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Should We Fear A Reappearance Of Inflation?

Should We Fear A Reappearance Of Inflation?

 In today’s Washington Post Robert J. Samuelson has raised the possibility that the Federal Reserve may be setting the US up for a reappearance of inflation.  He invoked the 1960s and 1970s when supposedly the Fed allowed inflation to get out of control out of a supposedly misguided effort to bring down unemployment by allowing successive small increases in inflation. Supposedly the newly released report on changed Fed policies may be taking us back to those bad old days, even though for now RJS admits that inflation is low, with expectations of inflation only at 1.34%.  How worried should we be?

OK, I am not going to say that a resurgence of inflation is impossible.  I can imagine it possibly resurging, with such a development perhaps being associated with a sharp decline of the US dollar, perhaps associated with a turn from its use as a reserve currency.  I do not see that happening immediately, but there is theoretical literature that suggests that such an event could happen rather suddenly at some point.  If so, then maybe it could happen.  Is the new Fed policy likely to bring this on?

I suppose one reason to be concerned is that the supposedly new policy approach has been rather opaque.  I have had trouble getting a clear picture what the changes are in the policy. The main reports have been relatively undramatic, basically an idea that at least through the next year there will be no interest rate increases.  Probably a bigger deal is that the Fed might tolerate inflation higher than the 2% targeted rate.

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Trump and Antifa

No one seems to know what or who Antifa is; so far be it from me to pretend that I do. I did meet a self-avowed one once. Interviewed the young man for 30-45 minutes; even talked on the phone a few minutes with his parents who lived in Oakland. By way of providing context; this was during the Occupy Wall Street protests in Oakland, CA. Down from Portland, OR, he was looking for a place to stay for ‘up to a week’. Twitchy, desperate, and vague, …, fits the description. I encouraged him to talk on the premise that I would learn more from listening than from asking.

It’s been a while, memory fades, but here’s what I recall: There was some connection to Guy Fox (Fawkes). His parents told me that they were estranged from their son, that he was involved in activities they didn’t approve of, would not allow their son to stay in their home, and couldn’t recommend that I do so. Joining a protest movement in progress was obviously nothing new for him. He was a bit of a Peter Pan; having no visible means of support. Others from Portland had come down at the same time. He talked vaguely about radioactive materials. For sure, he wasn’t down to sit in a tent on Broadway. I came to conclude that the young man was an anarchist, sought to somehow bring the Occupy Wall Street protest to a boil, to get a real revolution going, and, that somehow, he thought that doing so was a good thing. He intimated that he may have somehow been tangentially involved in the WTO riots in Seattle; not sure those numbers worked.

There is little evidence that Trump knows or cares what Antifa is other than a word that spits well. He does seem to believe that it would be good to associate such a mysterious sound with liberalism. Here in the US, it seems that no one is clear on what or who Antifa is. I hear that there is a more defined Antifa Movement in Europe. But anarchists abound. Some of the right-wing armed militia groups advocate Civil War which would certainly lead to anarchy. Many of Bernie’s Bros wished to pull the house down.

What is the appeal of tearing the house down and starting all over again? For the Right, it appears to be a wish to erase all changes to the nation since 1950; 20-30 years before most of the militiamen were born. For Bernie’s Bros, a wish to somehow impose their political philosophy on us all; something straight out of the bowels of 1950s Brooklyn, NYC. Seems 1950 was a very good year.

In the breast of every good anarchist beats the heart of one who sees themselves coming out on top in the end. All takers of shortcuts to the top of the mountain they would reduce to rubble. Hard to think of the armed right-wing militia groups separate seeing them as white supremacists wishing to return us to those good old days when blacks and browns knew their place. Cases of arrested development the both. Fantasies of Anarchism are common to teenage boys; fantasies fortunately most outgrow. What are the odds that these fantasies would persist so long in so many into middle age and beyond? Our times.

What of those who would employ these lost souls for their own purpose? Trump, no doubt saw right-wing, white supremacist, armed militias as part of a coalition allowing him to attain and retain the reins of power. In case of anarchy, Trump would do his fail-up trick to come out on top. Bernie must have thought that he could somehow leverage his <30% of about 30% into his gaining control of those very same reins. As to how Bernie was planning to ascend to the top in the advent of anarchy, don’t know.

In Trump’s case, they did follow. Alas, for Bernie’s, we will never know. Is America a land of sheep, or only a land of half sheep?

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DeJoy’s Fix for the Post Office: The Wrong Time, the Wrong Plan, the Wrong Man

PMG Louis DeJoy’s Fix for the Post Office, Mark Jamison, Save The Post Office, Aug. 29, 2020

After years of being a journalistic backwater the Postal Service is all over the news. From the usual contextually vacant reports about financial losses, we shifted to meaty and sometimes sensational coverage about the removal of Blue collections boxes and mail processing equipment at plants. There’s also the entrance of a new villain on the scene, Louis DeJoy, a wealthy Trump and Republican contributor with business interests and investments that coincide with the Postal Service.
Mr. DeJoy began his tenure as Postmaster General in June of this year after being named to the post by the Postal Board of Governors, which oversees postal operations. The Board is populated by a former RNC chair, a couple of investment bankers, the CEO of a public affairs and corporate advocacy consultancy, and a former CEO of various logistics and transportation companies that also specialized in mail consolidation, a form of outsourcing of mail processing.

Mr. DeJoy’s first couple of months have been eventful to say the least. His comments to the BOG at his first open session of the board on August 7th make clear that his intentions are to transform the Postal Service. Early in his remarks he says, “We are at the beginning of a transformative process. Our goal is to change and improve the Postal Service to better serve the American public, and I am excited about the opportunities ahead.” He proceeds to offer the usual professions of fealty to the ethic of service to the American, followed by the even more usual assertions about the dire straits the institution finds itself in.

Whatever he may say, it’s clear that Mr. DeJoy has entered the scene like a bull in a china shop. Within weeks of his taking office, there have been widespread reports of delays and service failures (which are backed up by internal USPS documents), news stories about Blue box removals, reports of mail processing equipment being removed, employee reports of mail left on docks or at carrier cases, and actions that seem to violate basic contractual provisions with the unions, causing the initiation of grievances as well as the breakdown of normal lines of communication between the APWU and L’Enfant Plaza. Mr. DeJoy seems to be moving full steam ahead at executing the expressed desires of the president for dismantling the USPS.

It’s fair to say that under DeJoy the Postal Service has lost any sense of urgency with respect to delivery of the mails. DeJoy seems to be taking his cue from the Wall Street manipulators who populate the BOG and hired DeJoy. He is in paring mode, sacrificing service and performance for operational reductions with questionable or at least unproven financial payoffs. This is especially damning during a pandemic and economic slowdown and certainly before an election, times when the postal network is more necessary and important than ever.

An article earlier this week in the Wall Street Journal suggests that DeJoy is actually doing the right things “to make the U.S. Postal Service’s operations more efficient,” but he may have picked the wrong time to get started on them.

But the problem is bigger than the timing. It’s always the wrong time for any plan that sacrifices service for “efficiency.” DeJoy’s plan is the wrong plan for saving the post office, and DeJoy is simply the wrong man for the job.

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“Be Ready to Distribute Vaccines on Nov. 1”

CDC tells states: Be ready to distribute vaccines on Nov. 1, Modern Healthcare, September 2, 2020

The federal government told states to prepare for a coronavirus vaccine to be ready to distribute by Nov. 1; from which the declaration of the early timeline raised concern among public health experts about the  “October surprise” of a vaccine approval and use being driven by political considerations ahead of a presidential election, rather than science.

The planning  documents here and here sent to governors Aug. 27 by CDC Director Robert Redfield advises states they will receive permit applications “in the near future” from the authorized distributor, McKesson Corporation, to distribute vaccines to places which include state and local health departments and hospitals. Dr Redfield wrote in an accompanying  letter,

“CDC urgently requests your assistance in expediting applications for these distribution facilities and, if necessary, asks that you consider waiving requirements that would prevent these facilities from becoming fully operational by November 1, 2020,”

There is not even a hint or a suggestion of partial Phase 3 testing being given beforehand which causes me to wonder if the extent of this is allowed under the 21st Century Cures Act passed in 2018. The act allowed for the skirting of some testing and the use actual data outside of the normal testing protocol to show a drug works? I believe the Cures Act only allowed a partial go-live on new drugs during a phrase 3. We must be following Putin lead. He gave the vaccine to his daughter. Perhaps, Trump will have Ivanka inoculated ?

Any volunteers at AB?

C.D.C. Tells States How to Prepare for Covid-19 Vaccine by Early November, New York Times, September 2, 2020

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Preserve the People’s Post Office: Let Us Do Meaningful Postal Reform

It is said the Postal Service is mired in debt, that it is unsustainable, a burden to the American people. This is the position of the current postmaster general, supported by the board of governors who hired him and by a treasury secretary who seems to be the chief architect of the current assault on a cherished national institution, goaded by a president who cares little for governing or the public welfare.

These claims are a lie, one that has been pushed repeatedly for at least fifty years by those who would steal an American asset and convert its public benefits into private profits.

If the Postal Service has large unfunded liabilities, it is as much because they have been defined as such by those who seek to look at this most American of institutions in a way that lays the most burdens upon its shoulders. The truth is that the Postal Service has incurred its liabilities in the service of a greater and necessary good. Far from being onerous and intractable, they are evidence of a skewed perspective, a perspective bent on being intentionally blind in furtherance of an ideology that denigrates and denies the validity and necessity of government.

If one begins with the premise that government is only a creator of debt, then the normative assumptions underlying the accounting systems designed to measure government will be weighted towards finding liability, not value.

The Postal Service has employed as many as 800,000 Americans gainfully in jobs that paid living wage and provided life-sustaining healthcare and secure retirements. These benefits rebound and reverberate through local economies, spreading both wealth and security. They have lifted many whose options were otherwise limited into productive middle-class lives while bringing communities together. And this has been done in the service of a noble and useful purpose, creating an essential infrastructure whose uses are limited only by a failure of imagination and political will.

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What is Looting?

“Looting is a natural response to the unnatural and inhuman society of commodity abundance.” — Guy Debord, “The Decline and Fall of the Spectacle-Commodity Economy.”

The photograph used in Andy Warhol’s 1964 print, “Race Riot” was taken by Charles Moore and was published in LIFE magazine in May of 1963. Warhol used it without permission and Moore sued. Eventually there was an out-of-court settlement. The scene depicted was not a “Race Riot” as Warhol’s presumably ironic title claimed. It was a police attack ordered by Police Commissioner “Bull” Connor on a nonviolent demonstration in Birmingham, Alabama.

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The long leading forecast for H1 2021 at Seeking Alpha

by New Deal democrat

The long leading forecast for H1 2021 at Seeking Alpha

It’s been a long time since I “officially” updated my primary set of long leading indicators, mainly because until it is brought under control the coronavirus pandemic renders other indicators moot.

But that is likely to change by sometime in spring next year, so it makes sense to see what the economy might look like right after that.

This post is posted at Seeking Alpha.

The outcome of the election, and the likely time by which a decent vaccine might become available factor importantly into this outlook.

As I commented in response to some pushback there, my thought process was generally as follows:

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The 2020 Presidential and Senate polling nowcast: Biden’s popular majority is congealing

The 2020 Presidential and Senate polling nowcast: Biden’s popular majority is congealing

Here is my weekly update on the 2020 elections, based on State rather than national polling in the past 30 days, since that directly reflects what is likely to happen in the Electoral College. Remember that polls are really only nowcasts, not forecasts. They are snapshots of the present; there is no guarantee they will be identical or nearly identical in early November.

As I have frequently noted, Trump’s approval has always reverted to the mean, absent a new outrage that is both unusually cruel and simultaneously unusually inept. Since there has been none in the past few weeks, Trump’s margin reverted by 2% for both approval and disapproval. Perhaps more importantly, there has been virtually no movement in the past week, despite the RNC convention:

 

Here is the updated map through August 22. To refresh, here is how  it works:

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It’s all on Trump

The Post Office is Trump’s responsibility.  He appointed the Postmaster General.  If he had asked for more funding, he would have gotten it.  If there is any delay in delivering ballots this November, it’s on Trump.
The integrity of the election is on Trump.  He runs the intelligence services and is responsible for preventing foreign interference.  With his leadership, Congress would have provided more funds to help states deal with the disruption caused by COVID-19.  Any delay in counting ballots is on Trump.
The continuing deaths and economic hardship caused by COVID-19 is now on Trump.  It has been 6 months now since it was clear that COVID-19 would kill tens of thousands of people and wreck the economy.  If Trump had led a federal effort to massively ramp up testing capacity, we could be testing 20 million people a day now.  Everyone with COVID would quickly be identified and quarantined.  The epidemic would be over and we could all go back to work and school and ordinary life.  Every death, layoff, and eviction that occurs now on is on him.
The looting and violence in American cities is on Trump.  If he acknowledged the legitimacy of the protests and supported a reasonable police reform bill, the country would come together.  There would be no opportunity for looters or violent counter-protesters.  The frustration, chaos, and violence in our cities is on him.
Joe Biden and the Democrats in Congress can’t make Trump do his job, but at this point it doesn’t matter.  He’s President.  It’s all on him.  Call him out.

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