Tylenol is made from crude oil!

Now that Donald Trump has got the USofA into a fossil fuel war. I figured I ought to know more about oil in our lives. Obviously, the big issue is petroleum in several forms -- gas and diesel fuel for cars and trucks. And also in some areas for heating. But it turns out there is so much more that we do with oil, including with the ubiquitous petroleum-based scourge of modern life: plastics. 

The video here explains how Tylenol is made from a component of crude oil with a lot of help from appropriate bacteria-eating plastic. Really. This is a clear explanation and mind bending fun. Even the fund pitch in the middle is smart and bearable. Enjoy.

There are a huge lot of everyday items that use oil in some way. If the current disruption of the global oil economy goes on, the Donald will have succeeded in screwing up everyone's lives. Seems in character.

Click to enlarge.

The economist Paul Krugman observes our moment:

... now we have the worst of both worlds. The world is now highly dependent upon a complex global supply chain and the erstwhile leader of the free world is erratic. Does anyone know what our Iran policy will be a week from now, or even tomorrow? Moreover, the Iran debacle has revealed us to be far weaker than most people realized – so weak that we are afraid to stop Iran from exporting oil even as we threaten to destroy its civilian infrastructure. The truth is, even our allies no longer trust or respect us.

So what we are facing now isn’t simply a matter of consumers losing the ability to purchase imports. Instead we are facing a scenario in which producers lose access to crucial inputs they need to keep producing. The crisis in the Strait of Hormuz is raising prices at the pump, which is bad. But it is also threatening to deprive American farmers of fertilizer during planting season, to cut off essential helium supplies to semiconductor producers in Asia, to deprive pharmaceutical producers of crucial materials, and more.

In short, terrifying as the Hormuz crisis is, I worry that it may be only the beginning. For a world economy that is riddled with multiple potential choke points can no longer rely on a strong, reliable and trustworthy America to act as a guarantor of the system. While things are bad now, they may very well get a lot worse.

Donald is sure taking a lot of hits

The pundit class consensus today seems to be that "the tide is turning" against the Donald. So opines JVL at the Bulwark and he's no cockeyed optimist. I'll be skeptical til I get around to assessing for myself what a determined observer can see. 

Meanwhile, here's JVL's list of why we just might save some broken version of American democracy. He enumerates a case that efforts to throw sand in the gears of a rising fascism might be having an impact.

• 7 million people came out to protest the regime.

• The administration’s shutdown of the government turned into a political liability for Trump.

• Trump demanded that Senate Republicans get rid of the filibuster; they refused.

• The MAGA right split on the acceptability of Nick Fuentes and his groypers.

• Democrats won more electoral victories and by far larger margins than polling indicated they would.

• A series of Epstein documents suggested a much closer relationship between Trump and the pedophile than was previously assumed.2

• Four House Republicans defied direct pressure from Trump to a enact a discharge petition and override the speaker’s attempt to avoid an Epstein file vote.

• With the petition signed, enough Republicans were going to defect that Trump had to surrender and “authorize” them to vote for the release of the Epstein files.

• The DHS occupation of Chicago failed. The city did not bend to Trump’s will. The state prevented him from deploying an invading force of Texas National Guard troops.

• Indiana Republicans have resisted Trump’s desire for them to redraw their congressional districts.

• His net approval rating is -14.

Unfortunately, we'll have to see -- and must keep pushing to make it happen

Meanwhile, not considered in JVL's catalogue of Trumpian horrors, is a crypto collapse that takes down large parts of the US financial sector. Could happen. I put my money of Paul Krugman's assessment of crypto. 

 

If only this madness didn't also take down the rest of us. We're running a hella test of Adam Smith's proposition that "there's a great deal of ruin in a nation."

Ronald Reagan against crazy tariffs

  

This ad was posted by the Canadian province (that's Canadian for "state") of Ontario. Ontario is Canada's most populous subdivision, the most industrialized, and contains some of the country's most important cities, including Toronto and the national capital, Ottawa. 

Not surprisingly, the Orange Toddler threw a hissy fit seeing the Republican icon's free trade convictions thrown back at him. 

Ottawa took it down but the point was made, especially for Canadians: the current US incumbent is nuts. 

Target's broken promises to Black community spur boycott

When an economic actor is already on the skids, that's the moment to push harder, not to compromise. 

Under intense competition from the likes of Walmart and Amazon online, Target -- the huge mid-American retailer -- has plenty to worry about. Consumers are complaining of messy stores and poorly stocked shelves. 

The number of Americans who say they regularly shop at Target has gone down 19% since 2021, according to GWI, a behavioral attitudinal data provider. The number of Americans who say they do not shop at Target has risen 17%. 

Further, Target is backing out of promises made to the African American community.

... the company had heavily touted a commitment to DEI back in 2020 after protests erupted across the nation over the murder of George Floyd. That year, Target announced it would increase representation of Black staff by 20% over three years and invest $10 million in social justice organizations. In 2021, the company pledged to dedicate more than $2 billion toward Black-owned businesses before the end of 2025.

In January, however, Target said it would conclude the hiring and advancement goals it had set. 

Then the company contributed $1 million to Donald Trump's inauguration fund ...

African American leaders think the retailer owes respect to its customers' community, not to a billionaire President.

Pastor leading Target boycott on its impact and the retailer's response
Target is reeling as sales have stalled and its stock price has plunged. The company faced backlash after a rollback of its DEI initiatives prompted a boycott that slowed store traffic nationwide, one of the factors that pushed CEO Brian Cornell to step down. Now, Target is scrambling to reset its image. Geoff Bennett discussed more with Pastor Jamal Bryant, who spearheaded the Target boycott.

Interviewer Geoff Bennett: ... Why single out Target when this appears to be a broader corporate retreat? 

Pastor Jamal Bryant, senior pastor of New Birth Missionary Baptist Church in Georgia: After the inauguration of Trump, 23 corporations backed away from inclusion and we thought it prudent to just go after one at the time. The African American community spends upwards of 12 million dollars a day at Target. We thought that the one that was the most trafficked should be the focus of our media attention. 

Bennett: ... it's striking that Target hasn't reinstated its DEI program even as it struggles with declining sales, sluggish foot traffic. ...

Pastor Bryant: I think that diversity is in as much danger as democracy is. The president of Target as well as of Amazon and Walmart met with the President [Trump] back in February. I think they have held on to his admonishment more than what the consumers are clamoring to say. 

Bennett: ... [Target] highlights a $2 billion investment in Black-owned businesses, more than doubling the number of Black-owned brands on its shelves, supporting more than 500 entrepreneurs, completing a more than $100 million investment in Black-led community organizations. Why do you see those efforts as insufficient?

Pastor Bryant: ... they produce no receipts. $2 billion but they have not been forthcoming as to what entities are the recipients of it. ... We'd love to put a ribbon on it, but if Black companies or Black banks were the recipients, they would be clamoring to announce it and yet we're in the silence of the lambs. ...

... [Target] is one of the lead employers of African Americans. They are the beneficiaries of African American consumption.

... When George Floyd died, they made the pledge of $2 billion and then it stalemated. It was supposed to be turned over to us on July 31. And we still are not seeing anything. We are reasonable and amenable... but none of those requests have been responded to.

Bennett: What's the end game if Target does not meet your requests?

Pastor Bryant: Then they will continue to hemorrhage. ... with 9.7 percent of foot traffic being slowed down, online sales being slowed down, the stock continuing to plummet ... I think it is time of for the share holders to make their voice clear ...

The Montgomery bus boycott went for a year and a day. This is just our fifth month. ...

Bennet: How do you see yourself leveraging this kind of power on other issues?

Pastor Bryant: ... this is the first real organizing power of Black economic strength in 70 years and a lot of  corporations are waiting to see what will be the outcome ... this generation needs a victory, that our collective works are not in vain ...

This boycott is the real thing -- not just performative hand waving. Like the Tesla Takedown, the boycott takes aim at a corporation which counts on the good reputation of its brand and which is fouling that brand through association with the Trump regime. And it hurts Target. Market researchers report: 

Since last year, the number of regular Target shoppers who identify as Democrat has declined 13%. Inversely, the number of Republican customers has risen 13%. It's not clear if that is due to Target’s $1 million donation to Trump's inauguration or some other factors. 

The boycott is spreading beyond its founding base in Black churches. Over Labor Day, the American Federation of Teachers joined the movement, hoping to cut into Target's Back to School business.  

AFT President Randi Weingarten explained: 

This movement comes at a crucial moment—when American workers find themselves at the whim of billionaires and board rooms that are more invested in money over people. We want this resolution—and the full weight of our nearly 2 million members—to be a reminder to Target that there are consequences to dismissing the will of the American worker and that, until they do right, our members will be spending their money in places they feel respected and recognized. 

Boycott Target! This is yet another way to assert there's more to this country than MAGA!  

A righteous rant ...

I reproduce here a righteous rant from Simon Rosenberg. His Hopium Chronicles project may be a little too Democratic Party-oriented for the taste of most of my friends. But you got to love that he activates people, in the style of, and in homage to, FDR and Harry Truman.

I've made this a little easier to read:

In these first six terrible months of Trump they have told us who they are and what they want - they want our country to be poorer, weaker, less safe, less healthy and less free. 

The agenda is clear. There is no American greatness or a better tomorrow. Their way is a diminished country, with fewer opportunities for our people, an end to our democracy, and a nation less able to chart our course in a competitive world. They want for more them and less for all of us. They cannot run away from who they are and what they are doing. There isn’t any way to put lipstick on this Trumpian pig. 

And unlike 2024 we cannot shirk from our responsibility to tell this part of the story. 

For the first step in defeating Trumpism is to make sure every voter available to us understands exactly who they are and what they mean for our nation’s future. 

The passage of the Big Ugly [Budget Bill] gives us an opportunity to go tell this bigger story about this rancid agenda of sabotage, plunder and betrayal. We are no longer limited in our comms and story telling to the elements of the big ugly. We must now in fact integrate the elements of the big ugly into their broader agenda and attack it on all fronts. They have betrayed us and we can and must find a better way, together. 

• The tragedy in Texas has started a national debate about their “more for me, less for all of you” agenda. 

• The return of measles has given us an opportunity to talk about their assault on our health care. 

•Trump’s ongoing tariff fiasco allows us to talk about his core betrayal of working people by raising prices not lowering them. 

• His attempt to create a secret police gives us an opportunity to talk about his authoritarian fantasies and abandonment of the Constitutional order here in American. 

The upcoming debate over Congress’ Fiscal Year 2026 budget gives us an extended opportunity to explain the harms of their agenda to the American people. 

Democrats in state and localities across the country can start to immediately organize town halls, hearings and other community conversations to talk to their constituents about what the Big Ugly and the broader GOP agenda means for them (and we need to help them do this). 

For it is no longer notional or a promise. It is here. 

And people are dying. The economy is slowing. Prices are rising. Our debt is exploding. 

Masked men are disappearing people into foreign and domestic gulags. Measles has returned. 

The world is laughing at us. 

They’ve given themselves huge tax cuts while levying one of the largest tax increases in history on working people. 

Our leader is a fucking painted clown, a joke, an impulsive and out of control fool, being enabled by unprecedented cowardice in what was once the Party of Lincoln and Reagan. ...

What else, Simon? Unfortunately, there's always more when a conman is dependent on hyping up a base of the vengeful and deluded.

The crypto scam: still nothing but a con for crooks

Mission District, SF

According to NBC News:

Today a growing number of people in the United States have crypto kiosks at their local grocery stores or gas stations. There are roughly 30,000 bitcoin ATMs (BTMs) in the United States, according to Coin ATM Radar, a website that tracks them. The Coinstar machine where they haul in loose change for cash might now also sell bitcoin. Bitcoin Depot, North America’s largest BTM operator, has kiosks in 48 states and is still expanding. The operators can charge users hefty transaction fees, and the stores often receive payment for hosting the BTMs.

These machines (and other brands) are in every corner store in my home neighborhood which is full of poor workers and immigrants. Can't blame the folks who take a flyer on this thing; I've even seen charities boasting they'll take contributions in crypto. It must be real, right?

Nope, it's not. Here's economist Paul Krugman with the true story: 

Crypto Is Still for Criming

... the entire crypto enterprise is corrupt. Money-laundering and scams that exploit naïve investors aren’t unfortunate behavior that taints a potentially useful enterprise. For crypto, they are the whole game, more or less the only reason cryptocurrencies exist.

That may sound like an extreme statement, but you should bear in mind that Bitcoin, the original cryptocurrency, was created in 2008. That makes cryptocurrency ancient by tech standards — not much younger than the iPhone, much older than Apple Pay. Ever since crypto’s invention, enthusiasts have promised that blockchain tokens will find widespread legal use cases, displacing conventional means of payment, any day now. But it keeps not happening.

At this point, 17 years after crypto arrived on the scene, there are still no — I repeat, no — significant legal use cases. This is despite many efforts to make crypto a real medium of exchange. ...

But if crypto has no legitimate uses, why are crypto assets worth more than $3 trillion? Well, the marketing of crypto has been brilliant, with many small investors in particular still being sucked in by the combination of technobabble and libertarian derp. Promotion of crypto by legitimate enterprises, which profit from crypto sales, has been relentless. Venmo is a digital payment system that actually works and is in widespread use — even the fruit and vegetable stand around the corner from me takes it. But every time I use Venmo it tries to sell me crypto:

And while crypto has failed to find legitimate uses, it has flourished as a vehicle for illegitimate uses: extortion, money-laundering and, as we’ve seen, bribes to politicians....

Ah, now we know why Donald Trump and his merry band of crooks have become crypto evangelists. Just another way to rob the American people ...

Is this what really inspires MAGA?

 

When this unprepossessing graph floated by in my media feed, I had an aha-moment. Apparently white American men's fraction of the income pie was highest in 1960 -- and ever since their segment of our economic prosperity has been declining. That doesn't mean white guys are earning or owning less in real terms. Most everybody is doing a lot better than in 1960 in a much larger economy that has seen repeated bouts of goods-inflation (troublesome) and higher wages (all positive). But relative portions taken home by different segments have changed.

 

So even though white men in this country, in general, are doing just fine, in the last 60 years changes in society have meant they've had to share their prosperity with white women and everyone else.

 

The chart is from a Medium post by Joe Francis.  Here's some of what he has to say about it, slightly edited:

White men’s position in the class structure has diminished considerably.

According to the census and the American Communities Survey (ACS), the median income of white men aged 18 and above fell from a peak of 264 percent of the national level in 1960 to 143 percent in 2023.

White men’s share of national income has similarly fallen dramatically. Figure 1 shows their share falling from 70 percent in 1960 to 43 percent in 2020, and it fell further to 41 percent in 2023.

There has thus been a historic shift in the income distribution away from white men toward non-white and female Americans. …

Non-college educated white men, meanwhile, are being left behind. ... the era of white male egalitarianism is long a thing of the past.

... inequality has surged for white men, even as the overall level has remained largely unchanged.  ...

As a class, [white men] have seen their privileges diminish due to the prohibition of racism and sexism, although the college-educated have prospered thanks to the greater education premium.

By 2045, even if Trump succeeds in throwing out millions of immigrants, the majority of Americans will not be what we currently describe as "white". (Racial categories can be mutable, subject to income, prejudice, and fashion, but that's another post.) He can't turn back the clock. The era of white America is over. We already live that in California; Texas and Florida do too, but haven't adjusted yet. MAGA diehards will eventually live in reality; Americans have survived such shifts before.

Ran across this paper thanks to Adam Tooze.

The lunacy of King Donald

I like charts. I learn well from informative visualizations of data. And therefore, I appreciate the work of Washington Post journalist Philip Bump.

Bump knows what he thinks about Donald Trump's tariffs:

This will almost certainly prove to be bad for the economy, but it has been pretty good for data visualization. For example:

We've gone back to the late 1800s.

 

 

Add a tariff on washing machines, raise the price. Remove the tax and price falls.

 ... tariffs will instead mean surges in the prices Americans pay.

 

How uncertain is the country’s economic future? As the Financial Times’ John Burn-Murdoch put it, it is “equivalent to a global pandemic” uncertain.

At least we get some nice charts out of the deal.

Unfortunately the Canadian cartoon with which I led this post gives an incomplete picture. Presumably King Donald intends to get plenty out of his tariffs, knowing he can shakedown particular businesses and whole favored sectors of the economy for a personal payoff after which he'll make an exemption from his taxes.

If we want this set of impositions to blow back on King Donald, we the people will have to make it so. Along with Canadians, we're the fan.

Stupid, destructive, and utterly unrealistic: that's our Prez say the economists!

Why are Trump, along with Musk and his Muskrats, breaking government and the institutions that make this country a somewhat livable place? Seems crazy.

A couple of our most significant economic thinkers took up the puzzle in the last few days. Short answer: yes, the Trump regime is crazy -- and vile too.

Adam Tooze is the preeminent English language economic historian of the 20th and 21st century world capitalist system. (I have written about his highly accessible books here, here, here and here.) He does the work to engage what passes for economic theory claimed by Trump's intellectual apologists and wrecking appointees. 

I began to wonder whether this search for a rational wing in Trump’s economic policy is not, in fact, a step towards sane-washing and whether this sane-washing is not driven by some engrained mainstream framings of America’s problems that react in sympathy with the Trump administration’s rhetoric of crisis and victimization even if they are out of sympathy with the Trump administration in general.

Is there a real and important continuity of problems in America’s political economy that at least parts of the new Trump administration are trying to address, thus forming a continuity with the Biden team and Trump 1.0?

Or is the shellshocked commentariat of 2025 in the grip of a kind of Stockholm Syndrome in which our own inner fears lead us to engage with our captors in a way which denies the actual reality of being hurled into a mad house? Call it Mar-a-Lago (Accord) Syndrome.

... we are all struggling to find some kind of rational purchase on the unhinged situation created by the Trump administration.

Turns out, after serious engagement with some Trump apologists, that he finds "no there there" in Gertrude Stein's memorable formulation. 

The Stockholm syndrome element kicks in when we come to the original framing of the problem: The belief that something must be done. Once you are convinced that “something must be done”, you become vulnerable to someone hawking a big plan to “do things”.

Why do sane people in contemporary America believe that “something must be done”? Ignoring the reflexive element of crisis by which Trump himself is the main reason something must be done, which renders one susceptible to any big idea that might fix Trump (even if elements of that “fix” are shared with analysis offered by the Trump camp itself) etc etc, there are two main schools of thought:

• 1. American deindustrialization and class balance. ...

• 2. American debt....

Both arguments 1. and 2. are well known. Both are also contentious. No reader of Chartbook will be surprised to hear that I find both 1. and 2. unconvincing. But that is not my point here. My point is that if you do believe either 1. or 2. you need to be on your guard against Mar-A-Lago syndrome.

Even if you disapprove of the Trumpites style and lawlessness, you may be tempted to take at their word the more reasonable members of the highjack team who insist that they offer a dramatic and comprehensive plan to address the crisis you also believe in, leading you to lose track of the fact that … they are highjackers and they are holding you hostage!

By buying into the reality of underlying problem that Mar-A-Lago claims to be addressing you run the risk of overemphasizing the rational element in Trump 2.0.

Tooze simply finds no rational element.

None of us really knows where this clown car is headed and what drives it on its crazy course. It seems like a mystery even to many on board. Quite reasonably we look for elements of rationality. We ask: who inside MAGA 2.0 is thinking and what are their thoughts? We then relate that to our own efforts to diagnose America’s history and the history of the world economy. ...

... To historically minded people it is appealing for obvious reasons. But it puts us at risk of is underestimating the radicalism of the break marked by the Trump administration. In search of historical context we miss what is most historically significant. We avoid facing the conclusion that the vision of a Mar-a-Lago Accord may have more in common with grift, a protection racket or a facelift pandering to the ignorant vanity of an old man than with economic policy as we have hitherto known it.

Faced with Trump, the risk is that conventional realism is a form of escapism.

You can read the entire Tooze argument here. 

Paul Krugman, former NY Times columnist and Nobel Prize for economics recipient, comes to similar conclusions, even more pithily expressed. In trying to understand the Trump/Musk vandalism in government, he sees no plan -- just the wounded egos of ignorant men.

My guess, instead, is that it’s an ego thing, that Social Security has become to Musk what Canada has become to Donald Trump. Both men at one point said something stupid, something that would have turned them into laughingstocks if there weren’t so much fear in the air. But both men have been unable to let go, doubling down in what amounts to an attempt to redeem their initial foolishness.

In case you’ve forgotten, back in December, when Justin Trudeau visited Mar-a-Lago, Trump taunted him by suggesting that Canada become a U.S. state, calling him “Governor Trudeau.” Some people suggested that it was meant as a joke, but it would be more accurate to call it a dominance display.

Trump's chief of staff listens to him threaten to annex Canada

But once Trump realized how ridiculous the performance made him look, he refused to let go. Instead, annexing Canada seems to have become a fundamental plank of Trump’s foreign policy, with his demands getting ever more insistent the more obvious it becomes that Canadians loathe the idea.

Since then, Musk has replicated his insecure co-president and put Social Security under the gun:

Musk’s big blooper was his claim that millions of dead people are receiving Social Security checks. This claim probably reflected the failure of young Musk staffers — what Dudek called the “DOGE kids” — to understand how the SSA’s databases work, combined with a complete lack of common sense. I mean, if there really were huge numbers of dead people receiving Social Security payments, don’t you think someone else would have noticed?

In a normal political environment, getting something that big that wrong would have destroyed Musk’s credibility and led to his permanent exile from any role in setting policy. But this is America in 2025, so Trump amplified the already-refuted claim when addressing Congress, and Musk seems more powerful than ever.

Furthermore, Musk refuses to give up his Social Security smears, making the completely implausible claim that fraudulent use of Social Security numbers accounts for 10 percent of federal spending. And I’d argue that that the plan to effectively cut off many disabled Americans is best seen as part of a desperate effort to find or pretend to find Social Security fraud, retroactively justifying Musk’s big mistake.

Still, does the plan have to be this cruel to the most vulnerable Americans? As I see it, the cruelty is a feature, not a bug.

... It's hard to escape the sense that DOGE staffers are actually enjoying this. And why not? We’re mostly talking about poorly socialized young men suddenly given the power to ruin other people’s lives, taking their cues from a leader who has declared that “the fundamental weakness of Western society is empathy.” So why should we be surprised that the DOGE kids’ rampage through the government looks more and more like a remake of Lord of the Flies?

Krugman read Tooze's screed and agrees. 

Look, I understand that it’s more fun to write an article about the supposed emergence of a new economic philosophy than to write yet another article about how ignorant men are, once again, saying stupid things. And I guess some journalists are uncomfortable at the thought that people with great power to shape policy have no idea (or rather nothing but false ideas) what they’re doing. 

But trying to put an intellectual gloss on Trumpist international economic policy is sanewashing that misinforms readers rather than helping their understanding.

... My point is that Trump believes many blatantly false things that suit his prejudices. Why imagine that he and his courtiers have sophisticated ideas and a deep strategy when it comes to international economics?

On the surface, Trump’s trade policy looks stupid and destructive. Dig deeper, and you discover that this first impression was completely valid. Trying to pretend otherwise is just misinforming readers.

We don't have to be overawed because these guys are considered some of the best academia has to offer in their field. They care about being understood and they have given us the goods: Trump's economic antics are stupid and cruel, without any rationality beyond grift and grievance. 

Economy insight

Okay -- maybe I begin to get it. For the last couple of years, economic surveys have reported that a majority of Americans feel positive about their own financial position, but think "the economy" is going to hell. (That link is a couple of years old, but current opinion research largely agrees.)

Yes -- there has been inflation, but, in general, wage growth has been exceeding price increases to consumers for months so we ought to feel better. And housing has become insanely expensive. But most of us, most of the time, aren't really in the market for housing. So what's the beef?

Today the shrunken San Francisco Chronicle passed along some local data that might be a contributing cause of our discontent. In much of the city, too many neighborhood businesses have not come back from the pandemic. 

Businesses in most S.F. neighborhoods are still struggling to bring back customers. ...

Four years after the beginning of the pandemic, consumer spending in most San Francisco neighborhoods still hasn’t recovered to anywhere near pre-pandemic levels, according to city data.

Citywide, sales tax revenue from April to June this year was down 34% compared to the same period in 2019, adjusting for inflation. In over half of neighborhoods, revenues are down more than 25% compared to before the pandemic, according to a Chronicle analysis of city data.

Actually my home turf, the Mission, is doing a little better than the city at large, down only 25 percent. But it is dotted with empty storefronts like the one pictured above, steps from my house. It sure doesn't feel as if small businesses are thriving.

So, even if we're personally doing okay, we are constantly visually reminded that something is amiss.

It's a mystery ...

 Kevin Drum points out:

Compared to a year ago, eggs are down 9%! Apples are down 13%. Seafood is down 3%. Coffee is down. Citrus fruits are down. White bread is down. Peanut butter is down. Lunchmeat is down.

And this has all been happening while average wages have gone up 4% in the past year. You'd think all of this would be of some interest to news consumers ...

 

It's certainly of interest to me. I was looking to buy eggs and encountered this in the supermarket. But noting how well things are going in the economy seems out of reach to too many of us much of the time.

On the one hand, there are all kinds of signs, like the egg prices, that inflation is controlled. Pretty much anyone who wants a job can find one judging by the "HIRING" signs in storefronts. And the stock market is booming; that's not everyone's preoccupation, but for those who benefit, this signals good times.

click to enlarge

Yet people's confidence in being able to maintain their standard of living is not much higher than it was in the midst of the Great Recession of 2008.

The political implications of these mixed experiences and feeling are truly weird:

click to enlarge

In all the states where the choices for president will likely determine who wins, most voters think their local state economy is doing fine. And at the same time, they believe that the American economy, the whole country's economy, is doing poorly. This seems schizophrenic, but I don't doubt the survey research.

And it seems too simple to assume, as I've heard some say, this is just prosperous Republicans whining because they don't like Joe Biden. Sure, researchers find plenty of GOP folks who are happily jamming flights to go on vacations and buying boats while complaining about this president.

But the intense sense of economic precariousness isn't entirely politically partisan. The best explanation I can come up with is that we're still living a hangover from the pandemic. It turned out that we could not assume that our lives would just chug along uninterrupted; we, whatever our politics, could find ourselves thrown off by a microbe. What a shock! We're shaken and our feeling of expected safety will take a long time to recover, if ever.

We think inflation is terrible because prices are higher than we remember

I'm usually a fan of Paul Krugman. He's a humane commentator on our condition who often gets reality right. But he made an argument today in his NYTimes newsletter (link may not work as it is a newsletter, but there it is) which completely misses the point of what people are talking about when we complain about inflation.

 

He observes that he gets huge push back when he observes that inflation is coming down. He earnestly discusses the various measures of inflation; there are several and they serve different analytical and policy purposes. He assures the reader that he is not gaming the system when he chooses which measure is relevant in which context. I believe him.

 

Krugman asserts:

The question of what’s happening to inflation is, or should be, a purely technical issue.

But probably most of us don't think any of this makes any sense because we know it requires more of our dollars than it used to once to go about our daily business. I am going to a warehouse store later today; I know that I'll spend 15-20 percent more dollars than I would have in 2019.

The pandemic has left a rift in our consciousness. There was before; there is after. Everything costs more. That's what inflation means in common understanding.

"Inflation" is not whether some measures favored by economists are going up -- and are currently going down. Inflation in every day life means that prices are higher (some much higher) than "before." We simply won't notice the trend line until the disruption is further in the past -- when the meaning of "before" changes. Might that be this year?

I hope so.

When the home place dwindles

Monica Potts. a senior politics reporter for the data journalism website FiveThirtyEight, grew up Clinton, Arkansas, a tiny town in the Ozark Mountains which has no economic reason for continuing to exist. She had a mother whose primary aim for her children was for them to escape out of this dead-end place. Potts did escape. She attended Bryn Mawr College near Philadelphia on scholarships and became employable and acculturated to the contemporary American world. Neither her talented sister Ashley, nor her dearest childhood friend Daria made it out. The former was killed in a teenage auto accident; the latter became addicted, lost her children, was often jailed, and endured without hope.

The Forgotten Girls: A Memoir of Friendship and Lost Promise in Rural America tells the stories of these women of Clinton, movingly and painfully. The women are not caricatures, but readily imaginable, appealing individuals who had very little chance in life. 

Because Potts really is a data journalist, her accounts of life incidents -- church services, high school team sports, parties with boys who drank, jobs found and lost -- are interspersed with demographic data.

When she gets to explaining the central feature of these young women's lives, that their expected destiny was to bear children early and often, you get both the vignettes and the sociological facts:

My friends began to wear "promise rings" in middle school, public signs of their pledge to remain virgins until they were married. Because some of them already had serious boyfriends, they dedicated these "promise rings" to their boyfriends, sort of as pre-engagement rings. In other words, we were thinking about marriage at thirteen and fourteen -- before we were thinking about high school. ...

An explanatory ethnographic paragraph follows in a footnote:

In 2019, the most recent year available at the time I was writing this book, CDC numbers showed Arkansas had the highest number of teen moms per capita ... In general, the rates of teen pregnancy are highest for Black and Latina girls, but because there are more white girls in the population, the numbers of young mothers in each group are nearly the same.

For me, this mildly pedantic approach worked well. Potts is a worthy narrator for these women's lives; they are her people. These lives could have been her own if not for some lucky accidents. If you care about women's realities, this is a book to cry over.

• • •

I had an additional, more personal reaction to this book. I, too, grew up in a place losing its economic reason for being. In my earliest days, Buffalo, New York, was shaped by echoes of its honorable role in the World War II era, a center of industrial production, automotive and aerospace, and chemical factories. But all that was aging out, decaying, dying. And what would be left?

A child doesn't understand when purpose is draining out of her home place. But, especially for an unconventional young person (lesbian in my case), there's a nagging feeling -- a feeling that suggests that the assumptions which the adults hold about the place have become inaccurate. Maybe even dangerous. And that probably it is better to look for more promising places.

Potts' description of how loss of economic purpose in her Arkansas home place changed how people related seems so familiar to a Buffalonian of the 1950s and 60s. Here's how she observed it:

... The young people I spoke to in high school took it for granted that they would have to move away to find jobs, whether they wanted to or not. And when high school graduates move away, rural hometowns experience continued population loss. ...

... People who returned to Clinton with degrees often filled the same roles their parents had: they were dentists, doctors, lawyers, business owners, and teachers. They went to the same churches they's grown up in and lived much as they had growing up. A few of them returned with the idea that they would improve people's lives here, but most came back because they liked Clinton and because their families had been successful here and still lived here. Few thought anything in town needed to change, so nothing much ever did. They thought of themselves as town leaders, and they were well off enough to weather any storms Clinton suffered. But this small group of town elite were the exceptions: most the people who stayed in town were the worst off, with the least prospects.

When the majority of high school graduates don't start their adult lives in their rural birthplace, they don't buy homes there, get married, have children, and enroll them in their alma maters. They don't start jobs and businesses, volunteer, or bring back the expertise they've acquired elsewhere. The result is a smaller property tax base, fewer kids in schools, fewer jobs, and other signs of decline. Fewer people come in with new ideas and new money and earning power -- the dynamism that drives city life. These towns are less likely to have robust civic institutions or services to help people. All these factors affect health, well-being, and life expectancy. ...

... Clinton, like many small towns in rural America, was the kind of town you could get stuck in.

Yes! That's how it was for a long season in the Rust Belt too. 

This kind of decline isn't limited to rural areas. What were once the thriving cities of the Midwest have also undergone this loss of dynamism. Some, like Pittsburgh, have found new purpose; in that instance, a healthcare empire. Others, like Cleveland and Buffalo, not so much so.

No wonder we live amid the politics of grievance. The need for broader dispersion of prosperity and consequent purpose isn't just about Potts' sad Arkansas. For too many places and people, hope is still in short supply. Especially for the women.

As we await a Nor'easter on Martha's Vineyard ...

Much of this summer tourist island is shut down or hunkered down for the New England winter. But the characteristic post-pandemic economic dislocations persist here too. 

I was greeted by this sign while looking for bird seed at the feed store.

What we feel doesn't agree with the numbers

There's all sorts of evidence that the U.S. economy is humming along happily. Many economic indicators say we've recovered from the terrible bottom this fictional entity plunged to during the pandemic. People are working and earning. Heather Cox Richardson wrote last week:

The December jobs report from the Bureau of Labor Statistics showed that job growth continues strong. The country added 223,000 jobs in December, and the unemployment rate went down slightly to 3.5 percent. The last two years of job growth are the strongest on record, and the country has recovered all the jobs lost during the pandemic. According to the White House, 10.7 million jobs were created and a record 10.5 million small businesses’ applications were filed in the past two years.

On Monday the Wall Street Journal reported that median weekly earnings rose 7.4% last year, slightly faster than inflation. For Black Americans employed full time, the median rise was 11.3% over 2021. A median Hispanic or Latino worker’s income saw a 4.8% raise, to $837 a week. Young workers, between 16 and 24, saw their weekly income rise more than 10%. Also seeing close to a 10% weekly rise were those in the bottom tenth of wage earners, those making about $570 a week. The day after the Wall Street Journal’s roundup, Walmart, which employs 1.7 million people in the U.S., announced it would raise its minimum wage to $14 an hour, up from $12.

All true, but, somehow, many of us find it hard to believe these are good times. 

Economist Paul Krugman has noticed the disjunction between the statistics and what we believe. He asked in the NYTimes, Will Americans Even Notice an Improving Economy?

Political observer Brian Beutler knows something is out of kilter:

The reality of our strong economy has not defined perceptions of it, which have tended to resemble doom-laced political reporting and outright propaganda, rather than raw data gathered by government agencies and other researchers. A huge percentage of Americans believes that the country is in the midst of a recession. [It's not.]

It shouldn't be surprising that the various information media -- even if they aren't in tank for the Republicans -- should overestimate the bad economic news. That's what attracts an audience.

Here in San Francisco, I find it not surprising that people feel the economy sucks. We've been living a tech boom for a decade, so big layoffs in the sector feel scary and novel (and crummy for the people laid off). A young man in our household is part of the collateral damage of tech retrenchment. He'll be able to find another job, but it's tough that he has to.

Further, this city has not fully recovered from the pandemic bust. Downtown S.F. still has North America’s weakest pandemic recovery, reports the Chron.

And out in the 'hood, Mission Street sure doesn't look like it is experiencing a vibrant recovery.

Maybe the vacancies and boarded up storefronts are just normal urban churn, but it sure feels as if something died and has not yet been replaced.

There's no local election this year in which to take out our sense of gloom and doom on our office holders. But 2024 could be something of a local earthquake if the powers-that-be can't help the city feel as if it is humming again.

Solution looks pretty simple to me

Times econ columnist Peter Coy passes on a chart that we might all keep in mind while the Republican Congress plays games about letting the government pay its bills:

 

If we're worried about having enough money to pay the government's bills, we know where to find it. There are people who have more wealth than they need. Elizabeth Warren had it right: we should be taxing wealth. Not to the extent of confiscating it, but enough. "Enough" is a concept which capitalism (organized anti-social greed) destroys. We need to retrieve it.

• • •

And no, this has nothing to do with the "debt ceiling" which is an arbitrary piece of nonsense generations of legislators have allowed to infest our law-making processes. They voted (or didn't) to incur some bills under budgets they passed. The United States has historically most always borrowed to pay its bills and this hasn't sunk the country yet. Our vast economic engine has made the country a good bet for lenders who need a safe place to park money. Republicans are willing to trash that by reneging on our promises to pay --- for what purpose? Perhaps an appearance on Fox or approval from Victor Orban? 

Do your damn jobs!

The residue of Brexit

Six years on, The Guardian revisits Brexit, Britains' messy divorce via referendum from the European Common Market and the project of a united Europe. The article is long and detailed but paints a convincing picture of Brexit failure.

On 23 June 2016, Geoffrey Betts, the managing director of a small office supplies business in Marlow, Buckinghamshire, had high hopes for his firm, and the British economy, when he voted for Brexit. 

“I thought we would be like … ‘here we go, here we go. We are going to become the most competitive country in Europe and we are going to be encouraging business.’ Now I think: ‘What have we done?’” 

His firm, Stewart Superior, has survived, but not without major restructuring and huge efforts to get around obstacles that Brexit has put in the way of the export side of the business.

For a lot of people in Britain, Brexit isn't working out as they were promised and had hoped. Add in the global pandemic, and the economy became mired in doldrums.

I've been convinced that the flat out insane vote for Brexit was the product of a creaky, elitist, oblivious political system that had delivered the poisonous Iraq war and a generation defining economic crash during the 2000s, but couldn't provide constructive leadership or widely shared prosperity to many Britons. (Yes ... that has all too much in common with the conditions that elected Donald Trump in the same year.)

Six years after the referendum which took the UK out of the EU, the economic case for Brexit is proving increasingly difficult for its supporters – including inside the Conservative party – to make. 

The impression was that there would be no downside. We would thrive outside Europe’s bureaucracy which was strangling our companies with red tape. The huge benefits of the single market – trading freely across borders, with common standards – were never highlighted by Vote Leave, and rarely by the crudely alarmist Remain camp, either. 

Only now, with the worst of the pandemic (probably) behind us, and ministers unable to blame Covid, is Brexit reality being laid bare. Next year the OECD calculates that the UK will record the lowest growth in the G20 with the exception of Russia whose economy is being drained by its war on Ukraine.

Going it alone attracted a slim majority of British voters in 2016. It now seems the Boris Johnson's Conservative Party may finally pay a price for the drag that Brexit is exerting on British well-being. Last week the Tories lost two special elections in areas they had controlled.

But, as in the United States, the damage inflicted on the national edifice by an impulsive vote by frustrated people will be hard to recover from.

What's really behind inflation?

There are plenty of opinions, some conflicting.

This may not be the most judicious take on why food and gas prices are rising, but it is a certainly part of the story. Big businesses are raising prices because they know they can. Pandemic battered consumers find no alternative but to pay up.

Business leaders are admitting that corporations are using the narrative of hyperinflation as an excuse to raise prices on you and increase profits for themselves. ... The largest corporations in America have never made more money. ... Corporations are seizing the opportunity to engage in massive profiteering because they can.

The Republican Party is there for the one class it always coddles: plutocrats.

Christopher Ingraham of  The Why Axis thinks he knows what these high profits should mean:

What it says to me is that firms have plenty of wiggle room to create better conditions for their employees — they can clearly afford the higher pay, more generous benefits and more flexible arrangements that workers are increasingly demanding.

The Washington Post's super smart (really, pay attention to her), plain-speaking business columnist Catherine Rampell believes she knows how to describe the current inflation:

The main reason price growth is up has to do with constrained supply not keeping up with booming demand. That is, the pandemic has resulted in worker shortages, supply-chain disruptions and other bottlenecks in the United States and abroad. These problems are happening at the exact same time that cooped-up consumers are eager to buy even more stuff than they did pre-pandemic.

... Arguably, recent U.S. fiscal policy may have exacerbated this dynamic: Biden and the Democrats enacted stimulus payments and other government transfers earlier this year, which gave consumers more cash to spend. Now consumers are spending that cash.  

...Aside from some vague rhetoric about Democrats’ “big spending” habits, though, those checks are not really what Republican politicians are criticizing Biden for. Perhaps with good reason: The spring stimulus checks were extremely popular, including among Republican voters. ...  So they’re peddling “war on Halloween” hokum instead.

The chair of the Republican National Senatorial Committee (the fundraising arm of GOPer campaigns) Florida Senator Rick Scott announced to the Wall Street Journal: "This is a gold mine for us." 

You can always be sure -- the current Republican Party doesn't care who gets hurt, as long as they hold power.

There's a sucker born every minute

The independent mini-markets that mostly sell a few edibles and booze to the neighborhood have begun displaying new signage. 

I was a mildly astonished to see what some corner stores are peddiling now.

Yes, you can get your bitcoin at the same place you buy your lottery ticket. Somehow this doesn't increase my confidence in cryptocurrency. I assume the whole thing is a ponzi scheme to fleece the unwary.

Bitcoin enthusiasts will be displeased that I look for explanation of the bitcoin phonomenon to economist Paul Krugman:

... cryptocurrencies play almost no role in normal economic activity. Almost the only time we hear about them being used as a means of payment — as opposed to speculative trading — is in association with illegal activity, like money laundering or the Bitcoin ransom Colonial Pipeline paid to hackers who shut it down.

... If normal, law-abiding people don’t use cryptocurrency, it’s not for lack of effort on the part of crypto boosters. Many highly paid person-hours have been spent trying to find the killer app, the thing that will finally get the masses using Bitcoin, Ethereum or some other brand daily.

But I’ve been in numerous meetings with enthusiasts for cryptocurrency and/or blockchain, the concept that underlies it. In such meetings I and others always ask, as politely as we can: “What problem does this technology solve? What does it do that other, much cheaper and easier-to-use technologies can’t do just as well or better?” I still haven’t heard a clear answer.

... a long-running Ponzi scheme requires a narrative — and the narrative is where crypto really excels.

First, crypto boosters are very good at technobabble — using arcane terminology to convince themselves and others that they’re offering a revolutionary new technology, even though blockchain is actually pretty elderly by infotech standards and has yet to find any compelling uses.

Second, there’s a strong element of libertarian derp — assertions that fiat currencies, government-issued money without any tangible backing, will collapse any day now....

But hey, you can gamble in Bitcoin right at your corner store.

The education con game

Erudite Partner has taken on the scam which is so much of U.S. higher education. 

I left school owing $800, or about $4,400 in today's dollars. These days, most financial "aid" resembles foreign "aid" to developing countries—that is, it generally takes the form of loans whose interest piles up so fast that it's hard to keep up with it, let alone begin to pay off the principal in your post-college life. Some numbers to contemplate: 62% of those graduating with a BA in 2019 did so owing money—owing, in fact, an average of almost $29,000. The average debt of those earning a graduate degree was an even more staggering $71,000. That, of course, is on top of whatever the former students had already shelled out while in school. And that, in turn, is before the "miracle" of compound interest takes hold and that debt starts to grow like a rogue zucchini.

There's much more, especially explaining the strange trajectories of people whose expensive PhD's only qualify them to become poorly paid "adjunct" college teachers, shepherding masses of students through an education of dubious value. Read all about it.

Yet she doesn't give up on the idea of humane learning -- nor can any of us. 

Photo is from 2012, but the demand to "Cancel the debt" remains.