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.
When the government shuts down, the politicians pipe up.
No sooner had a midnight deadline passed without congressional action on a must-pass spending bill than lawmakers launched their time-honored competition over who gets the blame for their collective failure. The Senate floor became a staging ground for dueling speeches early Saturday morning, and lawmakers of both parties—as well as the White House and political-activist groups—flooded the inboxes of reporters with prewritten statements castigating one side or the other.
Led by President Trump, Republicans accused Senate Democrats of holding hostage the entire government and health insurance for millions of children over their demands for an immigration bill. “This is the behavior of obstructionist losers, not legislators,” the White House said in a statement issued moments before the clock struck midnight. In a series of Saturday-morning tweets, Trump said Democrats had given him “a nice present” for the first anniversary of his inauguration. The White House vowed that no immigration talks would occur while the government is closed, and administration officials sought to minimize public anger by allowing agencies to use leftover funds and by keeping national parks and public lands partially accessible during the shutdown—in effect, by not shutting down the government as fully as the Obama administration did in 2013.
John Hughes’s coming-of-age classic feels dated in retrospect, but the film paved the way for more character-focused teen stories.
When John Singleton—the groundbreaking filmmaker behind movies like Boyz n the Hood, and the first African American to get a Best Director Oscar nomination—first saw The Breakfast Club in 1985, he was reviewing it for his high-school newspaper. “The various characters were teenage archetypes, but they were rooted in genuine human problems,” he later said. “I didn’t feel alienated by the fact that they were all white kids. They were just teens finding their way into adulthood—like I was.”
Six years later, Singleton made Boyz n the Hood, a teen drama about growing up in South Central Los Angeles; he cites the Breakfast Club writer-director John Hughes as a major influence. “He gave me a template,” Singleton has said, according to David Kamp’s essay in the new Criterion Collection release of the movie, which came out this month. Watching Hughes’s foundational tale of adolescent angst more than 30 years on, it’s easy to be put off by the homogeneity and privilege of its main characters: five suburban white kids in Chicago who spend the entire film fretting over their social status, overbearing parents, and existential fears. But The Breakfast Club undeniably laid the foundation for a whole new kind of teen drama—one motivated less by plot, and more by mood.
Allegations against the comedian are proof that women are angry, temporarily powerful—and very, very dangerous.
Sexual mores in the West have changed so rapidly over the past 100 years that by the time you reach 50, intimate accounts of commonplace sexual events of the young seem like science fiction: You understand the vocabulary and the sentence structure, but all of the events take place in outer space. You’re just too old.
This was my experience reading the account of one young woman’s alleged sexual encounter with Aziz Ansari, published by the website Babe this weekend. The world in which it constituted an episode of sexual assault was so far from my own two experiences of near date rape (which took place, respectively, during the Carter and Reagan administrations, roughly between the kidnapping of the Iran hostages and the start of the Falklands War) that I just couldn’t pick up the tune. But, like the recent New Yorker story “Cat Person”—about a soulless and disappointing hookup between two people who mostly knew each other through texts—the account has proved deeply resonant and meaningful to a great number of young women, who have responded in large numbers on social media, saying that it is frighteningly and infuriatingly similar to crushing experiences of their own. It is therefore worth reading and, in its way, is an important contribution to the present conversation.
The website made a name for itself by going after Aziz Ansari, and now it’s hurting the momentum of #MeToo.
Fifteen years ago, Hollywood’s glittering superstars—among them Meryl Streep— were on their feet cheering for Roman Polanski, the convicted child rapist and fugitive from justice, when he won the 2003 Academy Award for Best Director. But famous sex criminals of the motion picture and television arts have lately fallen out of fashion, as the industry attempts not just to police itself but—where would we be without them?—to instruct all of us on how to lead our lives.
The Golden Globes ceremony had the angry, unofficial theme of “Time’s Up,” which quickly and predictably became unmoored from its original meaning, as excited winners tried to align their entertaining movies and TV shows with the message. By the time Laura Dern—a quiver in her voice—connected the nighttime soap opera Big Little Lies to America’s need to institute “restorative justice,” it seemed we’d set a course for the moon but ended up on Jupiter: close, but still 300 million miles away. And then Oprah Winfrey climbed the stairs to the stage, and I knew she wouldn’t just bat clean-up; she’d bring home the pennant.
Stories of gray areas are exactly what more men need to hear.
The story of Aziz Ansari and “Grace” is playing out as a sort of Rorschach test.
One night in the lives of two young people with vintage cameras is crystallizing debate over an entire movement. Depending on how readers were primed to see the ink blot, it can be taken as evidence that the ongoing cultural audit is exactly on track—getting more granular in challenging unhealthy sex-related power dynamics—or that it has gone off the rails, and innocent men are now suffering, and we are collectively on the brink of a sex panic.
Since the story’s publication on Saturday (on the website Babe, without comment from Ansari, and attributed to a single anonymous source), some readers have seen justice in Ansari’s humiliation. Some said they would no longer support his work. They saw in this story yet another case of a man who persisted despite literal and implied cues that sex was not what a woman wanted.Some saw further proof that the problems are systemic, permeating even “normal” encounters.
An infamous gap in Interstate 95 will finally be closed this summer.
PENNINGTON, N.J.—The past few years have been thick with promises of shiny new infrastructure and the revival of American greatness.
Funny, then, that so little has been made of a quiet victory for U.S. infrastructure due later this year. By September 2018, one of the country’s most famous civil-engineering projects will finally complete construction, six decades after work on it began.
Interstate 95, the country’s most used highway, will finally run as one continuous road between Miami and Maine by the late summer. The interstate’s infamous “gap” on the Pennsylvania and New Jersey border will be closed, turning I-95 into an unbroken river of concrete more than 1,900 miles long. In so doing, it will also mark a larger milestone, say transportation officials—the completion of the original United States interstate system.
How men and women digest differently, diet changes our skin, and gluten remains mysterious: A forward-thinking gastroenterologist on eating one's way to "gutbliss"
Robynne Chutkan, MD, is an integrative gastroenterologist and founder of the Digestive Center for Women, just outside of Washington, D.C. She trained at Columbia University and is on faculty at Georgetown, but her approach to practicing medicine and understanding disease is more holistic than many specialists with academic backgrounds. She has also appeared on The Dr. Oz Show (of which I’ve been openly skeptical in the past, because of Oz’s tendency to divorce his recommendations from evidence).
The national-security adviser is one of the biggest hawks in the Trump administration.
In the increasingly urgent, dramatic debate about the North Korean nuclear threat, National Security Adviser H.R. McMaster stands out in the Trump administration as the strongest advocate of a hawkish position. But where do H.R. McMaster’s views on North Korea really come from? Why, to pose a question The Atlantic’s Uri Friedman recently did, is he so worried about North Korea? Notwithstanding the suggestion, in Friedman’s piece and elsewhere, that McMaster’s views represent some kind of heresy of nuclear deterrence, his worries must be seen in light of how he views Kim’s motives. Indeed, those motives mean the possibility of military action against North Korea could be understood not as a “good thing,” but as the “least bad.”
Thousands gathered in New York City to protest Donald Trump and show support for the growing movement against sexual abuse.
More than 100,000 protesters showed up on a warm, sunny day in New York to celebrate the anniversary of the Women’s March protests that followed Donald Trump’s inauguration as president last year. But in contrast with last year’s events, this year’s gathering was optimistic, almost celebratory. The pink pussy cat hats were out; so were the signs (“A Women’s Place Is in the Revolution,” “Grab ‘Em By the Putin,” “Shed Walls, Don’t Build Them”). Couples danced to brassy tunes floating from somewhere down the block.
Last year, more than 400,000 protesters clogged Fifth Avenue and descended upon Trump Tower, according to the Mayor’s Office. That event was just one of the hundreds that comprised one of the largest single days of protest in U.S. history, with more than 3 million people estimated to have participated, according to crowd-size experts. No matter that the Women’s March on Washington, the original event, was borne from a single Facebook post and organized entirely ad-hoc. People then were coming together for one reason: to protest the election of Donald Trump. This year, more than 300 towns and cities across the U.S. have registered for events.
Advocates are tracking new developments in neonatal research and technology—and transforming one of America's most contentious debates.
The first time Ashley McGuire had a baby, she and her husband had to wait 20 weeks to learn its sex. By her third, they found out at 10 weeks with a blood test. Technology has defined her pregnancies, she told me, from the apps that track weekly development to the ultrasounds that show the growing child. “My generation has grown up under an entirely different world of science and technology than the Roe generation,” she said. “We’re in a culture that is science-obsessed.”
Activists like McGuire believe it makes perfect sense to be pro-science and pro-life. While she opposes abortion on moral grounds, she believes studies of fetal development, improved medical techniques, and other advances anchor the movement’s arguments in scientific fact. “The pro-life message has been, for the last 40-something years, that the fetus … is a life, and it is a human life worthy of all the rights the rest of us have,” she said. “That’s been more of an abstract concept until the last decade or so.” But, she added, “when you’re seeing a baby sucking its thumb at 18 weeks, smiling, clapping,” it becomes “harder to square the idea that that 20-week-old, that unborn baby or fetus, is discardable.”