Good morning from Timothy Noah!
The 1970s really are back. No sooner does ABBA reunite than inflation becomes the lead story in todayâs New York Times and Washington Post. Can grotesquely wide lapels be far behind? (And yes, this child of the â70s still reads the print editions. I donât feel informed unless my fingers turn black.) The Consumer Price Index rose 6.2 percent in October over the previous 12 months, faster than it has in 31 years, and that, the Times says, is âan unwelcome development for the Biden administration.â The biggest hikes were for fuel oil (up 59 percent), motor fuel (up 50 percent), and car rentals (up 39 percent).
Since newspapers love to pepper their economic trend stories with personal anecdotes, hereâs mine about the scarcity of rental cars. I spent three goddamned hours at Los Angeles International Airport Saturday trying to retrieve, first, a reserved Hertz rental (âMy managers overbook,â the clerk said, âthen vanish, leaving me to deal with pissed-off guys like youâ) and then an unreserved Avis rental (I signed a contract but gave up waiting on the loading dock after 45 minutes). In the end I took an Uber instead. I mean, who needs a car in L.A.?
It wonât last forever. âHouseholds are sitting on huge savings stockpiles amassed during the pandemic,â the Times reports, âbut should theoretically spend those down now that government support programs like expanded unemployment insurance have fully or mostly lapsed.â But: âSupply chain experts have been warning that some of the shortages driving up costs might get worse before they get better, especially headed into the busy holiday shopping season.â Whereâs the War on Christmas when you really need it?
âSome economists are also concerned,â The Washington Post reports, âthat while wages are climbing, they arenât growing enough to compensate for the rising cost of living, at least in the short term.â The Postâs economics columnist Catherine Rampell, citing a Bureau of Labor Statistics summary of real earnings, tweeted, âAfter adjusting for todayâs new inflation numbers, average hourly wages fell 1.2 percent from Oct 2020 to Oct 2021. Change in real average hourly earnings combined with a decrease of 0.3 percent in average workweek resulted in a 1.6 percent decrease in real avg weekly earnings.â
The stock market doesnât seem to mind. The Wall Street Journal reported, at 8:22 a.m., that stock futures tied to the S&P 500 rose 0.3 percent. Stocks had âan eight-day record-setting streak this week, as concerns about inflation reignited.â Inflation shifts investment from bonds to stocks, though in the long run itâs bad for both.
Politico reports that corporate executives are bellyaching that the president isnât doing anything to fight inflation. More 1970s nostalgia! As Harvard economist Jason Furman explained to me yesterday, presidents and Congress havenât set inflation policy in a generation. âThatâs the Fedâs job,â he said. University of Chicago economist Austan Goolsbee further pointed out that inflation is a global phenomenon right now, even as âfiscal responses have varied a great deal in different countries.â Itâs the Covid, stupid.
At NewRepublic.com, your faithful correspondent explains to Senator Joe Manchin why the $1.75 trillion Build Back Better bill wonât worsen inflation to any significant degree. New Republic editor Michael Tomasky, in his latest video Tomaskycast, interviews Democratic pollster Cornell Belcher about whether Democrats should panic in light of Terry McAuliffeâs defeat in Virginiaâs gubernatorial election and how they can reframe matters for the midterms. Wanda Bertram reveals that, despite assurances from state prison officials that theyâve stepped up compassionate release during the Covid pandemic, in at least 10 states, fewer people were released in 2020 and the start of 2021 than in 2019. And Alex Shephard argues the Democrats should do more to tout how strong the economy is for workers.
See you next week,
Timothy Noah, staff writer |
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