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Raising interest rates is a good way to control inflation that is caused by excessive demand, particularly if it is being financed with borrowed money. For cost-push inflation, not so much. From an analytical perspective, how should the Fed view supply disruptions caused by the pandemic and the war?

Higher costs caused by extraordinary events should be viewed as the equivalent of an increase in the sales tax. Increasing interest rates to deal with higher taxes is just doubling down on the pain. The appropriate governmental response is to let the consumer deal with the higher costs by limiting his consumption of the goods in question, or, where that isn’t possible, by seeking a less expensive alternative. That is what has happened with gas consumption, and you can see the results for yourself.

The difference between reactionaries, say, ten years ago and today is the sense of impending doom. Starting with Michael Anton’s Flight 93 article, intellectual leaders of the far right have told the flock that the end is nigh if the next election isn’t won. White Christians, they say, face cultural annihilation. It’s just a matter of time until they wind up in concentration camps if the left remains in control of America. Their only hope is to do whatever it takes to guarantee that the left is permanently excluded from power. Hence, January 6 and its aftermath.

This is, of course, a paranoid dream with absolutely no basis in reality; white Christians may not be politically or culturally dominant in this country, but their rights to speak and worship as they please are not under threat. Wouldn’t it be great if Biden went on national TV and said so? Why can’t he demand to see the evidence that we have moved towards a woke dictatorship during his presidency?

If he can’t make that case, nobody can.

While it is highly unlikely, given that extremists on both sides drive the train, you can at least imagine a deal in which a national standard of, say, 15 weeks is established for abortions. Lindsey Graham’s proposal sounds like that deal at first blush, but it is in reality something quite different.

Graham’s legislation wouldn’t apply to red states with stricter standards. As a result, it creates a national ceiling for abortion rights, but not a floor. It is thus purely a mechanism to restrict rights in blue states.

The proposal is being sold as a “compromise.” It is a compromise between the most extreme elements of the anti-abortion crowd and more moderate abortion opponents within the GOP. It does not consider the interests or opinions of the vast majority of Americans, who support abortion rights, at all.

What this proposal actually does is illustrate the hypocrisy of a party that long purported to believe in states’ rights on the abortion issue. It also strongly suggests that the filibuster is finished if the GOP wins control of both houses of Congress and the presidency, because a national abortion ban is going nowhere until then.

Here are five possible outcomes of the midterm elections, with the consequences that will follow:

1. BLUE WAVE: The Democrats hang on to the House and win at least two additional Senate seats. The discussion that follows all revolves around repealing the filibuster. If it happens–and it probably will–the new Congress passes a boatload of progressive legislation, most notably on voting rights.
2. STATUS QUO: The Democrats maintain control of both houses, but do not pick up Senate seats. Not much happens in the next two years. There is turmoil over the debt ceiling, but Mitch has enough clout to keep the lights on, given that there is no mandate to play hardball with Biden.
3. DIVIDED GOVERNMENT: The Democrats barely keep control of the Senate, but lose the House. Implausibly viewing the election results as a mandate for right-wing radicalism, the tiny GOP majority immediately goes to work in the House, conducting investigations of Hunter Biden (among others), passing a national abortion ban, impeaching cabinet officers, and refusing to lift the debt ceiling. Financial chaos ensues, to the delight of the “burn it down” caucus. Biden consequently gets to run against both Trump and McCarthy in 2024.
4. TINY RED WAVE: The GOP has small majorities in both houses. This is the same as Scenario #3, except that McConnell refuses to confirm any new judges. Biden has a second clear target to run against in 2024.
5. BIG RED WAVE: The GOP wins a large majority in the House and a genuine working majority in the Senate (Collins and Murkowski are the GOP equivalents of Sinema and Manchin). The result is the same as #4, except that McCarthy is able to ignore the crazoids and keep the lights on in the interest of winning in 2024.

The most likely outcome? I predicted #3 last year. That prediction is looking pretty good today.

German troops poured over the border with Austria today. They did not meet any opposition. Tucker Carlson saw this as cause for celebration.

“Why shouldn’t I celebrate?” he said. “Has Hitler ever called me a bigot? Has he ever suggested that my viewers are some kind of lower species American? No!”

“Hitler is a tough guy, I’ll admit. He uses rough methods. But his heart is in the right place. And one thing is for sure: he’s definitely not woke. He knows who the enemy is, and he says so. He’s not afraid of the PC crowd. He says exactly what he’s going to do, and he does it. What’s not to like?”

“Do you see any gay pride parades in Nazi Germany? Does Hitler give special rights to trans people, or ethnic minorities? Of course not! He’s fighting for traditional Christian civilization against lower civilizations and perverts, and he hates communists and rootless cosmopolitans. There are way too many of those people in Vienna today. He’s going to get rid of them. That’s why he’s my kind of guy.”

The argument that most issues should be resolved at the state level is based on the proximity to the problems. The people who are closest to the situation have the best information about it and are thus best qualified to resolve it. It is an observation that doesn’t work for every issue, but you have to admit that it makes sense in many situations.

Several prominent red states, however, have preempted the ability of municipal governments to deal with hot button ideological issues. Proximity to problems, it seems, is only a valid argument when it is applied against the federal government.

If, as seems likely, DeSantis cruises to re-election, one of the people he has to thank is . . . Joe Biden! DeSantis declined to cut spending during the worst of the pandemic, hoping that the federal government would bail him out, which it did. As a result of the pandemic relief bill, he had plenty of money to pay state employees, maintain service levels, and even cut taxes. Don’t expect him to give the president any credit for it, though.

Conversely, if you’re pissed off about the performance of the federal government, and you’re represented in Congress by a conservative Republican, what are you going to do? You might stay at home, or even vote for his opponent, if you really want to show how unhappy you are. That helps the Democrats, even if they are arguably responsible for the current unsatisfactory (in your eyes) state of affairs.

It is a paradox, to be sure.

He’s running away! And he’s been reduced to buying weapons systems from Iran and North Korea! Isn’t that pathetic?

Poor little guy! Who would have guessed that those woke warriors from Ukraine would actually stand up to him? Not Ted Cruz and Tucker Carlson–that’s for sure.

Right-wingers who realize they benefit from the anti-democratic features of our Constitution are fond of saying that America is a republic, not a democracy. Is that true? And is the question even meaningful?

Let’s take a brief stroll through American history:

1. The Founding Fathers were very progressive for their day, when compared with political leaders in Europe, but they were not democrats.
2. But by 1830 or so, due to the easy availability of real property and ideological trends, virtually every white American man had the vote.
3. The right was extended to blacks in the Fifteenth Amendment.
4. Women won the right to vote in the Nineteenth Amendment in 1920.
5. The age limit on voting was lowered to 18 in the Twenty-sixth Amendment in 1971.

The bottom line here is that the Founding Fathers’ views of democracy, at least as they apply to voting rights, are not relevant to a contemporary discussion of our political system, and have not been so for many years. Like it or not, America is both a democracy and a republic.

Of course, there are other anti-democratic features in the Constitution, most of which have the support of the left as well as the right. I will discuss these in a future post.

As we know, the combination of the pandemic and a recovery that was faster and stronger than anticipated led to widespread labor shortages. Businesses responded to the shortages by increasing wages, raising prices, and persuading consumers to live with a lower level of service. As a result, profits are at a very high level in spite of the turbulence, and inflation has become a serious issue.

By now, both businesses and consumers have had time to adjust to the new normal. Barring some new and horrible variant of the virus, the workforce isn’t going to shrink again. That means wage increases are going to slow, which in turn means inflation should continue to decline in the absence of new shocks with commodity prices.

On the old Russian tyrant named Vlad.

His Ukrainian venture’s gone bad.

He insists all is well,

But his plan’s shot to hell,

And I can’t say that makes me feel bad.

We all know what a “MAGA Republican” looks like–he’s the guy who wants to burn it down. He wants to give Donald Trump unlimited power to impose a reactionary agenda on America regardless of what the majority of Americans think, because, after all, tens of millions of them are not “real Americans.” Lying about the 2020 election and taking steps to rig the 2024 contest are just steps in getting from Point A to Point B.

As Biden correctly noted, many Republicans are not “MAGA Republicans” by this definition. How should we deal with the evil kind? There are two broad choices:

1. Try to split the “MAGA Republicans” from the rest; or
2. Identify the OK kind of Republicans as “MAGA Republican” enablers, and call on the electorate to reject them both in order to save American liberal democracy.

Biden started his speech by drawing a clear distinction between “MAGAs” and others, which is consistent with #1, but he subsequently implied that anyone who rejects the Democrats’ position on a variety of controversial substantive issues is a “MAGA,” which is consistent with #2, but makes the “MAGA” distinction irrelevant.

The two alternatives are mutually exclusive. Making both arguments at the same time makes no sense. The Democrats need to either tone down the rhetoric and make concessions to relatively moderate Republicans in order to save liberal democracy, or ramp up the pressure and call the entire GOP a threat to the system in order to drive up turnout and elect more Democrats.

As David Stockman later ruefully admitted, the Reagan tax cut was supposed to be just the first step in a “starve the beast” campaign; the second step, massive spending cuts, would be driven by a soaring deficit. It didn’t happen. Instead, the stimulus created by the tax cuts somewhat mitigated the impacts of the Volcker interest rate increases, and when interest rates were finally eased, it was morning in America. The GOP has never gotten over it.

Liz Truss is proposing to cut taxes and provide relief from rising energy prices at the same time. In effect, she wants to do what Reagan did without the promise of spending cuts. Unfortunately, the UK is not conspicuously overtaxed, so there is no reason to believe the tax cut will lead to some sort of growth explosion; there is plenty of precedent in this country after the Reagan years for that. In addition, the UK relies more heavily on imports for goods than we do. As a result, the tax cut will lead to higher demand and a falling pound, which will lead to increased inflation, which will cause interest rates to rise, which in short order will cause . . . stagflation.

The British monarch is intended to be a living, breathing, unifying symbol–a sort of human Union Jack. As anyone who has watched “The Crown” knows, even though it comes with plenty of perks, it is a difficult job, because to do it right, you have to give up your right to live and think outside a very small box. Some members of the family can’t tolerate the limitations of the box, and suffer for it. Others learn to accept the tradeoffs and are more successful.

Elizabeth was a success. I think it helped that she was young and inexperienced when she became queen; she had the ability to grow into, and to some extent define, the job, and she didn’t have a record that would offend anyone. Charles is in the exact opposite position. He knows the role perfectly well, but he also has a lengthy record that does not exactly inspire confidence.

My guess is that he will be OK. The UK is a very different place than it was in the early years of Elizabeth’s reign, so Charles’ propensity for running his mouth will probably be met with a tolerant shrug, not a glare of disapproval.

Biden’s legal authority to extinguish student debt, by all accounts, is open to question, so you can be sure the question will be asked. Under normal circumstances, the judicial system would hold that the issue is not subject to challenge because nobody has a sufficient interest to establish standing. The current Supreme Court has shown on multiple occasions, however, that it has no regard for such niceties. You have to assume that Alito, Thomas, and the rest of the reactionary crew are just dying to deliver another stinging defeat to the administration. If that happens, what’s next? Will the disappointed debtors take it out on Biden or the GOP?

It will be the fault of the vast right-wing conspiracy, but my guess is that they will blame Biden. Fortunately, it will be after the midterms.