I wonder if the Democrats are going to lose even some of their elite support in this week’s election (or maybe we should say “last week’s election” because so many people voted early?). Elites own stock and the S&P 500 is down nearly 2% in nominal terms compared to January 20, 2021 (closed at 3,799; compare to 3,771 today). We don’t have official CPI numbers for October yet, but this is down more than 15% if adjusted by official CPI. If we adjust for inflation in the prices of goods and services that elites buy, e.g., houses, cars, travel, etc., the S&P 500 is down 20-25%.
Democrats have been running the White House, the House, and the Senate. Unless they can claim that a reduction in abortion care for pregnant people at reproductive health centers has resulted in the losses suffered by investors, it will be tough to blame those losses on Republicans.
Speaking of early voting, here’s an epic line in Austin, Texas:
Don’t let anyone tell you young people don’t show up to vote.
We are — and we will continue to show up these last five days until Election Day, including on campus at UT Austin! pic.twitter.com/h2AW1JDIRb
The city of Austin and Travis County, which is essentially the same group of people, is overwhelmingly Democrat (72% Biden and 27% Trump in 2020). Every elected official in Travis County seems to be a Democrat (to the point that most run unopposed by any Republican). Democrats say that Republicans are guilty of voter suppression by making it difficult to vote, but how can Republicans be responsible for the long lines and inconvenience in Austin/Travis County?
(This is not to say that Democrats are incompetent everywhere. I early-voted by biking over to the Abacoa “honors” campus of Florida Atlantic University (next to Scripps and Max Planck) and, thanks to the Democrats who run Palm Beach County, was voting within about 2 minutes after parking the bike. Then it was time for a Cuban sandwich at an outdoor table at the nearby cluster of restaurants in our fake downtown (shops, restaurants, bars, mini golf, escape room; no trash, pit bulls, unhoused people, pit bull poop, sidewalk tents, and the rest of the features that make California cities so vibrant and exciting).)
Late-night political thought… If prices are guaranteed to keep spiraling upward due to everything the government spends being indexed (see Can our government generate its own inflation spiral?), might Republicans be better off losing all of the Senate and House races on Tuesday? Even if the Republicans earned majorities in both sides of Congress, Joe Biden would likely veto any legislation that cut spending or removed inflation indexing from spending. So the Republicans have no realistic chance of reducing inflation, any more than the Inflation Reduction Act. If they’re totally out of government, only the Democrats will be blamed for the next two years of inflation and maybe that would help Republicans win the White House as well as Congress in 2024.
If we ignore the government inflation spiral-from-indexing effect, how much pent-up inflation is there? I remarked on the price increase for frozen peas (Peaflation at Publix). On a more recent trip, the supermarket shelves were entirely bare for all brands of frozen peas. The market-clearing price for peas is obviously higher than even the new high-ish prices. Similarly, canned pumpkin was sold out. Our 42-inch-wide built-in fridge is dying. Is a Sub-Zero a ripoff at $14,000? Actually, it is underpriced and should go up further according to Econ 101 because it will take a year (a year!) for them to build and deliver one. The company is giving away fridges right now for way less than the market-clearing price.
Isn’t there a good chance that Americans will become disenchanted with whoever wins in 2022? And some might remember Republicans’ absurd campaign promises. Here’s a medical doctor promising to “fix” inflation, which is as plausible as a Scientologist being significantly helpful at a car accident scene (Tom Cruise video; go about 1 minute in).
Inflation is an economic and health crisis – a doctor can help fix it. As PA's next Senator, I'll keep us safe, cut your taxes, and protect our jobs.
Even if Dr. Oz was in possession of an economic policy that would Whip Inflation Now, Joe Biden would surely veto it. Sprinkling a few Republicans into Congress isn’t going to turn around the policies that got the U.S. into this inflationary mess. Will Republicans truly gain by promising to stop inflation and then not stopping it?
Here are the House Republicans implying that voting for them will somehow stop “the highest inflation in 40 years”:
WATCH 📺@GOPLeader slams the Biden administration and House Democrats for their Far Left agenda that has created the highest inflation in 40 years:
Here’s a promise from the Republican House leader to “lead the way” on inflation:
Democrats: —> Defunded the police and made our cities less safe. —> Spent $9 trillion dollars and increased inflation. —> Cut our energy production, and made you pay more at the pump.
It’s time to chart a better course. Republicans are ready to lead the way.
The big story of the year is the worst inflation in almost 40yrs. It is a tax on Americans. Families have had to spend $3,500 more than they did last year just to tread water. It is directly attributable to Democrats' multi-trillion-dollar inflationary spending earlier this year. pic.twitter.com/NgwT9Q70qB
But Congress has never been able to cut spending (which spirals upward with inflation automatically). And the Republicans won’t support tax increases. So the deficit spending will continue even if Mitch McConnell and fellow Republicans can win a majority.
The biggest economic decision a woman will make in her lifetime is whether to have children. We need to give women the freedom and autonomy to make these critical decisions for themselves. We must protect access to safe, legal abortion.
— Governor Gretchen Whitmer (@GovWhitmer) August 3, 2022
I’m not an expert on reproductive health care, of which we are informed that abortion care is the most critical component, but I had a thought while viewing Love and Birth at the Musée D’Orsay (Georges Lacombe, circa 1895):
Where is the abortion-care-themed art for Democrats who own Hunter Bidens and want to demonstrate their passion for this most important aspect of reproductive health care?
Separately, a Hero of Faucism at the jammed art museum fights an aerosol virus with a humble surgical mask…. worn over a beard:
A masked Follower of Science in front of a sculpture titled “Redneck and Alligator” (well, maybe it is actually a crocodile scene set in Africa):
Here’s an overview of the converted train station:
The ceiling of the museum restaurant:
This prompted our almost-9-year-old to say “Hey look, there’s a peacock. Dad, you need to give me a shotgun and then…. problem solved.” (Readers: If you are having problems with ornamental peafowl on your estate, let me know and we’ll send the youth over to deal with the birds directly.)
Speaking of problems, like most of Paris, the museum is afflicted with gender binarism:
On the other hand, they do give a lot of floor and wall space to Kehinde Wiley:
Here’s part of an email from the Harvard president, sent on Halloween:
When Harvard assembles a class of undergraduates, it matters that they come from different social, economic, geographical, racial, and ethnic backgrounds. It matters that they come to our campus with varied academic interests and skill sets. Research and lived experience teach us that each student’s learning experience is enriched by encountering classmates who grew up in different circumstances.
Harvard is not alone in believing that we are more than our test scores and that our unique perspectives bring a wealth of educational benefits to a high-quality educational enterprise.
See if we can guess an ethnic group that is less than its members’ test scores…
The legal battle we have waged, which reaches its apex today, is as important to other colleges and universities, and to society, as it is to us. Educators and scholars, civil rights organizers, historians, and education advocates stand with us. Leaders in business and technology stand with us. Former military officers and the heads of the nation’s service academies stand with us. Their voices—ringing out in amicus briefs—are part of a chorus that has risen across our campus and throughout our country in defense of forty years of legal precedent, as well as the history of the 14th Amendment.
Today, individuals of great skill will argue in favor of our cause inside the highest court in the land.
Mediocre individuals were apparently scheduled to argue against Harvard’s Great Cause.
We now await the final decision of the court with earnest anticipation. Whatever it is, we will honor the law while also remaining true to our values.
Translation of “remaining true to our values”: “We will find a workaround so that we can continue discriminating against these Asian nerds without running afoul of the law.”
This academic bureaucrat is proud of the work that he has done for decades in sorting student and faculty applicants by skin color. Suppose, however, that the Supreme Court rules that the sort-by-skin-color policy is unconstitutional. By inference, then, Harvard and its bureaucrats have been depriving applicants of their constitutional rights to be judged by factors other than skin color. The big question for today: Will the president of Harvard and lesser bureaucrats offer an apology?
Speaking of unconstitutionality and appeals, what happened to the Biden administration’s appeal of Judge Kathryn Mizelle’s finding that the CDC’s mask order was unconstitutional? Joe Biden never apologized for violating Americans’ constitutional rights, I don’t think. The appeal was filed in April (heritage.org). In the meantime, it looks as though Joe Biden actually could legally order Americans to #MaskUpSaveLives. The courts seem to agree that this can be done via the TSA if not the CDC. “Supreme Court leaves TSA mask requirement ruling in place” (The Hill, Halloween):
The Supreme Court on Monday let stand a ruling that allows the Transportation Security Administration (TSA) to require mask-wearing on planes, trains and other forms of transport.
The U.S. Court of Appeals for the D.C. Circuit found no merit in Corbett’s claim and affirmed the TSA did have the agency to maintain security and safety within the transportation system, including imposing the masking requirement.
Biden has the power to keep us safe and secure! But why didn’t he reimpose the airport-and-airline mask order on November 1 after the Supreme Court failed to intervene? Even if most airline passengers are vaccinated we don’t want people gathering unmasked and breeding a vaccine-resistant superbug that will be deadly to the unvaccinated, as happened with Marek’s disease. Even if Democrats can control the entire United States and force everyone to get accept COVID-19 vaccinated there will still be billions of unvaccinated and/or unboosted folks in poor countries who would be vulnerable to the superbug that we created via our policy of widespread vaccination followed by mass gatherings.
Is Joe Biden following the Science, but waiting until after the election to bring the masks back?
The company has also been in the news after the same legislature passed a law undoing the company’s ability to run its own county, the Reedy Creek Improvement District (WPTV). Democrats in Massachusetts and California have been predicting that this will be disastrous for ordinary taxpayers in Florida, who will be on the hook for the $1 billion that Reedy Creek has borrowed (applying the general principle that people in Florida are too stupid not to understand their own interests).
First, why did Disney want to have its own county?
To pay for the infrastructure throughout the property—such as roads, sewer systems, and water lines—the Reedy Creek Improvement District sold federally subsidized tax-exempt municipal bonds.
Florida did not have a personal income tax at the time (nor does it now). Therefore, allowing Disney to borrow money tax-free did not cost Florida anything. The Federal income tax rates hit 50 percent at $22,000 per year and 70 percent at $100,000 per year, so Disney would have been able to borrow at a substantial savings compared to if the company had to issue conventional taxable corporate bonds (see discussion in the comments about whether a 50 percent tax rate implies that a muni can be sold at half the yield of a same-risk same-duration corporate bond).
How could the arrangement be justified? If it is that easy, why not have the Florida state government give every company a 1-foot-square county-like “district” to administer and then the company can use its district to issue tax-exempt bonds? Disney told the legislature that the planned primary use for the 27,000 acres it had purchased was a town: Experimental Prototype Community of Tomorrow (EPCOT). Walt in 1966:
But the most exciting, by far the most important part of our Florida project—in fact, the heart of everything we’ll be doing in Disney World—will be our experimental prototype city of tomorrow. We call it E.P.C.O.T. spelled E-P-C-O-T: Experimental Prototype Community of Tomorrow. Here it is in larger scale.
No city of today will serve as the guide for the city of tomorrow. E.P.C.O.T. will be a planned environment demonstrating to the world what American communities can accomplish through proper control of planning and design.
E.P.C.O.T. begins with an idea new among cities built since the birth of the automobile. We call it the radial plan. Picture a wheel: like the spokes of a wheel, the city fans out along a series of radials from a bustling hub at the center of E.P.C.O.T. A network of transportation systems radiate from the central hub carrying people to and from the heart of the city. These transportation systems circulate to and through four primary spheres of activity surrounding the central core. First, the area of business and commerce … next, the high-density apartment housing … then the broad greenbelt and recreation lands … and finally the low-density, neighborhood residential streets. E.P.C.O.T.’s dynamic urban center will offer the excitement and variety of activities found only in the metropolitan cities: cultural, social, business, and entertainment.
Among its major features will be a cosmopolitan hotel and convention center towering thirty or more stories. Shopping areas where stores and whole streets recreate the character and adventure of places ‘round the world … theaters for dramatic and musical productions … restaurants and a variety of nightlife attractions. And a wide range of office buildings, some containing services required by E.P.C.O.T.’s residents, but most of them designed especially to suit local and regional needs of major corporations. But most important, this entire fifty acres of city streets and buildings will be completely enclosed. In this climate-controlled environment, shoppers, theatergoers, and people just out for a stroll will enjoy ideal weather conditions, protected day and night from rain, heat and cold, and humidity.
Here the pedestrian will be king, free to walk and browse without fear of motorized vehicles. Only electric powered vehicles will travel above the streets of E.P.C.O.T.’s central city.
One of the ideas was a three-level road system. Trucks on the bottom. Cars in the middle. Pedestrians, bicycles, and electric golf carts on the top. There would be a “greenbelt” around the high-rise offices and apartment buildings. Beyond the greenbelt would be single-family homes. At least 20,000 people, which was a substantial number in a time before mass immigration, would live in E.P.C.O.T.
Since it would be primarily a municipality, in other words, it made sense for Disney to have the right to issue tax-free muni bonds.
An unrelated tidbit of potential interest is that two of the principal managers for getting Disney World ready for visitors were MIT graduates.
General Joe Potter (birth name William Potter, nickname Joe) was an integral part of the early team working on the Florida land acquisition and helped with the legislation to form the RCID.
A graduate of the Massachusetts Institute of Technology with a degree in civil engineering, General Joe was a logistics planner for the invasion of Normandy and commanded the troop section of the Propaganda and Psychological Warfare Division during World War II.
Potter worked behind the scenes, overseeing the construction of the park’s infrastructure, which included underground utilities, a sewer system, and a power grid, along with water treatment plants and land reclamation measures. The other Joe, Rear Admiral Joseph W. Fowler, was at the helm of just about everything else Potter wasn’t handling, including the creation of the theme park itself, the hotels, transportation, and the like. Admiral Fowler had graduated second in his class from the US Naval Academy in 1917. Like General Potter, Fowler was also a graduate of MIT, with a master’s degree in naval architecture.
What was the land worth before Disney showed up? Somewhere between $45 and $150 per acre (950 in 2022 Bidies). By keeping its plans secret, the company paid roughly $200 per acre to buy up 43 square miles of land (2X the size of Manhattan and similar to San Francisco, but without all of the homeless encampments). As soon as word leaked out to the media, “land prices in the area skyrocketed to over $1,000 an acre.” (Disney paid $7,000 an acre in 2019 for 1,600 additional acres of swap.)
The prices on opening day in 1971?
General Admission: adult admission, $3.50; junior admission, ages twelve through seventeen, $2.50; and children three through eleven, $1.00. If you felt the need to bring man’s best friend, your four-legged friend could stay at the Disney kennel for fifty cents a day, which included a lunch. The cost of individual attractions ranged from ten cents to ninety cents. … you could spend the night at the Polynesian Village or the Contemporary for $25.00 to $44.00 a night at either hotel.
The book notes that in 2010, Disney actually did build a handful of houses inside Disney World: Golden Oak. Right now they seem to be selling for about $1,000 per square foot. A few hundred people live there, but presumably anyone with $5-20 million to spend on a house will also have additional houses in which to live.
Circling back to the original topic, Disney was able to cut its costs tremendously at the expense of the average Federal taxpayer. What’s curious is that DeSantis-hating folks in other states who’ve been paying Disney’s tax bills advocate for this arrangement to continue. They’re so against DeSantis that they’re in favor of corporate welfare that actually costs them personally (since if people who buy Disney World (“Reedy Creek”) bonds don’t have to pay tax on the interest, taxes necessary to run the Federal government will have to be extracted from ordinary schlubs) and if you ask them “How much longer do you think Disney should have the right to issue tax-free municipal bonds?” they don’t propose any end date.
(I still can’t figure out how President Biden’s first executive order wasn’t shutting down all U.S. theme parks. Schools were still closed in many big U.S. cities when Biden took office. Why allow daily superspreader operations if it was too dangerous to run schools New York, Boston, Los Angeles, San Francisco, etc.?)
Elon Musk fired a lot of people from Twitter today (CNN). But the advertisers are leaving even faster, now that there is the potential for users to utter misinformation, e.g., that COVID-19 “vaccines” don’t prevent infection and transmission.
Twitter has had a massive drop in revenue, due to activist groups pressuring advertisers, even though nothing has changed with content moderation and we did everything we could to appease the activists.
Extremely messed up! They’re trying to destroy free speech in America.
Appeasement doesn’t work, apparently. Government-funded General Motors and Pfizer, for example, will no longer advertise on a platform that allows people to say things that are contrary to what the Biden administration wants residents of the U.S. to hear.
Let’s look at the overall quality of the product that the pre-rightsizing crew developed. Suppose that we are searching to see if Kanye West has been unpersoned. A search for “kanye west” does not yield Kanye West’s profile:
How about “@kanyewest” as a search string?
What if we type “kanye west twitter profile” into the Google?
There is an account and it exactly matches one of our search strings (“@kanyewest”), but Twitter couldn’t find it! Maybe this is because Google hired everyone competent? Bing also shows the @kanyewest account as the number 1 result. So does Duck Duck Go.
How soon do we think we can start seeing the kind of big improvements in Twitter that a good product manager could drive, e.g., “If you type ‘Kanye West’ it has to return Kanye West’s account as the first result.”
How did Elon Musk and team zero in on the low-productivity workers? You’d think it would take a few months for new management to figure out which programmers on the search team were the good ones.
Also, when do we get a high-quality remake of the following:
Elon Musk can play himself.
Some lines:
Put that kombucha down! Kombucha’s for accepted check-ins only.
The good news is you’re fired. The bad news is that all you’ve got is just one week to regain your jobs. Starting with tonight’s git. .. First prize: a Tesla S. Second prize: a set of pronouns. Third prize is you’re fired.
f*ckin’ f*ggots -> f*ckin MAGAs
ABC = Always Be Censoring
I made $970,000 last year -> I lost more than $100 billion this year.
Update, November 5:
Search within Twitter reminds me of Infoseek in ‘98! That will also get a lot better pronto.
A “yes” supports authorizing the Florida State Legislature to provide an additional homestead property tax exemption on $50,000 of assessed value on property owned by certain public service workers including teachers, law enforcement officers, emergency medical personnel, active duty members of the military and Florida National Guard, and child welfare service employees.
I wonder if this will catch on nationwide as a stealth way to increase the amount of money that flows from those who aren’t part of the government to those who are. Instead of increasing property tax rates and then giving government workers a raise, which would be readily noticed, the scheme gives government workers a boost in spending power by relieving them of paying property taxes (to at least some extent). Note that this only helps government workers who are rich enough to own houses. Landlords who rent to government workers won’t get a property tax reduction so government workers who rent, like our local friend who is a police officer for a city down the coast, won’t get a rent reduction.
This could be expanded so that when government workers purchase items at retail they don’t have to pay sales tax (there is typically already a mechanism for sales tax exemption for resale, non-profit orgs, etc.).
Separately, the local police officer renter is an interesting example of someone who benefits from open borders. Without all of the crime committed in a Haitian immigrant neighborhood, the seaside city where she works wouldn’t have needed or wanted to hire additional police officers.
One of the long-held dreams of people in general aviation is that a car company would come in and fix all of our woes (high costs, low volumes, intensive maintenance requirements, dumb-as-bricks systems). If Honda, for example, could make an airplane that is as comfortable and reliable as a Honda Odyssey minivan, mass-produced at a reasonable price, life would be awesome.
Well, Honda actually did go into the airplane business! And it took them way longer to push the plane out the door than it would have taken Cessna or Embraer. And an operator of the first-generation plane at NBAA 2022 gave the airplane low marks. (I wrote a review of the plane in 2016.) The airplane is fueled from a single point in the tail, which requires a ladder, and can take nearly 30 minutes for a line guy (this desirable job working in the cold or heat is almost always done by those who identify as “men”) to fill. During this time there will be periodic overflows that will cover the line guy in Jet A. When finished, the plane was never able to hold the advertised maximum capacity. “We were always 100 lbs. light.” The lav is externally service, but in a non-standard way that results in some bad outcomes. “Ten percent of the Gen 1 airplanes went off the runway,” noted the operator. “They’ve maybe fixed that in the newer ones by limiting nosewheel travel depending on speed.”
The plane itself did not end up having way better specs or a lower price than the very light jet/light jet competition. Honda announced a variety of Gen 3 features at NBAA. There is an extra fuel tank under the tail, which increases the ability to accept fuel, extends range slightly. A light next to the fuel filler comes on when the massive overflow spray is imminent:
The cockpit is more or less unchanged. It is a clean Garmin G3000, with no overhead panel and a general lack of clutter:
What will be new in the cockpit are autothrottles and a big button for the amazing Garmin Autoland system.
Performance:
How many Bidies for this wonderful device? About $7 million, which sadly means that all of Honda’s manufacturing and engineering expertise aren’t doing anything to bring the price of new aircraft down (it’s cheaper than the Embraer Phenom 300, but not if you adjust for size, seats, range, etc. (and the per-hour operating cost may be similar); it is more expensive than the Embraer Phenom 100 and Cessna M2 jets and provides some additional performance and cabin size).
Related:
“Jet It Pivots Away From HondaJet to Phenom 300” (Flying, 11/23/2022): Jet It’s CEO accused the OEM of poor service and said the company had absorbed more than $20 million in off-fleet expenses since 2020.
Joe Biden’s economic policy seems to follow the same logic as that used by my 88-year-old mom’s circle of friends. These women are generally innumerate, despite having enjoyed elite educations, because they took their last math class in high school and, as stay-at-home wives, could enjoy afternoons at the theater rather than reviewing accounting reports or doing the other tedious stuff with numbers that is required to earn money. They believe that the U.S. has an infinite supply of wealth, partly because Asians are inferior to Americans in creativity and, therefore, cannot truly compete with us. Due to the fact that our wealth is infinite, there shouldn’t be any limit to what the government can spend. Any spending program that might help at least one American, therefore, should be approved.
Joe Biden seems to hold similar beliefs, but what about the professional economists who have been advising him on his Inflationary Journey? Jerome Powell, chair of the Federal Reserve, must be one of the world’s leading experts on macroeconomics, right? Wikipedia says that his/her/zir/their degrees are in “politics” and law. I.e., there was no formal training in economics behind “Fed’s Powell says high inflation temporary, will ‘wane’” (AP, June 2021).
The Chair of Biden’s Council of Economic Advisors is Cecilia Rouse. In May 2021, she characterized inflation as “transitory” and “temporary” (Reuters). Here she is in June 2021 doubling down:
“As supply chains ease, as people get back to work, as we normalize our economy, the price pressures will start to ease,” said Rouse, who’s on leave from her post as a Princeton University economics and education professor.
Rouse called the coronavirus the biggest, ongoing threat to the U.S. economy — one that could upend Americans’ willingness to take jobs, travel and spend money on activities like dining out. It’s still too early to know the ways in which the new variant called omicron could affect the U.S. economy, she said.
(It is not politicians ordering lockdowns and school closures that are threats to the economy, but SARS-CoV-2 itself.)
She’s 58 years old so at least has the potential to not be senile. On the other hand, Cecilia Rouse seems to be a specialist in labor economics, a potentially irrelevant specialty given a country where the long-term trend is people preferring not to work:
Google Scholar shows this top advisor’s papers. A sampling:
“Orchestrating impartiality: The impact of blind auditions on female musicians” (possibly flawed; see also this critique)
“Diversity in the economics profession: A new attack on an old problem”
“Constrained after college: Student loans and early-career occupational choices”
“The Costs and Benefits of an Excellent Education for All of America’s Children” (Science says that the obvious answer is to close schools entirely for 12-18 months, particularly anywhere that Children of Color are to be found)
The Fed has raised its primary credit rate by 3 percent compared to the spring of 2022 (this chart doesn’t show today’s bump):
If the Fed recognized back in the spring of 2022 that low interest rates plus wild deficit spending was a toxic combination, thus leading to the 0.75 percent bump in June with forecast additional bumps, why didn’t it increase the rate to today’s level immediately? If you want to stop inflation, and convince markets that you’re serious about the effort, why keep lending money at an interest rate dramatically lower than the inflation rate?
The obvious answer is “Philip, you’re an idiot who took a few graduate level econ courses; Fed chair Jerome Powell is a brilliant macroeconomist who knows what he/she/ze/they is doing.” The problem with that answer is Wikipedia says that Mx. Powell has no formal training in economics. He/she/ze/they studied politics and then law. While it is still a safe bet that I don’t know anything about economics, it is also possible that Jerome Powell has no better insight into what will happen with inflation.”
I think that there is plenty of room for continued inflation in the U.S. economy. Now that higher mortgage rates make buying a house more expensive, landlords shouldn’t feel dramatic pressure to cut rental rates (though, presumably, they did get a little ahead of the market in the spring). There should still be steady demand driven by immigration and the resulting higher rents will ensure the continued misery of the working class that was forecast back in 2016 by a Harvard economist. After rent, cars are a big expense for Americans. A neighbor shopping for a Honda was told that it would be $6,000 over dealer cost and that he might have to wait a month. Those aren’t better terms that what I learned about in the spring of 2022 when getting an oil change for our beloved Odyssey. Let’s look at appliances. We recently priced a Sub-Zero refrigerator to replace our dying 42″-wide KitchenAid. The Sub-Z is plainly underpriced at $14,000+ (including sales tax and installation) because there is a one-year wait (in 2019 it was a 7-10-day wait). Why not buy another 42″-wide KitchenAid and then wait for that one to die? The cost would be closer to $12,000, but they are also out of stock, which means the correct price is higher.
Maybe the downturn in real estate occasioned by these higher interest rates actually will do enough damage to the economy to stop hyperinflation for 2023. But that leads us right back to the question above: Why didn’t the Fed do a full 3 percent raise back in June and stop hyperinflation perhaps 6 months earlier? (Presumably we’ll still have inflation of at least 2 percent, just not hyperinflation!)
Related:
Can our government generate its own inflation spiral? (since everyone in the government half of the economy gets an inflation-indexed paycheck, folks in the non-government half will need to be nearly ruined before inflation is whipped)
“Why the Federal Reserve has made a historic mistake on inflation” (Economist, April 23, 2022): “America’s Federal Reserve has suffered a hair-raising loss of control. … the worst overheating in a big and rich economy in the 30-year era of inflation-targeting central banks.”
