Here's the one number that proves that inflation isn't "really" 10 percent.
British celebrity historian and Harvard professor Niall Ferguson thinks inflation is "really" much higher than its official number. So does celebrity politician and self-styled Austrian economist Ron Paul. And then there's John Williams of Shadow Stats. He too warns of double-digit inflation -- but curiously takes payments for his newsletter in dollars. Even more curiously, he hasn't increased its price in years.
There's just one problem with the inflation monster. It's not real.
The U.S. economy has added 1.9 million jobs over the past 12 months. That number is the best indicator that inflation isn't 10 percent. Here's why.
A country's nominal GDP (NGDP) refers to the total size of its economy. In other words, it's the dollar size of our economy, including both inflation and real growth. Here's why it's interesting: If we work backwards from NGDP and inflation, we can infer how much real GDP grew in the past year. And we can infer from real GDP how many jobs we would expect the economy to add.
The below chart shows much NGDP has grown year-over-year since the Great Recession hit. (Note: 2008 was the first time NGDP hit negative territory since 1960).
In 2011, NGDP grew just a hair under 4 percent. That's not good in normal times, let alone after a deep slump. Trend NGDP growth is around 5 percent, so we would hope to grow substantially faster than that to catch-up to where we should be. It's why the Fed should adopt a more aggressive target now. And it also tells us that inflation is certainly not far higher than its reported figure.
Let's try a thought experiment. If inflation really is 10 percent, that implies that real GDP fell around 6 percent last year. How bad is that? That's roughly where the economy was in the first quarter of 2009. Basically, complete free-fall. And thanks to Okun's Law -- which relates real GDP and unemployment -- we can guesstimate what that would mean for jobs. A back-of-the-envelope estimate says that unemployment should have risen between 3 and 4 percent in that scenario. Instead, we added 1.899 million jobs in the last year.
And no, this wasn't about government hiring distorting things. Government has been the only sector cutting jobs the past year, due to austerity at the state and local level. There's only one logical conclusion. Real GDP was positive, if disappointing, and inflation was in fact low.
The conspiracy theory that inflation is being wildly under-reported doesn't withstand more than 30 seconds of scrutiny. So why the persistent belief that we're reliving the stagflationary nightmare of the 1970s when the deflationary nightmare of the 1930s is much more relevant? It's mostly frequency bias. The things people buy the most often -- gas and groceries -- have gone up the most the past few years. The things people buy the least often -- gadgets and other goods -- have not. It's an understandable mistake. But still a mistake.
Of course, none of this is new. The same fears of increasing prices paralyzed policymakers and the public alike during the 1930s -- despite precipitous falls in prices. British economist Ralph George Hawtrey likened it to "cry[ing] 'Fire! Fire!' in Noah's flood." Ben Bernanke and other central bankers have thankfully managed to prevent outright deflation this time around, but high inflation is still our economic Godot. It's not here, and it's not coming anytime soon.
Update:Ramesh Ponnuru of National Review made very much the same argument in response to Niall Ferguson back in 2011.
The first episode of the Streaming Wars is over. The rebels won. Now the empire strikes back.
Disney announced on Thursday that it would acquire most of the entertainment assets of 21st Century Fox for about $60 billion in stock and debt, in what would be the largest-ever merger of two showbiz companies. Already the most storied entertainment empire in the U.S., Disney would become a global colossus through this deal, gaining large stakes in the biggest entertainment companies in both Europe and India. The deal will almost certainly receive regulatory scrutiny, as the Justice Department has been lately dubious of mega media mergers.
The yuletide haul includes some of the most famous properties in television and film. In the transfer of power, Disney would receive the 20th Century Fox film studio, including the independent film maestros at Fox Searchlight (Best Picture Oscar–winners include: Slumdog Millionaire, 12 Years a Slave, and Birdman), the X-Men franchise, Fox’s television production company (worldwide hits include: The Simpsons, Modern Family, and Homeland), the FX and National Geographic cable channels, and regional sports networks, including the YES Network that broadcasts New York Yankees games. Disney also acquires a majority stake in the TV product Hulu, which it may use to kickstart its entry into the streaming wars.
Don't make a scene. Look the other way. Social discomfort has long been used to maintain the status quo.
“Young women say yes to sex they don’t actually want to have all of the time. Why? Because we condition young women to feel guilty if they change their mind.”
That was the writer Ella Dawson, in her essay reacting to “Cat Person,” the New Yorker short story that went viral, and indeed that is still going viral, this week. Kristen Roupenian’s work of fiction resonated among denizens of the nonfictional world in part because of its sex scene: one that explores, in rich and wincing detail, the complications of consent. Margot, a 20-year-old college student, goes on a date with Robert, a man several years her senior; alternately enchanted by him and repulsed by him, hopeful about him and disappointed, she ultimately sleeps with him. Not because she fully wants to, in the end, but because, in the dull heat of the moment, acquiescing is easier—less dramatic, less disruptive, less awkward—than saying no.
A conversation with Nikole Hannah-Jones about race, education, and hypocrisy.
Public schools in gentrifying neighborhoods seem on the cusp of becoming truly diverse, as historically underserved neighborhoods fill up with younger, whiter families. But the schools remain stubbornly segregated. Nikole Hannah-Jones has chronicled this phenomenon around the country, and seen it firsthand in her neighborhood in Brooklyn.
“White communities want neighborhood schools if their neighborhood school is white,” she says. “If their neighborhood school is black, they want choice.” Charter schools and magnet schools spring up in place of neighborhood schools, where white students can be in the majority.
“We have a system where white people control the outcomes, and the outcome that most white Americans want is segregation,” she says.
Democratic men are 31 points more likely to say that the “country has not gone far enough on women’s rights” than Republican women.
Amidst the exhilaration of Roy Moore’s defeat, and the broader cultural revolution sparked by women’s willingness to expose the sexual misdeeds of powerful men, it’s worth remembering this: Ninety percent of Republican women in Alabama, according to exit polls, cast their ballots for a man credibly accused of pedophilia. That’s a mere two points less than Republican men. By contrast, Democratic men voted for Moore’s opponent, Doug Jones, at the same rate as Democratic women: 98 percent. In early December, The Washington Postand the Schar School at George Mason University asked Alabamians whether they believed the allegations against Moore.
At my request, researchers from the Schar School broke down the answers by party and gender. The results: Party mattered far more. Republican women in Alabama were only four points more likely than Republican men to believe Moore’s accusers. In fact, Republican women were 40 points less likely to believe Moore’s accusers than were Democratic men. All of which points to a truth insufficiently appreciated in this moment of sexual and political upheaval: It’s not gender that increasingly divides the two parties. It is feminism.
The internet is as much the enemy as it is the hero of contemporary life.
Ajit Pai, the chairman of the Federal Communications Commission, opens a bag of Cheetos with his teeth, dumps them onto a hipster food-court lunch bowl, and slathers it in Sriracha sauce. He snaps a pic for social media.
It’s a scene from a video, “Seven Things You Can Still Do on the Internet After Net Neutrality,” shot by the conservative outlet The Daily Caller and published Wednesday, the day before the Federal Communications Commission voted to gut rules to treat internet traffic equally. Besides “’gramming your food,” Pai also assures The Daily Caller’s readers they will still be able to take selfies, binge watch Game of Thrones, cosplay as a Jedi, and do the Harlem shake.
Net-neutrality proponents have lambasted the video, and with good reason. A federal appointee charged for stewardship of public communications infrastructure comes off as insolent.
In 2018, party strategists fret, they’ll face a tough electoral landscape—and a bumper crop of fringe candidates.
Washington Republicans have put the fiasco of Alabama’s special election behind them, but their electoral nightmare may just be beginning.
Roy Moore’s stunning defeat Tuesday night was met with quiet sighs of relief throughout the GOP establishment, where the culture-warring ex-judge and accused child abuser was widely regarded as radioactive. Yet even as Moore’s political obituaries were being written, party strategists were bracing for the army of Moore-like insurgents they expect to flood next year’s Republican primaries.
Indeed, Breitbart News chief Steve Bannon has already pledged to field challengers for every incumbent Republican senator up for reelection next year (with the exception of Ted Cruz). And even if Bannon fails to deliver on his threat, many in the GOP worry that experienced, fully-vetted candidates are going to struggle to beat back a wave of rough-edged Trump imitators who lean into the white identity politics that the president ran on in 2016.
With late support from Senators Bob Corker and Marco Rubio on a package finalized Friday, the GOP is on the precipice of a major legislative victory next week.
Updated on December 15 at 6:14 p.m. ET
It’s all over except the voting.
Republican negotiators representing the House and Senate on Friday morning signed off on a final version of legislation that will, at a cost of up to $1.5 trillion, deliver a steep permanent tax cut to corporations and more modest, temporary reductions for individuals and families. In the last hours of tweaks, the GOP boosted a benefit for working families at the behest of Senator Marco Rubio of Florida, likely securing his vote and the support the party needs to pass the bill next week. And they flipped the one Republican senator who had voted no on the chamber’s original bill earlier this month, Bob Corker of Tennessee.
The House and Senate must each hold final votes on the tax plan next week, and given the GOP’s fractious and shaky majority, there’s always the potential for last-minute drama. But the conference-committee report signed on Friday won’t be subject to amendments, and negotiators evinced little worry that the landmark deal—which represents the largest changes to the tax code in more than 30 years—would fall through. House Majority Leader Kevin McCarthy announced the House would vote on Tuesday, with the Senate expected to send the plan to President Trump’s desk soon after.
Early marriage is a common cultural practice within the Rohingya Muslim communities in Myanmar. Limited food rations in crowded refugee camps in Bangladesh causes even more families to force their young daughters to marry.
In November, photographer Allison Joyce, working for Getty Images, spent time with several Rohingya families in crowded refugee camps in Bangladesh, as they prepared their young daughters for weddings, hoping to secure more food for them and their families. Joyce: “Early marriage is a common cultural practice within the Rohingya Muslim communities in Myanmar with child marriages being extremely common among the ethnic minority group. As over 620,000 Rohingya have fled their homes into neighboring Bangladesh since late August, food rations have reportedly been a major factor in the decision for families to marry off their children in the camps while UN officials warned that Rohingya children, especially those who were unaccompanied, are at great risk of being trafficked or forced into marriages. An investigation by the International Organization for Migration recently uncovered documented accounts of Rohingya girls as young as 11 getting married, and families at refugee camps in Cox's Bazar are forcing their girls to marry early to reduce the number of mouths to feed and secure more food for themselves.”
Content moderators review the the dark side of the internet. They don’t escape unscathed.
Lurking inside every website or app that relies on “user-generated content”—so, Facebook, YouTube, Twitter, Instagram, Pinterest, among others—there is a hidden kind of labor, without which these sites would not be viable businesses. Content moderation was once generally a volunteer activity, something people took on because they were embedded in communities that they wanted to maintain.
But as social media grew up, so did moderation. It became what the University of California, Los Angeles, scholar Sarah T. Roberts calls, “commercial content moderation,” a form of paid labor that requires people to review posts—pictures, videos, text—very quickly and at scale.
Roberts has been studying the labor of content moderation for most of a decade, ever since she saw a newspaper clipping about a small company in the Midwest that took on outsourced moderation work.
A timeline of the events that led up to former National-Security Adviser Michael Flynn’s departure from the White House
Special Counsel Robert Mueller is authorized to broadly investigate Russian meddling in the 2016 presidential election, but recent reports suggest he’s focusing on a narrow period in the years-long saga.
NBC News reported on Monday that Mueller and his team are paying close attention to events between January 26, 2017, and February 13, 2017. That timespan stretches from the day Sally Yates, the acting attorney general at the time, notified the White House that then-National-Security Adviser Michael Flynn had made misleading statements to the FBI to Flynn’s resignation 18 days later.
Earlier this month, Flynn pleaded guilty to lying to the agency. Now, the question turns to who knew what—and when—about his false statements. If, hypothetically speaking, the president knew Flynn had committed a crime when he purportedly urged former FBI Director James Comey to drop the agency’s inquiry into Flynn on February 14, that could be used as evidence of intent when pursuing obstruction-of-justice charges. Below is an updated timeline to help contextualize this potentially crucial sequence of events in Trump’s early presidency.