rates we'd see new supply which would put downward pressure on real home prices.
(Although I'd prefer we just do the right macro policy and let interest rates fall out. And then fix our NIMBY problems to directly influence housing supply and lower home prices that way)
In their heart of hearts, Democrats see tariffs as a tax paid by Business™ and not a cost passed on to the consumer. Eliminating tariffs is a gift to Business™, and Business™ is evil.
On the flip side, you could probably convince a critical mass of Democrats to unite around a complicated Tariff Offset and Mitigation Credit written into the tax code that would refund one hundred percent of the tariff cost passed on to the consumer, but which would be so byzantine to claim and administer that it would actually cost money.
However, much your description might have been true 2024 about your typical Democrat, not sure how much that's true today. My suspicion is actually tariffs even before Trump came along had a decent number of voters on both sides who viewed them the way you describe Democrats as viewing them; paid for by Big Business. Think we underrate how much Trumps' we need to have tariffs didn't have the GOP backlash one might of expected because a decent number of GOP voters were probably decently ok with them already (especially in Rust Belt).
But getting back to my first point. Negative partisanship is very real. Meaning a whole lot of Democrats who were maybe tariff-curious pre 2016, pre-2020 or pre-2024 are pretty anti tariff today. Honestly, think it should be pretty easy to use "Orange man bad" to convince most Democratic voters to be against tariffs full stop (one of those times where that simple heuristic is basically accurate in describing a policy failure).
So I stand by my claim that given the number of Dems who are trying to have it both ways on tariffs including being mildly supportive as a concept and given my contention most Democratic voters are pretty primed to accept a "free trade" argument, that I think this really is about too many Dem politicians trying to curry favor with a very small number of old school Unions based on a wildly out of date conception of who blue collar voters are and a misconception about what might actually get blue collar voters to vote for you.
I think most Democratic politicians and Democratic voters know very little how tariffs/anything work in economic theory or practice and can and will be swayed by whoever is leading the party. This is also true for Republicans!
So Republicans are being led by supporting Trump's tariffs and Democrats are being led by opposition to Trump's tariffs. Swap out Trump and those preferences could change for 70%+ of the electorate.
I agree with your comments about tariffs and old-school unions. As experience under DJT is proving, tariffs do not accomplish the supposed goal of reviving manufacturing jobs. They increase costs and prices, and they inherently create opportunities for cronyism and corruption. ... It's quite unfortunate that Dem leaders in several "blue collar" swing states are fans of tariffs (just not DJT's tariffs) ...
You already know that the tariffs are not revivifying manufacturing? I’d bet my bottom dollar that if they were bipartisan they absolutely would. Uncertainty about democrats keeping them (or even Trump, for that matter) is a heavy headwind to that.
There is a world in which carefully crafted bipartisan legislation could revive certain manufacturing, yes*. What Trump is doing is not that, and Democrats could be doing absolutely nothing and it wouldn't change how badly he's implementing policy. Republicans control the house and senate, he could at least try and get legislation passed, but he doesn't want any constraints on his power at all.
*I'm not certain it would be worth the economic drag that it would still cause, but its at least feasible.
I have some qualms with the latter half of this comment, but I do agree wholeheartedly with the first half.
Lower interest rates would make it cheaper to buy cars and houses which are some of the largest recurring payments people make. Even people who already have a cheap mortgage are affected by higher rates because it hinders their ability to move and sell.
Cheap interest rates are what got us into this housing bubble in the first place. Bush/Greenspan started it---I still remember real estate agents saying since you were paying less interest the house price could higher. Same with the post GFC 0 interest days. And lowering interest rates now will likely feed inflation which probably won't help bring down housing costs. Have you noticed lots of entities buying gold and silver? They're hedging against the effects of what 25 years of cheap money, tax cuts, and too much stimulus has wrought. It's the Everything Bagel Bubble, lol.
It's been a bummer to watch affordable car models get steadily marched off the market over the past decade. As someone who lives in a small house and rolls his eyes whenever somebody says "nobody wants small houses anymore," I have sympathy for the folks who would still buy small cars if they were offered, but it feels like the bulk of society decided they were too good for hatchbacks and sedans before throwing a tantrum now that the bill has come due.
Reducing the budget deficit would help with the trade deficit and manufacturing jobs. Financing the budget deficit sets off a row of monetary dominoes, the bottom line of which is a distorted exchange rate that fuels imports and hurts exports.
The politics of this continue to be inept. Unions are causally linked to people voting more left-wing than they otherwise would. If the Teamsters can get a group of what would otherwise be 75% Republican voters to vote 55% Republican that's delivering votes. So Dems should be very willing to straight-up buy votes from unions with policy. Find the cuts somewhere else.
Tariffs are a different kettle of fish because the degree to which they help unions relies on a bunch of bankshot logic that I'm not even sure holds anymore. But if the policy directly raises union membership, the political calculus is extremely easy that benefitting unions vastly outweighs any impact on prices.
Can you give evidence for “Unions are causally linked to people voting more left wing”? Or that “benefitting unions vastly outweighs any impact on prices”? I get the feeling you don’t remember the 1970s and the inflationary spiral that led to the downward spiral in union membership since the 1980s. A lot of people blamed high union wages for inflation and manufacturing moving overseas.
Re: the linkage between unions and left-wing politics, Tom Frank's "Listen, Liberal" has that analysis in the notes, and it's easily visible in the 2024 election results, where union members' votes essentially didn't shift at all and thus trended something like six points left relative to the nation as a whole. It's one of the most powerful forms of persuasion in all of politics.
I do not in fact remember the 1970s because I didn't exist then. But it's certainly true that in a world where employers can cherrypick the most destitute people on earth to pressure wages to starvation level, they will do so. The raison d'etre of the political left wing is literally to stop that from happening.
Much like how the Laffer curve might be true for marginal tax rates vastly in excess of ours but has no relevance to current or foreseeable tax rates, I have no doubt that if you counterfactually imagine a world where union density is close to 100%, the effect of any further increases in union membership might be offset by the effect on prices--but we're not in that world. US union density is so low that raising it is basically a price-related free lunch.
I don’t think the problem is so much that it’s boring as much as that a normal person would have a hard time understanding how it addresses costs, especially the salient ones people complain about so much.
It’s really hard to connect the dots for people on this stuff and if we’re honest wages explain many of the most salient things (people post 2019 restaurant menus all the time)
Do you need to explain? The flip side of voters not having a good grasp on policy is that, if the President makes a bunch of moves in year 1 to reduce inflation such that it's lower by year 4, voters will give him credit even if he doesn't do something like rent control that they think will lower inflation. It worked for Reagan – voters don't know why the economy got better, it just did.
I think most voters understand that inflation drives prices, but what they want is lower prices, not lower inflation. I remember during the Biden administration, Paul Krugman was writing columns about inflation coming down, and then the comments section would be full of people saying that prices were too high, and he'd respond with ... well, but inflation is going down! See this number? It's lower! When he was really providing an accurate answer to the wrong question.
Wages did go up during this period, but not evenly across the board, and even though lower wage earners benefited, those increases were rapidly eaten up by rising cost of food, rent, and (for homeowners) actual increases in their mortgage payments driving by higher property taxes on their now more valuable houses. And those costs are a larger share of spending for lower income earners. So people are making more money but not feeling materially any better off -- in some cases, they may be worse off in real dollar terms, depending on the wage/price increase ration in their own household.
I'm not sure how you really address from the policy perspective; lower interest rates won't help people who bought a house ten years ago and had their mortgage payment go up a few hundred bucks a month, or the change the fact that it is now more expensive to buy the same amount of food.
I think the problem with rising wages + rising prices is that people credit themselves for their raises but blame the economy for the prices, even though obviously they're very, very connected.
It seems like a really hard problem to satisfy the demand for lower prices in any way that the median voter can understand. I think you just have to do economic policy that can be sold to the voters as "we did this for you. specifically you!"
That Biden-era discourse was probably as much a question of rates vs levels as wages vs prices. “Inflation is coming down” was a technically correct statement, but it’s a bit daft to realize that voters care more about absolute price levels than their second derivative without also acknowledging that the first derivative is also more important.
The tragedy of Yglesisnism is the worst stupidities in the discourse really could be fixed by making people take a two week macro economic seminar. Basic Keynesian economics requires only arithmetic. Average IQ people could understand it if they just devoted a quarter of their screen time to it for a month.
Give up trying to teach a second language (Spanish, French) whatever. Unless you've got [foreign language] immersion program, it's not going to work. Nobody ever learned to speak a language fluently by studying it in a classroom 2-3x a week. ?Como se dice "complete waste of time" en espanol?
I don't know what the standard is these days, but when I was in high school you typically had at least 3 credit hours of electives each semester in sophomore year and later where you chose the class to take and it wasn't something that necessarily counted towards requirements. If that's still true (or true in most school systems), you could require an economics class without "giving up" anything except one elective class.
I don't think the commenter meant that you need math to do econ, they meant that in this country we struggle to teach essential knowledge via school. Therefore, the idea that the public would be more educated on a topic if we required it in high school is specious.
It's more of a rhetorical point. Of course many students do learn the material taught in high school. But it's hard to read so many articles showing the struggles of secondary education in the U.S. and not react when someone proposes it as a remedy to another problem.
A more direct approach would be to start with personnal finance and mix in Econ 101, at the high school stage of life direct acknowledge would have broader appeal
We spent a ton of time learning how to write checks and balance a checkbook, just in time for online banking to come along and make that skill completely obsolete.
Also we learned about stocks and investing from participating in one of those paper trading competitions. Problem was, you didn’t get anything unless you came in first and the time horizon was like a couple months, so the only viable strategy was to day trade like a maniac and hope you caught lightning in a bottle.
What I think is missing in the culture as a whole is at a personnal level of money management, similar to basic understanding of civics. Not taking anything away from econ 101, but when people can’t appreciate living within their income! consumer interest rates, how to eat on a budget etc etc they rarely give a fig about what public debt or the fed setting interest rates. Even those with family trust fund money don’t have the life experience of discovering being without this income yet are often concerned informed on econ 101 if even just from within perspective.
I don't think regular people should have to understand it. Politicians hire experts so that they can make decisions that regular people cannot. It's the failure of the political class that they cannot communicate these decisions to regular people.
The median voter wants prices to decrease and 95% of people who understand macro economics understand deflation is a disaster. The voters’ preference is the bug and education might fix it.
I don't agree. People don't need to have a good understanding of how everything works. They just need someone they can trust to make the right decisions and explain it to them. The problem is the lack of trust, not the lack of education, which is not a recent problem.
They used to trust some politicians in the past. That’s why some politicians were popular. Currently, there’s a skill deficit among politicians who can earn the trust of voters.
This is where having a communicator like Bill Clinton or Barack Obama would come in handy, but unfortunately that's about as actionable as telling the Jets "you guys should draft somebody like Josh Allen."
If it's the Obama who, at the time of a very sluggish economy, communicated to us that it was necessary for the government to tighten its belt, just like families everywhere, then no thanks.
"Draft Josh Allen" is very good advice, though. Having worked in a consulting-type business, I recognize excellent recommendations when I see them.
What you want to do is promise a 25% cut in government, get elected, and pass Social Security, launch a massive public works program, create the SEC and FDIC, and guarantee the right to unionize.
That's how you win 4 times and defeat the axis powers.
Obama said a lot of things but government spending continued to increase under his administration. The only exception to the rule was the 2011 Budget Control Act and subsequent sequestration, which were a result of a Republican Party empowered by the 2010 midterms playing hardball with the debt ceiling.
My point isn’t that Obama was profligate (he wasn’t) my point was that he wasn’t aggressively trying to rein in government spending until Republicans forced him to eat dirt (deficits surged during the financial crisis and didn’t fall until after the BCA passed)
This is mostly because the GOP saved him from doing SS & Medicare cuts in exchange for fairly small tax hikes. If Obama gets his Grand Bargain in 2010, Romney beats him in 2012.
Lower deficit = lower inflation and lower interest rates (Ie mortgages, car loans, credit card debt, etc).
A competent politician can sell this. People also have a natural understanding for things like "not living outside your means" and other such comparisons.
But like the thing I see posts on is usually like the nominal inflation in food prices. I’m not sure how much these policies lead to 6 dollar burritos.
I know the effect you’re describing but it doesn’t seem that related to what people bitch about.
The bigger problem: the public no longer trusts people in positions of traditional authority on confusing topics (for good reason, I’d say) but also the public doesn’t actually have ability to make sound judgments on its own.
Do you think there’s good reason for people to be less trusting now than in the 1980s or 1950s or 1930s? In general, the response to the pandemic seems to have been more effective and less disruptive than similar events in the past, but the public understanding of it was worse because of greater transparency.
Because in the 1980s or 1950s the average person didn't have access to a bunch of YouTube videos or Xitter posts saying "the authorities are Lying To You, here is the truth They Don't Want You To Know!!!!!"
We'd probably disagree about the effectiveness/disruptiveness of the pandemic response, but I'm more thinking of things like: 20 years of war in Iraq and Afghanistan, decades of globalization-fueled economic disruptions, a health reform bill that created an incomprehensible system and didn't fix the underlying problems, etc.
But, point taken that the distrust may be more a matter of transparency than anything else! I don't think policymakers in the 1950s were necessarily more deserving of trust.
Folks can understand, "Interest rates are too high, and that's why your car payment/new mortgage payment is too high." If you focus that, and leave the cancellation of tariffs to do the work on the other front, you can win rhetorically and on substance. And these are things you can do through fiscal policy.
But if you want to go beyond that, there's a ton more that can be done, especially if you're willing to gore some more sacred cows.
Embrace automation rather than pearl-clutching at the the potential loss of employment for taxi drivers or whatever. The biggest thing that's driven cost increases over my lifetime has been the price of human labor, as a result of Baumol's cost disease. Products and services that haven't realized productivity gains on the inputs of human labor relative to the broader economy are more expensive. So invest in automation where possible. Replace (supplement?) massive data center CAPEX with massive investment in automated manufacturing of high-value products.
And implement a massive reform to the immigration system. Implement draconian enforcement laws at the borders along side a not-very-generous-by-quite-large guest worker program. Take whatever unpalatable steps on enforcement seem necessary to get folks on board. Don't just focus on the most skilled folks at the top of the income ladder, but let in folks at many levels. You wanna see prices drop for labor-intensive sectors like food service, groceries, and child care? Increase the labor supply in those sectors!
The personal pocketbook metaphor Obama used is really compelling (you're tightening your belt, so the government should too). But it's actually the opposite of what Keynesian economics says. Is there a compelling story we can tell that actually aligns with the economics?
Or do we just fudge it a bit and *say* that people are tightening their belts because times are hard, when the existence of inflation means they're actually doing the opposite.
Here's the economy in a nutshell. Over $40 trillion debt, well over $300,000 per working taxpayer. Sensible economics won't work anymore, they should have been talking about nipping the deficit in the Obama years.
I don’t think moving inflation from 2.7% to 1.7% would meaningfully change public opinion. When people complain about “affordability,” they’re not doing CPI arithmetic — they’re saying “I want more status.” Higher GDP growth would help, but a couple of percentage points spread over four years is thin gruel and much of status is relative.
The deeper problem is national malaise: we’ve lost even the pretense of shared purpose. Biden clinging to power as a dotard didn’t just hurt Democrats electorally; it ceded the moral high ground by signaling that in-group aggrandizement mattered more than renewal or honesty. In a society without shared purpose, people don’t rally around policy competence — they resent their betters. Envy hardens into politics, and performative outrage flourishes.
Shared purpose is eggheadist abstraction that the Professional classes focus on.
Rebuild sense of opportunity and you get purpose. Putting the Abstraction in front is the Cart before the Horse.
Reduction of inflation towards 2% and reducing pricing pressures including interest rates within the economy and acclerating growth goes a long way to meeting the public where their concerns are (versus hand-wringing about the abstractions)
and Democrats ceasing to focus on Academics abstractions and digging themselves holes into complexity via excessive focus on abstraction (example trying to run a campaign on the abstraction of Democracy) would be a good place to start, to focus on the practical.
I am about 50% with Abbott on this one. To take it super academic for a moment, Francis Fukuyama's writing around the importance of feeling respected and the quest for superior status, which Fukuyama has a couple of Greek names for, has always been a really important part of politics. And in our current information economy is ever more visible and salient. Redirecting some of that energy to some shared sense of pride and purpose would be good, if possible.
That said, people actually care about their material lives and budgets, especially the people who switch parties from election to election.
But is the elasticity such that people will hold their nose and vote for the candidate they don’t like but grudgingly admit will deliver 0.8% lower annual inflation.
My intuition is no. There is little meaning data. Politically significant historical inflations have been much bigger than 3%.
If finding a shared national purpose were easy, we would have done it. France also has a notoriously hard time finding shared purpose.
There are certainly many purposes I don’t want to share- defending Taiwan, revivifying christianity, eliminating racial gaps. I suspect the next time we converge on a national purpose we will be at war. And yet I’m confident the politics of envy will persist until a shared purpose is found.
This is a hard problem. Matt hasn’t solved it, and I think he’s being too earnest about prices in part because he can’t solve the purpose coordination problem.
The good news is someone with Obama level charisma and discipline might be able to solve this problem even though Matt can’t.
I think you're wanting something that's almost a contradiction in terms -- a democratic republic of hundreds of millions of free citizens with liberty to make how to live their lives, AND who all happen to want the same thing. By design, the only purpose that really has to be shared in our country is a shared commitment to giving each other the space and freedom to make our own decisions. That's a pretty weak, lowest-common-demonimator bond, except when it's under perceptible external threat. If you want to be part of a polity with a stronger sense of shared purpose that than, you'll probably have to find it in a smaller government within this large Union.
Are they really saying, "I want more status," or are they saying, "I'm stressed and scared because my house payment is half my paycheck, I have a $5K health deductible, I can't afford daycare any more, and now a hamburger costs $10"?
I go back and forth on whether persistent economic "bad vibes" = the underlying cultural / psychological malaise along the lines you identify, or whether it really comes down to material factors and we're overthinking it. People are unhappy because their lives really do feel more unaffordable now. Yes, I know that's not what the long-term macroeconomic figures say, but I'd say that suggests the way we measure these things is flawed.
I think if you break down the budget of the average person, compared to 20 years ago, they have more outflows as a percentage of inflows because they do more things that cost money, not because the prices of things have outpaced wages.
They're unwilling to give up these things in order to balance their budgets because of the damage they'd feel to their status
I don't doubt that status is part of it, but the costs that stress people out the most can't be reduced down to such a simple formulation. Health care and child care spending don't have much to do with status. With housing, car payments and student loans, it's more complicated -- clearly there's a strong dimension of status to all those things, and many people do make unwise choices financed by debt. But getting in a bit over your head on a 30-year mortgage is a lot different than blowing your paycheck at fancy restaurants or expensive clothes, and a lot harder to scale back.
There’s no clean answer. sid it were concentrated among 2%, it wouldn’t be affluence. And gains are concentrated.
And yet the median earner in the U.S. is doing better than the median German worker. The Massachusetts median exceeds the Swiss median, on a comparable scale.
My understanding is the median German isn't too happy these days, either. Regardless, I always find it very odd to do these sorts of cross-national comparisons, because the shape of the social contract is just so different in Germany vs the US that it feels like it tells us next to nothing about who's "doing better" on a human scale.
My objection is to the idea that the "only" reasonable explanation for economic anxiety during apparent boom times is status envy; we should be asking better questions about why people feel persistent anxiety, not dismissing it.
I literally don't know if you're asking because find $10 cheap or expensive. I can walk to one place where they are $4 and to another place where they are $16.
Ha, I guess I think $10 for a sit down hamburger is quite cheap and for drive through a bit expensive? City hamburgers seem to range from $14 at say like Shake Shack to $24 at restaurant with small plates.
I don’t know what it exactly takes to make the public “feel” inflation decrease. But I think doing substantive things and then pushing out press releases about how this or that policy is keeping grocery prices down would be received positively by swing voters who are often asking themselves if dems are out of touch with their concerns. If it’s backed by hard data, and credible sources agree even better. It may just highlight how bad the Rs are on the issue as well. I think starmer did a good job projecting himself as fiscally responsible as a candidate even though he’s not popular now. Dems need to do that as well.
This is why we need a great communicator like Cinton or Obama, er, sorry, I mean Carter to give a prime time televised speach hectoring Americans about their "national malaise".
My contention is people almost always want more status but, given a coherent national purpose, some people can subordinate the pursuit of personal status to larger goals
I think we've lost something we can't really get back. Social media has poisoned our politics in a very direct way, but also indirectly - people are never going to be happy about the direction of the country if they are constantly being fed video evidence of the lives of people with higher socioeconomic status.
If that were true, watching Leave it to Beaver would have destroyed both party coalitions and sorted voters between bourgeois adjacent and working class.
The problem is that Democrats are running on middle-class tax cuts, which we all know would increase the deficit and inflation. As the piece acknowledges, undoing Trump tax cuts, increasing taxes for "the rich," and minor subsidy cuts aren't going to be nearly enough
I bet a lot of downwardly mobile progressives think getting $400k a year from their parents’ trust funds makes them working class… and by many I just mean a few in Manhattan
I certainly have a trust fund giving me money and I am not ashamed of it, but I never thought of myself as middle class. It was always upper class or rich.
Well that's a very different tax situation. If you were making $400k on labor income, you would find that your taxes go up under both parties, and you're not going to qualify for any programs or tax breaks, you are definitely not treated middle class when it comes to the tax code
You can extend this point to a more general criticism of the column, which is that the hard part is picking whose ox is gonna be gored either whose taxes are going to be increased or which constituency is going to lose its federal funding. Losers fight harder to prevent a loss than broad winner’s fight for a slight improvement for everyone.
"House Democrats have a plan to bring down the cost of living for working families by banning corporate price gouging, building more homes to tackle the affordability crisis and cutting taxes for working Americans to give them the breathing room that they need"
I have to admit, while I understand why lowering costs is undesirable, and not possible anyway, it is a little hard for me to wrap my head around the idea that $20 burgers and $6 for a small bag of chips are just how things are going to be going forward. I think a lot of people are in the same boat. Especially when you throw in the average price of a new car being $50k and average house prices over $500k.
Prices are anchored in our minds but they also become unanchored eventually. If you think back to your childhood I'm sure prices were wildly different.
People can live with prices moving up 2-3% a year. The problem is that during the aftermath of COVID we had a couple of years of 5%+ inflation, or large non gradual changes, and it's going to take a while for people to internalize that. But if inflation stayed at 3% forever people would eventually adapt as long as salaries move in tandem.
>Prices are anchored in our minds but they also become unanchored eventually.<
Yep. People readjust to the new reality—and stop pining for yesteryear's nominal prices—once inflation returns to normal and enough time passes. I do think, given the very long run of ultra low inflation we experienced, that 3.x inflation isn't going to get it done. It needs to get back to 2 percent or under. Happily for Democrats, the only way that happens under Trump is if we get a serious recession (I suspect a merely mild recession will get us stagflation).
If you would've told people in 1985, that burgers would be $10 and it'd be $3 for a bag of chips in 2010, they'd be stunned. Prices rise, people get used to it. The issue is just as people were sort of kind of getting used to things, Trump added a whole bunch of tariffs.
Isn't the rational approach to rising inflation cutting back on expenses and maybe making burgers at home and buying a big bag of chips from Costco? I'm not seeing that adaptive behavior from consumers.
You can deflate the price of a burger by firing everyone in the burger shop and replacing them with automation - that's the only answer that is going to materially change those prices.
Otherwise, you're implying that the people working in the burger shop should never get a raise.
I don't think that's what you're necessarily implying. It's totally fine to have entry level jobs with high annual turnover rates so that no one ever "gets a raise" or at least not within that specific role. But lots of people change roles (e.g., move onto a retail supervisor) or change companies to get a raise. That's fine.
Note on a completely unrelated topic. I would like to think I’m not a particularly egotistical person. Or at the very least, I am in general one to not be too much of a braggadocio.
But you know what? There certain times where there are exceptions and certain times I’m going to say “you know what, I’m going to indulge a bit”…
I am taking an absolute victory lap about Bari Weiss.
I cannot emphasize enough I had her pegged back in pre 2020 days. This commitment to being a free speech warrior? Yeah, not so much if it happens to conflict with her own political goals. Knock me over with a feather this 60 minutes fiasco happened. I am jack’s lack of surprise. Really, the person who first gained fame trying to get an Israel critic fired wasn’t actually committed to all free speech especially when it’s comes to anything even mildly critical of Likud? Really, the person who did her very best to use her New York Times perch to elevate “intellectual dark web” bigots and crazy people because they happened to hate the same lefties she hated (I said it then, you can defend free speech without needing to elevate the worst bigoted garbage out there).
As I said indulge me. Because I got a lot of crap especially when I was more active on Twitter from a lot of right of center and left of center types for making what I thought was a pretty easy thing to see which was “she’s a conservative with conservative policy goals who you think is your ally because she personally used to be anti Trump but is clearly not anymore and is not actually your ally against Trump and lefty overreach!”
I am waiting for a bit more detail about what happened (I tweeted "I hope it's not true") but yes, if the early reports pan out, Weiss may have done something extremely bad that may have repercussions at CBS for years to come.
I have a hard time believing Sharyn Alfonsi is going out on the limb she did if she wasn't on solid ground. If the segment really did have major gaps she basically nuked her chances of any sort of career at any reputable news organization.
Like you, the story is "fresh" enough, I want to be humble enough (my "victory lap" above notwithstanding) to note that it's at least possible that more info will come out indicating possible serious gaps in the segment. It's not like 60 Minutes hasn't had any issues with segments in the past that had serious holes in it (see Dan Rather National Guard story).
But yeah, all evidence so far suggests that a lot of centrist and left of center defenders of Bari need to look in the mirror a bit.
The Bari statement on this honestly makes it worse. If I'm reading this correctly, her "defense" of pulling the story is at least attributable to the idea that the New York Time has already devoted stories to abuses in El Salvador prisons so therefore this 60 minutes segment is some how not new info.
Hey, all you centrist and left of center defenders of Bari, you know she's openly mocking with this statement right? Like basically laughing at your gullibility all these years. If the bar for whether a story is worthy a of news segment or an article the entire reason for The Free Press to exist would go away. Her entire schtick was essentially beating to a dead horse "person X is being silenced by left wing censorship". Like any story that involves someone not sufficiently left wing enough getting their wins clipped by lefties policing speech was and is a story either from her or her publication.
Like even if you believe that every story of left wing overreach on speech is 100% true based on how Bari or Bari's publication described it, then based on Bari's own criteria regarding why this El Salvador story was spiked how much of her output the past 10 years should never seen the light of day.
I stopped bothering after that bit on her podcast where she decided that a show on the Ukraine invasion was a good time to beat up on identitarianism (while lacking the self-awareness of her own extreme identitarianism).
Useful. I think the international lessons on inflation essentially say it takes several years for people to adjust to new price levels (what people particularly hate are sudden bursts of inflation / rapid changes in rate), as what happened). As Noah Smith has touched on as well.
In terms of austerity - the Clinton model probably is excellent - real tax hikes plus showing some belt-tightening goes a long way for credibility and upending the 'tax & spend'
Abundance and broad program of regulatory simplification / streamlining (don't call it deregulation, call it regulatory streamlining [which as Biden Admin inability to make things move showed is badly badly needed]) and removing the proliferation of veto-points for everything.
Energy abundance: Looking for opportunities for public-private funding where US Federal guarantees (along with regs streamlining) at a fairly modest budgetary costs can reduce risk, reduce interest rate cost on financing - with big and extensive program on Grid Expansion and promoting (a) expanded and reinforced interconnects for true continental grid for max potential on energy wheeling / exchange and time/generation arbitrage [great for RenEnrgy], (b) guarantees backing and promiting regional and local transmission and distribution grid modernisation / upgrading of in place grid (smart grid management [metering etc], improved cable tech, promo of high cap transmission) and co-siting for existing potential right-of-ways to enable particularly rapid build out of Transmission. Generation needs connection, connection needs grid, and cheapest generation needs focus not on touchy-feely greeny left anti-scale concepts but economy-of-scale installations (storage, generation) where per-unit pricing on installation benefits from scale.
Basically agreed with all of this. I will point out though that our fiscal situation is MUCH worse than in the 90's with Clinton. In particular our demographic situation has changed.
Any realistic solution will have to include cuts to SS and Medicare/Medicaid. Because that's where all the money is going. In particular we need to end heroic end of life care. We torture old dying people while wasting hundreds of thousands of dollars. It makes no sense.
As I was reading Matt's piece, I was wondering what Jessica Riedl would say about his proposals. I'm guessing "Fine but not nearly enough to make a difference"? It feels like the unstated claim here is "We have to cut Medicare/Medicaid/SS and probably also raise taxes, but no one can say that and get elected, so let's tinker with some smaller fixes that seem politically feasible."
Yeah, I think the Blue Ribbon commission is probably the best idea, then after votes to approve it, while grumbling about it.
But tax increases AND benefits cuts will have to be what happens, Dems won't vote for benefit cuts without tax increases and Reps won't vote for tax increases without benefit cuts.
Not to mention, trying to close with gap with just one or the other will probably be too much
Do MAGA Republicans even care that much about benefit cuts? Obviously they actually did cut Medicaid but that was to make reconciliation work, AFAICT nobody is out there bragging about it.
I don't personally have the expertise to know on the retirement front what is the proper policy although to my understanding if the SS regime did not cap off how much earnings were subject to SS, there would be much better numbers
This aside economic growth abolves many many sins, economic stagnation brings the sins to the forefront.
Democrats focusing on energy price abundancy and reg streamlining to help reignite growth in a smart way rather than the bungling idiocy of the Trump clowns could do a very long way. US is engaging in a lot of self-handicapping and luxury of non-reform when America was much further ahead on infra and tech is now looking to me like the threadbare outdated luxury of backwards looking aristocrats...
Out entire politics is mired in a backwards looking paradigm. I can never decide how much of it is cynicism of the governing class or just the natural progression of a really big democracy with a really big generational cohort approaching its twilight years. Reform of the big cost centers of the state may well not be politicslly possible, to the extent they require current claimants of our old age support systems to make any sacrifices. More likely when they do happen they'll be phased in for millenials but by then we'll have put ourselves in a deficit that is going to be really hard for subsequent generations to dig out of.
Maybe there will be a technological breakthrough or some sort of external events that shake things up. Otherwise on my more pessimistic days I think we're likely facing a much more stagnant, poorer future than the one most of us would have predicted growing up.
Big rich countries have a strong tendency to fall into this. And added aging population as Old People tend to be backwards looking idealising their youth.
Encouraging growth-oriented dynamism is actually not easy, not "natural" for people and needs work
Democrats could get back to such a mindset, I dont know if they will - they need to dump the anti-growthism and spend all time making sterile land-statements twattery tho.
I am aware of the pretext of the cap, but that is economic nonsense.
remove the cap and you are funding the retirement program. that does not make it different than before, one is simply removing a stupid incoherent pretext (as the SS program is not and never has been an retirement invesment program despite some incoherent fig leafs for rubes).
It makes much more sense to do such than maintain the pretet. This is I should say something that would effect me (as in my earnings) so not an argument from own interest, contrary really
First, lifting the Cap does effect me, my income being abov the cap, but it is a logical thing to remove the cap for retirement funding solvency.
Second, the Pretext is that there is a direct relationship between what personal income subject to SS contribution and the eventual retirement payout. There is no SS benefit "cap" in a pay-in cap to pay-out.
This was and never has been actually true, it is a pretext used initially in the st-up. SS was and has to recent date depended on larger inflows than outflows on an aggregate basis, not on a real individual balances as like a retirement fund.
Removing the pretense and simply making current income, sans cap off, subject to SS is simply good financial solvency logic for a global basic retirement security program.
As other policy choices resolve to retirement funding insolvency or raiding the general budget, removing the cap and engaging in some reitrement welath transfers for high income persons (of which myself so I am arguing against my short-term financial interest in favor of financial solvency logic as the pay-off from coherent finances is going to be better than a political crisis around retirement insolvency.
How much do you think requires new federal spending (fed backed loans, tax credits, etc) vs how much of it could be done with better/new regs (eg permitting) and better leadership/priority setting from FERC?
honestly I know I don't know enough to really have a proper insight so I take even my thoughts w a grain of salt... as a vulgar finance guy... - but I know enough finance to see budget actionable paths with Fed guarantees and tax credits [versus direct infra spend] (the successful part of Biden action notably on tax credits, guarantees can work well but need serious streamlining, stop the everything Bagelism).
I think regs streamlining is fundamental as "leadership' w/o that is pouring water in the sand but both with Federal guarantees and tax credits I think s/b a focus for the future. Otherwise we're going to have an elec grid train wreck (and no way is US gonna pull off the amazing black-start the Iberians did)
Energy cost is fundamental to economic growth - so getting the cheapest energy into the grid and enabling more efficient ElecTech Stack is a great path to generating a more dynamic US industrial economy for the future instead of lamebrained "recreate 1960s era as mythologised"
Just like how a previous column pointed out that voters conceptualize corruption differently, I think people's view of prices and inflation doesn't map neatly to actual prices. In particular, people often dislike service sector productivity increases, because they (necessarily) involve getting less time from a person helping you. You might even describe that as inflation -- you pay the same price and get less service at the grocery store when they eliminate baggers or at the restaurant when they switch to counter service. Unfortunately given the dominance of the service sector, this is a big problem.
Maybe, but shrinkflation is usually getting less product for the same price. If you conceptualize grocery stores as places that sell you groceries, then the quantity of store staff isn't part of what you're paying for.
It's baffling that Democrats have had two presidents (Carter and Biden) derailed by inflation but Democrats still don't really care about lowering inflation.
The fundamental barrier to lowering deficits and reducing inflation is the inability to reach credible long term agreements across party lines. It's like sharing your credit cards with a stranger and trying to reduce your balance. As long as you both believe that the other side will just spend (or cut income/taxes) more anytime you save it's irrational for either side to do so.
And not only are lawmakers aware of this but so are the most active voters in both parties.
The more I think about it the more this seems like a really helpful analogy. And made even more powerful by Trump pushing the judiciary to say that the executive cannot be bound by agreements it has made.
Taking away the ability to make binding promises might feel like empowerment, because you can’t be bound, but it’s really a kind of disempowerment.
Ohh, you mean the unwillingness of the courts to enforce the limits on appropriations etc? Yah, that is just pure cowardice even many of the conservative legal scholars who are big on the unitary executive (yes it's a principled position but that makes it worse not better -- people doing things out of principle are more willing to drive off the cliff) are upset about that one.
Honestly, my read on that (unlike the unitary executive stuff) is that the court simply blinked. They realized if they stepped in they'd become the resistance to Trump's whole administration and simply chickened out. Notice, these have pretty much all been procedural cases the court hasn't heard on the merits but practically make enforcement infeasible -- that's the kind of thing you do when you don't feel good about it but are scared to say no. I think the justices are aware of the views people have about them and chickened out on being despised by everyone.
While Roberts kinda believes in doing that in general (see the ACA) I wonder if the court will change it's tune the next time there is any administration but Trump in charge (even republican).
I say we meet the voters where they are and run on a platform of redenominating the dollar by about a 3:2 ratio. Immediate 33% reduction in housing, grocery and childcare prices! No actual catastrophic deflation! The 33% fall in wages can be blamed on billionaires, or perhaps on illegal immigrant billionaires if we want to meet Trump voters halfway.
All you are communicating is that you are dishonest. Republicans enacted the SALT cap in the TCJA because it adversely affected resident in Democratically controlled states. Republicans reversed the SALT caps because it adversely affected them in many House races. Calling for Democrats to enact a GOP policy is just you demanding that Democrats hand Republicans House and maybe Senate seats.
Expounding on this: this is just not how I view politics at all. I don't care which team got punished by this or that policy, I care about whether or not the policy is good. Ok so Republicans only put the SALT cap in TCJA to poke Democrats in the eye. Ok broken clock!
Way back in 2015 and 2016 one of Hilary's problems vs both Sanders and Trump was that she had a BS Deficit, at least on economic promises. In part that resulted in her turn to identity issues, with all that has led to since then.
Attacking the deficit used to have a populist bent and it seems like one could bring that back to a degree by explicitly tying it to inflation. There's probably a list of reasonably popular tax targets that one can use as examples such as the carried interest, but there's no real reason to mimic the overly specific health-care debates that Democrats tend to have in the primary.
The rest can be put on to a Blue-Ribbon Commission, or some such formulation, which are sort of unreasonably popular with voters since they seem to promise reasonable yet, somehow easy, solutions.
People trust Bernie’s heart is in the right place but didn’t for Hillary. This is important when they’re going to negotiate a compromise on your behalf with the forces of evil. You want every concession to be hard-fought. Bernie has always been practical when it comes to his actual voting record, he’s rarely let the perfect be the enemy of the good when it’s put to a vote. Democrats need someone they can put confidence in to be like this, and ideally one committed to putting all the costs of austerity on those who voted for Trump.
He's been in the Senate for close to 20 years and has hardly any major legislative accomplishments. Completely useless guy popular for his vibes and "authenticity".
As one of the "generation of millennials reared on the political combat of Barack Obama’s first term" I agree with the logic of pretty much everything in this post. However, the last two times this played out under Clinton and Obama, Republicans turned around and immediately plowed deficit reduction into tax cuts for the wealthy and businesses when they retook power soon after. I have a hard time believing any deficit reduction will stick around long enough to actually make a meaningful difference in inflation. It's a lot easier for me to believe we'll just piss off a bunch of seniors that like Medicare Advantage if President Mayor Pete does this in 2029, and will then be plowed into tax cuts under President Vivek in 2033. They did the same thing railing against the "cuts" (small amounts of savings due to efficiencies to help pay for it) to Medicare that were in the ACA to make it more efficient, and then never actually reversed the cuts in Trump's first term.
Annoying but sane? Following the logic of a commenter on the last post, he should be inelligible by virtue of having attended harvard this century. Tough luck i guess...
Yup, I am totally willing to say I totally support the Republican's doing some SS cuts or even Medicare Advantage cuts on high income people, Democrats getting very angry over it during a campaign in 2028, then mostly only papering over the worst excesses and keeping most of them.
But the Democratic Party should not be the party that cuts Social Security & Medicare. I'd argue us not actually cutting Medicare in 2010 but being seen as doing so because of adjustments due to the ACA hurt us bad enough.
The problem is getting a Republican dumb enough politically and committed enough ideologically to do so.
As the beginning of this post notes, I’ll be a bit less active in the comment section this week. I’m traveling around vietnam! If anyone has any recs for Saigon and Hanoi lemme know. I’ll also be around vinh hy
If you have a couple days in Hanoi, go out to Ha Long Bay and take a small cruise, or even private charter, and spend one night on the water (sunrise among the karst islands is spectacular), with some kayaking thru caves and climbing to the top of an island for the view. Possibly a visit to a floating village if you can do it while avoiding the crowds.
In Hanoi proper, if you feel like treating yourself, I recommend the Hotel Metropole ($300-$500 per night); expensive but it has understated French colonial luxury, with plenty of rosewood, mahogany, and white marble, in the center of Hanoi next to B-52 Lake and lots of great restaurants, plus the daily Jane Fonda bunker tour is only for guests.
The Hanoi Hilton tour is interesting for how small the US focus is, plus both John McCain and Kerry visited and commemorated their reconciliation with the Vietnamese people. The Vietnamese Military History Museum was fascinating and comprehensive in 2015; apparently it moved to a new home in Hanoi last year, so hopefully the presentation has improved somewhat.
ETA: Despite the unfortunate sounding name,"kem cốm" (green rice ice cream) is worth trying at least once; I think it's fantastic and you've now reminded me that I have to make a trip to Eden Center here in the DMV soon.
+1 Metropole hotel. At least go for tea if you already have lodging planned.
Woah cool. Food reviews please!
Go get yourself some bespoke tailored suits. You'll save a fortune, it'll almost be like the trip is paying for itself. You can bring in some photos from a magazine or printed from the internet if you want, and they'll copy them to a T.
In Hanoi, Loading T Café was a neat little spot (and there's a great pastry place on the ground floor). The train street is gimmicky but mostly lives up to the hype (I didn't do as much in Hanoi since my partner had a stomach bug).
The Cafe Apartment in Saigon is neat, and the War Remnants Museum is worthwhile. If you like vegetarian food there's a great little spot called TuLi KuSu.
I'm about to go to Vietnam in a week, any tips from your partner's experience to avoid food poisoning?
I don’t know if it was classical food poisoning, or something like norovirus that you can pick up from a surface and that alcohol-based hand sanitizer is unfortunately not great at killing. Despite super paranoid handwashing I got the same thing a couple of days later.
Comments section’s about to get spicier than a whole bowl of Bun Bo Hue.
Honestly, not even that spicy.
When you are in Saigon you have to post this quote ""Saigon, shit. I'm still only in Saigon. Every time I think I'm going to
wake up back in the jungle. When I was home after my first tour,
it was worse. I'd wake up and there'd be nothing...
I hardly said a word to my wife until I said yes to a divorce.
When I was here I wanted to be there. When I was there, all I
could think of was getting back into the jungle.
I've been here a week now. Waiting for a mission, getting
softer. Every minute I stay in this room I get weaker. And every minute Charlie squats in the bush he gets stronger.
Each time I look around the walls move in a little tighter." ;)
Absolutely drink many, many Hanoi egg coffees (cà phê trứng). Utterly delicious (and I'm a tea drinker!), and nowhere else in my opinion (even other parts of Vietnam) makes them quite the same.
Oh, and be careful crossing the street anywhere in that country. The scooter/moped culture is off the charts.
Anyway, you're in for a treat. Vietnam is a super cool destination. Hanoi in particular retains this amazingly intense, old world ambience, and this time of the year it's perfect for extensive urban hiking because the weather has cooled off. (Saigon AFAIK is pretty much always hot and muggy).
Love seven bridges if you need a beer. Take a risk and have some street BBQ. Though I'd skip the seafood.
For Ho Chi Mihn.
Can I note that the three things Americans probably have the most complaints about are items Dems can actually bring down prices “day 1”. I would say in order they are groceries, cost of mortgages and cost of car loans. Groceries is the item that if you get rid of tariffs cost of a lot goods should actually possibly come down. Furthermore, housing and cars are Americans two biggest purchases. Policies that actually meaningfully bring down the 10-year would actually lower prices.
Back to the tariffs though. It pains me to no end that Democrats seems to be rhetorically supportive of tariffs. That somehow the only issue is Trump is implementing them stupidly. Which at least as the virtue of being true. But my god is there a “horse shoe” theory going on with tariffs. Maybe a reminder that Trump was once a Democrat and this issue might be a reason why. Basically it’s the absurd utterly out of date mental model of “blue collar workers” as somehow all “lunch pail” steel workers. For Trump he wants to bring back these jobs because they somehow bring some fake time when “men were men, grrrr”. But for Dems it seems to be all about bringing back old school unions.
And to piggyback off that last point. I’m not even particularly anti Union. I actually have a decent amount of sympathy for SEIU or workers trying to unionize Starbucks. But these older unions? These relics of an economy that doesn’t exist? I will repeat to Dems; These aren’t your friends! Even the ones who endorsed Harris. The membership of Teamsters, Dockworkers, etc voted for Trump. For the love of god Dems can you please also update your mental model of the modern economy. And to bring it back to the post at hand. You know what can bring down prices? Automating ports! The dockworkers had no greater friend than Biden and it did square root of f**k all. So why are we trying to protect their jobs decades after any time they could deliver votes?
Lowering mortgage rates will allow people to pay more for a house for the same monthly payment. Thus, in the absence of a huge increase in housing supply, lower rates won’t lower house prices, they’ll raise prices and leave payments the same. People will just be allowed to be even more in debt.
Long-term we have much bigger problems in the housing market. If anything, today’s interest rates are helping stop the skyrocketing price trend of the last 10+ years.
High mortgage rates have impacts well beyond the downstream effect of people willing to bid more for a house (which is undoubtedly true and almost certainly a big part of the story of why 2020-2021 house prices went up so much*). In general, I agree, if you long term want housing costs to go down, you need to build more housing.
But you know what helps a lot with building housing? Lower interest rates. We're in for a weird ride over the next 12-16 months when it comes to CPI and shelter costs. Because a big part of the inflation rise in 2022 and the subsequent fall is shelter. And a big part of why CPI came down is shelter costs plummeted in large measure due to the huge glut of new construction that came to market in the sunbelt. And since shelter is based on spot rents from 12 months prior, shelter is actually going to have a pretty big downward impact on CPI for the next 12 months going forward (underrated reason the tariffs haven't been as impactful on CPI as one might expect as shelter costs keep coming down).
But you know why all that new construction was delivered? Low interest rates. Those deals penciled out in 2021-2022. And given realities of how long it takes to build an apartment complex, there was a huge number of deliveries from 2023 to basically today. Guess what, those deliveries are starting to dry up which means the downward pressure on shelter costs is about to really abate in 2026 (I'd guess mid 2026). Here's the thing, the drop in shelter costs are are going to continue to exert downward pressure on inflation throughout 2026. If there was ever a time to focus more on core CPI than CPI it's going to be next year.
So what happens in 2027 when rents are increasing again? Especially an environment where construction costs have increased for reasons beyond interest rates because of ICE raids (that's the other one, should be pretty easy for a Dem President to be pro border enforcement but anti internal ICE raids. Or at least not nearly as Fascistic about it).
So yeah, I'll maintain my stance that lowering interest rates in 2028 should have real impact on housing costs.
Right - while I could have taken my down payment and invested in the stock market for better returns, A) I can’t live in my brokerage account, and B) I can’t buy stocks on 80% margin, so the best place to put that money was in the housing market. I’ve seen less than 100% increase in my home’s value (especially when you factor in the maintenance/improvements), but I’ve seen a several-hundred-percent return on my actual down payment because I only invested the down payment. The bank lent me most of it.
In a perfect world, it’s illogical, but I operated rationally, given the market distortions that existed. There are millions of Americans like me, and anyone that runs on upsetting that apple cart is facing a real uphill battle. As more current homeowners die off, many of those houses will go back into the supply on their own, but sensible property tax policies that don’t tilt so far into favoring older homeowners could accelerate that process. But that’s not a lever accessible at the federal level.
Count me among the many who find special carveouts just for older Americans for property taxes indefensible. I mean I think on a limited scale, narrowly targeted, I think that are at least defensible as a sort of safety net measure for lower income people who bought houses in neighborhoods before they gentrified (I brought this up a little while ago, but a seeming source of tension on a lot NYC coop boards is that a lot of coops are in neighborhoods that have changed dramatically just in the past 10-15 years. So you have a lot of older residents who really can't afford major increases in carrying charges to fund CapEx projects and younger owners who are likelier to be high paid white collar workers who want said upgrades and think their building should reflect its new "luxury" status).
But yeah some of the current careveouts and some of the proposed carveouts are just give aways for mostly well off Boomers.
One thing you touched on that I think is worth unpacking "but I’ve seen a several-hundred-percent return on my actual down payment because I only invested the down payment. The bank lent me most of it." Can't emphasize enough how different this dynamic plays out if you had an actual free market in housing. First, the 30-year fixed rate mortgage shouldn't exist. It can only exist because lenders can sell their mortgages to FNMA and FHLMC. Reality is home loans should have some sort of "floating rate" component if banks were really to lend based on free market risk without the Agency backstop. Second, the mortgage interest tax deduction really has to be factored in to any sort of ROI calculation. Especially since it has the distortionary impact of resulting in much larger homes being built.
Huge ROI on your "down payment" is definitely still possible without these distortionary effects. See UK and Canada as examples, especially the former given unbelievable strong NIMBY is there (Though that might change with the recent Labour announcement in Parliament). But just wanted to note that so much of the ROI on down payment is result of government policy putting their thumb on the scale.
I don’t know, Joe. Your analysis should be taking to a present value the down payment and all of the monthly payments. That should be compared to the present value of the home (less real estate fees) plus the PV of any tax savings from mortgage deductions. This leaves aside property taxes and maintenance. This might mitigate the return on your downpayment.
Very true, but the flip side is what I’d have to spend for housing otherwise. Here in SoCal, a home fit for four adults* would cost a lot to rent; probably about the same as my mortgage payment.
*I moved my parents here with me from PA because I’m their only child, and my work is here.
* Meant to note this. Think we underrate the "wealth effect" of rising home values. As Matt noted for most Americans this is the most valuable "investment" most Americans have. Now the problem is it shouldn't be an "investment", it should be a "consumption". Unfortunately, 40 years of housing policy has meant especially for people in "superstar" cities a house is basically seen as akin to a stock. It's a huge part of the story of why housing politics is so difficult is you have an entire generation of Boomers who have seen their houses sky rocket in value and who are extremely protective of that "investment". Add in Boomers vote way more in local elections than other voters and talk about a toxic housing policy stew.
Point being, while I'm all in favor of finding ways long term for people to not see their house as equivalent of a tech stock, if we're talking about short term political impacts for Dems, lower interest rates leading to people at least feeling wealthier due to house appreciation is still a "win".
Big difference between a stock and a house is you can sell the stock and still have some place to live.
But if your house goes up in value and you sell it where will you live? If you have to buy another house, then you haven't come out ahead.
So maybe you come out ahead if you move into a nursing home (or in with a relative). Or move to a much cheaper state.
But the vast majority of the time a house isn't an investment and shouldn't be thought of in such a fashion.
Since I have to live in my house, the value increasing only drives up the cost of my insurance and taxes. Assuming my wife and I don't have to sell it and move into a nursing home, the big winner will be our heirs when we die.
Prop 13 in California is a big part of why houses here are so valuable. My house has nearly doubled in value over the past 8 years, but my property taxes have increased by perhaps 15% or so. Maybe 20%, I’d have to look, because refinancing in 2021 would dropped my interest rate by more than half, due to lower rates overall and hitting the 20% equity threshold, so there are a lot of variables that make it so I can’t just say for sure how much my property taxes changed without actually looking.
Lower rates make it cheaper to build new units.
Agree. I think that most people don't get the idea that some relationships are counterintuitive. Bond prices and rates. Interest rates and affordability. The low rate for so long allowed so many people to move their house payments down. It will take a long time of normalish rates for that to work its way out of the system.
We just had lower rates a few years ago and monthly payments were half of what they were today. This theory has been completely disproven IMO. While lower interest rates might cause some increase in price it is a tiny fraction of the decrease in monthly payments.
You mean a few years ago when rates dropped and prices shot up 25-50% all over the country?
Some of that also had to do with remote work allowing a lot of the housing shortage in superstar cities getting exported all over the country. A lot of more exurban and rural places that hadn’t seen real housing price growth in my lifetime got a surge of it during COVID.
Median monthly payments only started going up in 2022 when interest rates started going up; it’s a very clear break in the data: https://www.mba.org/images/default-source/advocacy/papi3.png?sfvrsn=cf975af9_1. When prices were going up in 2020-21, monthly payments actually went down because the interest rates effect exceeded the price effect.
But this is exactly my point. Rates dropped, which meant that for a moment payments went down. People used that leverage to offer higher prices to win bidding wars. Prices went up dramatically. Then rates went up, but all the homeowners remember what that house down the street went for during COVID and are very reluctant to lower their asking price. Plus they all refinanced at abnormally low rates and are less willing to move because they’d lose their crazy deal.
In other words the pain in the market today is not caused by the historically normal rates we have today, but by the recent episode of ultra-low rates + high demand that really broke the housing market. (Keep in mind that ultra low rates would normally only happen in a severe recession, which would temper demand).
People saying we need to drive rates down to fix affordability just misunderstands how fast house prices rise and how sticky they are once they do. Also — we can’t go lower than 0 Fed Funds rate, and that’s what it would take to substantially lower rates. ZIRP causes all kinds of other problems … the fact that we got used to it for an extended period post 2008 and again during COVID is a bug, not a feature.
Yes, but that leaves more well-off buyers moving up the ladder in terms of the quality of housing stock, opening up the homes that are currently what THEY can afford for people who, right now, can’t afford them.
Also, there are a lot of folks - like me - who would be open to downsizing if the delta between the mortgage rate they have now and the rate they’d get on a new mortgage weren’t so large. But that might offset some of the effect of the first change.
So I think it’s more nuanced than you’re implying.
I think you're right with the implication that mortgage rates should fall out of sound macro economic policy, and shouldn't be a specific target.
But keep in mind that the composition of principle/interest even when they leave mortgage payments the same matter significantly on how much they incentivize new home building. If interest rates dropped down to 2% but mortgage rates remained the same, profit for home builders would go way up. This would incentivize new home building. Although I agree that we are way too NIMBY, in the recent past there was lots of home building when development was highly profitable and I expect, even leaving constant the level of NIMBYism, with low interest rates we'd see new supply which would put downward pressure on real home prices.
(Although I'd prefer we just do the right macro policy and let interest rates fall out. And then fix our NIMBY problems to directly influence housing supply and lower home prices that way)
In their heart of hearts, Democrats see tariffs as a tax paid by Business™ and not a cost passed on to the consumer. Eliminating tariffs is a gift to Business™, and Business™ is evil.
On the flip side, you could probably convince a critical mass of Democrats to unite around a complicated Tariff Offset and Mitigation Credit written into the tax code that would refund one hundred percent of the tariff cost passed on to the consumer, but which would be so byzantine to claim and administer that it would actually cost money.
However, much your description might have been true 2024 about your typical Democrat, not sure how much that's true today. My suspicion is actually tariffs even before Trump came along had a decent number of voters on both sides who viewed them the way you describe Democrats as viewing them; paid for by Big Business. Think we underrate how much Trumps' we need to have tariffs didn't have the GOP backlash one might of expected because a decent number of GOP voters were probably decently ok with them already (especially in Rust Belt).
But getting back to my first point. Negative partisanship is very real. Meaning a whole lot of Democrats who were maybe tariff-curious pre 2016, pre-2020 or pre-2024 are pretty anti tariff today. Honestly, think it should be pretty easy to use "Orange man bad" to convince most Democratic voters to be against tariffs full stop (one of those times where that simple heuristic is basically accurate in describing a policy failure).
So I stand by my claim that given the number of Dems who are trying to have it both ways on tariffs including being mildly supportive as a concept and given my contention most Democratic voters are pretty primed to accept a "free trade" argument, that I think this really is about too many Dem politicians trying to curry favor with a very small number of old school Unions based on a wildly out of date conception of who blue collar voters are and a misconception about what might actually get blue collar voters to vote for you.
I think most Democratic politicians and Democratic voters know very little how tariffs/anything work in economic theory or practice and can and will be swayed by whoever is leading the party. This is also true for Republicans!
So Republicans are being led by supporting Trump's tariffs and Democrats are being led by opposition to Trump's tariffs. Swap out Trump and those preferences could change for 70%+ of the electorate.
This is just obviously false, totally inconsistent with how Democrats have governed
I agree with your comments about tariffs and old-school unions. As experience under DJT is proving, tariffs do not accomplish the supposed goal of reviving manufacturing jobs. They increase costs and prices, and they inherently create opportunities for cronyism and corruption. ... It's quite unfortunate that Dem leaders in several "blue collar" swing states are fans of tariffs (just not DJT's tariffs) ...
You already know that the tariffs are not revivifying manufacturing? I’d bet my bottom dollar that if they were bipartisan they absolutely would. Uncertainty about democrats keeping them (or even Trump, for that matter) is a heavy headwind to that.
There is a world in which carefully crafted bipartisan legislation could revive certain manufacturing, yes*. What Trump is doing is not that, and Democrats could be doing absolutely nothing and it wouldn't change how badly he's implementing policy. Republicans control the house and senate, he could at least try and get legislation passed, but he doesn't want any constraints on his power at all.
*I'm not certain it would be worth the economic drag that it would still cause, but its at least feasible.
Thanks for a providing me with a nice laugh. What an asinine hypothesis.
I have some qualms with the latter half of this comment, but I do agree wholeheartedly with the first half.
Lower interest rates would make it cheaper to buy cars and houses which are some of the largest recurring payments people make. Even people who already have a cheap mortgage are affected by higher rates because it hinders their ability to move and sell.
Cheap interest rates are what got us into this housing bubble in the first place. Bush/Greenspan started it---I still remember real estate agents saying since you were paying less interest the house price could higher. Same with the post GFC 0 interest days. And lowering interest rates now will likely feed inflation which probably won't help bring down housing costs. Have you noticed lots of entities buying gold and silver? They're hedging against the effects of what 25 years of cheap money, tax cuts, and too much stimulus has wrought. It's the Everything Bagel Bubble, lol.
I saw Adam Schiff attacking the tariffs.
It's been a bummer to watch affordable car models get steadily marched off the market over the past decade. As someone who lives in a small house and rolls his eyes whenever somebody says "nobody wants small houses anymore," I have sympathy for the folks who would still buy small cars if they were offered, but it feels like the bulk of society decided they were too good for hatchbacks and sedans before throwing a tantrum now that the bill has come due.
Honda Civic. And if it’s important to you, the four door hatchback model is assembled in Indiana.
Reducing the budget deficit would help with the trade deficit and manufacturing jobs. Financing the budget deficit sets off a row of monetary dominoes, the bottom line of which is a distorted exchange rate that fuels imports and hurts exports.
The politics of this continue to be inept. Unions are causally linked to people voting more left-wing than they otherwise would. If the Teamsters can get a group of what would otherwise be 75% Republican voters to vote 55% Republican that's delivering votes. So Dems should be very willing to straight-up buy votes from unions with policy. Find the cuts somewhere else.
Tariffs are a different kettle of fish because the degree to which they help unions relies on a bunch of bankshot logic that I'm not even sure holds anymore. But if the policy directly raises union membership, the political calculus is extremely easy that benefitting unions vastly outweighs any impact on prices.
Can you give evidence for “Unions are causally linked to people voting more left wing”? Or that “benefitting unions vastly outweighs any impact on prices”? I get the feeling you don’t remember the 1970s and the inflationary spiral that led to the downward spiral in union membership since the 1980s. A lot of people blamed high union wages for inflation and manufacturing moving overseas.
Re: the linkage between unions and left-wing politics, Tom Frank's "Listen, Liberal" has that analysis in the notes, and it's easily visible in the 2024 election results, where union members' votes essentially didn't shift at all and thus trended something like six points left relative to the nation as a whole. It's one of the most powerful forms of persuasion in all of politics.
I do not in fact remember the 1970s because I didn't exist then. But it's certainly true that in a world where employers can cherrypick the most destitute people on earth to pressure wages to starvation level, they will do so. The raison d'etre of the political left wing is literally to stop that from happening.
Much like how the Laffer curve might be true for marginal tax rates vastly in excess of ours but has no relevance to current or foreseeable tax rates, I have no doubt that if you counterfactually imagine a world where union density is close to 100%, the effect of any further increases in union membership might be offset by the effect on prices--but we're not in that world. US union density is so low that raising it is basically a price-related free lunch.
I don’t think the problem is so much that it’s boring as much as that a normal person would have a hard time understanding how it addresses costs, especially the salient ones people complain about so much.
It’s really hard to connect the dots for people on this stuff and if we’re honest wages explain many of the most salient things (people post 2019 restaurant menus all the time)
Do you need to explain? The flip side of voters not having a good grasp on policy is that, if the President makes a bunch of moves in year 1 to reduce inflation such that it's lower by year 4, voters will give him credit even if he doesn't do something like rent control that they think will lower inflation. It worked for Reagan – voters don't know why the economy got better, it just did.
I think most voters understand that inflation drives prices, but what they want is lower prices, not lower inflation. I remember during the Biden administration, Paul Krugman was writing columns about inflation coming down, and then the comments section would be full of people saying that prices were too high, and he'd respond with ... well, but inflation is going down! See this number? It's lower! When he was really providing an accurate answer to the wrong question.
Wages did go up during this period, but not evenly across the board, and even though lower wage earners benefited, those increases were rapidly eaten up by rising cost of food, rent, and (for homeowners) actual increases in their mortgage payments driving by higher property taxes on their now more valuable houses. And those costs are a larger share of spending for lower income earners. So people are making more money but not feeling materially any better off -- in some cases, they may be worse off in real dollar terms, depending on the wage/price increase ration in their own household.
I'm not sure how you really address from the policy perspective; lower interest rates won't help people who bought a house ten years ago and had their mortgage payment go up a few hundred bucks a month, or the change the fact that it is now more expensive to buy the same amount of food.
I think the problem with rising wages + rising prices is that people credit themselves for their raises but blame the economy for the prices, even though obviously they're very, very connected.
It seems like a really hard problem to satisfy the demand for lower prices in any way that the median voter can understand. I think you just have to do economic policy that can be sold to the voters as "we did this for you. specifically you!"
That Biden-era discourse was probably as much a question of rates vs levels as wages vs prices. “Inflation is coming down” was a technically correct statement, but it’s a bit daft to realize that voters care more about absolute price levels than their second derivative without also acknowledging that the first derivative is also more important.
The tragedy of Yglesisnism is the worst stupidities in the discourse really could be fixed by making people take a two week macro economic seminar. Basic Keynesian economics requires only arithmetic. Average IQ people could understand it if they just devoted a quarter of their screen time to it for a month.
Econ 101 needs to be a mandatory class in High School.
We have a hard enough time teaching people arithmetic
also opportunity cost is literally the first concept you learn in econ. If we're making that mandatory, what are we giving up?
Give up trying to teach a second language (Spanish, French) whatever. Unless you've got [foreign language] immersion program, it's not going to work. Nobody ever learned to speak a language fluently by studying it in a classroom 2-3x a week. ?Como se dice "complete waste of time" en espanol?
I think this depends on where you live. You don't need an immersion program to practice speaking Spanish in a state like CA.
Make longer school days and years
I don't know what the standard is these days, but when I was in high school you typically had at least 3 credit hours of electives each semester in sophomore year and later where you chose the class to take and it wasn't something that necessarily counted towards requirements. If that's still true (or true in most school systems), you could require an economics class without "giving up" anything except one elective class.
I took IB Econ and it was one of my favorite classes in high school. Don't remember it being math heavy.
I don't think the commenter meant that you need math to do econ, they meant that in this country we struggle to teach essential knowledge via school. Therefore, the idea that the public would be more educated on a topic if we required it in high school is specious.
It's more of a rhetorical point. Of course many students do learn the material taught in high school. But it's hard to read so many articles showing the struggles of secondary education in the U.S. and not react when someone proposes it as a remedy to another problem.
Macro is usually 102, but I agree.
A more direct approach would be to start with personnal finance and mix in Econ 101, at the high school stage of life direct acknowledge would have broader appeal
Econ has the advantage of already being a high school course, just one a minority of people take.
Personal finance is a few weeks of material, tops. To my knowledge no one teaches that in isolation.
My high school had a personal finance class.
We spent a ton of time learning how to write checks and balance a checkbook, just in time for online banking to come along and make that skill completely obsolete.
Also we learned about stocks and investing from participating in one of those paper trading competitions. Problem was, you didn’t get anything unless you came in first and the time horizon was like a couple months, so the only viable strategy was to day trade like a maniac and hope you caught lightning in a bottle.
What I think is missing in the culture as a whole is at a personnal level of money management, similar to basic understanding of civics. Not taking anything away from econ 101, but when people can’t appreciate living within their income! consumer interest rates, how to eat on a budget etc etc they rarely give a fig about what public debt or the fed setting interest rates. Even those with family trust fund money don’t have the life experience of discovering being without this income yet are often concerned informed on econ 101 if even just from within perspective.
It is in New York!
I don't think regular people should have to understand it. Politicians hire experts so that they can make decisions that regular people cannot. It's the failure of the political class that they cannot communicate these decisions to regular people.
The median voter wants prices to decrease and 95% of people who understand macro economics understand deflation is a disaster. The voters’ preference is the bug and education might fix it.
I don't agree. People don't need to have a good understanding of how everything works. They just need someone they can trust to make the right decisions and explain it to them. The problem is the lack of trust, not the lack of education, which is not a recent problem.
The median voter can’t meaningfully adjudicate who to trust on macroeconomic issue because he lacks the empirical tools to do so.
Of politicians were omniscient angels this would be ok. They arent.
They used to trust some politicians in the past. That’s why some politicians were popular. Currently, there’s a skill deficit among politicians who can earn the trust of voters.
This is where having a communicator like Bill Clinton or Barack Obama would come in handy, but unfortunately that's about as actionable as telling the Jets "you guys should draft somebody like Josh Allen."
If it's the Obama who, at the time of a very sluggish economy, communicated to us that it was necessary for the government to tighten its belt, just like families everywhere, then no thanks.
"Draft Josh Allen" is very good advice, though. Having worked in a consulting-type business, I recognize excellent recommendations when I see them.
Amateur move by Obama.
What you want to do is promise a 25% cut in government, get elected, and pass Social Security, launch a massive public works program, create the SEC and FDIC, and guarantee the right to unionize.
That's how you win 4 times and defeat the axis powers.
Obama said a lot of things but government spending continued to increase under his administration. The only exception to the rule was the 2011 Budget Control Act and subsequent sequestration, which were a result of a Republican Party empowered by the 2010 midterms playing hardball with the debt ceiling.
Federal spending basically goes up every year (https://www.statista.com/statistics/200397/outlays-of-the-us-government-since-fiscal-year-2000/?srsltid=AfmBOoql92dn5wloYC6a2eJdpUBgf6uvc5gU6R2yjMGvXls4SCiJ0v1V)
The only time it's been roughly flat was 2009-2014.
My point isn’t that Obama was profligate (he wasn’t) my point was that he wasn’t aggressively trying to rein in government spending until Republicans forced him to eat dirt (deficits surged during the financial crisis and didn’t fall until after the BCA passed)
https://news.gallup.com/poll/656330/obama-best-liked-among-living-presidents-biden-least.aspx
This is mostly because the GOP saved him from doing SS & Medicare cuts in exchange for fairly small tax hikes. If Obama gets his Grand Bargain in 2010, Romney beats him in 2012.
Lower deficit = lower inflation and lower interest rates (Ie mortgages, car loans, credit card debt, etc).
A competent politician can sell this. People also have a natural understanding for things like "not living outside your means" and other such comparisons.
People often hold incompatible beliefs.
Yep, Bill Clinton sold this in 1992.
I am fully onboard with some fiscal hawkishness but this heuristic is far too simple imo
But like the thing I see posts on is usually like the nominal inflation in food prices. I’m not sure how much these policies lead to 6 dollar burritos.
I know the effect you’re describing but it doesn’t seem that related to what people bitch about.
Where are burritos still $6?
They’re not, well possibly Taco Bell but even bean and rice only cost me 9 something most places.
That’s what people want is 6.50 chipotle but it won’t come back anymore than dime stores.
It's indirect at best to food prices. For that the answer is really tariffs and other supply side reforms.
But with housing costs it could make a difference.
Lower deficits is certainly not a cure all.
The bigger problem: the public no longer trusts people in positions of traditional authority on confusing topics (for good reason, I’d say) but also the public doesn’t actually have ability to make sound judgments on its own.
Do you think there’s good reason for people to be less trusting now than in the 1980s or 1950s or 1930s? In general, the response to the pandemic seems to have been more effective and less disruptive than similar events in the past, but the public understanding of it was worse because of greater transparency.
Because in the 1980s or 1950s the average person didn't have access to a bunch of YouTube videos or Xitter posts saying "the authorities are Lying To You, here is the truth They Don't Want You To Know!!!!!"
Relatedly, the men in old 1950s PSAs sure were smooth talkers. I'd probably buy whatever they were selling, even if they were wrong on the merits.
We'd probably disagree about the effectiveness/disruptiveness of the pandemic response, but I'm more thinking of things like: 20 years of war in Iraq and Afghanistan, decades of globalization-fueled economic disruptions, a health reform bill that created an incomprehensible system and didn't fix the underlying problems, etc.
But, point taken that the distrust may be more a matter of transparency than anything else! I don't think policymakers in the 1950s were necessarily more deserving of trust.
Folks can understand, "Interest rates are too high, and that's why your car payment/new mortgage payment is too high." If you focus that, and leave the cancellation of tariffs to do the work on the other front, you can win rhetorically and on substance. And these are things you can do through fiscal policy.
But if you want to go beyond that, there's a ton more that can be done, especially if you're willing to gore some more sacred cows.
Embrace automation rather than pearl-clutching at the the potential loss of employment for taxi drivers or whatever. The biggest thing that's driven cost increases over my lifetime has been the price of human labor, as a result of Baumol's cost disease. Products and services that haven't realized productivity gains on the inputs of human labor relative to the broader economy are more expensive. So invest in automation where possible. Replace (supplement?) massive data center CAPEX with massive investment in automated manufacturing of high-value products.
And implement a massive reform to the immigration system. Implement draconian enforcement laws at the borders along side a not-very-generous-by-quite-large guest worker program. Take whatever unpalatable steps on enforcement seem necessary to get folks on board. Don't just focus on the most skilled folks at the top of the income ladder, but let in folks at many levels. You wanna see prices drop for labor-intensive sectors like food service, groceries, and child care? Increase the labor supply in those sectors!
> It’s really hard to connect the dots for people
The personal pocketbook metaphor Obama used is really compelling (you're tightening your belt, so the government should too). But it's actually the opposite of what Keynesian economics says. Is there a compelling story we can tell that actually aligns with the economics?
Or do we just fudge it a bit and *say* that people are tightening their belts because times are hard, when the existence of inflation means they're actually doing the opposite.
When times are tough and people are tightening their belts, the government should be there to lend a helping hand.
When times are a bit too good and your waistline is expanding, then it's time for all of us to hit the gym.
Here's the economy in a nutshell. Over $40 trillion debt, well over $300,000 per working taxpayer. Sensible economics won't work anymore, they should have been talking about nipping the deficit in the Obama years.
https://www.usdebtclock.org/current-rates.html
I don’t think moving inflation from 2.7% to 1.7% would meaningfully change public opinion. When people complain about “affordability,” they’re not doing CPI arithmetic — they’re saying “I want more status.” Higher GDP growth would help, but a couple of percentage points spread over four years is thin gruel and much of status is relative.
The deeper problem is national malaise: we’ve lost even the pretense of shared purpose. Biden clinging to power as a dotard didn’t just hurt Democrats electorally; it ceded the moral high ground by signaling that in-group aggrandizement mattered more than renewal or honesty. In a society without shared purpose, people don’t rally around policy competence — they resent their betters. Envy hardens into politics, and performative outrage flourishes.
Shared purpose is eggheadist abstraction that the Professional classes focus on.
Rebuild sense of opportunity and you get purpose. Putting the Abstraction in front is the Cart before the Horse.
Reduction of inflation towards 2% and reducing pricing pressures including interest rates within the economy and acclerating growth goes a long way to meeting the public where their concerns are (versus hand-wringing about the abstractions)
and Democrats ceasing to focus on Academics abstractions and digging themselves holes into complexity via excessive focus on abstraction (example trying to run a campaign on the abstraction of Democracy) would be a good place to start, to focus on the practical.
I am about 50% with Abbott on this one. To take it super academic for a moment, Francis Fukuyama's writing around the importance of feeling respected and the quest for superior status, which Fukuyama has a couple of Greek names for, has always been a really important part of politics. And in our current information economy is ever more visible and salient. Redirecting some of that energy to some shared sense of pride and purpose would be good, if possible.
That said, people actually care about their material lives and budgets, especially the people who switch parties from election to election.
But is the elasticity such that people will hold their nose and vote for the candidate they don’t like but grudgingly admit will deliver 0.8% lower annual inflation.
My intuition is no. There is little meaning data. Politically significant historical inflations have been much bigger than 3%.
I am unclear what you are arguing for here.
not sure i can help any more than i have
If finding a shared national purpose were easy, we would have done it. France also has a notoriously hard time finding shared purpose.
There are certainly many purposes I don’t want to share- defending Taiwan, revivifying christianity, eliminating racial gaps. I suspect the next time we converge on a national purpose we will be at war. And yet I’m confident the politics of envy will persist until a shared purpose is found.
This is a hard problem. Matt hasn’t solved it, and I think he’s being too earnest about prices in part because he can’t solve the purpose coordination problem.
The good news is someone with Obama level charisma and discipline might be able to solve this problem even though Matt can’t.
I think you're wanting something that's almost a contradiction in terms -- a democratic republic of hundreds of millions of free citizens with liberty to make how to live their lives, AND who all happen to want the same thing. By design, the only purpose that really has to be shared in our country is a shared commitment to giving each other the space and freedom to make our own decisions. That's a pretty weak, lowest-common-demonimator bond, except when it's under perceptible external threat. If you want to be part of a polity with a stronger sense of shared purpose that than, you'll probably have to find it in a smaller government within this large Union.
Our “shared national purpose” should simply be punishing MAGA.
MAGA feels the same about libs...
Where exactly is the mure de federes?
https://en.wikipedia.org/wiki/Communards%27_Wall
Are they really saying, "I want more status," or are they saying, "I'm stressed and scared because my house payment is half my paycheck, I have a $5K health deductible, I can't afford daycare any more, and now a hamburger costs $10"?
I go back and forth on whether persistent economic "bad vibes" = the underlying cultural / psychological malaise along the lines you identify, or whether it really comes down to material factors and we're overthinking it. People are unhappy because their lives really do feel more unaffordable now. Yes, I know that's not what the long-term macroeconomic figures say, but I'd say that suggests the way we measure these things is flawed.
I think if you break down the budget of the average person, compared to 20 years ago, they have more outflows as a percentage of inflows because they do more things that cost money, not because the prices of things have outpaced wages.
They're unwilling to give up these things in order to balance their budgets because of the damage they'd feel to their status
I don't doubt that status is part of it, but the costs that stress people out the most can't be reduced down to such a simple formulation. Health care and child care spending don't have much to do with status. With housing, car payments and student loans, it's more complicated -- clearly there's a strong dimension of status to all those things, and many people do make unwise choices financed by debt. But getting in a bit over your head on a 30-year mortgage is a lot different than blowing your paycheck at fancy restaurants or expensive clothes, and a lot harder to scale back.
The only way of reconciling unprecedented affluence with economic anxiety is status envy.
Unprecedented affluence can't be unevenly distributed?
There’s no clean answer. sid it were concentrated among 2%, it wouldn’t be affluence. And gains are concentrated.
And yet the median earner in the U.S. is doing better than the median German worker. The Massachusetts median exceeds the Swiss median, on a comparable scale.
My understanding is the median German isn't too happy these days, either. Regardless, I always find it very odd to do these sorts of cross-national comparisons, because the shape of the social contract is just so different in Germany vs the US that it feels like it tells us next to nothing about who's "doing better" on a human scale.
My objection is to the idea that the "only" reasonable explanation for economic anxiety during apparent boom times is status envy; we should be asking better questions about why people feel persistent anxiety, not dismissing it.
so what are plausible, alternative motivations that fit the data?
not being able to afford things doesn’t work because 70% of voters are more able to afford more shit today than at any past time.
Where are you getting $10 hamburgers??
I literally don't know if you're asking because find $10 cheap or expensive. I can walk to one place where they are $4 and to another place where they are $16.
Ha, I guess I think $10 for a sit down hamburger is quite cheap and for drive through a bit expensive? City hamburgers seem to range from $14 at say like Shake Shack to $24 at restaurant with small plates.
ha, adjust upward or downward depending on location and default fast food tier. You know what i mean.
This is an interesting point. On a $7 carton of eggs, going from 2.7 to 1.7% inflation only saves you $0.07. Will people really notice that?
I don’t know what it exactly takes to make the public “feel” inflation decrease. But I think doing substantive things and then pushing out press releases about how this or that policy is keeping grocery prices down would be received positively by swing voters who are often asking themselves if dems are out of touch with their concerns. If it’s backed by hard data, and credible sources agree even better. It may just highlight how bad the Rs are on the issue as well. I think starmer did a good job projecting himself as fiscally responsible as a candidate even though he’s not popular now. Dems need to do that as well.
People look at the grocery store prices a hundred times as often as they look at press releases. This is not a messaging problem.
This is why we need a great communicator like Cinton or Obama, er, sorry, I mean Carter to give a prime time televised speach hectoring Americans about their "national malaise".
Better Houlebecq than Carter!
This suffers from the same problems as the greedflation narrative. People didn’t want more status five years ago?
My contention is people almost always want more status but, given a coherent national purpose, some people can subordinate the pursuit of personal status to larger goals
I think we've lost something we can't really get back. Social media has poisoned our politics in a very direct way, but also indirectly - people are never going to be happy about the direction of the country if they are constantly being fed video evidence of the lives of people with higher socioeconomic status.
If that were true, watching Leave it to Beaver would have destroyed both party coalitions and sorted voters between bourgeois adjacent and working class.
I think Matt is the vanguard of bringing people like me (Romney Republicans who hate Trump) into the Dem coalition.
The seven of you will really liven up the potlucks and bingo games!
There are dozens of us... DOZENS!
NARRATOR: There were, in fact, only ONE dozen.
Welcome in! Turns out they're my people.
The problem is that Democrats are running on middle-class tax cuts, which we all know would increase the deficit and inflation. As the piece acknowledges, undoing Trump tax cuts, increasing taxes for "the rich," and minor subsidy cuts aren't going to be nearly enough
Democrats have been continuously redefining their middle class threshold upwards as more well to do college graduates join their ranks.
I am certainly rich but make less than $400k per year, and I was surprised to find that I am defined as middle class by progressives.
I bet a lot of downwardly mobile progressives think getting $400k a year from their parents’ trust funds makes them working class… and by many I just mean a few in Manhattan
I certainly have a trust fund giving me money and I am not ashamed of it, but I never thought of myself as middle class. It was always upper class or rich.
Well that's a very different tax situation. If you were making $400k on labor income, you would find that your taxes go up under both parties, and you're not going to qualify for any programs or tax breaks, you are definitely not treated middle class when it comes to the tax code
SALT and home mortgage interest deductions are just waddling over here and you are ignoring all the quacks they are making.
Beat me to it. Democrats have needlessly backed themselves into a corner with this stupid pledge.
Fudge it. Avoid any details.
You can extend this point to a more general criticism of the column, which is that the hard part is picking whose ox is gonna be gored either whose taxes are going to be increased or which constituency is going to lose its federal funding. Losers fight harder to prevent a loss than broad winner’s fight for a slight improvement for everyone.
Are Democrats running on middle class tax cuts? I missed that.
They wanted to extend the middle class Trump tax cuts
Last year, sure. Any current tax cuts proposed by prominent Democrats?
No they prefer to give out the money through subsidies instead of tax cuts.
"House Democrats have a plan to bring down the cost of living for working families by banning corporate price gouging, building more homes to tackle the affordability crisis and cutting taxes for working Americans to give them the breathing room that they need"
https://www.dems.gov/newsroom/press-releases/chairman-aguilar-house-democrats-have-a-plan-to-bring-down-the-cost-of-living-for-working-families
I have to admit, while I understand why lowering costs is undesirable, and not possible anyway, it is a little hard for me to wrap my head around the idea that $20 burgers and $6 for a small bag of chips are just how things are going to be going forward. I think a lot of people are in the same boat. Especially when you throw in the average price of a new car being $50k and average house prices over $500k.
You need to look at the wage side of it as well. One of the reasons those burgers are expense is how much wages have risen for folks at the bottom.
Prices are anchored in our minds but they also become unanchored eventually. If you think back to your childhood I'm sure prices were wildly different.
People can live with prices moving up 2-3% a year. The problem is that during the aftermath of COVID we had a couple of years of 5%+ inflation, or large non gradual changes, and it's going to take a while for people to internalize that. But if inflation stayed at 3% forever people would eventually adapt as long as salaries move in tandem.
>Prices are anchored in our minds but they also become unanchored eventually.<
Yep. People readjust to the new reality—and stop pining for yesteryear's nominal prices—once inflation returns to normal and enough time passes. I do think, given the very long run of ultra low inflation we experienced, that 3.x inflation isn't going to get it done. It needs to get back to 2 percent or under. Happily for Democrats, the only way that happens under Trump is if we get a serious recession (I suspect a merely mild recession will get us stagflation).
Vincent Vega would be galled once $5 milkshakes became the norm.
They don’t even put bourbon in them!
Productivity gains cause real price declines.
If you would've told people in 1985, that burgers would be $10 and it'd be $3 for a bag of chips in 2010, they'd be stunned. Prices rise, people get used to it. The issue is just as people were sort of kind of getting used to things, Trump added a whole bunch of tariffs.
Isn't the rational approach to rising inflation cutting back on expenses and maybe making burgers at home and buying a big bag of chips from Costco? I'm not seeing that adaptive behavior from consumers.
The rational response is to switch jobs and get a raise taking advantage of the wage component of inflation.
That depends on whether your profession is seeing wage inflation or not and the job market, not on median wages.
Exactly - entry level software developers - no. On the other hand my haircuts and the plumber are way more expensive.
But the overall we seem to be agreement that there are ways for consumers stung by high inflation to adapt in different ways.
You can deflate the price of a burger by firing everyone in the burger shop and replacing them with automation - that's the only answer that is going to materially change those prices.
Otherwise, you're implying that the people working in the burger shop should never get a raise.
It's probably what we *should* do as soon as it's feasible; no more humiliating hats or fake smiles.
I don't think that's what you're necessarily implying. It's totally fine to have entry level jobs with high annual turnover rates so that no one ever "gets a raise" or at least not within that specific role. But lots of people change roles (e.g., move onto a retail supervisor) or change companies to get a raise. That's fine.
When I was a kid you could get a burger for $3 and still have money for the bus ride home ... We will be that generation.
McDonald's was selling burgers for under a buck as recently as 2010.
We're all going to be referencing 2019 prices until the day we die.
Note on a completely unrelated topic. I would like to think I’m not a particularly egotistical person. Or at the very least, I am in general one to not be too much of a braggadocio.
But you know what? There certain times where there are exceptions and certain times I’m going to say “you know what, I’m going to indulge a bit”…
I am taking an absolute victory lap about Bari Weiss.
I cannot emphasize enough I had her pegged back in pre 2020 days. This commitment to being a free speech warrior? Yeah, not so much if it happens to conflict with her own political goals. Knock me over with a feather this 60 minutes fiasco happened. I am jack’s lack of surprise. Really, the person who first gained fame trying to get an Israel critic fired wasn’t actually committed to all free speech especially when it’s comes to anything even mildly critical of Likud? Really, the person who did her very best to use her New York Times perch to elevate “intellectual dark web” bigots and crazy people because they happened to hate the same lefties she hated (I said it then, you can defend free speech without needing to elevate the worst bigoted garbage out there).
As I said indulge me. Because I got a lot of crap especially when I was more active on Twitter from a lot of right of center and left of center types for making what I thought was a pretty easy thing to see which was “she’s a conservative with conservative policy goals who you think is your ally because she personally used to be anti Trump but is clearly not anymore and is not actually your ally against Trump and lefty overreach!”
I am waiting for a bit more detail about what happened (I tweeted "I hope it's not true") but yes, if the early reports pan out, Weiss may have done something extremely bad that may have repercussions at CBS for years to come.
I have a hard time believing Sharyn Alfonsi is going out on the limb she did if she wasn't on solid ground. If the segment really did have major gaps she basically nuked her chances of any sort of career at any reputable news organization.
Like you, the story is "fresh" enough, I want to be humble enough (my "victory lap" above notwithstanding) to note that it's at least possible that more info will come out indicating possible serious gaps in the segment. It's not like 60 Minutes hasn't had any issues with segments in the past that had serious holes in it (see Dan Rather National Guard story).
But yeah, all evidence so far suggests that a lot of centrist and left of center defenders of Bari need to look in the mirror a bit.
The Bari statement on this honestly makes it worse. If I'm reading this correctly, her "defense" of pulling the story is at least attributable to the idea that the New York Time has already devoted stories to abuses in El Salvador prisons so therefore this 60 minutes segment is some how not new info.
Hey, all you centrist and left of center defenders of Bari, you know she's openly mocking with this statement right? Like basically laughing at your gullibility all these years. If the bar for whether a story is worthy a of news segment or an article the entire reason for The Free Press to exist would go away. Her entire schtick was essentially beating to a dead horse "person X is being silenced by left wing censorship". Like any story that involves someone not sufficiently left wing enough getting their wins clipped by lefties policing speech was and is a story either from her or her publication.
Like even if you believe that every story of left wing overreach on speech is 100% true based on how Bari or Bari's publication described it, then based on Bari's own criteria regarding why this El Salvador story was spiked how much of her output the past 10 years should never seen the light of day.
I stopped bothering after that bit on her podcast where she decided that a show on the Ukraine invasion was a good time to beat up on identitarianism (while lacking the self-awareness of her own extreme identitarianism).
Useful. I think the international lessons on inflation essentially say it takes several years for people to adjust to new price levels (what people particularly hate are sudden bursts of inflation / rapid changes in rate), as what happened). As Noah Smith has touched on as well.
In terms of austerity - the Clinton model probably is excellent - real tax hikes plus showing some belt-tightening goes a long way for credibility and upending the 'tax & spend'
Abundance and broad program of regulatory simplification / streamlining (don't call it deregulation, call it regulatory streamlining [which as Biden Admin inability to make things move showed is badly badly needed]) and removing the proliferation of veto-points for everything.
Energy abundance: Looking for opportunities for public-private funding where US Federal guarantees (along with regs streamlining) at a fairly modest budgetary costs can reduce risk, reduce interest rate cost on financing - with big and extensive program on Grid Expansion and promoting (a) expanded and reinforced interconnects for true continental grid for max potential on energy wheeling / exchange and time/generation arbitrage [great for RenEnrgy], (b) guarantees backing and promiting regional and local transmission and distribution grid modernisation / upgrading of in place grid (smart grid management [metering etc], improved cable tech, promo of high cap transmission) and co-siting for existing potential right-of-ways to enable particularly rapid build out of Transmission. Generation needs connection, connection needs grid, and cheapest generation needs focus not on touchy-feely greeny left anti-scale concepts but economy-of-scale installations (storage, generation) where per-unit pricing on installation benefits from scale.
Basically agreed with all of this. I will point out though that our fiscal situation is MUCH worse than in the 90's with Clinton. In particular our demographic situation has changed.
Any realistic solution will have to include cuts to SS and Medicare/Medicaid. Because that's where all the money is going. In particular we need to end heroic end of life care. We torture old dying people while wasting hundreds of thousands of dollars. It makes no sense.
https://www.saturdayeveningpost.com/2013/03/how-doctors-die/
As I was reading Matt's piece, I was wondering what Jessica Riedl would say about his proposals. I'm guessing "Fine but not nearly enough to make a difference"? It feels like the unstated claim here is "We have to cut Medicare/Medicaid/SS and probably also raise taxes, but no one can say that and get elected, so let's tinker with some smaller fixes that seem politically feasible."
Yeah, I think the Blue Ribbon commission is probably the best idea, then after votes to approve it, while grumbling about it.
But tax increases AND benefits cuts will have to be what happens, Dems won't vote for benefit cuts without tax increases and Reps won't vote for tax increases without benefit cuts.
Not to mention, trying to close with gap with just one or the other will probably be too much
Do MAGA Republicans even care that much about benefit cuts? Obviously they actually did cut Medicaid but that was to make reconciliation work, AFAICT nobody is out there bragging about it.
MAGA republicans maybe not. Trump and Dems seem to be aligned on this because voters don't want cuts.
Voters want rainbows and unicorns for everyone at someone else's expense.
I think we should tax all foreigners living abroad.
I don't personally have the expertise to know on the retirement front what is the proper policy although to my understanding if the SS regime did not cap off how much earnings were subject to SS, there would be much better numbers
This aside economic growth abolves many many sins, economic stagnation brings the sins to the forefront.
Democrats focusing on energy price abundancy and reg streamlining to help reignite growth in a smart way rather than the bungling idiocy of the Trump clowns could do a very long way. US is engaging in a lot of self-handicapping and luxury of non-reform when America was much further ahead on infra and tech is now looking to me like the threadbare outdated luxury of backwards looking aristocrats...
Out entire politics is mired in a backwards looking paradigm. I can never decide how much of it is cynicism of the governing class or just the natural progression of a really big democracy with a really big generational cohort approaching its twilight years. Reform of the big cost centers of the state may well not be politicslly possible, to the extent they require current claimants of our old age support systems to make any sacrifices. More likely when they do happen they'll be phased in for millenials but by then we'll have put ourselves in a deficit that is going to be really hard for subsequent generations to dig out of.
Maybe there will be a technological breakthrough or some sort of external events that shake things up. Otherwise on my more pessimistic days I think we're likely facing a much more stagnant, poorer future than the one most of us would have predicted growing up.
We won't be able to wait that long, we are looking at a 20% cut to SS in 7 6 years.
Not to mention, I don't believe the bond markets will finance the deficits required.
Yup. Yet my bet is that we will suffer ratings downgrades, structural deficits, and slow growth before we cut benefits for anyone born before 1975.
agreed, I think we will end up with some type of fiscal crisis before politicians are forced to do what's needed.
Nostalgia.
Big rich countries have a strong tendency to fall into this. And added aging population as Old People tend to be backwards looking idealising their youth.
Encouraging growth-oriented dynamism is actually not easy, not "natural" for people and needs work
Democrats could get back to such a mindset, I dont know if they will - they need to dump the anti-growthism and spend all time making sterile land-statements twattery tho.
There is a cap on SS taxes because there is a cap on SS distributions, and SS is supposed to be mainly a retirement program not a welfare program.
But yes you are correct that a massive tax increase (which would be what changing the cap is) would make things better.
I am aware of the pretext of the cap, but that is economic nonsense.
remove the cap and you are funding the retirement program. that does not make it different than before, one is simply removing a stupid incoherent pretext (as the SS program is not and never has been an retirement invesment program despite some incoherent fig leafs for rubes).
It makes much more sense to do such than maintain the pretet. This is I should say something that would effect me (as in my earnings) so not an argument from own interest, contrary really
There's no pretext at all.
Benefits are capped, so taxes are capped.This makes perfect sense
A huge tax increase does not.
Note Lifting the cap really isn't going to affect me either.
I just don't think such a massive tax increase is a great idea.
First, lifting the Cap does effect me, my income being abov the cap, but it is a logical thing to remove the cap for retirement funding solvency.
Second, the Pretext is that there is a direct relationship between what personal income subject to SS contribution and the eventual retirement payout. There is no SS benefit "cap" in a pay-in cap to pay-out.
This was and never has been actually true, it is a pretext used initially in the st-up. SS was and has to recent date depended on larger inflows than outflows on an aggregate basis, not on a real individual balances as like a retirement fund.
Removing the pretense and simply making current income, sans cap off, subject to SS is simply good financial solvency logic for a global basic retirement security program.
As other policy choices resolve to retirement funding insolvency or raiding the general budget, removing the cap and engaging in some reitrement welath transfers for high income persons (of which myself so I am arguing against my short-term financial interest in favor of financial solvency logic as the pay-off from coherent finances is going to be better than a political crisis around retirement insolvency.
Love the grid stuff - but it's a lot.
How much do you think requires new federal spending (fed backed loans, tax credits, etc) vs how much of it could be done with better/new regs (eg permitting) and better leadership/priority setting from FERC?
honestly I know I don't know enough to really have a proper insight so I take even my thoughts w a grain of salt... as a vulgar finance guy... - but I know enough finance to see budget actionable paths with Fed guarantees and tax credits [versus direct infra spend] (the successful part of Biden action notably on tax credits, guarantees can work well but need serious streamlining, stop the everything Bagelism).
I think regs streamlining is fundamental as "leadership' w/o that is pouring water in the sand but both with Federal guarantees and tax credits I think s/b a focus for the future. Otherwise we're going to have an elec grid train wreck (and no way is US gonna pull off the amazing black-start the Iberians did)
Energy cost is fundamental to economic growth - so getting the cheapest energy into the grid and enabling more efficient ElecTech Stack is a great path to generating a more dynamic US industrial economy for the future instead of lamebrained "recreate 1960s era as mythologised"
Thx. Much appreciated.
Of course as per last night, instead of doing any reforms
US can always double down on 1940s-1950s era tech and build Trump Class Battleships.... cause Trump watches a lot of WWII movies.
and has understood f-all from Ukraine and the lessons of the Drones.
Just like how a previous column pointed out that voters conceptualize corruption differently, I think people's view of prices and inflation doesn't map neatly to actual prices. In particular, people often dislike service sector productivity increases, because they (necessarily) involve getting less time from a person helping you. You might even describe that as inflation -- you pay the same price and get less service at the grocery store when they eliminate baggers or at the restaurant when they switch to counter service. Unfortunately given the dominance of the service sector, this is a big problem.
I'd call it shrinkflation
Maybe, but shrinkflation is usually getting less product for the same price. If you conceptualize grocery stores as places that sell you groceries, then the quantity of store staff isn't part of what you're paying for.
Cookie Monster agrees!
It's baffling that Democrats have had two presidents (Carter and Biden) derailed by inflation but Democrats still don't really care about lowering inflation.
It's not really odd *right now* given that inflation helps them and hurts MAGA.
The fundamental barrier to lowering deficits and reducing inflation is the inability to reach credible long term agreements across party lines. It's like sharing your credit cards with a stranger and trying to reduce your balance. As long as you both believe that the other side will just spend (or cut income/taxes) more anytime you save it's irrational for either side to do so.
And not only are lawmakers aware of this but so are the most active voters in both parties.
The more I think about it the more this seems like a really helpful analogy. And made even more powerful by Trump pushing the judiciary to say that the executive cannot be bound by agreements it has made.
Taking away the ability to make binding promises might feel like empowerment, because you can’t be bound, but it’s really a kind of disempowerment.
Ohh, you mean the unwillingness of the courts to enforce the limits on appropriations etc? Yah, that is just pure cowardice even many of the conservative legal scholars who are big on the unitary executive (yes it's a principled position but that makes it worse not better -- people doing things out of principle are more willing to drive off the cliff) are upset about that one.
Honestly, my read on that (unlike the unitary executive stuff) is that the court simply blinked. They realized if they stepped in they'd become the resistance to Trump's whole administration and simply chickened out. Notice, these have pretty much all been procedural cases the court hasn't heard on the merits but practically make enforcement infeasible -- that's the kind of thing you do when you don't feel good about it but are scared to say no. I think the justices are aware of the views people have about them and chickened out on being despised by everyone.
While Roberts kinda believes in doing that in general (see the ACA) I wonder if the court will change it's tune the next time there is any administration but Trump in charge (even republican).
I say we meet the voters where they are and run on a platform of redenominating the dollar by about a 3:2 ratio. Immediate 33% reduction in housing, grocery and childcare prices! No actual catastrophic deflation! The 33% fall in wages can be blamed on billionaires, or perhaps on illegal immigrant billionaires if we want to meet Trump voters halfway.
(I’m only about 80% kidding)
Easy money is reinstating the SALT cap, but idk if the Democrats' coalition will let them.
Democrats are not going to do that. It disparately benefits their constituents.
Right. Won't happen. They'd be putting multiple House seats at risk in NY, NJ and elsewhere.
Yeah and that's bad. Friggin' hypocrites.
All you are communicating is that you are dishonest. Republicans enacted the SALT cap in the TCJA because it adversely affected resident in Democratically controlled states. Republicans reversed the SALT caps because it adversely affected them in many House races. Calling for Democrats to enact a GOP policy is just you demanding that Democrats hand Republicans House and maybe Senate seats.
Expounding on this: this is just not how I view politics at all. I don't care which team got punished by this or that policy, I care about whether or not the policy is good. Ok so Republicans only put the SALT cap in TCJA to poke Democrats in the eye. Ok broken clock!
What? How am I dishonest? I think it's hypocritical for the economically progressive party to support regressive policy. End of sentiment.
No, you said Democrats are hypocrites because they refuse to put "multiple House seats at risk in NY, NJ and elsewhere."
Why should the highest taxed citizens in this country be on the bill for Republicans’ deficit exploding tax cuts?
I give up, why?
Way back in 2015 and 2016 one of Hilary's problems vs both Sanders and Trump was that she had a BS Deficit, at least on economic promises. In part that resulted in her turn to identity issues, with all that has led to since then.
Attacking the deficit used to have a populist bent and it seems like one could bring that back to a degree by explicitly tying it to inflation. There's probably a list of reasonably popular tax targets that one can use as examples such as the carried interest, but there's no real reason to mimic the overly specific health-care debates that Democrats tend to have in the primary.
The rest can be put on to a Blue-Ribbon Commission, or some such formulation, which are sort of unreasonably popular with voters since they seem to promise reasonable yet, somehow easy, solutions.
People trust Bernie’s heart is in the right place but didn’t for Hillary. This is important when they’re going to negotiate a compromise on your behalf with the forces of evil. You want every concession to be hard-fought. Bernie has always been practical when it comes to his actual voting record, he’s rarely let the perfect be the enemy of the good when it’s put to a vote. Democrats need someone they can put confidence in to be like this, and ideally one committed to putting all the costs of austerity on those who voted for Trump.
He's been in the Senate for close to 20 years and has hardly any major legislative accomplishments. Completely useless guy popular for his vibes and "authenticity".
Has he always been practical and rarely let the perfect be the enemy of the good when it's put to a vote?
https://cancerletter.com/cancer-policy/20251219_7e/
It isn't wrong to call it a "BS Deficit" but it can just as easily be described as being bad at politics.
Both descriptions are accurate.
As one of the "generation of millennials reared on the political combat of Barack Obama’s first term" I agree with the logic of pretty much everything in this post. However, the last two times this played out under Clinton and Obama, Republicans turned around and immediately plowed deficit reduction into tax cuts for the wealthy and businesses when they retook power soon after. I have a hard time believing any deficit reduction will stick around long enough to actually make a meaningful difference in inflation. It's a lot easier for me to believe we'll just piss off a bunch of seniors that like Medicare Advantage if President Mayor Pete does this in 2029, and will then be plowed into tax cuts under President Vivek in 2033. They did the same thing railing against the "cuts" (small amounts of savings due to efficiencies to help pay for it) to Medicare that were in the ACA to make it more efficient, and then never actually reversed the cuts in Trump's first term.
> President Vivek in 2033
Here we were, starting on a nice festive holiday season. Why do you have to ruin everything.
Annoying but sane? Following the logic of a commenter on the last post, he should be inelligible by virtue of having attended harvard this century. Tough luck i guess...
I don't seem to get past the annoyance to objectively evaluate sanity/insanity of the policies. You have better habits of mind.
Yup, I am totally willing to say I totally support the Republican's doing some SS cuts or even Medicare Advantage cuts on high income people, Democrats getting very angry over it during a campaign in 2028, then mostly only papering over the worst excesses and keeping most of them.
But the Democratic Party should not be the party that cuts Social Security & Medicare. I'd argue us not actually cutting Medicare in 2010 but being seen as doing so because of adjustments due to the ACA hurt us bad enough.
The problem is getting a Republican dumb enough politically and committed enough ideologically to do so.