Cromwell

We are frequently told, mostly by people with vested interests who probably know better, that the poor suffer the most from inflation. The truth, as usual, is more complicated, as follows:

1. People with existing debts tied to fixed interest rates are unquestionably winners, as they get to repay the debt in depreciated currency. Creditors lose, for the same reason.
2. People whose income comes from the government, and who benefit from statutory cost of living increases (i.e., Social Security) break even.
3. Businesses have the legal ability to raise prices, and thus protect their profits, very quickly. Whether they can do so in practice depends on the elasticity of the demand for their product or service and their market power.
4. Workers subject to collective bargaining agreements that do not contemplate inflation, and which expire in the distant future, are losers.
5. Minimum wage workers may win or lose, depending on the state of the labor market. In today’s market, they have the ability to move on for higher pay. That will probably change in the fairly near future.
6. People with large sums of money in long term CDs lose, unless the CDs provide for inflation protection, which is unusual.
7. Investors are dependent on the businesses in which they invest–see #3.

On the specter of rising inflation.

It is causing a public sensation.

The prez and the Fed

Want to kill it stone dead.

Will they work to control expectations?

As anyone who grew up in the 1970s knows, there are both objective and subjective elements of inflation. The objective elements consist of things like supply chain bottlenecks and labor shortages that will undoubtedly be fixed with reasonable efforts over time. The subjective element, which is more important in the long run, revolves around the expectations of the public. Once workers and consumers have concluded that price increases are inevitable, they will adjust their habits accordingly, and only dramatic action, probably resulting in a recession, will break the cycle. What, then, should be done?

The key here is messaging. Both the White House and the Fed need to look tough and determined on inflation without actually doing anything to damage the economy. Making a big deal about ending bond purchases, which are unnecessary at this point, is a good start; since the markets have changed their focus to inflation, this can probably be done without creating a taper tantrum and driving the markets down. Raising interest rates, on the other hand, will not kill the booming demand for goods, which is being driven by savings; it will only restrict investment and choke off supply-based solutions.

Fox News is going to bang on about inflation for self-interested reasons, so the message won’t get through to everyone, but the vast majority of Americans get their information elsewhere. If the optics are handled properly, the problem will disappear.

Once the reactionaries win on abortion, they are going to move on to gay marriage. Will the Supreme Court go along?

It’s a close call. On the one hand, gay marriage is more closely rooted in the language of the Fourteenth Amendment than abortion, the reliance factor (at least in red states) is greater, and the decision has not been as controversial as Roe in the legal profession. On the other hand, there is no legislative history tying the Fourteenth Amendment to gay marriage, which matters to the originalists, and the decision is relatively recent, which makes it logically easier to overturn.

I think you will see increased pressure on the issue, but it won’t bear fruit for at least a few years.

Justice Thomas is angry. He’s been angry since his confirmation hearings. Probably, he was angry even before then. He wants to get even—now.

He will have his chance. Next year, he will join the majority in overturning Roe. He will undoubtedly feel righteous, and vindicated. It is the ultimate way of owning the libs. It is what he has been waiting for all of these years.

The majority opinion in Dobbs will undoubtedly make an effort to soothe the fears of women all over America. It will reassure them that the Supreme Court hears them, and empathizes with their desire for equality–just not where abortion is concerned. Will Thomas play along, or will he spike the football in the face of the left?

I don’t think he will be able to restrain himself. He will write an opinion that will be remembered, and hated, by the left for a long, long time.

We all know that American reactionaries aren’t going to support tax increases to pay the costs of dealing with millions of new unwanted children after Roe. Would it be possible to privatize and equalize those burdens by sticking it to the fathers?

You can see, conceptually, how it might work. Unmarried women who become pregnant would be required to undergo DNA tests as early as possible to establish paternity. That done, the father of the unborn child would be required to pay for all of the medical and social costs of giving birth to the child. He would remain responsible for those costs unless and until the child is adopted. If he doesn’t comply, he goes to jail for contempt of court. Great idea, no?

There are three huge problems with it. First of all, the average father doesn’t have any money, and putting him in jail won’t solve the problem. Second, this system would require significant new public resources for enforcement; reactionaries aren’t going to support that. Finally, most legislators are men. Do you really think they would go along with a scheme like this? Does our experience with child support enforcement give you an answer to that question?

To my readers: I will be on vacation until late Thursday. Don’t count on any new posts until then.

Consider the plight of the pregnant, unwed teenage girl. She will be ostracized by society as a whole, and may be rejected by her family. She could be thrown out of her house, and even subjected to physical violence. Her access to medical care during the pregnancy, particularly in red states, is not guaranteed. She will not be able to work and earn money for a significant period of time. Bearing and giving birth to a child comes with serious physical dangers. Finally, when the birth is over, she will either have to give up any dreams she might have of a career for the foreseeable future, or live with the pain of giving up the child. Doesn’t sound too great, does it?

No problem, says Justice Barrett. Just drop the baby off at a fire station and move on with your life. The baby gets adopted by a loving family, and everyone lives happily ever after.

Except, in the real world, they don’t. Barrett’s experience of motherhood bears no relationship to what happens to our hypothetical subject in 21st century America.

Ross Douthat is excited by what he calls the “New Right”–a group of reactionary intellectuals concerned primarily with what they view as the moral decay of our country. Well, of course he is; they sound just like him. He views them as being new and refreshing. Is he correct?

The “New Right” is only “new” in that it is very, very old. It has its intellectual roots in medieval Europe. It rejects the Enlightenment in favor of canon law and scholastic philosophy–Thomas Aquinas, not Thomas Jefferson, if you like. As a result, it also rejects the ideas behind the foundation of this country. Its adherents sound more like 19th century French monarchists than Americans.

Naturally, this presents some towering practical political problems. How can the “New Right” possibly take power in the foreseeable future when their ideas are completely inconsistent with American institutions and legal thought, and are opposed even by a large majority of the mainstream, individualist right? There are only two possible answers. One is a violent counterrevolution, followed by the creation of a theocracy over the will of the vast majority of the American people; the other is to jump on the bandwagon of a more popular movement, such as Trumpism, and then move it stealthily in the correct direction.

The members of the “New Right” don’t talk about this implicit element of their program, because it wouldn’t exactly win them a lot of fans in the public. It should not be ignored, however. These people may have some cuddly ideas about the importance of the community, but only the unpopularity of their ideas keeps them from being very dangerous.

Today’s decision only addressed a narrow issue relating to parties. The case can go ahead, but it isn’t going anywhere fast. What is the end game here?

The Supremes are clearly uncomfortable with the vigilante aspect of the law, because it is a potential threat in blue states to some of their favorite parts of the Bill of Rights. As it stands today, it is likely that they will be presented with a final decision to review after they overturn Roe in the Dobbs case. Texas is likely to repeal the vigilante law and replace it with a state-enforced total ban after Dobbs. At that point, the current case will be moot, and the justices won’t have to rule on the vigilante elements of the statute, which can nonetheless remain in effect until Dobbs is over. Even if they do take the vigilante case, for reasons I can’t currently fathom, they could distinguish abortion from, say, gun rights simply by referring to the decision in Dobbs that abortion is not a fundamental right.

Dilemma solved.

I have gathered the two of them together to discuss their views on Biden’s first year in office.

C: So, what do you think of Biden’s first year?

S: Worst ever.

M: Worst ever.

C: Let’s start with you, Mark. Why do you say that?

M: Because he’s terrible for business, of course.

C: Does that mean your profits are way down?

M: No. Actually, we’re holding up just fine.

C: Are you being forced to pay your employees a lot more as a result of the Great Resignation?
M: No. I don’t have minimum wage employees. Getting people to sell cars isn’t really a problem. I hear things from my friends in business, though. They have big problems keeping employees. It concerns me.

C: Why? Do they have some sort of divine right to pay their employees poorly?
M: It’s important to keep costs down. People like me have to make a living, you know. I could be next. You never know.

C: What’s happening with your investments?

M: They’re doing fine, actually.

C: And your taxes haven’t gone up, either.

M: No thanks to Biden.

C: So profits are fine, business is fine, your investments are fine, and your taxes haven’t gone up. Why is Biden bad for business?

M: He doesn’t respect us the way he should.

C: Oh, so this is a reprise of the Romney makers and takers thing?

M: Damn right! Business people are responsible for all of the jobs and all of the money everyone else makes in this country. Without us, this country is nothing!

C: And, as we saw during the pandemic, without workers, we aren’t anything, either. We can’t even eat unless we have employees working at the grocery store, or delivering to us.

M: That was a special case. And it’s over. Things need to go back to where they were, and my friends and I are entitled to more respect.

C: What about you, Sebastian? Why do you think Biden is the worst?

S: For starters, he shouldn’t even be president. He stole the election.

C: With the assistance of Republican governors, election workers, and judges, I suppose.

S: Hey, they’re all part of the establishment. The GOP is full of RINOs. If you didn’t support Trump, you’re really a Democrat.

C: So what would Trump have done differently than Biden?

S: He wouldn’t have spent as much money. We wouldn’t have the inflation we do today.

C: You do know that he supported the stimulus payments that Congress approved last winter?

S: It would have been different. It just would have.

C: What else?

S: We wouldn’t have had the Afghanistan debacle.

C: You do know that Trump made the deal to get out of Afghanistan.

S: It would have been different, somehow. He probably would have scared the Taliban. He’s a tough guy, you know.

C: What else?

S: We wouldn’t have to deal with all that critical race theory crap.

C: How is Biden responsible for that? When has he ever supported critical race theory? That’s a state and local issue.

S: Leftists are all the same. Biden and Bernie may not talk about that crap, but they support it.

C: How do you know that?

S: Tucker says so.

C: Well, this has certainly been enlightening. Thanks for coming.

A right-wing writer named Erika Bachiochi argues in the NYT that Trump, for all of his conspicuous personal shortcomings, did the country a favor by squelching the GOP’s libertarian biases and embracing a form of communitarianism. According to her, the demise of Roe is just the beginning; the GOP will reject outmoded Reaganite ideology in favor of policies that protect the weak and dependent (including, but far from limited to, the unborn) from the strong and wealthy. Is there any basis for this?

The appropriate response is to inquire as to what planet this woman inhabits. The GOP she lionizes supports militant anti-vaxxers crying “My body, my choice,” regressive tax cuts for the wealthy, the deregulation of business, anti-union legislation and regulations, and benefit cuts for the poor. Donald Trump was, and is, completely in step with this ideology. Does this sound like the communitarian great white hope to you?

For sixteen eventful years, Angela Merkel wore two important hats: German Chancellor and de facto leader of Europe. They came with different responsibilities, and pulled her in different directions. Now that she is gone, what is her legacy with each job?

As Chancellor, I think it is fair to say that she played a good hand reasonably well. The economy had been revived by the SPD labor reforms and by Chinese demand for German products by the time she came into office. She rode with the tide, never pushed the voting public too far, held off extremists, and frequently stole the SPD’s clothes during her tenure in office. At the time of her departure, Germany is clearly the great power in Europe, and is more prosperous than ever, but it suffers from a lack of investment and increased inequality. A more dangerous Russia looms, and China is no longer a reliable trade partner. The next few years are likely to be bumpy for the new coalition.

As the leader of Europe, her objectives were to keep the EU afloat and impose German values on it to the maximum extent possible. She barely succeeded at the former–the UK is gone, but Greece is still there–and ultimately failed at the latter, winning the ill will of the Greeks, Italians, and others along the way. She had no answers for the emerging illiberal democracies within the EU, and ultimately agreed to a number of very grubby compromises to keep immigration from getting out of hand. With Merkel’s departure, Europe is a project led by a visionary without the clout to make his dream happen–Macron. But the EU will continue to muddle through, because it always has.

The bottom line is that Merkel’s legacy is a mixed bag. But then, whose isn’t?

I think it is fair to say that the MSM’s coverage of Biden–particularly his economic record, but also including Afghanistan–has been relentlessly negative for most of the year. Some left-leaning commentators are puzzled by this; others think the MSM have an obligation to downplay the administration’s real problems in an effort to preserve liberal democracy from the GOP. For his part, Ross Douthat believes the MSM would only make Trump’s case for him by appearing to behave in a partisan fashion. Who is right here?

This is not as complicated as it seems, for the following reasons:

1. The MSM are only focusing on the issues of the moment, as usual. We hear and see stories about inflation and supply chain problems every day; naturally, that tends to drive Biden’s poll numbers down. What we don’t hear is a reminder that, if you look at the big picture, everyone is better off today than at this time last year, due to rapidly rising employment, as well as the stimulus and enhanced UI benefits which created a large pool of savings that is currently contributing to some extent to inflation. The legitimate criticism of the MSM here, in other words, is that it should be talking about the big moving picture, not the snapshot.
2. Douthat is essentially right about the role of the MSM as to their coverage of Biden. Once again, however, the big picture is that the GOP is an openly insurrectionist party, not a normal opposition. The MSM have a duty to avoid false equivalence and make sure the electorate is kept aware of the qualitative differences between the two parties when it has reason to compare them.
3. The MSM’s coverage of the big Biden bills has focused almost exclusively on their cost and the difficulties involved in getting them through the system. That makes about as much sense as talking about the cost of a car without discussing what you get in return. The problem is not the administration’s “messaging;” it is the MSM’s reluctance to get into the appropriate level of detail regarding the benefits of the legislation, largely due to laziness. Inform the public as to both the costs and the contents of the spending programs and let the voters decide.

Once Roe is finally dead, you can anticipate a rush to adopt abortion prohibitions with few if any exceptions in the red states. There will be some perfunctory discussion about exceptions for rape, incest, and the like, but most of the new statutes will be very close to absolute prohibitions. This may look like terrible politics, but the reactionaries will take the position that they haven’t paid any price thus far, and that the electorate is already as polarized as it can get, so the risk is minimal.

At first, this may appear to be true. At some point, however, the MSM will start running horror stories about the plight of women who have been denied abortions. There will be a new groundswell of opposition to the law inspired by these stories. The law will be modified accordingly.

That’s what happened in Ireland. It will happen in Texas, too.

As I noted in a post about a year ago, Putin could invade and take Ukraine at any time of his choosing. His purported concern today–that he fears NATO expansion into Ukraine–is ludicrous, and he knows it. So what is he trying to accomplish, and why is this happening now?

As important as Ukraine is to Putin, it is never the entire picture; he is also concerned about domestic politics, about portraying Russia as a great power, and about splitting the EU and NATO. All of these factors are undoubtedly present here. Russia is struggling with the virus; he is facing a potent anti-vaxxer opposition; there is a new and untested government in Germany; and the American withdrawal from Afghanistan wasn’t exactly glorious. There is undoubtedly opportunity here to make trouble and profit from it.

Will he invade? I doubt it, because it would involve taking lots of casualties and assuming the costs of occupying Ukraine for the indefinite future. The new EU and American sanctions would hurt, and NATO would be united in its opposition. Better to keep turning the pressure on and off and hope that Ukraine falls into his hands without an invasion at some point in the future. In the meantime, he can show strength both at home and abroad, take the attention of the Russian public away from the virus, create a narrative in which Russia is in danger from NATO, and test the stoutness of the new German PM and FM. He can put an end to the crisis whenever he likes, so what’s the risk?