BBO Discussion Forums: Inflation? - BBO Discussion Forums

Jump to content

  • 4 Pages +
  • 1
  • 2
  • 3
  • 4
  • You cannot start a new topic
  • You cannot reply to this topic

Inflation?

#21 User is offline   Cyberyeti 

  • PipPipPipPipPipPipPipPipPipPip
  • Group: Advanced Members
  • Posts: 13,979
  • Joined: 2009-July-13
  • Location:England

Posted 2021-November-30, 12:48

View Postawm, on 2021-November-14, 12:39, said:

My experience in Germany has been that it's a much more driving-oriented country than Switzerland or France (both of which have much better rail connections) and this may explain why Germany is among the few European countries seeing significant inflation (although still nowhere near the US rate).


I've done many thousands of Km on German railways and my experience is the exact opposite. Germany has ENORMOUS amounts of rail and many more tracks on a lot of routes because they were able to (re)build their rail infrastructure after we bombed it flat, hence it is easier for them to run multiple types of train at multiple prices on the same routes, which is what we struggle with in the UK.

Germany has about 10% more rail Km than France and 2/3 of the land area although a larger population.
1

#22 User is offline   helene_t 

  • The Abbess
  • PipPipPipPipPipPipPipPipPipPipPip
  • Group: Advanced Members
  • Posts: 17,122
  • Joined: 2004-April-22
  • Gender:Female
  • Location:UK

Posted 2021-November-30, 13:02

Inflation is quite high here in the UK.

Brexit is part of the reason. Imported stuff is more expensive due to the weakening of the pound, import taxes and costs of the bureacracy faced by importers. Also, some workers (most notably fruit pickers and lorry drivers) have left the country, leading to wage hikes.
The world would be such a happy place, if only everyone played Acol :) --- TramTicket
0

#23 User is offline   kenberg 

  • PipPipPipPipPipPipPipPipPipPip
  • Group: Advanced Members
  • Posts: 11,082
  • Joined: 2004-September-22
  • Location:Northern Maryland

Posted 2021-November-30, 13:08

The Krugman article is very interesting. It has a link to yesterday's article on "The Great Resignation", also very interesting. Of course "interesting' is an all-purpose word. I might have further thoughts later.
Ken
0

#24 User is offline   mycroft 

  • Secretary Bird
  • PipPipPipPipPipPipPipPip
  • Group: Advanced Members
  • Posts: 7,180
  • Joined: 2003-July-12
  • Gender:Male
  • Location:Calgary, D18; Chapala, D16

Posted 2021-November-30, 21:17

Thank you y66. So, it looks like in Europe, inflation, while high and rising, is at about the 2%/year "limit" we're hearing about, not the Big Scary 7% number - provided we take a reasonable starting point. And in the U.S., a bit worse. Concerning, but not - at least not yet - Big Monster territory some people would prefer to report. How many of them were reporting Big Monster tracks 18 months ago: "Negative! Inflation!"?
When I go to sea, don't fear for me, Fear For The Storm -- Birdie and the Swansong (tSCoSI)
0

#25 User is offline   y66 

  • PipPipPipPipPipPipPipPip
  • Group: Advanced Members
  • Posts: 6,496
  • Joined: 2006-February-24

Posted 2021-December-01, 09:39

Andrew Ross Sorkin at NYT said:

Jay Powell, the Fed chair, said yesterday that he was retiring the word “transitory,” which he has used for months to describe how long a period of high inflation would last. Stubbornly high inflation could push the central bank to speed up its plan to withdraw financial support from the economy, he said. Today, the O.E.C.D. took a similar tack, warning in its latest economic forecast that the Omicron variant of the coronavirus could worsen supply bottlenecks and push up inflation.

Assessing how a potential surge in cases of the new variant would affect economic growth, supply chains and inflation is roiling the market, which has been seesawing in recent days. Stocks tanked yesterday after Powell’s comments but are bouncing back today as sentiment shifts between competing interpretations of how things will play out.

No doubt, Powell's decision to retire the word "transitory" and his comments about speeding up the timetable for pulling back on the fed's easy-money policies and opening the door to raising interest rates in the first half of next year, are causes for tempered optimism and joy in one corner of the water cooler.
If you lose all hope, you can always find it again -- Richard Ford in The Sportswriter
0

#26 User is offline   y66 

  • PipPipPipPipPipPipPipPip
  • Group: Advanced Members
  • Posts: 6,496
  • Joined: 2006-February-24

Posted 2021-December-01, 20:05

Jason Douglas at WSJ said:

https://www.wsj.com/...d=hp_lead_pos10

For a glimpse at why inflationary pressures aren’t likely to ease anytime soon, consider the bicycle.

Bike prices in the U.S. and Europe rose sharply at the start of the pandemic because of booming consumer spending and snarl-ups in global supply chains that meant long delays and higher costs for manufacturers.

Now, manufacturers are working on building bikes for 2022 in a continuing environment of economic uncertainty—with more questions added recently by the emergence of the Omicron variant of the coronavirus. Today’s rampant demand and strangled supply are already pushing next year’s prices higher.

“The cost of our product is not going down,” says Richard Thorpe, chief executive of Karbon Kinetics Ltd., which sells Gocycle electric bikes world-wide from its base in Chessington, southern England. “If that is inflation, I wouldn’t call it transitory.”

Mr. Thorpe says that beginning Jan. 1, he plans to increase the prices of his range of folding e-bikes by up to 25%. The company’s latest models will cost between $4,999 and $6,999, depending on the specification, compared with $3,999 and $5,999 in 2021.

The price increase is needed to cover the higher costs of components and shipping, Mr. Thorpe says, and to provide a financial cushion should supply-chain bottlenecks again hurt production, as they did this year. The company is also aiming to bring in more per unit, after shortages have kept it from increasing production to meet demand.

Prices for handlebars, brake levers, reflectors and chains have risen sharply over the past 12 months. Mr. Thorpe is still waiting for delivery of a thousand pieces of an electrical component he ordered more than a year ago, and he is competing with auto makers and online ordering bots, which use software to scoop up stock, to get hold of computer chips.

He says he is making decisions based on his belief that supply-chain knots won’t untangle and that consumer demand won’t ebb anytime soon, and says Omicron, a possibly more-contagious variant of the virus that causes Covid-19, has reinforced that view. “It’s all disruption, which costs money,” Mr. Thorpe says. “It’s the Wild West out there.”

The bicycle industry’s challenges—when generalized across the economy—go to the heart of the policy conundrum facing the Federal Reserve and central banks around the world. Policy makers have earlier said they believe inflationary pressures will dissipate over time as high demand for consumer goods subsides and kinks in the global supply chain work themselves out.

With Omicron again closing borders, that process looks set to play out over a longer period of time than initially thought.

Fed Chairman Jerome Powell said Tuesday in testimony to lawmakers that “it now appears that factors pushing inflation upward will linger well into next year.” He signaled the central bank would consider quickening the wind down of its easy-money policies, which would open the door to raising interest rates in the first half of next year. Consumer-price inflation in the U.S. rocketed to a 31-year high in October.

The Bank of England has signaled it expects to begin gently lifting short-term interest rates in the U.K. imminently to restrain the accelerating growth in prices. Central banks from Canada to Australia to Norway, New Zealand and the Czech Republic have already begun withdrawing pandemic-era stimulus or nudging up borrowing costs to manage inflation.

Economists say the potential economic effects of Omicron are unclear, as health experts still don’t know how dangerous the variant is.

Bicycle makers and retailers say they see no respite on the horizon from the intense pressure on prices.

“We don’t see any improvement for 2022, for sure. We’re going to be in the same boat that we’ve been in since the end of the summer 2020, when there’s not enough supply to meet demand,” says Larry Pizzi, chief commercial officer at Alta Cycling Group LLC, based in Kent, Wash., which owns cycling brands including Diamondback, iZip and Redline.

The average selling price of a new bicycle in the U.S. in September was $346, up 28% compared with 2020 and 54% higher than the average selling price of a bicycle in 2019, according to data from NPD Group Inc., a market research agency.

Pandemic lockdowns in the U.S. and Europe turbocharged a cycling renaissance that was already benefiting from growing consumer interest in personal fitness, greener forms of transport and the proliferation of bike lanes in big cities.

Countries such as the U.K., where Prime Minister Boris Johnson is a cycling enthusiast, designated bicycle repair an essential service during lockdowns, allowing stores to remain open.

In the U.K., bicycle prices were 26% higher in October 2021 than they were at the beginning of 2020, according to official inflation statistics. The country left the EU on Jan. 31, 2020, remaking trade agreements. Brexit in most cases didn’t cause tariffs on imports of bikes or components from the EU, though it did disrupt supplies from EU manufacturers.

In Germany, bicycle prices were 9% higher in October than they were in January 2020, according to official inflation statistics published by Eurostat. In Sweden and Poland, prices were up 15% and 13% over the same period, respectively. In Lithuania they were up 16%, in Hungary 19% and in Slovenia 18%.

For Mr. Thorpe, of Karbon Kinetics, raising prices in 2022 is essential to cover ballooning costs.

A basic child’s bike might have 50 components. A full-suspension electric mountain bike might have 350. Gocycles have around 800. A single missing part can cause delays that bring the entire production process to a halt.

Mr. Thorpe resisted pushing up prices for Gocycles in 2021 because he spent a chunk of the year explaining to unhappy customers why supply-chain disruptions meant there would be delays to their orders. That and cost pressures mean the company is unlikely to report a profit this year, he says.

He says he is pressing ahead with price increases for 2022 because he doesn’t expect these supply-chain issues to get much better. He estimates the cost to the company of producing a single bike has shot up by 20% to 25% compared with the cost before the pandemic, as competition between manufacturers for common parts pushes prices skyward.

Seatpost prices have gone up 20% in the past 12 months. So have prices for the cranks the rider turns when pedaling. Handlebars are up 11%. Brake levers and calipers are up 14%. Chain prices are up 17%, and reflectors are up 50%, according to Karbon Kinetics.

Mr. Thorpe learned by email Wednesday that higher prices for magnesium—used in Gocycle wheels—mean future shipments of wheels will be 17% more expensive than they are now.

Multiple industries are competing for the batteries, semiconductor chips and tiny electronic components Gocycle uses for its dashboard displays, power management systems and charging ports.

Mr. Thorpe says at one point in the pandemic he became so desperate for stock he toyed with ordering some chips from sellers he knew little about on Chinese online commerce platform Alibaba. In the end he thought it wiser to stick with a trusted supplier and swallow sharply higher prices.

One essential circuit board in Gocycle bikes cost 1.66 euros, or about $1.87, as recently as six months ago. Now Mr. Thorpe says he is being quoted prices as high as 30 euros to 40 euros for the same tiny component.

A switch for controlling power to the motor used to cost 80 euro cents. The cheapest he can source them now is 1.70 euros. A Gocycle needs seven of them.

Shipping a container full of parts from China costs him around $20,000, Mr. Thorpe says. It used to cost $4,000. Shortages of pallets and blockages at ports mean he can’t be certain when shipments will arrive. He estimates shipping costs for a single bike have effectively doubled, on average, depending on where exactly it is destined.

The flood of demand for bikes as the pandemic arrived took the industry by surprise, executives say, an example of how unprepared the global economy was for the mass switch in consumption to goods from services as the pandemic forced people to stay home.

That switch has fueled rapid price increases in everything from consumer electronics to used cars, propelling faster inflation overall. Consumer prices in the U.S. rose by an annual 6.2% in October, the fastest rate of price-growth in more than 30 years.

Alta’s Mr. Pizzi says at the beginning of the pandemic he thought he was going to be canceling orders. By April 2020, he says, he was asking his suppliers in Asia if there was any way they could increase production.

Before the pandemic, the company would have expected to sell 200,000 bikes a year. In 2020 it sold 250,000, completely exhausting its stock. “It was bike in, bike out,” Mr. Pizzi says.

Alta could easily have sold another 125,000 or so last year if its contractors in countries including Thailand, Cambodia and Vietnam could have kept up with retailers’ appetite, he says.

“The pandemic has been a curse for a lot of businesses, but it has been a blessing for ours,” says Woody Smith, owner of Bike Mart, which has five bike stores in Texas. He sold 13,400 bikes in 2019. In 2020, he sold 18,200 and this year he is on track to sell 22,000. Manufacturers of the bikes he sells over the past 18 months increased prices by around 8% and 10% on average, he says, which he passed on to his customers. He says he stayed in line with those recommended selling prices without adding any premium.

Part of the explanation for consumer demand for bikes is a Covid-19-related trend that is pushing up prices for all sorts of manufactured goods. The pandemic has meant people are less able to spend their income on eating out, overseas travel and other services, so have been splashing out on gadgets and recreational products instead.

Retailers say consumer demand pushing up bicycle prices is still intense. Some bike buyers are seeking ways to avoid traffic or public transport as they return to the regular commute, a trend that is fueling adoption of pricey electric bikes in particular. Some retailers say they are seeing recent converts to cycling upgrade basic models for more expensive rides.

Wary of being caught short of stock, Mr. Smith of Bike Mart says he has already placed orders for 75% to 80% of the bikes he anticipates he will need for Christmas 2022. Final prices with his suppliers haven’t been agreed upon, but he says he expects those models will be 8% to 10% more expensive than those he is selling this year.

Karbon Kinetics, the maker of Gocycles, has also absorbed other cost increases, including on staff. One new hire is a former aviation industry executive who has been tasked with managing the logistical headaches of tangled global supply chains. Others are focused on keeping up stocks of spare parts and servicing the growing number of Gocycles on the road. Energy prices are up, too.

The supply-chain mess meant Karbon Kinetics fell 40% short of its production goal this year, making only 3,000 of a planned 5,000 bikes—cutting the company’s expected revenue for the year.

Mr. Thorpe says he is hopeful of hitting the 5,000 mark in 2022, a more conservative goal than the 10,000 or so he had penciled in before the pandemic struck.

That is if he can get the parts. The prospect of further disruption because of the Omicron variant means he is more sure than ever that raising prices is the right strategy, as it will mean higher revenue on every bike he can deliver. “I’m so glad we made the plan we did,” he says.

If you lose all hope, you can always find it again -- Richard Ford in The Sportswriter
0

#27 User is offline   kenberg 

  • PipPipPipPipPipPipPipPipPipPip
  • Group: Advanced Members
  • Posts: 11,082
  • Joined: 2004-September-22
  • Location:Northern Maryland

Posted 2021-December-01, 20:34

I still have my bike around somewhere.
I did not save my Superman comics from the 40s, and somewhere along the way I lost some blues recordings from the 30s, but I still got my bike.
The auction starts at 3K
Ken
0

#28 User is offline   y66 

  • PipPipPipPipPipPipPipPip
  • Group: Advanced Members
  • Posts: 6,496
  • Joined: 2006-February-24

Posted 2021-December-13, 15:43

From Prakash Loungani's Nov 30 interview with Paul Krugman:

Quote

Loungani: Let's start with your November 14th tweet where you said: “I got inflation wrong I didn't see the current surge coming.” Can you tell us why you had reached that conclusion? What has happened since and where do you stand now: are you still sort of the captain of Team Transitory or are your views starting to shift?

Krugman: Okay, so I guess Chairman Powell told us today that the use of the term ‘transitory’ is just a passing fad. Let me describe where the debate was -- I think I find it helpful to think of it kind of in terms of how this has unfolded, where the debate was early this year and what has happened. So, this is a debate, you know, where people on either side are not stupid [and] not crazy, which is unusual these days.

Earlier this year we had in the United States the American Rescue Plan, which was a lot of money. And on one side of the debate, Larry Summers and Olivier Blanchard looked at the scale of it and said that is a huge amount of fiscal stimulus and we'll push the economy far above potential and lead to a lot of inflation. People like me took a look at it and said, yeah, that is a whole lot of money but it’s very low multiplier. Things like aid to state and local governments will not be spent rapidly, and a lot of the checks individuals would probably be saved -- it would probably be a low multiplier event and wouldn't overheat the economy that much.

What actually happened, at least as I read it, is that the low multiplier analysis was correct in that if fact if you look at final demand -- if you look at C + I + G – it’s up about 4% over the past 2 years, which is roughly in line with the normal growth of potential output. However, the economy looks overheated and inflationary. So, in some sense, neither side has been right about how the story would play out. We've actually had the low multiplier story but we've had the inflation.

I think, basically, nobody should be doing a victory dance in the end zone here. It hasn't come out the way anyone expected. My read on what's happened --which I thought was uncontroversial, but I've got this slightly hysterical pushback from some people on the other side this debate in private – is that we've run into supply constraints that probably we should have seen coming -- or some of them we should have seen coming -- but we didn't. I think there are actually two quite distinct supply constraint stories. One is the supply chain stuff that we all talk about. And the other is the Great Resignation, the surprise drop and persistence of low labor force participation.

The supply chain stuff is very much about the composition of demand because of the extreme skew towards goods, -- as opposed to services -- and durable goods in particular. And the numbers are really kind of eye-popping. It's faded a bit but at the peak durable goods consumption was 34% above pre=pandemic levels. So no wonder we have a problem with the supply chain. And that we should have seen coming but we didn't. It's a little bit like shadow banking -- once we understood what was happening it was obvious, but it wasn't obvious in advance.

The other is the Great Resignation and that has really been mind boggling, So we're still four million down from pre=pandemic employment in the United States. But all indicators are now pointing to a very, very tight labor market.

Okay, where I am now: The supply chain stuff should fade. The labor market stuff is very much up in the air. But the question has got to be: one-time overheating of the economy, whether it's because of demand or supply constraints, has historically not translated into sustained inflation, It takes a long period -- at least in the past it has taken a long period – of year after year of an overheated economy for it to get embedded in expectations. And so that's why, where I am right now is: we can talk about historical episodes, but right now this has not played out the way anyone expected, but it's not yet at the point where you want to say: hey, we have a fundamental prolonged overheating that is feeding into expectations.

If you lose all hope, you can always find it again -- Richard Ford in The Sportswriter
0

#29 User is offline   kenberg 

  • PipPipPipPipPipPipPipPipPipPip
  • Group: Advanced Members
  • Posts: 11,082
  • Joined: 2004-September-22
  • Location:Northern Maryland

Posted 2021-December-13, 20:42

My first reaction to the interview with Krugman was that he confirmed a common view: If you want to figure what's going to happen don't ask an economist.
After thinking about it a bit. that still might be my view. The Great Resignation caught them flat-footed?
Ken
0

#30 User is online   akwoo 

  • PipPipPipPipPipPip
  • Group: Advanced Members
  • Posts: 1,315
  • Joined: 2010-November-21

Posted 2021-December-13, 23:10

View Postkenberg, on 2021-December-13, 20:42, said:

My first reaction to the interview with Krugman was that he confirmed a common view: If you want to figure what's going to happen don't ask an economist.
After thinking about it a bit. that still might be my view. The Great Resignation caught them flat-footed?


I'm not at all surprised that the Great Resignation caught economists flat-footed.

One of the possible (there's some evidence for it, but it's not that strong, but neither is there a lot of evidence against it) strange things about labor economics is that, at the macroeconomic level, the slope of the supply curve for labor might be negative. In simple words, this is saying that, if you pay people more, they actually work less (because they earn enough for their life with less work). This is so against everything else in economics (normally, if the price of something goes up, more people are willing to sell more of it) that economists have a hard time grasping it and accounting for it.
1

#31 User is offline   kenberg 

  • PipPipPipPipPipPipPipPipPipPip
  • Group: Advanced Members
  • Posts: 11,082
  • Joined: 2004-September-22
  • Location:Northern Maryland

Posted 2021-December-14, 08:27

View Postakwoo, on 2021-December-13, 23:10, said:

I'm not at all surprised that the Great Resignation caught economists flat-footed.

One of the possible (there's some evidence for it, but it's not that strong, but neither is there a lot of evidence against it) strange things about labor economics is that, at the macroeconomic level, the slope of the supply curve for labor might be negative. In simple words, this is saying that, if you pay people more, they actually work less (because they earn enough for their life with less work). This is so against everything else in economics (normally, if the price of something goes up, more people are willing to sell more of it) that economists have a hard time grasping it and accounting for it.


Yes, but they have taken on the job of grasping it and accounting for it.

What people expect, what they expect from a job, from the government, from life, matters. Expectations change.
Growing up in the 1940s-50s, the expectation was that children were born to married couples, the father had a job and supported the family, the mother took care of the kids. Largely (not completely but largely) these expectations matched what I saw among my friends.
Those expectations changed over the years. Mothers work, they need child care for their kids. Whatever we think about the good and bad of this change, it happened.
The pandemic and our response to it brought about further change. Jobs disappeared, some temporarily, some permanently. Child care was never all that great and it got much tougher to find and pay for. When some jobs started coming back, many of these jobs became more dangerous to the health of the worker. Kids were not in classrooms and so how is that handled? And so on. It never occurred to economists that this might affect how people responded? I'm no economist, I'm not trained in social analysis, but it occurred to me. I'm not saying I anticipated exactly what would happen but I'm not being paid to do that sort of analysis

In the summer of 1961, between my first and second year of grad school. I worked a temporary job doing mathematics. Skipping false modesty, I was well regarded. So they selected me to help on an analysis of military plans in a hypothetical war. I was fine with the math. But the model was built on assumptions that I considered to be somewhere between naive and absurd. Maybe call it "very hypothetical". It's not enough to "do the math". The model has to reflect reality.

I get tired of hearing "Who could have anticipated this?". Maybe the people who make a good living by predicting the effects of actions and counter-actions?
Ken
1

#32 User is offline   y66 

  • PipPipPipPipPipPipPipPip
  • Group: Advanced Members
  • Posts: 6,496
  • Joined: 2006-February-24

Posted 2021-December-14, 09:39

View Postkenberg, on 2021-December-14, 08:27, said:

Yes, but they have taken on the job of grasping it and accounting for it.

I would say "attempting to grasp and explain" based on available data and something resembling a rational model. My sense is that Krugman and Summers do update their models and their thinking as new data become available, but it's not like the data become available in real time which is why we see evolving debates like the one they've been having.
If you lose all hope, you can always find it again -- Richard Ford in The Sportswriter
1

#33 User is offline   kenberg 

  • PipPipPipPipPipPipPipPipPipPip
  • Group: Advanced Members
  • Posts: 11,082
  • Joined: 2004-September-22
  • Location:Northern Maryland

Posted 2021-December-14, 19:50

View Posty66, on 2021-December-14, 09:39, said:

I would say "attempting to grasp and explain" based on available data and something resembling a rational model. My sense is that Krugman and Summers do update their models and their thinking as new data become available, but it's not like the data become available in real time which is why we see evolving debates like the one they've been having.


Ok, there is something to that.
I still think too many things are written off as just totally unforeseeable.

A couple of quickies, discussed before
Afghan: The US announces that we will pull out, after which Afghan soldiers will be on their own. Afghan soldiers desert and the government quickly collapses. Unforeseeable?
A campaign opens to defund the police. People who live in tough neighborhoods, including Black citizens in tough neighborhoods, are strongly opposed to this. Unforeseeable?
The government sponsors a student loan program that lends a great deal of money to a great many people with lax supervision. The country is then hit with a massive student debt problem. Unforeseeable?
And I have already commented on the Great Resignation. Also unforeseeable? Mind-boggling, as Krugman says.
And I could go on for a while.

The people who have responsibility for planning things seem to suffer from unforeseeable events very frequently.
I realize that tough problems are tough. I do. I will continue to hope for better.

Sticking with inflation: Did it really not occur to anyone that since covid had a substantial impact then just perhaps they should be a bit cautious about trusting the conclusions of a model that did not take this impact into account?
Ken
1

#34 User is online   pilowsky 

  • PipPipPipPipPipPipPip
  • Group: Advanced Members
  • Posts: 3,663
  • Joined: 2019-October-04
  • Gender:Male
  • Location:Israel

Posted 2021-December-14, 21:57

My understanding of the unfortunately named "Defund the police" slogan was that there was a lot more nuance to the campaign that lay behind it.
The single largest demographic of police in the USA (could be true elsewhere) is military veterans who are white males.
The primary training of this group is not in the area of deescalation and non-violence.


Add to this the toxic swamp of firearms in the USA and there is a recipe for fear, loathing and dangerous escalation of conflict that might otherwise be peacefully resolved.


What the "defund" campaign sought was a reallocation of funds within the municipal departments responsible for serving and protecting citizens.


Not the elimination of law and order.



Non legit hoc
0

#35 User is offline   Winstonm 

  • PipPipPipPipPipPipPipPipPipPipPip
  • Group: Advanced Members
  • Posts: 17,218
  • Joined: 2005-January-08
  • Gender:Male
  • Location:Tulsa, Oklahoma
  • Interests:Art, music

Posted 2021-December-14, 22:44

View Postpilowsky, on 2021-December-14, 21:57, said:

My understanding of the unfortunately named "Defund the police" slogan was that there was a lot more nuance to the campaign that lay behind it.
The single largest demographic of police in the USA (could be true elsewhere) is military veterans who are white males.
The primary training of this group is not in the area of deescalation and non-violence.


Add to this the toxic swamp of firearms in the USA and there is a recipe for fear, loathing and dangerous escalation of conflict that might otherwise be peacefully resolved.


What the "defund" campaign sought was a reallocation of funds within the municipal departments responsible for serving and protecting citizens.


Not the elimination of law and order.

Totally correct but in this country perceptions rule - a poor choice of words crippled a useful idea.
"Injustice anywhere is a threat to justice everywhere." Black Lives Matter. / "I need ammunition, not a ride." Zelensky
0

#36 User is offline   kenberg 

  • PipPipPipPipPipPipPipPipPipPip
  • Group: Advanced Members
  • Posts: 11,082
  • Joined: 2004-September-22
  • Location:Northern Maryland

Posted 2021-December-15, 07:42

At the very least, the people who chose the words "Defund the police" were apparently stunned to discover that some people, really stupid people from their point of view, thought that "Defund the police" advocated cutting off funding for the police. The extent to which "Defund the police" meant that we should defund the police varied from one advocate to another, but the designers of this slogan really should not have been surprised at the reaction. It left them on the defensive, desperately trying to explain that they did not mean what the slogan said, or at least what a large number of people took it to mean.

Of course Krugman's views on the inflation debate are relevant: I quote: "So, this is a debate, you know, where people on either side are not stupid [and] not crazy, which is unusual these days.". Got it. Since Krugman was wrong about inflation he has to acknowledge that some people, not many of course but a few, people who disagree with him are neither stupid nor crazy. Most are either stupid or crazy, but not all. The occasional exception. So he thinks. Same with defund the police. How could people be so stupid or crazy as to think that this slogan suggests defunding the police? Maybe the organizers should have thought about this slogan a bit more? Or, maybe, those who favored this slogan because they meant exactly what it appears to say, and some did, needed to think that through?


I often look back on the play of a hand that did not go so well. Often I can see, in retrospect, something I should have thought of. Something in plain sight, I just missed it. I am suggesting that the same thinking, preferably before everything falls apart, could be useful in social/political/financial situations. Often there seems to be a "damn the torpedoes, full speed ahead" approach. Such an approach can work. Often it doesn't work. Torpedos can, well, they can torpedo plans.




Ken
0

#37 User is offline   Winstonm 

  • PipPipPipPipPipPipPipPipPipPipPip
  • Group: Advanced Members
  • Posts: 17,218
  • Joined: 2005-January-08
  • Gender:Male
  • Location:Tulsa, Oklahoma
  • Interests:Art, music

Posted 2021-December-15, 08:23

View Postkenberg, on 2021-December-15, 07:42, said:

At the very least, the people who chose the words "Defund the police" were apparently stunned to discover that some people, really stupid people from their point of view, thought that "Defund the police" advocated cutting off funding for the police. The extent to which "Defund the police" meant that we should defund the police varied from one advocate to another, but the designers of this slogan really should not have been surprised at the reaction. It left them on the defensive, desperately trying to explain that they did not mean what the slogan said, or at least what a large number of people took it to mean.

Of course Krugman's views on the inflation debate are relevant: I quote: "So, this is a debate, you know, where people on either side are not stupid [and] not crazy, which is unusual these days.". Got it. Since Krugman was wrong about inflation he has to acknowledge that some people, not many of course but a few, people who disagree with him are neither stupid nor crazy. Most are either stupid or crazy, but not all. The occasional exception. So he thinks. Same with defund the police. How could people be so stupid or crazy as to think that this slogan suggests defunding the police? Maybe the organizers should have thought about this slogan a bit more? Or, maybe, those who favored this slogan because they meant exactly what it appears to say, and some did, needed to think that through?


I often look back on the play of a hand that did not go so well. Often I can see, in retrospect, something I should have thought of. Something in plain sight, I just missed it. I am suggesting that the same thinking, preferably before everything falls apart, could be useful in social/political/financial situations. Often there seems to be a "damn the torpedoes, full speed ahead" approach. Such an approach can work. Often it doesn't work. Torpedos can, well, they can torpedo plans.





I took Krugman’s crazy or stupid as reference to wild-eyed Trump supporters.
"Injustice anywhere is a threat to justice everywhere." Black Lives Matter. / "I need ammunition, not a ride." Zelensky
0

#38 User is online   pilowsky 

  • PipPipPipPipPipPipPip
  • Group: Advanced Members
  • Posts: 3,663
  • Joined: 2019-October-04
  • Gender:Male
  • Location:Israel

Posted 2021-December-15, 15:44

What is "stupidity"?
It has nothing to do with education or accomplishment in any field.

There's a nice explanation with cartoons here: https://sproutsschoo...y-of-stupidity/
Here's the Editors introduction: https://ms.wearesparkhouse.org/downloads/9781506402741_Editor's%20Introduction%20to%20the%20Reader's%20Edition.pdf




Here's an excerpt:
BONHOEFFER'S LETTERS FROM PRISON
In his famous letters from prison, Bonhoeffer argued that stupidity is a more dangerous enemy of the good than malice, because while "one may protest against evil; it can be exposed and prevented by the use of force, against stupidity we are defenseless. Neither protests nor the use of force accomplish anything here. Reasons fall on deaf ears."


Facts that contradict a stupid person's prejudgment simply need not be believed and when they are irrefutable, they are just pushed aside as inconsequential, as incidental. In all this, the stupid person is self-satisfied and, being easily irritated, becomes dangerous by going on the attack.
Non legit hoc
0

#39 User is offline   kenberg 

  • PipPipPipPipPipPipPipPipPipPip
  • Group: Advanced Members
  • Posts: 11,082
  • Joined: 2004-September-22
  • Location:Northern Maryland

Posted 2021-December-15, 20:02

Ok, I may have gotten this off track. My thinking is that some things that are claimed as unforeseeable could be at least partially foreseen, and it would be a good idea to do so. I gave a few examples that I think have merit, but I have said enough about that.

Apparently, the fed plans to step up its efforts in interest rates. My first thought about that, and no one will disagree, is that I lack the knowledge to judge. I think inflation has become a threat, and I understand that raising interest rates is one tool. But that's about it as far as I understand things.

Here is a Wapo article:
https://www.washingt...on-powell-fomc/

Quote

Economists and policymakers often cite backlogged supply chains for driving prices up. But they also point to high consumer demand that is far outpacing levels seen before the pandemic. Such high demand was boosted, in part, by major stimulus measures passed by Congress, along with the Fed's own monetary supports.

Powell defended the Fed's moves, saying that monetary and fiscal aid during such extreme circumstances helped stabilize the recovery and bring about "really strong growth, really strong demand, high incomes," even as the economy is experiencing high inflation now.

"People will judge in 25 years whether we overdid it or not. But the reality is we are where we are," Powell said. "We think our policy is the right one for the situation that we're in."



Sounds as if Powell is far from certain. I like that.
The Dow went up after this if, that means anything, which I am not sure it does.
Ken
0

#40 User is offline   y66 

  • PipPipPipPipPipPipPipPip
  • Group: Advanced Members
  • Posts: 6,496
  • Joined: 2006-February-24

Posted 2021-December-16, 06:31

Neil Irwin at NYT/Upshot said:

https://www.nytimes....896ed87b2d9c72a

Inflation has been building for months. But it was over 13 days this fall that Jerome Powell, the Federal Reserve chair, decided the central bank needed to get more serious about trying to choke it off.

The story of the latest Powell pivot — the abrupt move toward tighter monetary policy announced Wednesday — shows a great deal about the decision-making approach of the man President Biden has nominated for a second term as the nation’s top central banker.

In short: He may stick to his chosen policy path in the face of public pressure as long as evidence doesn’t undermine his assumptions, but he’s willing to change course quickly when data emerges that suggests the world is different.

The Fed’s policy committee announced Wednesday that it would speed up the end of the central bank’s bond-buying program and was likely to raise interest rates sooner than had been envisioned as recently as early November. The mantra of Fed officials through the summer months that inflation was likely to be transitory is now, officially, history.

More than usual in a Federal Reserve news conference, Mr. Powell narrated the events that caused his policy pivot.

Complaints about high inflation have been surging since the spring, but Mr. Powell and the Fed stuck to their view that it would fade and that they needed to move gingerly in pulling back on stimulative policies. That started to change with a piece of economic data on Oct. 29 that is closely followed by economists but gets relatively few headlines — a surge in the employment cost index.

That surprisingly high number suggested that employers’ spending on wages and benefits was rising faster in the summer months than economists had thought. It put Mr. Powell on alert that inflationary pressures had the potential to be broader and longer lasting than the Fed had been expecting.

That, he said, made him consider adjusting plans for a Fed policy meeting five days later, to wind down the central bank’s bond-buying program faster than analysts expected. He and his colleagues on the Federal Open Market Committee instead stuck to the plan, but two more data points in the ensuing days were making clear that inflation risks were building.

First, on Nov. 5, a robust employment report showed strong job creation and a rapidly falling unemployment rate. Then, on Nov. 10, the Consumer Price Index showed a surge in inflation. That was enough for Mr. Powell. As colleagues began giving speeches and interviews in the days that followed, they made clear that a more hawkish approach to monetary policy was in the offing, which Mr. Powell affirmed in congressional testimony last week.

“I think that the data we got toward the end of the fall was a really strong signal that inflation is more persistent and higher, and that the risk of it remaining higher for longer has grown,” he said in the news conference. “And I think we are reacting to that now.”

The particular constellation of evidence that emerged from those three data points from Oct. 29 to Nov. 10 — since confirmed by other data releases — suggested that an inflation problem that once seemed mainly confined to automobiles, airfare and a handful of other products had become more broad-based.

And as employers pay more in wages and other costs to keep their workers, the possibility that they simply pass those costs on to customers in a self-reinforcing cycle of higher pay and higher prices has become more real. This so-called wage-price spiral was a feature of the sustained high inflation that lasted from the late 1960s to the early 1980s.

Central bankers always face a tension between underreacting and overreacting to the latest economic headlines. On one hand, if they react too quickly to incoming information, policy can become erratic, creating unnecessary market volatility and failing to see through temporary forces that buffet the economy.

But if they react slowly, it can create a risk of becoming out of step with the realities of the economy. Historical examples include when the European Central Bank increased interest rates in 2008 even as what would become the global financial crisis was starting to drag down the European economy.

In the worst case, it could drive the economy to bad results out of some mix of stubbornness, ego and a refusal to admit a mistake.

Mr. Powell’s strategy has been to set out a forecast of how Fed leaders believe the economy is likely to evolve, stick to his guns even in the face of outward pressure, but then be ready to change course abruptly if the evidence becomes compelling that the forecast was wrong.

That is also the pattern exhibited in an earlier Powell pivot, in late 2018 and early 2019, although that was a shift in the opposite direction from this one.

The Powell Fed raised interest rates four times in 2018, earning withering public attacks from President Donald Trump. And at its December 2018 meeting, almost all the officials gathered envisioned multiple additional rate hikes over the course of 2019 to head off inflation.

In the days that followed, markets plunged and bond and other markets suggested the Fed had made a mistake — that the economy was not in position to withstand those rate increases. Mr. Powell abruptly changed tone in January 2019, and by the middle of the year was cutting rates rather than raising them.

In that episode as now, Mr. Powell resisted the accusation that the Fed had made a mistake. (“I wouldn’t look at it that we’re behind the curve,” he said Wednesday. “I would look at it that we’re in position now to take the steps that we’ll need to take, in a thoughtful manner, to address all of the issues, including that of too-high inflation.”)

His first term as Fed chair has, in effect, been an embodiment of a quote possibly apocryphally attributed to John Maynard Keynes: “When the facts change, I change my mind. What do you do?”

As they weigh whether to confirm him to a second term or not, senators will ultimately be judging whether the Powell pivots, especially this most recent one, have been too fast, too slow, or just about right.

If you lose all hope, you can always find it again -- Richard Ford in The Sportswriter
0

  • 4 Pages +
  • 1
  • 2
  • 3
  • 4
  • You cannot start a new topic
  • You cannot reply to this topic

1 User(s) are reading this topic
0 members, 1 guests, 0 anonymous users