Can our government generate its own inflation spiral?

by philg

Earlier here I wondered Could our epic deficits drive inflation no matter how high the Fed raises rates? (the answer is “yes” according to one of the smartest economists in the world: Economist answers my question about high interest rates and high deficits). Regarding the latest rounds of interest rate hikes, a Democrat-voting university professor friend posted on Facebook:

If you tried to put out a fire with water, and the fire got no smaller even after 3 attempts, you’d hopefully realize this is no normal water and/or this is no normal fire. And if you were able to come to this conclusion, you would not be the Fed.

My response was “I think the government may itself be the inflation spiral. Government is nearly half the economy and everything the government pays money for is indexed to inflation. Medicare, military and similar contracts, Social Security, pensions, employee salaries, etc.”

(This was a few days before “Social Security cost-of-living adjustment will be 8.7% in 2023, highest increase in 40 years” (CNBC, today))

If everything that is part of the local/state/federal government sector is indexed to inflation, doesn’t that mean that inflation goes down only if horrific pain is being inflicted on those dumb enough to be in the private sector? If government workers are getting cost-of-living adjustments (COLA), their spending power by definition cannot change (assuming that the BLS is calculating the CPI correctly). If the CPI says prices went up by 10 percent, the government workers will have 10 percent more in salary to go chasing after a mostly fixed supply of goods. This is the classic wage-price spiral.

Government is not 100 percent of the U.S. economy, so maybe the wage-price spiral can be broken if significant spending power reductions are imposed on non-union non-government workers. But at some level of government control of the economy, the spiral should be unbreakable regardless of interest rates and regardless of how poor the private sector chumps become.

(Why “non-union”? Union workers typically would have an automatic COLA increase and we could also consider union workers part of the government sector because they depend on the government to sustain their union power.)

Loosely related… prices and government worker wages go around in the Bois de Boulogne:

Related:

  • “Inflation Is Unrelenting, Bad News for the Fed and White House” (New York Times, today): “This is a self-inflicted wound that will impact the most vulnerable members of our society the most,[” said Mohamed El-Erian] (I think that El-Erian is saying what I say above, but more succinctly; everyone involved with the government will be 100 percent protected from inflation, which means that the peasants are going to be destroyed to keep those affiliated with the government from feeling any pain)
  • “Retirees Catch a Break With the Social Security COLA” (WSJ): On Thursday, the Social Security Administration said recipients will get an 8.7% increase in their payments next year and, for the second year in a row, that actually exceeds estimates of how much their costs increased. That is according to a 35-year-old initiative to measure the true rate of inflation facing those over 62, via an experimental consumer-price index produced by the Labor Department’s Bureau of Labor Statistics, known as the CPI-E; the E stands for “elderly.” … This year, the COLA was 8.7%, more than the 8% rise in the CPI-E.
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Construction costs in Los Angeles

by philg

Here in Paris, I met a guy who works in real estate development in Los Angeles. Assuming that you’ve already got the land, what does it cost to build a McMansion-grade house? “$500 per square foot,” he responded. How about an apartment building for the middle class? “Closer to $400 per square foot,” was the answer (same as levelset.com). So the 2,500-square-foot house costs $1.25 million to build and the 1000-square-foot apartment will cost $400,000 to build… assuming that land is free.

“Rents have a long way to go up before they cover these kinds of costs for new construction, plus the land and all of the permitting,” he said.

I am not sure how California is going to house all of the migrants that it says it wants to welcome. How many folks who show up in the U.S. not speaking English will earn enough to pay $2 million for a house (construction plus land costs) or $600,000 for a condo (construction plus land costs)? At current interest rates, the nerdwallet calculator says that a Californian earning $200,000 per year can afford a $675,000 house (Census.gov says that median household income in California is less than $80,000 per year).

From these same folks, I learned that the cost of a suite in one of Paris’s nicer hotels is normally $2,800 per night, but they were paying $2,100.

Related:

  • City rebuilding costs from the Halifax explosion
  • the venue where the conversation happened, a house that would cost a lot more than $500/sf to replicate. Note the visitor using a cloth mask to protect him/her/zir/theirself against an aerosol virus in one of the world’s most crowded indoor environments whose ventilation system was put in by Louis XIV and got its last significant upgrade in 1698. Was the trip to Versailles actually necessary or could he/she/ze/they have stayed home and saved lives?
  • cloth masks again… outside in the bright French sunshine:
  • and, because I know Mike will want to see this, one last Warrior for Science in a hall depicting heroes in various French battles (note failure to shave beard while attempting to seal out aerosols with a mask):
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Tough questions from reporters for Ron DeSantis

by philg

“Hey Florida, your energy bills to rise if regulators approve this plan” (Tampa Bay Times, November 2019):

Both decisions could collectively cost customers more than $3 billion in the next three years and are being closely watched… The first issue regulators will decide is a rule that implements a law signed by Gov. Ron DeSantis this year that will allow utility companies such as Florida Power & Light, Duke Energy and Tampa Electric to charge customers so they can bury power lines in order to reduce storm-related outages in the future.

I wonder if the folks who opposed the Tallahassee Tyrant’s spending initiative on electric grid hardening and undergrounding are still opposed!

Separately, do we have a final verdict on the restoration of public services in Florida by Team DeSantis? Aside from repairs to and/or replacement of individual structures, what’s left to be done?

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How does a fake police scam in Paris work?

by philg

We walked to the Eiffel Tower yesterday evening.

At the edge of the park surrounding the Tower, a scene was playing out. A Black man was on the ground, in George Floyd position, while two white guys were handcuffing and generally abusing him. He was pleading for mercy in French. From what I could infer, the noble Black man had been apprehended by these two white cops in the act of attempting to steal a mobile phone from a tourist who looked to be in her 60s. A moment of reflection sufficed to realize that the cops and robber had to be confederates. Since when have the French police actually arrested a pickpocket, much less thrown him/her/zir/them to the ground? The white guys were not in uniform. A younger American man began to shout (in English, of course!) his demand that they show their badges. I’m not sure if he was a confederate or a victim. We edged away, but I don’t think that any badges were shown.

The question for today… how were the three actors planning to profit from this sidewalk theater?

(London seems to be a lot more orderly as well as less plagued by trash on the sidewalks!)

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Ode to turbojet capability

by philg

Airliners and Hurricane Ian at 6 pm on Wednesday, September 28. Note Spirit (NKS517) at about 32,700′ (^32700) above the ground flying straight over the hurricane itself:

How ugly did it get on the ground? Here’s the worst-looking METAR that I found from the big airport in Fort Myers:

KRSW 281935Z AUTO 18060G87KT 3/4SM +RA BR 25/24 A2888 RMK AO2 PK WND 18087/1929

Wind from the south (180) at 60 knots, gusting 87 knots. Visibility was three-quarters of a statute mile in heavy rain and mist.

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Feel better about your next colonoscopy: you’ll die in a state of grace

by philg

Let’s see how the War on Cancer that Richard Nixon started is going… “In gold-standard trial, invitation to colonoscopy reduced cancer incidence but not death” (STAT):

For decades, gastroenterologists put colonoscopies on a pedestal. If everyone would get the screening just once a decade, clinicians believed it could practically make colorectal cancer “extinct,” said Michael Bretthauer, a gastroenterologist and researcher in Norway. But new results from a clinical trial that he led throw confidence in colonoscopy’s dominance into doubt.

The trial’s primary analysis found that colonoscopy only cut colon cancer risk by roughly a fifth, far below past estimates of the test’s efficacy, and didn’t provide any significant reduction in colon cancer mortality. Gastroenterologists, including Bretthauer, reacted to the trial’s results with a mixture of shock, disappointment, and even some mild disbelief.

… So Bretthauer, of the University of Oslo and Oslo University Hospital, and several colleagues started one a decade ago, recruiting more than 80,000 people aged 55 to 64 in Poland, Norway, and Sweden to test if colonoscopy was truly as good as they all believed. Roughly 28,000 of the participants were randomly selected to receive an invitation to get a colonoscopy, and the rest went about their usual care, which did not include regular colonoscopy screening.

The researchers then kept track of colonoscopies, colon cancer diagnoses, colon cancer deaths, and deaths from any cause. After 10 years, the researchers found that the participants who were invited to colonoscopy had an 18% reduction in colon cancer risk but were no less likely to die from colon cancer than those who were never invited to screening.

Five colonoscopies will cost our society (private insurance or Medicaid/Medicare) about the same as 5 cruise vacations. Is it still worth getting 5 colonoscopies before finally dying (maybe of colon cancer)? Wouldn’t we be better off if we invested these resources in something enjoyable? “Pfizer CEO Albert Bourla tests positive for Covid-19 again” (CNN) can inspire us. His reported COVID-19 symptoms were exactly what same-age rednecks who never got any shots or pills reported. However, unlike the rednecks, he followed the Science and, pumped full of multiple “vaccine” shots and an experimental pill, went through COVID-19 in a state of grace.

Now colon cancer screening can go through the same statistical mill as breast cancer screening via annual mammograms. Here in the U.S. we convinced ourselves that annual X-rays were helpful. Then we realized that the improved 5-year survival rates for breast cancer were primarily due to treating “patients with breasts” (formerly known as “women”) for cancer when they didn’t have cancer. Since these victims of overdiagnosis never had cancer to begin with, they were unlikely to have died of cancer 5 years later. “Benefits and Risks of Mammography Screening in Women Ages 40 to 49 Years” is a 2022 article explaining the settled Science:

The American College of Obstetricians and Gynecologists (ACOG), American College of Radiology (ACR), American Cancer Society (ACS), National Comprehensive Cancer Care Network, and U.S Preventative Services Task Force (USPSTF) all reach different conclusions about when and how often to recommend screening mammography. Each organization places different relative weights on the benefits and risks of screening and uses different standards for evidence.

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Who is going to NBAA in Orlando?

by philg

Who wants to meet at the big business aviation conference (NBAA) in Orlando that runs October 18-22? This is the place to order your Boeing Business Jet. Photo from 2017:

I had some trouble registering this year due to the incomplete list of available pronouns:

I’m excited because Tammie Jo Shults is speaking. Also, for rednecks, Dale Earnhardt Jr. and, finally, for anyone who wants to know where to go after we destroy Earth with CO2… Neil deGrasse Tyson (keynotes).

Related:

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What’s an Indigenous Immigrant?

by philg

I’m back in our AirBnB in Paris where we live like the guys in La Boheme if they had 500 Mbit symmetric fiber Internet. No longer limited to 0.5 GB of mobile data per day at $10 (the Verizon Travel Pass; Google Maps by itself can consume close to this quota), it is time to check the New York Times. “Los Angeles City Council President Steps Down After Racist Comments”:

In a meeting last year, Nury Martinez mocked Indigenous immigrants and the Black child of a fellow council member. She will remain on the council but relinquished her leadership role.

The president of the Los Angeles City Council stepped down from her powerful leadership role on Monday after a leaked audio recording revealed racist and disparaging remarks that she had made about the Black child of a white council member, and about Indigenous immigrants in the city’s Koreatown neighborhood.

“I take responsibility for what I said, and there are no excuses for those comments. I’m so sorry,” Nury Martinez, the council president, said in a statement on Monday announcing that she would resign from the leadership role, but not from the council as some people had demanded. “As a mother, I know better and I am sorry. I am truly ashamed.”

In the profanity-laced recording, a copy of which was obtained by The New York Times and which was first reported by The Los Angeles Times on Sunday, Ms. Martinez, who is Latina, compared the Black child of a white council member to a “changuito,” Spanish for little monkey. She also called Oaxacan immigrants living in Koreatown “short little dark people.”

There is much to ponder here. If this politician were not a mother, she would not “know better”? What is it about motherhood that gave her so much wisdom?

Second, how is it possible for someone to be both indigenous and an immigrant? From M-W:

indigenous: produced, growing, living, or occurring natively or naturally in a particular region or environment

immigrant : a person who comes to a country to take up permanent residence or a plant or animal that becomes established in an area where it was previously unknown

Aren’t these opposite terms and concepts?

Finally, this politician is a racist and therefore cannot serve as leader of the 15-member City Council. At the same time, she is not a racist and therefore can serve as a member of the City Council?

Speaking of Los Angeles, Land of Lockdown in the Sun, here’s an except from In a Dry Season, a book that I read in prep for the UK trip:

[a Brit who returns from living in Los Angeles] smiled and patted his arm. “Thanks. You’re sweet.” She snatched a cigarette from his packet and lit up. “You don’t smoke,” Banks said. “I do now.” Jenny blew out a long plume. “I’ve just about had it up to here with those nico-Nazis out there. You can’t smoke anywhere. And to think California was a real hotbed of protest and innovation in the sixties. It’s like a fucking kindergarten run by fascists now.”

The book was published in 1999.

Speaking of immigrants and the UK, here’s a book that was for sale at the Tate Modern:

What else were they selling?

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San Jose takes a leaf from the Martha’s Vineyard Book of Migrants

by philg

Happy Indigenous Peoples’ Day, everyone! I hope that you’re celebrating with a new land acknowledgment.

Any time that we think about Native Americans we can also think about immigration, a process that certainly did not in any way replace Native Americans on what is today U.S. territory.

We are informed that low-skill migration into an advanced economy makes all native-born residents richer. At the same time, we are informed by low-skill migration into an advanced economy with ever-higher rents can lead to homelessness. See “From violence to homelessness: Colombian migrants’ journey to Silicon Valley” (San Jose Spotlight), for example.

Arias and Castillo, with an 8-year-old daughter and 1 1/2 -year-old son, had no option but to flee their homeland.

Arias and Castillo said they were sent to San Jose by ICE, which funded the trip. Others were led here by dishonest “guides” who claimed there would be resources for them, according to county officials.

It is “dishonest” to say that Californians who have “migrants welcome” signs on their lawns will actually welcome migrants?

With a language barrier and no idea where to find shelter or food, the family became homeless and ended up in Roosevelt Park in San Jose.

The county said many families arrive under a false impression that designated resources and housing are available. County officials have been working with the Colombian consulate on an education campaign.

“For folks who do not have status, there are limitations on what they’re eligible for—in housing or otherwise,” she said. “They should expect long waitlist on just about everything.”

Maybe a city packed with folks who say that they welcome migrants and want to help the unhoused can build some housing for those migrants and the unhoused? “San Jose: City workers urge council to scrap controversial tiny home site for homeless residents” (Mercury News, 9/19):

Following a backlash from neighbors, city workers are recommending that San Jose back down from a proposal to build tiny homes for homeless residents on a controversial piece of land across the street from an elementary school — the latest indication of the daunting difficulties in combating homelessness.

As part of its goal to build more much-needed shelter for the city’s growing homeless population, the San Jose City Council voted this summer to move forward with tiny homes on Noble Avenue near the Penitencia Creek Trail that winds between the Dr. Robert Gross Ponds. But the city employees tasked with vetting the project now want councilmembers to reconsider. Citing “additional associated challenges” with the Noble Avenue site, Deputy City Manager Omar Passons said the location is not feasible.

… Passons’ findings are likely to elicit applause from neighbors who objected to the plan.

San Jose, which has more than 6,700 homeless residents, is leaning heavily on tiny homes as a strategy to mitigate its worsening homelessness crisis.

Nearly 3,500 people have signed a Change.org petition titled “Say NO to the homeless tiny homes on Noble Ave,” citing the need to preserve the “safety and peace of our children.” The site is across the street from Noble Elementary School.

Think of the children!

Speaking of Martha’s Vineyard, here are some members of the Vineyard Poverty Relief Committee walking over the Thames (from last week’s trip to London):

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Practical tips for incels from the Gisele Bündchen-Tom Brady household

by philg

Happy National Work and Family Month. Nobody is more accomplished at working and having a family than Tom Brady, right? Let’s consider “Why Gisele Bündchen is right to ‘quiet quit’ her marriage to Tom Brady” (Journal of Venator Bidenus):

Gisele Bündchen, wife of legendary quarterback Tom Brady, is said to be fuming that he is still playing football after retiring at the end of last season — and then “unretiring” six weeks later.

The supermodel hinted at her disappointment to Elle magazine, saying “I’ve done my part, which is [to] be there for [Tom]. I focused on creating a cocoon and a loving environment for my children to grow up in and to be there supporting him and his dreams.”

But now her support seems to have dried up, with Gisele taking solo trips to Costa Rica and, most recently, New York, while skipping Brady’s first game of his third season with the Tampa Bay Buccaneers.

In short, the Brazilian stunner has been “quiet quitting” her marriage — and many of us wives and mothers of a certain age can relate. At some point, the job of running a household, raising kids and supporting a husband’s career while keeping the romance alive can feel like a burden. Especially during the pandemic. Who among us can honestly say they haven’t fantasized about taking a break and finally putting ourselves first?

And while Gisele certainly has more help than most of us managing the household, that doesn’t make it any easier, one expert said.

“Invisible labor isn’t necessarily the physical things that need to get done,” said Gemma Hartley, author of “Fed Up: Emotional Labor, Women and the Way Forward.”

“It’s noticing, planning and delegating. If you’re not the one that’s doing the work yourself, it’s overseeing it and making sure it gets done. Women see it as their responsibility, so even when we do delegate this work, it still seems to stay on our plates.”

That might mean she just needs an extended vacation. But it could also spell divorce.

Many professional working mothers with husbands unwilling to take on the demands of the household “have a tough choice,” writes author Lara Bazelon in her book, “Ambitious Like a Mother.” “Radically compromise who they are and what they want to stay in the marriage, or leave.”

A 2015 study by the American Sociological Association found that women initiate 69% of divorces, and among college-educated women, it’s 90%.

Instead of following his joy, perhaps it’s time Tom started giving his wife the support she needs — before it’s too late.

There is much to love in the above. My favorite is the idea of “invisible labor”. I am going to use that one to explain what do to keep our own tract mansion going.

For incels, the good news is that a loving female partner can be obtained and maintained. All that the incel needs to do is be (1) in possession of more charisma than Tom Brady, (2) more successful financially than Tom Brady, (3) in better physical condition than Tom Brady, and (4) more successful in his career than Tom Brady.

Separately, who has been to a Tampa Bay home game? I want to take the kids to see this potentially-soon-to-be-discarded-by-the-wife hero during his final season. What are some logistics suggestions for Raymond James Stadium? (One plan: see the giant flamingo sculpture at the Tampa main airport, which does not require going through security.)

Related:

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