There's a long list of things that could kill the euro zone. But the most deadly might also be the most overlooked. It's the crazy way that Europe measures inflation.
Let's step back for a minute. Most central banks nowadays aim for price stability defined as 2 percent core inflation. The "core" means that they strip out volatile food and energy prices because 1) those prices mostly don't figure into long-term contracts, and 2) they're set in world markets. But Europe goes further. They strip out housing too.
Spain and Germany can't agree on how to calculate housing costs. Neither can the rest of Europe. That makes measuring euro zone inflation a problem. But Europe's solution is no solution at all. They just ignore the problem. As Kantoos Economics points out, Europe's consumer price index, the HICP, simply excludes housing costs.
Why should you care about bad inflation data? Because the ECB is nothing if not a inflation-targeting central bank. And an inflation-targeting central bank with bad inflation data is like a blind firefighter.
The below chart courtesy of Lars Christensen tries to quantify the problem. It looks at an alternative measure of inflation, the GDP deflator (blue), and sees if it has grown at a 2 percent clip (red) recently. Spoiler alert: It hasn't.
Per the GDP deflator, inflation has been dangerously low in Europe the past four years. You can thank the euro-wide housing bust for that. From Spain to Ireland to France and the Netherlands, housing bubbles have deflated. But the ECB doesn't see these price declines when it targets 2 percent HICP inflation. So it overestimates inflation, underestimates the size of the crisis, and consequently does much less than it should.
There's a long list of things that could save the euro zone, and almost all of them involve the ECB being much, much more aggressive. That's not going to happen as long as the ECB targets a metric that conveniently ignores housing, which is, for families in most developed countries, the single biggest expense.
Better data won't save the euro any more than prescription glasses can put out a house fire. But, like better glasses on a firefighter, it would be a good start.
The Party of Lincoln's nominee returned to the site of his greatest speech, to attack the faith in democratic government that Lincoln so carefully fostered.
The world still judges Lincoln by his Gettysburg Address. Now, it may judge Donald Trump the same way—but with strikingly different results.
On Saturday, Trump spoke to supporters in the small Pennsylvania town where, a century and a half before, Americans met in battle. It was a speech that, as much as any in this campaign, offered the very best of Trump, underscoring why so many Americans are drawn to his candidacy. It also offered the very worst.
He began by invoking Lincoln’s fight against division, and framed his run as dedication to something larger than himself. “When I saw the trouble that our country was in, I knew I could not stand by and watch any longer. Our country has been so good to me, I love our country, and I felt I had to act.”
Tristan Harris believes Silicon Valley is addicting us to our phones. He’s determined to make it stop.
On a recent evening in San Francisco, Tristan Harris, a former product philosopher at Google, took a name tag from a man in pajamas called “Honey Bear” and wrote down his pseudonym for the night: “Presence.”
Harris had just arrived at Unplug SF, a “digital detox experiment” held in honor of the National Day of Unplugging, and the organizers had banned real names. Also outlawed: clocks, “w-talk” (work talk), and “WMDs” (the planners’ loaded shorthand for wireless mobile devices). Harris, a slight 32-year-old with copper hair and a tidy beard, surrendered his iPhone, a device he considers so addictive that he’s called it “a slot machine in my pocket.” He keeps the background set to an image of Scrabble tiles spelling out the words face down, a reminder of the device’s optimal position.
Late to this for family reasons, but catching up on an actually astonishing development:
Through the campaign, Donald Trump at times seemed more interested in promoting his business interests than in advancing a political campaign. He took time off this summer to fly to Scotland and tout the opening of a new Trump golf resort. He turned what was billed as a major campaign announcement into a promo for his new DC hotel. A surprisingly large share of the money he’s raised for his campaign’s expenditures has gone to his own businesses (notably Mar-a-Lago).
That is why today’s story, in Travel and Leisure, is so piquant and O. Henry-like. What Trump might have imagined would further burnish his personal brand may in fact be poisoning it. T&L reports that Trump’s new hotels will no longer carry his name!!! Instead they’ll be called “Scion.” Groan, given the actual scions, but fascinating in its own way. From T&L:
These are some reading recommendations that will hopefully provide a deeper look at some of these issues. Books may seem like small comfort. But in a time like this, when it’s hard to understand how American culture became so hate-filled, reading is probably the best possible option—to get off the internet, pick up a book, and think about how the country has gotten here.
What use is there today for one of the oldest virtues?
As many Americans go about their days, I imagine they have two little angels perched on their shoulders, whispering conflicting messages about happiness and material wealth. One angel is embodied by James Altucher, a minimalist self-help guru recently profiled by The New York Times. Altucher claims to have only 15 possessions, after having unburdened himself a few months ago of 40 garbage bags’ worth of stuff and never looking back. As I read about Altucher, I rolled the numbers 15 and 40 over in my mind, thinking about the belongings in my bedroom and the garbage bags under my kitchen sink.
The other angel is Tyler Brûlé, the editor in chief of the fantastically high-end lifestyle magazine Monocle and a columnist for the Financial Times. He is the sort of writer who tosses off such lines as “I zipped along the autostrada through the Val d’Aosta with the ever-trusty Mario (my Italian driver for the past 20 years) at the wheel” with little regard for how privileged and pretentious he sounds (especially in his superfluous parentheticals). Still, there is something, I’m a little ashamed to say, that I envy about Brûlé’s effortless cosmopolitanism—which, it’s hard to miss, is only made possible by unusual wealth.
Choosing a president isn’t easy in this election, but here are three ways a principled conservative might vote.
The day of decision is nearing. All the talk fades, and one mark must be made beside one box on the ballot. Many Republicans are agonizing. They reject Donald Trump; they cannot accept Hillary Clinton. What to do?
I won’t conceal, I’m struggling with this question myself. I’ve listened to those Republicans, many my friends, who feel it their duty to stifle their anger and disappointment, and vote for Trump; to cast a protest vote for the Libertarian Gary Johnson or the independent Evan McMullin; or to cross the aisle and vote for Hillary Clinton as the lesser evil. On the way to my own personal answer, I found it helpful to summarize the best case for each of these options.
Emphasize the word “best.” If your case for Trump rests on the assumption that America is hurtling toward national doom, if your case for McMullin rests on the hope of tossing the election into the House of Representatives, if your case for Hillary argues that she is a large soul eager to work cooperatively with those who think differently from her. I’d say you are not thinking very clearly. Despair and fantasy are misleading counselors.
It’s a political constituency just coming into its own—and although many Muslims are scornful of Donald Trump, they remain skeptical of the Democratic nominee.
ALEXANDRIA, Va.—This Democratic headquarters one warm October night could have been practically anywhere in the country. Volunteers crammed into a dingy, decrepit office suite, complete with fake wood paneling from the era when Hillary Clinton still wore bell-bottoms, filling up every space—crouched over rickety tables or into corners, reciting a script as they called worked through long lists of voters, checking to see if people were supporting Hillary Clinton and whether they’d be willing to volunteer.
The only clue that this was an unusual event was sartorial: Several women wore headscarves, and a man sported a stylish kaffiyeh. The phone bank is one of dozens of Muslims for Hillary events that the Clinton campaign has arranged this year, part of what the campaign contends is an unprecedented effort to court a small but growing population.
Narcissism, disagreeableness, grandiosity—a psychologist investigates how Trump’s extraordinary personality might shape his possible presidency.
In 2006, Donald Trump made plans to purchase the Menie Estate, near Aberdeen, Scotland, aiming to convert the dunes and grassland into a luxury golf resort. He and the estate’s owner, Tom Griffin, sat down to discuss the transaction at the Cock & Bull restaurant. Griffin recalls that Trump was a hard-nosed negotiator, reluctant to give in on even the tiniest details. But, as Michael D’Antonio writes in his recent biography of Trump, Never Enough, Griffin’s most vivid recollection of the evening pertains to the theatrics. It was as if the golden-haired guest sitting across the table were an actor playing a part on the London stage.
“It was Donald Trump playing Donald Trump,” Griffin observed. There was something unreal about it.
Minneapolis’ large Somali community made it through a grueling screening process in order to enter the country. Now, earning a living in the U.S. is proving difficult for younger generations.
Donald Trump’s crusade against immigrants and refugees is not only antithetical to the American ideal of inclusion, it’s also based on a false notion. This backlash against foreigners, fueled by political rhetoric in the election, suggests that the country’s safety is at risk—largely from Muslim extremists—due to the the government’s lax vetting policies. In fact, refugees face an exhaustive screening process by the United Nations High Commissioner for Refugees that can take years. Those who are lucky enough to make it through the process must then deal with another obstacle: a system that fails to fully integrate refugees into the American economy.
The federal government and its nonprofit partners provide job-search help and cash assistance for refugees during their first months in the United States. After that, they are largely on their own. This strategy has made it hard for refugee families—who often come to America with few assets or material possessions—to move up and out of poverty, and may be contribute to younger generations’ sense of isolation, the result of struggling to find their place in this country.
Can satellite images of our planet's varied terrain make humanity's impact apparent?
Only a handful of people have traveled into space to admire the blue marble we call home. Astronauts who have had this privilege describe the feeling of seeing the Earth from above as humbling; only from afar can one understand just how vast and interconnected everything truly is. And while most of humanity will never make it past the ozone, Benjamin Grant's Instagram project, Daily Overview, has been sharing high definition satellite photographs to give everyone access to this unique perspective. Come October 25, Grant will be publishing “Overview,” a new book that includes more than 200 original images of industry, agriculture, architecture, and nature that highlight graphically stunning patterns across the Earth’s surface. “From a distant vantage point, one has the chance to appreciate our home as a whole, to reflect on its beauty and its fragility all at once,” Grant said. He has shared a selection of those images, some of them previously unpublished, with The Atlantic.