Battleswarm Blog Respects Paul Krugman as Much as I Do

In other words, not at all.

Paul Krugman Is Always Wrong: Inflation Edition « Lawrence Person's BattleSwarm Blog

If you’ve been reading this blog long enough, one recurring theme is that Nobel-prize winning leftwing economist and pundit Paul Krugman is always wrong. Back in the day, Larry Kudlow made a career pointing out Krugman’s errors, and you may remember such Krugman howlers as “the Internet is no more important than a fax machine” and “markets will never recover from Trump.”

Lately he’s been in the news for dismissing the idea that inflation is a problem.

Paul Krugman, May 7: “[Treasury secretary] Janet Yellen and I believe that the Fed can contain any inflationary risks.”

Paul Krugman, June 21: “For those paying closer attention to the flow of new information, inflation panic is, you know, so last week.”

Paul Krugman, July 23: “Overheating is still possible, and the Fed should keep its eye on that possibility. But the big numbers aren’t as scary as they seem.”

Paul Krugman, August 12: “Anxiety about the inflationary impact of public investment just doesn’t make sense if you work through the numbers.”

Paul Krugman, September 10: “Companies aren’t acting as if they expect lots of future inflation, where they can hike wages without losing competitive advantage. They’re acting, instead, as if they see current inflation as a blip.”

Paul Krugman, November 11: “So yes, that was an ugly inflation report, and we hope that future reports will look better. But people making knee-jerk comparisons with the 1970s and screaming about stagflation are looking at the wrong history. When you look at the right history, it tells you not to panic.”

The New York Times, this morning:

Inflation jumped to the highest level in nearly 40 years, fresh data released on Friday showed, as supply chain disruptions, rapid consumer demand and rising housing costs combined to fuel the strongest inflationary burst in a generation (emphasis added).

I am always amazed that anyone listens to Krugman. If I’m in an internet discussion and someone quotes him, I just tell the person to stop right there. There’s no point in continuing an argument if Krugman is your source, because I havef no respect for him at all.

Look, this is just complete idiocy:

Proving that some of the most basic facts of economic life for ordinary people elude some Nobel-prize winning economists, Krugman dismisses the idea that inflation hurts the poor worse than the rich.

Aside from priorities, is this even true? Is there any good reason to believe that inflation hits low-income households especially hard? 1/ https://t.co/72hxWaL5zW

— Paul Krugman (@paulkrugman) December 11, 2021

Read the whole thing.

Prediction: They Won’t Keep Pace

And many companies don’t do COLAs. Mine doesn’t. I’ll be fortunate to get my 3% raise this year, which means I’ll lose ground with respect to inflation.

Major Companies Raise Wages To Keep Up With Inflation | The Daily Wire

As high inflation continues to grip the United States, major corporations intend to raise wages.

Roughly 39% of respondents in a forthcoming Conference Board report said that rising price levels are a motivating factor for the wage hikes. However, higher pay does not necessarily correspond to higher living standards — since President Biden took office, Americans’ inflation-adjusted wages have been declining.

Actually, new employees will get the benefits. The job market will demand it. Existing employees will suffer, which will increase turnover. So, that will be fun.

Speaking of fun:

As high inflation continues to grip the United States, major corporations intend to raise wages.

Roughly 39% of respondents in a forthcoming Conference Board report said that rising price levels are a motivating factor for the wage hikes. However, higher pay does not necessarily correspond to higher living standards — since President Biden took office, Americans’ inflation-adjusted wages have been declining.

Inflationary Death Spiral. Can I have that with extra sprinkles, please?

I Wish My Food Bills Were ”Greatly Exaggerated”

Democrat Rep. Susan Wild claims economic woes are ‘greatly exaggerated’ | One America News Network (oann.com)

In a recent appearance on MSNBC, Susan Wild elaborated on a letter she co-authored with other vulnerable Democrats, expressing concern over inflation and the supply chain. She said that while it is important to keep economics at the forefront of people’s minds, jobs are being filled and the economy is doing very well.

“I want to make sure that we keep economic issues at the top of the priority list for our leadership,” stated the Democrat. “But at the same time, I think that the rumors of this economic demise are greatly exaggerated. I think we’re in really good shape headed into 2022.”

All politicians spin. Politicians in power spin even more.

But there’s spin, and there’s denial of reality.

This fits clearly in the latter category.

Oh Great, Now They’re Admitting It

This can’t be good.

Janet Yellen Admits Inflation Shouldn’t Be Labeled ‘Transitory’ | The Daily Wire

“I am ready to retire the word transitory,” Yellen said at an event sponsored by Reuters, as recorded by The New York Times. “I can agree that that hasn’t been an apt description of what we are dealing with.”

“What we don’t want to have develop is a wage-price spiral, in which inflation becomes its own self-reinforcing kind of phenomenon that would become chronic in the U.S. economy — something endemic,” Yellen added while endorsing the Federal Reserve’s decision to taper its aggressive monetary stimulus.

Yes, the inflation death spiral. I’ve spoken of it before. That doesn’t concern me nearly as much as the scary word in her last sentence.

Endemic.

We’ve gone from “transitory”, to “not transitory” and worrying about “endemic” in about 30 seconds.

Treasury Secretaries pick their words more carefully than probably any other Cabinet post. They know that the stock market parses every single thing they say. The stock market is going to react very negatively if she starts using the word “endemic” more frequently.

CNN Runs Propaganda Piece on Inflation

CNN Story Says ‘Inflation Can Actually Be Good For Everyday Americans.’ Here’s What CNN Published Two Weeks Ago. | The Daily Wire

CNN is running some serious spin here for the Democrats. Try to imagine them saying the same thing if the Republicans were in charge.

CNN posted an article on its website Wednesday titled “Why inflation can actually be good for everyday Americans and bad for rich people” by CNN senior editor and business writer Allison Morrow. “[O]n the whole,” she writes, “many working-class Americans” will benefit from rising prices caused by the devaluing of the U.S. dollar, “especially those with fixed-rate debt like a 30-year mortgage.”

There’s a lot of nonsense in the piece about wages catching up to inflation, and being able to benefit if you have a fixed rate mortgage, etc. The problem is that there’s a long lag between wages catching up, and sure being able to benefit on the mortgage is nice, but doesn’t help me buy groceries.

Also, it’s stupid to say that this helps the lower or middle classes more, because it’s the affluent who are most likely to benefit from mortgage wins.

Here’s what’s been said about inflation n the past, including by CNN:

Traditionally, economists have called inflation “the cruelest tax,” because it hurts the poor, minorities, and people on a fixed income the worst. CNN has reported this fundamental economic principle numerous times, as recently as two weeks ago.

• On November 17, CNN published an article titled “The Americans who are getting the worst of the surge in inflation.” which stated that inflation-drive price hikes “disproportionately harm low-income, [b]lack and brown families. If left unaddressed, escalating food costs will not only make it difficult for these families to put holiday meals on the table; such costs will significantly exacerbate longstanding inequities in hunger and nutrition”;
• In July, a CNN headline stated, “Inflation will hurt low-income Americans for years to come.” Its author, Dana Peterson, wrote that “lower-income families and retirees on fixed incomes will especially feel their buying power erode — not just in the short-term, but for many years to come, further widening the nation’s wealth gap”; and
• In a May article on CNN.com titled “Everything is getting more expensive. That’s especially bad news for low-income Americans,” Anneken Tappe and Nathaniel Meyersohn wrote, “The inflation spike … has been harder for those at the bottom of the income ladder.”

This was all before they realized how much inflation is hurting the Democrats. CNN can’t have that. Have to run protection for the party of choice.

Why people hate the news media.

The Economy Is Going Great, Really!

November Jobs Report Falls Significantly Short Of Expectations In ‘A Huge Miss’ For U.S. Economy | The Daily Wire

The November jobs report that came out on Friday showed poor numbers for the U.S. economy, with growth in new jobs not even reaching 50% of what financial experts had predicted.

Making the news worse, the disastrous jobs numbers arrived before the U.S. government and the mainstream media triggered a panic over the new Omicron variant of the novel coronavirus.

“Nonfarm payrolls increased by just 210,000 for the month,” CNBC reported, noting that the “Dow Jones estimate was for 573,000 new jobs.”

Spectacular.

The unemployment rate also fell slightly to 4.2%. The retail sector lost 20,000 jobs last month while transportation and warehousing added 50,000 jobs and professional and business services added 90,000.

The latest job numbers are another issue that the Biden administration has to contend with as polling has shown that the overwhelming majority of Americans are worried about skyrocketing inflation. Some experts have recently warned that Biden’s Build Back Better agenda could further exacerbate inflation problems.

Federal Reserve Chairman Jerome Powell said this week that he expects high inflation to continue well into 2022 and that the U.S. government should stop trying to portray the situation as “transitory.”

And the hits just keep on comin’.

I just can’t wait for more and more inflation and higher unemployment. Oh, and more travel restrictions. All of that will make my job in a travel insurance company sooooo much easier.

And the Other Half Are Lying

Half of U.S. Households Say Inflation is Causing Them Hardship – PJ Media

According to a new Gallup poll published on Thursday, 45% of households in the United States say that inflation is causing them financial hardship. Ten percent have reported experiencing “severe hardship” as a result of the rise in prices.

Those in the lowest income brackets are hit the hardest.

No, that last can’t be true. Team Biden told me that it’s an upper class problem only.

Among those living in households making less than $40,000 a year, 71 percent said the recent price hikes have caused their family financial hardship, compared with just 47 percent of those in middle-income households and 29 percent in upper-income households.

Gallup defined an upper-income household as those bringing in more than $100,000 per year.

Among lower-income households, 28 percent described the hardship they’re experiencing as “severe and affecting their ability to maintain their current standard of living,” Gallup said.

Inflation appears to be a non-partisan plague with little difference in opinion about it across party lines. A YouGov poll found that 8% of Democrats said they’re experiencing “severe hardship” as a result of inflation, compared with 11% among both Republicans and independents.

This doesn’t agree at all with what Team Biden is saying.

Odd, that.

Inflation Is Already Hitting Businesses Hard, so Let’s Kick Them While They’re Down

Top CEOs Wary Of Biden Tax Hikes, New Coronavirus Variants | The Daily Wire

“We urge Congress to reject harmful tax increases like those included in the House-passed Build Back Better Act, which would be a shift in the wrong direction for our economy, American businesses and workers,” said Bolten, who also lauded the Infrastructure Investment and Jobs Act as “an important investment in the long-term health of the economy.”

“This quarter’s survey reflects the encouraging signs we’re seeing with the economic rebound as consumers begin to resume travel and spending,” added Business Roundtable Chairman Doug McMillon, who serves as CEO of Walmart. “Continued progress in defeating the pandemic, including new variants, will be necessary to sustain strong growth into the second half of 2022.”

Inflation is causing business costs to skyrocket, not just in terms of goods and services needed, but also many businesses are being forced to pay their employees more. This means that they must also raise their prices or be forced to suffer losses. Increasing their tax burdens will only make things worse.

My Forecast Is Simple: Inflation Remains High

In Remarks To Congress, Powell Says Omicron Complicates Inflation Forecasts | The Daily Wire

Powell, acknowledging that the inflation rate is running “well above” the Fed’s 2% long-run target, told members of the Senate Banking Committee:

Most forecasters, including at the Fed, continue to expect that inflation will move down significantly over the next year as supply and demand imbalances abate. It is difficult to predict the persistence and effects of supply constraints, but it now appears that factors pushing inflation upward will linger well into next year. In addition, with the rapid improvement in the labor market, slack is diminishing, and wages are rising at a brisk pace.

We understand that high inflation imposes significant burdens, especially on those less able to meet the higher costs of essentials like food, housing, and transportation. We are committed to our price-stability goal. We will use our tools both to support the economy and a strong labor market and to prevent higher inflation from becoming entrenched.

The recent rise in COVID-19 cases and the emergence of the Omicron variant pose downside risks to employment and economic activity and increased uncertainty for inflation. Greater concerns about the virus could reduce people’s willingness to work in person, which would slow progress in the labor market and intensify supply-chain disruptions.

You want less uncertainty? Stop panicking with each new variant. Open up the country. Open up the economy. Stop putting blockers like vax mandates in front of the economy. Stop closing pipelines. Stop making it harder for businesses to succeed. Then the uncertainty will go away along with inflation and unemployment.

Moron.

Each Time It Gets More Stupid

Biden Could Release More Oil From Strategic Reserves, Even Though First Release Didn’t Move Gas Prices | The Daily Wire

The 50 million barrels released so far amount to 1/12th the total supply. If we release much more, we go from stupid to dangerous.

President Biden may release more oil from the United States Strategic Petroleum Reserve — even though a similar move from the administration had a negligible effect on gas prices.

Amos Hochstein — the White House’s Senior Advisor for Energy Security — told CNBC’s Hadley Gamble that releasing oil from the reserve “is a tool that was available to us and will be available again.”

“Remember, this was not a 50-million-barrel release, 30 million barrels were an exchange where companies and traders can take the oil now and return it over a scheduled period of time. That means the Strategic Petroleum Reserve will be replenished,” Hochstein explained. “And therefore, we have more flexibility to be able to do this again in the future if the need arises. I think we wanted to do something that was impactful for the market and that also had the ability and the flexibility to allow us to do that again should the need arise for the American economy.”

The problem is that there isn’t much of a timetable for the replenishment. And you can guarantee that traders won’t be replenishing it until the price comes down. They want to make a profit here.

Of course, there are things that Biden could to to actually lower the price of oil and gas…

“Stay” Might Be an Exaggeration, but neither Are Going Away Soon

Economist: Biden’s supply chain crisis, inflation here to stay | One America News Network (oann.com)

Economist Mohamed El-Erian says Biden's inflation will go on well into next year pic.twitter.com/pOFHlfFk0g

— RNC Research (@RNCResearch) November 28, 2021

We used to talk about the “inflationary death spiral”, which demonstrates how hard it is to get inflation under control once it’s taken hold. It goes like this:

1. Costs for many common goods and services go up
2. People can no longer afford these common goods and services
3. They demand higher pay from their employers or seek new jobs with higher pay
4. Whether these people go or stay, the employer has to pay more, because the replacements will demand more pay. Or at best, the same pay for less experience. Which means the productivity vs cost ratio goes down
5. Employers must raise the cost of their own goods and services to compensate.
6. Consumers of those good services are now at Step 2 in this process. And it just gets worse and worse

The supply chain issues are similar. Hold ups on a few common goods cause downstream impacts everywhere, and ends up holding up many more goods and services, and it spirals along the same lines as inflation. Eventually things stabilize and then start to improve, but you have to get to that stable point first. We’re not there on either of these issues.

Welcome to Biden’s America.

#IToldYouSo

I’m Sure Joe Can Get Us to #1

U.S. inflation is one of the highest in the world | Fortune

With a 6.2% annual inflation rate in October, the U.S. is now seeing prices increase at the highest rate in more than 30 years.

According to a study by Pew Research Center, in the third quarter of 2021, the country had the eighth-highest annual inflation rate among 46 countries that were examined. The U.S. also had the third-highest increase in inflation, 3.58 percentage points, between the third quarter of 2019 and the same period this year. It trailed only Brazil and Turkey, both of which have less-developed economies that generally struggle with higher inflation rates more than the U.S.

Americans, especially the poor, have struggled with the effects of inflation as food prices have increased across the board in the run-up to Thanksgiving. Food prices globally are reaching their highest rates in decades, according to the United Nations Food and Agricultural Association.

But don’t worry. It’s a problem for the rich. And if you have an electric car, you don’t care about gas prices.

And Yet, They Can’t Figure Out Why Energy Prices Are So High

Biden Admin Recommends Tighter Constraints On New Oil And Gas Drilling Amid Energy Crisis | The Daily Wire

The report recommends that the federal government increase royalty rates for oil and gas drilling above the current rate of 12.5%, which is significantly less than many states and private landowners charge drilling companies to lease on their land. If implemented, the rate hike would be the first in 100 years, according to The Associated Press. The report also recommends an increase in the bond payments that oil and gas producers pay in advance for future cleanup operations from drilling new oil wells. Those rates have also not been raised in decades, according to the AP.

Brilliant.

Maybe we can close some pipelines again, too.

Well, They Have to Blame Somebody

And they cant blame Republicans. They have no power. They surely aren’t going to blame themselves. That leaves…

Democrats Start Blaming Biden For High Gas Prices, Slam His ‘Policy Band-Aid’ Of Releasing Oil Reserves | The Daily Wire

Democrat lawmakers are starting to blame Democrat President Joe Biden for high gas prices across the country that are threatening the party’s majorities in both chambers of Congress in the upcoming midterm elections.

“There is a variety of contributing impacts, but certainly I think the buck stops with the president,” Rep. Abigail Spanberger (D-VA) said in an interview this week. “And I’m proud to be among those legislators on Capitol Hill that continue to ring the alarm bells about how serious this is.”

Well, she’s right. It is precisely President Joe Biden’s (D-USA) actions that have led to the high price of oil and gas. And he could undo most of them with the stroke of a pen.

I Think I’ll Be Staying Home a Lot

Top investor says prepare for $100+ oil price, $5+ gas this winter | One America News Network (oann.com)

But it’s this kind of childish thinking that will compromise US National Security and harm the poor and underserved. A coordinated SPR release is a quick shot of morphine for a major infection. It fixes nothing and is evidence of a panic in DC. Prepare for $100 now..#GasPrice

— Kyle Bass (@Jkylebass) November 23, 2021

He actually thinks it could go higher than that. Yippee.

Thanks, Joe!

General Mills To Raise Prices On Yogurt, Cereal, Other Foods Due To Inflation | The Daily Wire

General Mills (GIS) notified retail customers that it’s raising prices in mid-January on hundreds of items across dozens of brands. They include Annie’s, Progresso, Yoplait, Fruit Roll-Ups, Betty Crocker, Pillsbury, Cheerios, Cinnamon Toast Crunch, Lucky Charm’s, Wheaties, Reese’s Puffs, Trix and more, according to letters General Mills sent to at least one major regional wholesale supplier last week.

For some items, prices will go up by around 20% beginning next year.

The wholesaler shared General Mills’ letters with CNN Business on the condition of anonymity to protect the company’s relationship with its suppliers. A leader at the company said it plans to push along all of the increases to its grocery and convenience store customers. He expects they will then pass them down to shoppers.

Along with General Mills, Tyson Foods — the second-largest meat and poultry producer in the United States — is raising prices to deal with the “accelerating and unprecedented inflation” threatening all of its business units.

Wonderful. But according to Team Biden, this is only a problem for the rich. I don’t know about you, but I doubt that I’m getting a 20% raise next year.

You voted for this. I warned you, but you voted for it anyway.

This Is Gaslighting, Pure and Simple

Elizabeth Warren Just Blamed High Gas Prices on Corporate Greed. Here’s Why That Doesn’t Make Any Sense - Foundation for Economic Education (fee.org)

Prices at the pump have gone up. Why? Because giant oil companies like @Chevron and @ExxonMobil enjoy doubling their profits. This isn't about inflation. This is about price gouging for these guys & we need to call them out. pic.twitter.com/kxiQkC2tYa

— Elizabeth Warren (@SenWarren) November 20, 2021

Who ya gonna believe? Senator Elizabeth Warren (D-MA), or your own lyin’ eyes?

Who shut down the Keystone XL Pipeline? Was it the gas companies or President Joe Biden (D-USA)?

Who canceled federal leases for driling? Was it the gas companies or President Joe Biden?

Who enacted policies leading to inflation all across the board? Was it the gas companies or President Joe Biden?

So, who’s to blame for high energy prices? Gas companies? Or President Joe Biden?

You can’t fool me, Senator. I trust my own lyin’ eyes.

Only an Idiot Would Do This, but We Have an Idiot for President, So...

Gas prices relief? Biden releases 50M strategic oil reserve barrels (usatoday.com)

The SPR is not for price manipulation. It’s so that the country, and particularly the armed forces, can have oil available in the event of a national emergency. High gas prices are annoying as heck, but they do not constitute a national emergency. The President has far too much latitude on this.

And it’s a drop in the bucket, literally. We use that much oil in about 2.5 days.

Great. So what’s he going to do next week?

President Joe Biden is releasing 50 million barrels of oil from the nation's emergency stockpile to lower energy costs amid a spike in gas prices and soaring inflation, the White House announced Tuesday.

Thirty-two million barrels will be released from the Strategic Petroleum Reserve over the next several months and will be replaced in the years ahead. An additional 18 million barrels that Congress authorized for sale will be released in the coming months.

"American consumers are feeling the impact of elevated gas prices at the pump and in their home heating bills, and American businesses are, too, because oil supply has not kept up with demand as the global economy emerges from the pandemic," the White House said in a statement. "That’s why President Biden is using every tool available to him to work to lower prices and address the lack of supply."

After months of diplomatic negotiations, the United States will release the oil in parallel with other major energy-consuming countries, including China, India, Japan, South Korea and the United Kingdom.

You shut down pipelines. You shut down drilling. Then you open up the SPR. Well, champ, you wouldn’t have had to open up the SPR, if you’d not done the other things. And they’d be a much better long term solution. Faced with that, instead of fixing what you did wrong, you did another stupid thing.

My President is an idiot.

#IToldYouSo

More Inflation Coming

UN Report: Supply Chain Crisis May Drive Import Cost Of Computers, Apparel, Furniture Up More Than 10% | The Daily Wire

Hooray. That’s just terrific news!

In a recent report, the United Nations Conference on Trade and Development said that high consumer demand and a variety of supply-side constraints — including “container ship carrying capacity, container shortages, labour shortages, continued on and off COVID-19 restrictions across port regions and congestion at ports” — could lead to price hikes through 2023.

According to a summary of the analysis:

Manufacturers in the United States rely mainly on industrial supplies from China and other East Asian economies, so continued cost pressures, disruption and delays in containerized shipping will hinder production, according to the report. A 10% increase in container freight rates, together with supply chain disruptions, is expected to decrease industrial production in the United States and the euro area by more than 1%, while in China production is expected to decrease by 0.2%.

I can’t wait.

I’m sure Team Biden will got on addressing this right away. Right after they address gender equity in bathrooms.

That’s Because Many Blue States Have Done Everything Possible to Stifle Economic Recovery

As Fed Contemplates a Move, Democratic States Lag Furthest in Jobs Recovery (freebeacon.com)

Data released on Friday show that through October employment in states with Republican governors was close to 99 percent of what it was in February of 2020, while Democratic-led states lagged, at roughly 96 percent.

While state-level estimates can be volatile, particularly month to month, the apparently larger remaining job shortfall in Democratic-leaning areas echoes the choices—and political divisions—that emerged early in the pandemic. States in the Northeast and mid-Atlantic tended to impose stricter measures against the coronavirus and keep them in place longer, than Republican-led states in the South and West.

Employment fell more sharply in those areas, and the gap has remained even late in the recovery.

Neither 99% nor 96% is that great. Population is growing all the time. A full recovery would have > 100% just about everywhere by now.

Until recently it seemed the Fed was intent on keeping monetary policy loose and borrowing costs easy for as long as it took to claw those jobs back.

That aim may now be in conflict with the Fed‘s other goal of stable prices, challenged by a run of inflation that is prompting central bank policymakers to discuss a faster move to tighter policy—which could slow job growth before areas central to Biden's political chances are able to catch up.

That fed policy is one of the key contributors to the rise in inflation. It was always a danger of this loose policy, but other factors kept it in check. These other factors are now gone, and we have contributing factors to increase inflation, such as the global supply chain issues.

The high inflation rate, which has persisted longer than policymakers had anticipated, is damaging Biden's approval ratings and elevating the importance attached to his choice of central bank chief.

It’s amazing that policymakers anticipated it going down sooner. They have done nothing to help lower the rate, and in fact have done things to help increase it.