Inflation Worries

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Jason Furman, ex-President Barack Obama’s (D) Council of Economic Advisers Chairman, wrote about four things about which to worry regarding the current inflation increase and its durability. Three of them were reasonably accurate. He also predicted a Fed response.

First, the economy is beginning 2022 with much tighter labor markets than a year ago. …
Second, demand should remain above pre-pandemic trends, while supply will likely continue to lag behind. …
Third, consumers, businesses, forecasters and financial markets all expect near-term inflation to be about 1 to 3 percentage points higher than a year ago. …

So far, so OK. But his fourth, not so much.

Fourth, the trajectory of Covid and its effect on inflation are highly uncertain.

In fact, it’s badly off the mark. What’s highly uncertain is the Federal government’s trajectory of variable, and often panic-hyped, (over)reaction to the Wuhan Virus. This one is beyond the ken of the Fed, or it should be, and is completely under the control of President Biden-Harris (D).

The Furman’s predicted Fed answer isn’t all that, either.

He [Fed Chairman and nominee for continuation as Chairman Jerome Powell] proved that the Fed’s actions will depend on the data, and the Fed is now on course to start raising rates in March. If inflation remains as high as I fear it will, expect him to continue to follow the data by pivoting further. Given the uncertainty, however, he should stay the course—for now.

No.

If the Fed is going to be serious about lowering inflation back into the neighborhood of its target rate of 2%, it needs to

  • stop buying Treasury debt
  • disgorge its existing Treasury debt instrument holdings (ideally by simply not rolling them at maturity)
  • set its benchmark interest rates at levels historically consistent with 2% inflation
  • sit down and be quiet instead of constantly trying to respond to every jot and tittle of market variation

A Good Idea?

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Progressive-Democrats are looking at “adjusting” Party’s proposed child tax credit in order to appease Senator Joe Manchin (D, WV).

Some Democrats have started exploring how to pare back their proposed expansion of the child tax credit in ways that are aimed at winning the critical support of Sen. Joe Manchin (D., W.Va.), according to people familiar with the matter.
Among the possibilities: Reducing the size of the credit’s expansion and limiting which Americans are eligible for it, according to the people.

Tweaking to appease a single Senator. Never mind any effort at looking for bipartisan support.

If the child tax credit, in any form, were a good idea, the Progressive-Democrats would put it into a separate, stand-alone bill and put that up for debate and a vote.

It’s instructive that Party won’t do that. It’s instructive that Party can’t even conceive of such a move.

Typical

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The Progressive-Democrat Jamaal Bowman now says his fellow Progressive-Democrat Kyrsten Sinema is a traitor for her continued verbal support for the Senate’s filibuster.

John Lewis is a hero, you [Sinema] are a traitor to his legacy, your constituents and our democracy.

This is typical of the Progressive-Democrat Party: either you support Party, or you’re a traitor, and separately, you’re also a racist.

Bowman’s rant brings to mind a couple of quotes. I’ll leave it as an exercise for the student to name the source(s).

It is thus necessary that the individual should finally come to realise that his own ego is of no importance in comparison with the existence of the nation, that the position of the individual is conditioned solely by the interests of the nation as a whole.

In every revolution, it has been the rule to brand political opponents as enemies…and so to justify completely depriving them of legal protection and property.

The…government will regard its first and supreme task to restore to the…people unity of mind and will. It will preserve and defend the foundations on which the strength of our nation rests…. In place of our turbulent instincts, it will make national discipline govern our life.

It is nonsense to suppose that a people wants to rule itself. It always comes to such ideas only when it is badly ruled.

Each activity and each need of the individual will be regulated by the party as the representative of the general good. There will be no licence, no free space in which the individual belongs to himself. The decisive factor is that the State, through the Party, is supreme.

And finally:

I will tolerate no opposition. We recognise only subordination—authority downwards and responsibility upwards.

No Law

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…but merely convenience. Australia’s immigration ministry makes Australia a nation ruled by men and not by law.

Immigration Minister Alex Hawke made clear in court documents concerning his second revocation of Novak Djokovic’s entry visa that the law counts for nothing.

Hawke didn’t dispute Djokovic’s claim of a medical exemption from rules that travelers to Australia must be vaccinated against Covid-19…. Hawke, who canceled Djokovic’s visa on Friday, said allowing the player to stay could sway some Australians against getting vaccinated.

Additionally,

Hawke didn’t refute Djokovic’s contention that he posed a negligible health risk, documents showed.

In his separate visa cancelation notice, though, Hawke said,

His [Djokovic’s] presence in Australia, given his well-known stance on vaccination, creates a risk of strengthening the antivaccination sentiment of a minority of the Australian community[.]

Because government convenience is all that matters.

Australia isn’t the US, and Aussies can accept the style of governance they choose—or that gets imposed on them by the men and women in their government. That, though, does not make their decision to be ruled by men—a very hard choice to reverse—rather than by law any less foolish.

UPDATE: Australia’s federal court upheld Hawke’s order to revoke Djokovic’s visa and ordered the tennis star deported. The court’s reasoning was this:

Chief Justice James Allsop said the decision came down to whether Immigration Minister Ethan Hawke’s decision was “irrational or legally unreasonable.”
“It is no part of the function of the court to decide upon the merits or wisdom of the [government’s] decision,” Allsop explained.

That’s appropriate, as far as it goes. Court judges should rule on the legality of the matter, not interpose their own views of societal needs or their own feelz.

It doesn’t, though, detract from Hawke’s decision to act on his feelz and his views of government convenience being more important than law.

What Does Putin Want?

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It’s not as complicated as some…pundits…want us to believe. One such, James Marson in his Wednesday Wall Street Journal piece, offered the following claim from a Vladimir Putin spokesman. Marson didn’t question it; he simply commented on other politicians’ responses to the claim as though it were accurate.

A Kremlin spokesman said President Vladimir Putin wasn’t presenting ultimatums, but was worried about threats to Russia’s security.

This is a truckload of bravo sierra. Putin knows full well that no one in the West is interested in threatening Russian security, no one in the West is interested in invading Russia. Putin knows full well that Russia has absolutely nothing at all of value to the West that isn’t gotten far more cheaply—and mutually beneficially—through free and honest trade.

Putin wants Ukraine. He wants Georgia and the Baltics and, later, Poland. He’s even cynically trotted out his effort to redress his mythical 20th century tragedy as his rationale for his empire-building.

It’s also entirely possible that Xi is egging Putin on, since a Putin seizure of Ukraine would give the Republic of China to Xi.