Hawks

 “Hawk” is a general term used to describe the entire group of diurnal (active by day) predatory birds. Worldwide there are approximately 270 species of carnivorous birds that comprise the order Falconiformes – the scientific name for hawks. All are classified as birds of prey, or raptors.

I thought it might be interesting to look up the word, "hawk". 

Why? you say.

Because too often I hear our politicians or our political views described as hawks or doves.

According to the above description of a hawk, it does not confer a very positive or happy view of what amounts to about half of the voting population. The definition above suggests that a hawk is a bird that is not very friendly to other birds and animals. Unlike other birds that are content to eat berries and such things, hawks are carnivorous.  

In the political arena a hawk, as a opposed to a dove, is used to describe someone who votes conservative and would probably be a Republican. It might be used at times to note a preference for a stronger military or it might describe someone who prefers less government. 

I am not sure that this terminology is useful or descriptive of either political ideology. A hawk is definitely not meant to be a compliment. But being named a dove is not much better. It often means that you prefer peace. That's nice. It also means you can find your way home. Often it means a person who votes liberal and is probably a Democrat. That might be good or bad. 

I suppose that all Ds are not doves and all Rs are not hawks. But sometimes it seems that way.

Whether you are a hawk or a dove, I hope you have a happy New Year. 

https://theraptortrust.org › bird-resources › bird-facts

Ice on Friday

Yesterday I was feeling almost poetic about the beautiful snowfall here. 

Well, no more. The lovely snow has turned to ice. It is freezing here in Seattle and I have spent the morning looking out my window watching people trying to navigate sidewalks across the street.  It is a sheet of ice out there and people are doing more sliding than walking. 

My gym, a two-block walk, is closed for the next few days so I don't have the temptation to skate over there. Once things begin to thaw I might try to take a walk. 

One guy has been out there on the sidewalk with a snow shovel and he is making some progress but it is very slow going. The street looks like an ice rink. I guess I will be inside for a while. My furnace is working fine but my anxiety makes me wonder if I have serviced it lately. I have to worry about something. 

Jason had the intelligence to get out of town before all this hit. But I am not sure that things are much better in Indiana. I hope it is. Oops. I just checked the weather and it is probably worse in Indiana. 

A guy just walked by my window. He had on a winter hat and gloves, and a short-sleeve t shirt. Weird. I am inside with a sweatshirt on. 

Now the guy's wife is out there breaking up the ice. She seems to be the better of the two. They are definitely getting their exercise for the week. 

By Saturday, the highs are supposed to be in the low 50s. That would be nice. 

Cheers

Larry

Snowy Morning in Seattle

 I'm feeling poetic. That's an urge I should and will resist.

The snow is falling. Big flakes now. Leafless trees across the street with bare branches covered in snow. 

No snow plows yet so the street look white and icy. 

Nowhere to go -- maybe a two block walk to the gym later. Maybe.

My cupboards and fridge are well stocked. No need to go shopping.

Pondering breakfast. An omelet sounds good but hot oatmeal sounds even better.

I might have a second cup of coffee. 

Chilly so I just turned up the thermostat. What the hell, I can pay for little more heat. 

Flakes getting even bigger. 

That's my morning in Seattle. How's yours?

Short Blurb on the US Economy

Here's a short blurb about the expected future course of the US economy. 

Looks like a bit of a slowdown but nothing crazy. 

I went to the CBO site  -- Congressional Budget Office -- for the latest macro data and forecasts for the U.S. from 2021 to 2026.

Output, as measured by real GDP,  grew relatively fast in 2021 and 2022 but it is forecast to grow much slower -- by 2.8% -- in 2023 and then gradually slowing to 1.4% in 2026. 

The unemployment rate is predicted to fall from 5.4% in 2021 to 3.5% in 2023. It will then rise to 4% in 2026.

Inflation, as measured by the CPI, hits 6.1% in 2022 but then slows to 2.3% by 2026.

The 10-year Treasury rate increases gradually from 1.4% in 2021 to 3.5% in 2026. 

Summary -- looks like a typical demand-induced slowdown with output growing more slowly, unemployment rising, and inflation falling. Interest rates are expected to rise, presumably because monetary policy will be tightening. The changes look pretty marginal and may not be that noticeable to most of us. 

Changing Things Up

Since March 5, 2010 I have posted in this blog more than 700 times. Its been a great ride for me. It gave me an opportunity to think more about many issues most of them macroeconomic. I studied macroeconomics in my graduate program and spent most of my career at Indiana University teaching macro and publishing in macroeconomic journals. I was never a household name in macro but I did enough to be promoted to full professor and receive tenure at Indiana University.  The blog posts did not count toward tenure but I think that activity gave me a familiarity with the real world that helped both my teaching and my academic research. 

In retirement I wanted to keep up with the usual topics.  Now I want to change things up a bit.  Today I am on to more fascinating topics. How many fairies fit on the head of pin is quite challenging? Or -- How much wood can a woodchuck chuck? I am hoping with more time to someday solve those challenging riddles. As you can see I will have a lot to keep me busy.

Just kidding about the fairies and woodchucks. 

While it has been fun to research and write about current macro events and issues, an underlying joy of this project has been communicating with you. You are my relatives, friends, and former colleagues and students. What a joy it has been to to keep in touch with you. 

So what am I going to change? I am going to write about the usual suspects -- but maybe with more brevity. I have helped you nap enough. Now it's going to be wham bam thank-you mam.

I request and hope to stay in touch with you. Perhaps you want to discuss the latest inflation rate. Maybe you want to tell me your 10 year old just graduated from MIT. Or maybe you are bored and want to tell me about the medicines you are taking. I am not planning to exit planet Earth for a while so I hope to stay connected with you. 

Also I might not stick with the Tuesday schedule. Be more spontaneous. When some news hits I hope to strike while the iron is hot. 

I hope you like the changes. 

Larry

Maxi-Min in 2024

When I was in school at Georgia Tech I learned about optimization theory in math courses. We learned that we could phrase a decision in terms of maximums and minimums. What choice of goods and services might lead to the most satisfaction for a family? What choice of productive inputs might lead to the lowest cost of production? Fun stuff. That's when we had to learn calculus -- a type of math that let's you find maximums and minimums. 

One can apply these basic ideas of choice theory to almost anything. Right now I am thinking about our choices of political candidates. Will Joe Biden be our optimal choice? Or will Donald Trump lead us to the best outcomes? 

I just read an article that came up with a surprising answer to this political optimization question. This article explained why the best choice was neither Biden nor Trump. It didn't argue for anyone else but it was pretty clear -- we are worse off with either of these guys. I think I agree. 

It is an interesting world or time that we live in where most of us believe that neither candidate ought to be President of the USA. Not that this opinion is totally unusual. I recall in the past people saying something like -- if anyone wanted to be President, then that ought to automatically disqualify him or her. 

You would think that democracy might solve this kind of problem of poor choices. You would think that if a candidate did not appeal to a majority of voters, then he or she could not win an election. The electorate breaks down into those on either extreme of political issues and those in the middle. Thus, candidates who represent extreme ideas might have a hard time winning enough votes. One has to appeal to at least part of that large group of voters we classify as moderate. 

I am not sure if Biden or Trump are extremists but they do seem to appeal to many extreme voters. Biden represents liberal progressives well. Conservatives would be more attracted to Trump even though he is not a typical conservative. But the picture is not just about ideologies. Both of these men are special. Biden is old and uncharismatic. He does not get away with things a younger John F. Kennedy might have. Trump is almost as old but he fits no ideological camp -- he is not a typical republican or conservative. His personality turns off a lot of the usual Republicans. 

The above is why many of us simply don't want to vote in the next presidential election. Maybe they will give an election and no one will come? Of course, many of us will look at the above and decide which candidate is the most dangerous and then vote for the other guy. But maybe instead, we will look at both guys and just not vote. In that case, the candidate who was the least of the worse might win. That's not anything to be happy about. 

First Born

Friends,

Today makes me think back. It is the birthday of Jason, my first born. Ashley came along six years later. 

My memory is pretty rusty these days but I think it was 1973. I had very recently been discharged honorably from the US Air Force and was resuming my graduate career at the University of North Carolina in Chapel Hill. Jason was born in a hospital not far away from Chapel Hill in Durham NC.

Phyllis and I rented a little house on a cul de sac a couple of miles from the University. We lived next door to an older couple -- Norman and Eileen Weatherly, who were very kind to us young folks. We lived there until we moved to Bloomington, IN and Indiana U. 

This might be too much information -- but we had been trying for a while to conceive and had almost given up hope. Jason was just a little stubborn but then finally decided to come together. And that was a about a half a century ago. 

I haven't been to Chapel Hill in a long time so I don't know what it is like now. But it was a nice easy place to live. It had a reputation back then of being the most beautiful place in in the world to live. I think it might have been a little exaggerated. People would swoon about Chapel Hill. Yes, it was a beautiful place. We were lucky to be there. 

One nice aspect of living there was college basketball. The place was legendary -- even back then. As a mediocre high school basketball player, I figured I had gone to heaven in Chapel Hill. We immediately bought season tickets and probably went to every home game played while we lived there. Dean Smith was the coach and was quite different from Bobby Knight at Indiana. But between those two coaches I saw a lot of great basketball. Smith was calm while Knight was easy to ignite but both had great teams. 

My last year of Air Force was celebrated by my tour in Vietnam. Not what I had hoped for but I came back alive.  No, I was not really in harms way. I worked in an office behind the lines and mostly ordered supplies for the guys who were doing the real fighting.  I even got an early-out to go back and finish my degree at UNC. 

It was lucky for me that Indiana needed a macroeconomist. I had not finished my dissertation but they took a risk on me and hired me ABD -- all but dissertation. My dissertation topic was an analysis of the Nixon Wage and Price Controls. I managed to finish it within a year and all was good. I spent my entire career at Indiana except for a one year leave at the St. Louis Federal Reserve Bank. 

That's enough reminiscing for the day. I'll end by just saying how thankful I am. Thankful to have been allowed to live a full life and to have a wonderful family.  

Limbo Like Me

You are probably wondering how to conflate the Limbo with Thanksgiving. After all, Thanksgiving is coming up. But you think too hard and while it seems that today I should be writing about Thanksgiving, burp, maybe it is better not to. I can think of few Thanksgivings when I did not feel like the Hindenburg after ingesting a record amount of turkey and stuffing. That's not a pretty picture. 

So let's forget Thanksgiving for a while and focus on the here and now. When I think of limbo I think of a couple different things. The first is the one associated with the song Limbo Like Me. The song is about a dance -- or at least a physical exercise in which the participant tries to limbo underneath a horizontally placed pole. Unlike the pole vault, in limbo the height of the horizontal pole gets lower and lower. You try to get yourself underneath the pole. Rubber man finally wins because he has no actual bones in his body and he is able to go under the bar at just a few inches off the ground. Inflexible people like me have to quit when the bar reaches about five feet from the ground. People at Thanksgiving parties often drink too much bubbly and often try the limbo dance as well as other strange activities like kissing your Aunt Ashley in the hall closet. 

Sadly, while colorful and not so much fun, this post is not about that limbo. It is more about "being in limbo". Being in limbo means not being in any specific state. It means being in between. Purgatory means being between heaven and hell. Limbo means you are waiting to see what floor you get off. And it is that purgatory that a lot of us are sadly getting used to.

What do I mean? It means that if you were unlucky enough to walk within four football fields of someone known to have active Covid, then you are immediately taken to purgatory. It depends on how strong and focused you might be, but the truth is that most of us in this purgatory are ready to jump off a tall construction crane.  I recently hugged someone who recently tested positive for Covid and luckily I am too afraid of heights to climb a tall construction crane. So instead of me diving from a tall object, my level of anxiety has shot higher than its normal heights and I am pretty damn sure that the Covid will either kill me or render me unable to fully enjoy my third helping of mashed potatoes. Either way, the anxiety is not my friend. 

One way to stay out of harms way when Covid is lurking about is to stay isolated. But that's no fun and it is pretty much impossible. We are all in limbo in the sense that we don't even know how many people we pass by and share the air with. So I say, to hell with it and hope that despite Covid, we will all have a safe, happy, and healthy Thanksgiving.  Hug your loved one. Eat a turkey. 

Food Glorious Food

I believe it was the musical Oliver where the cast sang the song Food Glorious Food. That was a long time ago but the song and some of the words have stayed with me. That's not by accident because the truth is that food is probably one of the most important aspects of my life. I can't remember a time when I was not hungry. Of course, right after sucking down a big steak or a large platter of pork ribs, I am clearly satiated. But that doesn't stop me from thinking about my next meal. 

I'll start this by pointing out that except for a few times decades ago I have never gone without a meal. While I don't eat much between meals, I will admit that my meals can be sumptuous.  There was a time when I thought I could use a diet to remove unwanted flab from my frame by skipping meals but those days are long over. 

The truly remarkable thing is how much I can eat. I recall once getting into a chili dog eating contest in Rockford, Michigan where I believe I ingested a dozen or so chili dogs. That was a special occasion and a little extreme but my family members can attest to my regular performances involving stuffed cabbage rolls, ribs, spaghetti, lasagna and many other foods.  

It seems that I always liked to eat a lot. But much changed when I went to Georgia Tech. Athletes at Tech had access to a dining room that basically kept food coming as long as you didn't pass out at the table. They served us at tables family style. They might place a large bowl of mashed potatoes on the table for 4 of us to share. When the bowl appeared to be close to empty -- the lovely waitresses would bring out another full bowl. And then another one. And so on. 

That was dinner. But they also gave us breakfast and lunch too. I remember well that Thursday lunch was sandwiches. The nice ladies would bring to the table platters of  luncheon meats and loaves of bread. Seems like the guys enjoyed sandwiches a lot and we could put away a lot of meats, cheeses, and breads. We could take some sandwiches back to the dorm in case we got hungry in between meals. 

I envy those people whose lives do not revolve around the timing of meals. I feel a little like Pavlov's famous dog who salivated after he rang a bell denoting meal time. There is no little bell but something goes off in my brain to alert me that the time is near for a meal. My friend Barbara, in contrast, could probably go all week without a meal. 

It's not just the amount of food. Some people can eat a lot because they have learned that its good to eat foods that are good for you. A second bowl of spinach is pretty harmless. And even though I love spinach it is not the type of thing that makes me want to have seconds. I want seconds of the things that either make you fat or they kill you. Give me a whole casserole tray full of baked macaroni and cheese or a full side of ribs. Wow. Now that's fun. 

Somehow I have made it to the ripe old age of 76. I doubt my eating habits are going to change very much though I am lucky to have a friend who helps me make better food choices.  I better go now. I am feeling a little hungry. 

November

This week's blog post is all about November. I am not sure how you relate to months or even if you do, but November is pretty special to me. 

My kids were born in November. One at the beginning and the other at the end of the month. Five years apart. Somewhere in between is Thanksgiving and right before November (at the end of October) is Halloween. All that is pretty cool. 

To make things even better, November is when the seasons change. The trees start changing colors and dropping their leaves. When I was a homeowner I didn't love raking all those leaves to the curb but it was a part of knowing that summer was definitely over and winter was on its way in. We had a very hot summer here in Seattle this year and so I am greatly enjoying the falling temperatures now. 

And then there is football. November means the end of the season is nearing and we will soon know the best teams. I recall my Georgia Tech freshman team playing Georgia on Thanksgiving each year. That was a big game! Forty thousand Atlantans showed up for those games -- even though it was only freshmen playing.  

Thanksgiving isn't as rewarding as Christmas but it is a great family celebration and features wonderful foods. There's nothing like pulling that big turkey out of the oven and scooping out all that delicious stuffing. Give me the turkey leg any day. And don't even talk about the skin. The meat is good but give me some of that that nice crispy skin. 

Just as the trees lose their leaves and the tree appears to die, we too arrive, blossom and then go. Sonny and Marge were the parents of me and my brother. Dasa departed a while ago but his and my children carry on. It's nothing to get depressed about. This process, like the trees and leaves, goes on and on. It is not personal. It is an ongoing process of change and renewal. 

So whether it is the trees or our families, November makes me think about all that. It's nice to spend a little time reflecting. I hope you enjoy November too!

Windfall Profits and the Bad Guys

The news on Halloween said that President Biden warned oil firms that he was going to tax their windfall profits. He also said that he was going to enroll in a business program at the nearest Junior College. Just kidding about the last one. I doubt he could even get into a junior college. 

I am not sure where to begin.  First, as I recall, it is Congress that has the power to tax. But you never know. A president can find ways to do things. Second, aren't oil companies like most other companies in the sense that they pay profits taxes. Joe, they already pay profits taxes. The word "windfall" is supposed to make us think that the profits are not of the ordinary kind. So regular profit taxes are not enough for Joe. He wants even more. Hmmm. How high should taxes be? Are they really so low? If it's bad for companies to make larger profits then is it good for Joe to skim them off? If it goes to Joe is it okay? 

Wow. This gets better and better. Joe says these oil firms are taking advantage of us. The price of oil is extraordinarily high and so the firms get profits they don't deserve. Somehow, in the current global economic environment the oil firms are supposed to ignore supply and demand. Let's face it, if there was not a large excess demand for oil, the price would not rise so much. But there is a huge excess demand for oil. My econ textbook taught me that the role of excess demand and higher prices is to signal the need for producers to bring more supply to market. It seems like more supply in the market would help cool the price. Supply does not come magically. Firms typically produce more output as a way to make higher profits. Should these companies be "good citizens" and bring more output to market at lower prices that damage their existence?

Which brings in Joe again. It seems to me that inflation is historically high these days. It seems to be historically high on Joe's watch. And he is not innocent. As I recall it was Joe and his merry band of Congressmen who lit the powder keg of government spending that caused the excess demand and a much higher inflation rate. Oil schmoil. The price of everything is rising thanks to their fiscal policies.  If you want to find the culprit for higher inflation look into the mirror Joe. 

But Joe is like a lot of politicians. He wants to blame the other guys and he wants to ride in on his bucking bronco and save the planet. Isn't it sad how politicians sometimes love to blame us. Us sometimes want higher wages. Us sometimes don't hire enough workers. Us sometimes make the wrong products. Us sometimes want to charge higher prices. Us is bad. 

Joe, you ran as a regular guy. One of the people. Sadly you are just another politician with more finger pointing and few real answers. You make us look like selfish bad guys. I don't think that's the case. As always, we respond to incentives. Why don't you think more about the incentives you create?

Guns Versus Butter

Guns versus butter is a terminology that goes back to Nazi Germany and then to President Lyndon Johnson. And it seems highly relevant now. No, the issue is not about butter. Butter is easy for most people to identify with but the statement ought to read something like guns versus other stuff. Guns versus butter refers to a choice that society often has to make -- with limited resources do we prefer to spend more of them on national defense or on other things? 

It begins with the assumption that we can't have more of everything. Limited incomes or limited resources means that we often have to make choices. I want a new car but I also want a new condo. I can't afford both. So I have to make a decision -- a new car or a new house? 

Guns versus butter is meant to meant to relate to how we use the government's budget to attain national goals. More "guns" means more national defense. More butter means more of other things. For example, more transfer payments. 

Why bring this up today? We know all the above already. The reason is that we are now very preoccupied with how we should respond to Russian aggression in Ukraine. Some experts believe we should prepare for a war and maybe even a nuclear war with Russia. Russia's aims in Ukraine worry some folks that in the near future Russia will invade Ukraine and perhaps other areas in that part of the world. 

If we are serious about constraining these Russian ambitions, then it will take money and resources. Those resources must be pulled from somewhere. Maybe they will come from other places in the government defense budget. Or maybe that won't be enough. Maybe we will have to find the money in other government programs. Thus -- guns versus butter. 

As of 2022 this is how OMB says we spent our federal government money:

    Defense 14%

    Human Resources (Health, Education, Training, Medicare, Income Security, Social Security, etc)  72%

    Physical Resources 5%

    Net Interest 7%

    Other 2%.

Clearly, if we are to pull more money into defense it will have to come from human resources. 

Here are the annual spending numbers for national defense (in billions of dollars) for 2012 through 2027 in five year increments:

   2012   678

   2017   599

   2022   780

   2027   867

After dropping by $79 billion from 2012 to 2017, defense spending rose by $81 billion from 2017 to 2022 and then is projected to rise by another $87 billion in 2027.

If we go to war with Russia, those defense numbers will likely rise even more. 

That $867 billion or more will have to come from somewhere. Will we raise taxes that much or will we cut nondefense? Or maybe we won't raise defense spending. I guess we will have to wait and see.  

Government and Growth 2019 to 2021

The bottom line of the table shows that real GDP fell in 2020 meaning that 2020 was a recession year. The recession lasted only a single year (if we ignore quarters) and real GDP was only somewhat larger in 2022 than in 2020. 

The table shows that we experienced a tripling of the government deficit from 2019 to 2020. It is not uncommon for the government to spend more and/or tax less during a recession. Both outlays and revenues recovered in 2021 but we were left with a large government deficit in 2021. 

The national debt grew in both years -- by $4.2 trillion in 2020 and then by another $1.3 trillion in 2021. The total increase over two years amounted to a 33% over the level in 2019. That's a whopping increase in debt in just two years. Recent news shows the national debt now at $32 trillion. 

So what? We have come to expect that governments will react this way after a recession. Governments feel the responsibility to juice up the economy and they do it by increasing national debt. It seems reasonable, right? If you lose your job and you go into a personal recession, you might borrow to carry you through the lean times. 

Debt seems natural and it is. But we always have to remember that when we go deeper into debt, we take a risk. On the personal level, if you don't get another job quickly, then you might not be able to pay back the debt. There is that same risk with the government. If the economy does not recover quickly, then we may not be able to repay the debt. Creditors don't like it when they are not repaid in a timely manner and there are consequences for failure to replay.

With governments it gets more complicated. Government has the power to tax and therefore we believe that the government should and can repay. Just because the government has the power to tax and repay, however, it doesn't mean it will. With government there is the additional element of policy. If government decides not to pay down the debt, it is possible that it will incur even more debt. Government, or should I say politicians, excel at finding ways to spend the people's money. If they fail to reduce government deficits and debt, what happens next? 

The recent behavior of national inflation and interest rates might give you a clue. The picture is not so rosy. 

The table shows a large increase in debt following a recession. But will it end there? Will politicians find excuses to not reduce spending or to not raise taxes? If national debt continues to rise in the future, we will surely get higher inflation and interest rates. Is that what we want? Is that what we elect leaders to do? I think not!

Government Budget and Real GDP (in trillions)

                        2019     2020     2021

Revenues          3.5        3.4        4.0

Outlays             4.5        6.6        6.8

Deficit             -1.0       -3.1      -2.7    

Debt               16.8       21.0      22.3

Real GDP       19.0       18.4     19.4

The Fed and the Indy 500

Honey, I think Junior found a box of matches. No worry. He doesn't know how to use matches. 

Honey, I think Junior took out a match from the box of matches.  No worry. He doesn't know how to use matches. 

Honey, I think Junior is striking a match.  No worry. He doesn't know how to use matches. 

Honey. I think the match is lit. No worry. He doesn't know how to use matches. 

Honey, Junior's room is on fire. Oops. 

Reminds me of the current discussion over monetary policy. Monetary policy aimed at expanding the economy remains a discussion item despite the fact the we have expanding economic growth and rapidly rising interest rates and inflation. It is time to blow out the match. 

The title of an article in the Wall Street Journal is Fed’s Inflation Fight Has Some Economists Fearing an Unnecessarily Deep Downturn. Interesting choice of words -- Fight, Unnecessarily, Deep, Downturn. To me those are fighting words. 

It's not enough that the Fed's errant policy might induce a slowdown in the economy -- folks are worrying that the downturn is deep and unnecessary. Why does the Fed risk something that is unnecessary? Why risk a deep downturn? What is wrong with those people? Aren't they satisfied with a good old slowdown? Won't that be enough to quell this inflation fire they started? 

I guess not. As in the inflammatory remarks above, you don't wait to call the fire department until the flames are all-consuming and there is little hope of saving the building. Instead, you might allow for a little friction but stop before you start a fire -- even a little fire. But not our Fed? 

They saw the fire starting but found every excuse under the sun to ignore all the signs. How high does the inflation rate have to rise before someone at the Fed slides down the fire pole?  Has the rise in the inflation rate not equaled or exceeded past increases in inflation? 

That's where we are. The Fed sat on its hands while the blaze started and now that it is roaring -- they sit on their hands again because they fear that they have backed themselves into an inflationary corner. 

As in the first lines of this piece above. Don't let Junior have the matches. Nope. Don't let him touch them. 

The Fed? Teach the Fed to act like a race car driver. When the car veers a little too far left, then make a correction rightward. Too far right, then correct to the left. Keep on top of the movements. Lots of little corrections keeps you on course. Waiting too long to correct puts you in the stands. 

What is wrong with our current crop of Fed officials that they can't understand these simple facts? Maybe the facts don't fit their ideology? Maybe to them rising inflation is more fun than falling?

Chemistry

I am reading a book called Lessons in Chemistry by Bonnie Garmus. It was recommended to me by a friend or else I would never have chosen it. I always heard that chemistry was a very hard course and I was very successful in avoiding that course in both high school and college. I was able to take biology instead so I don't know the first thing about chemistry. Just looking at the cover of that book scared me. 

As it turns out, it is a fabulous book and you don't need to know much about chemistry to read it. And despite the title, it is really a book about feminism. Speaking for myself, the book is stellar at what it tries to do and it probably turns most of us into feminists. That is, if feminism means understanding that the deck is stacked against equality and means that women usually have a hill to climb, then the book is about feminism. 

Elizabeth Zott has the misfortune to be a chemist -- a serious one. In the 1960s that meant she was a minority. Most chemists were men. But Zott had a strong personality and was not easy to be put down. Regardless of your own sex you will find Zott to be a role model. A person you would admire and trust. Turning the pages ought to remove you from your own hang ups and turn you  into a cheerleader for people. Yes people. All people. Literature is wonderful at making you think beyond the usual stereotypes. Zott is a great human being. Period. One review of the book says the following, "A story for the smart girls who refuse to dumb themselves down." In truth, it is a story for anyone who might dumb themselves down. 

What else? I love the way chemistry and cooking are tied in a knot in this book. Even me with limited understanding of chemistry can appreciate the intersections of chemistry and cooking. I think of chemists as people who mix things together and watch the outcomes. Cooks do the same things. Zott has a daughter and is thrown into cooking and then her own television cooking show when her daughter is fed a less than healthy lunch at school. So if you like cook books and cooking, you should love this book for that part of it. 

It makes me think about what it is that creates an Elizabeth Zott. I realize that she is a book character but I have been lucky to know a few Elizabeth Zotts -- both men and women who are successful because they have strong characters and they know how to solve problems. They set goals and work towards them. 

My Guitar

When I was at Ponce De Leon Junior High School I had a choice. I could either take shop, band, or chorus. The choice was easy since I had no skills with tools and I had never even held a musical instrument. But I did love to sing. That was back in the days of the Temptations and the Four Tops and those groups made me want to sing. Did I know how to sing? Could I carry a tune? Did I even know what a note was? No, No No. But taking Chorus with Mrs. Rayfield definitely beat band and shop.

Chorus class probably had at least 50 us in there. The girls in the soprano section could sing. Boys like me were assigned to the bass section and mostly we could sing loud. It was a good class. We were taught to read music -- read it enough to know whether to sing at a higher or lower pitch. We were not good at discerning pitches. We either went up or we went down. I loved chorus class. 

That's my musical history. Aside from listening to rocknroll on the radio and tapping my foot to the beat, I had no real training or ability. 

Eons later for no reason I can remember, I decided I wanted to play the guitar. Maybe I was influenced by my brother who seemed to be able to learn the guitar.  But a few years ago while I was living in Bloomington I bought a guitar and asked Charlie Jesseph if he would give me lessons. Charlie was a friend of my daughter and a gifted musician, and apparently he needed money. Let's be honest. I had zero skills. Charlie would play a note and then a higher note and ask me to describe the second note. I could not tell if it was a higher or a lower note. As I said, I had zero musical skills. 

I play an acoustic guitar. I am still taking lessons. Thankfully a teacher named Danny is willing to help me now. The nice thing is that I don't need to know how to read music. Most songs are found on sheets that simply display the chords. Play a G chord here. Then here play an E chord. I have learned some basic chords and I play songs that feature those chords. I stay away from songs that have chords I don't know.

Chords are, therefore, what its all about for me. Chords are not easy. Each chord asks you to put a finger on a particular place on the string. Of course, most chords have at least three notes so that requires you to have at least three fingers touching three strings in specific places. Wow. Talk about yoga for fingers. The fingers are one thing. The brain is the other. Each chord is different so when it says to play a D chord your fingers jump to specific places. Then you might jump to an E chord and you have to remember where your fingers go for the E. I get both hand and mind cramps. Ouch. 

Over these years I have learned to play maybe a dozen songs. Some of my favorites are Save the Last Dance for Me, Love is a Burning Thing, and Take the Load off Fanny. Harder is reading sheet music. I struggle with that. It is not really that hard but it requires memory and I seem to be short on that these days. I don't really need to know how to read sheet music since most guitar songs feature the chords. But it seems like perverse fun to give it a try. 

Age and Honesty

I was trying to find a topic to write about this week. The usual macro topics seemed overplayed by others. How much can you write about inflation? 

Then it occurred to me that there are topics that I think about all the time. They relate to my situation on this planet. Mostly that means that the topics are age/health related. I don't have to read piles of WSJs to write about health and aging. The facts are right there within me. 

For those of you who are under 50, I apologize for today's post. But it seems to me that most of you reading this blog are more my age. That means you are old. It also means you see yourself on the way out of here. Seems to me that we oldies have a lot in common and a lot to talk about that has nothing to do with inflation or GDP. 

Maybe I shouldn't write about health and aging. Maybe it is too personal. Maybe too depressing. Maybe. But it is also true that a lot of us are facing our toughest challenges ever and yet we don't have sufficient outlets to discuss or even vent. 

We all have some health concerns. And I won't try to discuss all of them. I am taking a purely personal approach today. But that doesn't mean that you can't widen the topic with the blog Q&A that follows my words. 

I don't have cancer. My heart seems to be ok as are most of my organs. I may be somewhat pre-diabetic. 

But my real challenge is short-term memory. Wow. My memory reminds me of the flight pattern of a drunk butterfly. I can forget a word or a thought in less than three seconds. Its right there one second and then wham, its outa here. 

Unlike a broken leg or even a serious heart problem -- a short-term memory issue is hard to hide but the embarrassment of it makes me want to try. You can tell your friend that you can't eat a giant fatty ribeye but it is another thing to tell that same friend that you can't remember the words they said to you just 10 seconds ago. So you just won't bring up that topic -- even though you'd like to keep talking about it -- whatever it was. 

I know several people who are my age and who suffer to some degree from memory issues. It is natural to have memory issues as you age. But there are memory issues and there are memory issues. And some old people don't suffer at all -- and they seem to flaunt their ability to remember just about everything that has ever happened to them, including what they ate for lunch. Damn!

Having short-term memory issues is one thing. No fun. But even worse are the solutions. To understand what is causing memory issues the doctor has to look inside your head. While Frankenstein used a hand drill for brain access, now they seem to use a modern thing called an MRI. To obtain the images inside your brain you have to go see a neurologist and he will ask you to lie down on a machine that will look inside your skull. 

That doesn't sound so bad until you realize that you have claustrophobia and you don't want to lie down with your hands tightly clapped to your sides inside an area that reminds you of the casing of submarine's missile. A small missile at that. 

Once you submit to the MRI you are in the hands of the medical community. Of course, that sounds good. It sounds good as soon as you realize that they might have a cure for your problem. But then, the possibility is that (1) they don't have a cure or (2) the cure is worse than the disease. 

Maybe you were wondering what is on my mind these days. Now you know. I hope I didn't totally spoil what otherwise might have been a fun day. My MRI is scheduled for September 26. Wish me luck. 

Green Lake

I have been in Seattle for a while and it looks like no other place on Earth is ready for me, so I might as well call this home. So it is worthy to write about in the blog.  

You probably already know I live in a neighborhood called Green Lake. It's called Green Lake because there is a lake here called Green Lake. Pretty clever naming scheme. 

Green Lake is a very attractive part of Seattle and attracts its share of sun worshippers. It's not big enough to attract speedboats and is more conducive to sailing and rowing. There is a small public beach as well. Green Lake mostly attracts people to the path that winds around the lake. On any given day  you might see hundreds of people walking the loop. I think it takes about an hour to walk around once. Runners are allowed too as are roller skaters. Bikes are not allowed access to the path but at times people who are poor readers sometimes zoom around to the chagrin of the rest of us. 

The neighborhood of Green Lake is perfect for me. It has just about everything within walking distance -- a grocery store, 7/11 Store, fitness center, at least two Mexican restaurants, other restaurants and various shops.  The lake is located in the middle of a very nice park. Within a short drive in the car is a Safeway, some nice restaurants, and more. Green Lake is north of downtown Seattle -- maybe takes about 10 minutes to drive downtown. Downtown is nice, especially because it is on the water with boats and docks and beautiful views.  

Driving to the west I can be on the Pacific -- lovely beach towns and beaches. Driving east of here takes me to some mountains and mountain towns. 

Green Lake Fitness Center is open to anyone who pays -- but seems to be populated by older folks like me. It doubles as a social club for some of us. It's a serious fitness center with instructors and classes and folks intent on getting a good workout. Sometimes it appears that the jaw is the main muscle being exercised. I took some classes there and decided that I would live long enough without trying to kill myself in very challenging classes. Now I go and workout without anyone yelling at me to do 10 more pushups. 

Even though Seattle is a big city, Green Lake feels like a small town. Whether it is the grocery store or the local tavern, the employees soon recognized me as a regular and often call me Larry. Tacos Guaymas is two blocks from my house and I feel like Victor and Abel are family. All the food is good there but my favorite is the carnitas. Machos Nachos ain't bad either. The family feel of TG generates a very loyal following of customers. It is hard to go there, sit at the bar, and not soon be talking to one of the regulars. When you are from elsewhere like I am, it is  really nice to have a place where you can go and meet nice people. 

I guess I could go on and on and on. I'd love to talk about macro topics but between Donald and Joe and the rest of those clowns in politics, its hard to find anything worth exploring. I cannot remember a time when this country was so poorly governed. 

Student Debt Forgiveness

Debt forgiveness is a strange animal. A person borrows money and then the government says -- don't worry about it. Someone else will pay it for you. Or maybe, they say, no one will pay it. Sorry banks -- you made a loan in good faith but now no one is going to pay you back. In either of those two cases the borrower skates while someone else ends up holding the bag. 

How our government can support that seems crazy to me. For one thing, it creates a moral hazard. Once this is allowed to happen, then who is going to lend you money? Hi Mr. Banker. I would like a bunch of money. Sorry Mr. Davidson, we don't lend money to people like you anymore. We just ran out of money yesterday because people don't pay us back anymore. Stick up a 7/11 if you need some cash. 

Hold on you say. The government exists to redistribute money from those who have a lot of money to those who need it. Higher income folks pay income taxes while lower income people get transfers to cover the cost of living.  We seem to think that is okay. Why is writing off loans so different? Give a poor person some income. Write off a loan. What's the big difference? It's all redistribution of income. 

For one reason it is different. It seems very different to me because this is a very specific financial transaction. We are not accustomed to using transactions to make incomes more equal. 

Back to basics. What is the value of education/training? There are two ways to estimate it. One estimate of the value of the education is the stream of income/benefits you get because of the education. Another way to estimate the value of education is what it costs to get it. Let's suppose the benefit stream is much larger than the cost of the education. In that case we say that education is a good deal. It has bang for the buck. We want to buy more education.  At the other extreme is that the income/benefits might be small relative to the costs or outlays for the education. In that case, education is not a good deal and we want less of it.  

Why go through all this obvious information? Because we seem to have lost track of the basics. We get all riled up about debt forgiveness. President Biden wants to let people borrow for education and then not have to pay back the loans. That doesn't make sense to me. Does the education have value? Can former students earn enough after graduation to pay off the loans? If so, what's the issue?

The issue could be that the educational benefit stream is too small. That means you can't earn enough after graduation to pay off the loans. The issue could be that the cost of the education is so high that it could never generate incomes that could pay down the debt. At the center of both of these possibilities are the schools and the lenders. 

Why would schools charge too much for the expected benefits? Why would lenders loan money to people who have zero chance of replaying the loans? The answer is found in our government. The market should work but the government waddles in without saying anything about the costs and benefits of an education. Someone has to point out when costs and benefits are so out of line that the government has to provide loans and then forgive them. Once we know the government is going to step in, then we have two problems. First, schools can raise prices knowing the government will make sure they get paid. Second, borrowers can fail to pay on their own with few consequences. 

As long as the government stands ready to bail out schools and borrowers -- these problems will never end. And taxpayers and paying students will end up footing the bill. 

Something's Happening Here

Buffalo Springfield sang that something's happening here...and what it is ain't exactly clear. 

Inflation fits that thought. Countless articles have been written lately to document the return of this rabid animal. We haven't had to worry about inflation for quite a while so its a new kind of paranoia. 

I decided to look at some of the numbers to get a better idea and it was a little shocking to see the stark changes. I won't predict the future but I have to say the story does not look as scary as some would have it. 

Much of the increase in inflation has come from admittedly temporary factors associated with Covid and Covid lockdowns. It would be nice to think that those changes are over now but it's probably too soon to put Covid to bed. 

I took numbers from the BLS -- for the monthly CPI. I compared the percentage change last year -- July 2021 to July 2022 to the average of the one-month percentage changes for the past three months -- May, June, and July of 2022. It is pretty startling. 

                                           1 Year  3 months

All  CPI Items                        8.5    0.8

Food                                     10.9    1.1

Energy                                  32.9    2.3

Fuel Oil                                75.6    1.6

Airline Fares                        27.7    1.3

Gas Utilities                         30.5    0.8

Food Away from Home         7.6    2.5

Gasoline                              44.0    2.5   

Clearly the last three months have been as unusual and unexpected as the last year. Looking at the average price of all the items in the CPI shows an increase of 8.5% from 2021 to 2022. That's a whopping increase. That performance has caused us to get a little crazy. Thinking the Fed is going to tighten money and raise interest rates to combat that supercharged inflation is doing a lot of economic damage. Just the worry that the Fed is going to tighten is causing people to be more cautious about spending. We are worried we might even get a recession. The simple expectation of tightened financial conditions is causing us to think a recession is around the corner. 

But then May 2022 arrived and the inflation data turned a corner. After rising at 8.5% for a whole year, we see the inflation rate in recent months falling to less than 1%. Less than 1% over three months! True, its only three months. I don't recall anyone predicting this. But clearly, if inflation surges can be caused by unusual things like Covid, then it is possible that those surges can reverse themselves. 

I don't think this reversal should be considered impossible. Look at some of those increases -- Fuel Oil 76%, Gasoline, 44%, Energy 33%. Those are huge increases and the fact that they had their day and are now returning to something more normal should not seem crazy. Somebody said, "what goes up must come down."

That saying has to do with gravity but is it intuitive that once a price rose by 76% in one year -- that it should keep rising at 76% forever? I don't think so unless you can tell me what permanent change should cause prices to keep rising at 76% for the foreseeable future. 

Stop. What's that sound? Everybody look what's going on. 

Poetry

I read the online version of Writer's Almanac every day. It's full of poetry. It makes me want to be a poet. Poetry isn't what it used to be. I thought to be a good poem the words had to rhyme. Apparently that's "old school" and thankfully so. Rhyming is hard. But eliminating rhyming doesn't make poetry easy. A poem has to say something. It has to say something important. And it has to say something in a beautiful or impactful way. 

The following words were written in the poem, Sea Fever in 1902. "I must go down to the sea again to the lonely sea and the sky. And all I ask is tall ship and a star to steer her by." Wow. How cool!

I am not sure how to differentiate a poem from the words of a song. "You've lost that loving feeling -- oh oh that loving feeling. You've lost that loving feeling and now its gone gone gone." The Righteous Brothers sang those words in 1965.

A few years ago I tried to write some poetry. The only poems that I finished were about aging. "Prostate Blues" and "I Found Myself in my Garage" were comical but they say a lot about getting old.  They are silly but real and heartfelt. Since writing those two poems/songs I have pretty much run dry. Which says to me that I am not cut out to be a poet or songwriter. Or maybe it says that I said whatever needed to be said and nothing else seems important enough for me to write about. Or it might say that I prefer writing prose over poetry. Whatever the motivation, here I sit at my laptop trying to write something that seems important to me. I like the idea that I might write a poem or a song, But nothing is coming today. 

I linger over the end of the last paragraph and wonder what I should write next. The white space is intimidating. When I finish one of my typical blog posts it is usually twice as long as the above. Is it possible that I have nothing more to say on this topic? Maybe this is enough. 

But maybe I need to give it a little more time. I should save this draft and come back to it later. Maybe there is more to say about why I prefer to write prose over poetry.  Maybe not. Let's see. 

Okay, let's finish this with a little about my location. My laptop sits on a desk in front of a sliding glass door in my apartment. I spend a lot of time looking out the window. Across the street is a fairly big apartment building so there is always movement over there. People come and go. Delivery people tap on phones to get them into the lobby so they can leave packages. Its a fairly busy street between me and the apartment building and I see a lot of cars and trucks go by. This street, 70th, more or less feeds into the street that goes around Green Lake. So it is busy most of the time. A young woman with her two daughters just stopped to pick up grandma. Looks like they might be going to the airport. 

That doesn't have much to do with poetry but I am sure a good poet could take the above paragraph and turn it into something. 

Otis Redding wrote something like --- sittin on the dock of the bay watching the tide roll away. I guess I could write something like -- sittin in front of a sliding glass door, watching the people roll away. Or maybe not. :-) 

Cheers.

Bobby Dodd

Most of you have no idea who Bobby Dodd was. I decided that the world would keep spinning if I took another week off from macroeconomics and had some fun sharing my past with you. 

My high school football team played for the state championship of Florida in 1963. It was a close game and we were behind the Tampa Robinson High School football team with only seconds left. Coach Kotys could have put in Larry Rentz at quarterback and tried a hail Mary but instead he looked at me and said, "son, get in there and kick a field goal." I had kicked a few field goals that year and it seemed logical enough until I realized that I might have pooped my pants before running on the field. Larry Rentz held the ball and I kicked it and the Gods shined on us as the ball somehow found that sweet spot between those goal posts.  

As an 18 year old virgin I was pretty sure that kick would get me laid, but it didn't turn out that way. But I was a home town hero for a little while and that was enough to get me a scholarship to play for the legendary college football coach at Georgia Tech, Bobby Dodd. Back then, Georgia Tech football must have been very rich because I was probably one of about 50 freshmen arriving at Tech that summer on full scholarship. Anyway, one of the highlights of my life was the honor of going to such a fine school. No, I didn't  play very much on the team but Coach Dodd let me sit on the bench until I graduated.  

And that seems to be the story of my life. I kinda luck into things. I was called a B+ student in high school -- more interested in sports and girls than studying. Football got me to a school well above my pay grade. Tech was hard. As Jim Kiltie, my Tech roommate and dear friend today is fond of saying -- I spent a lot of time in our room in Smith Dorm studying. I did not want to flunk out and as I said, I wasn't the brightest bulb in the package. Somehow God smiled on me and by the time I left Tech I was a pretty decent student. 

Then luck came along again. In this case, it was mostly bad luck that turned into good luck. The Vietnam War draft came along and my draft board was nice enough to let me finish college and start a MS degree at Tech before I had to enlist. Would I have gone to graduate school without the draft -- hell no. Anyway I got a taste of grad school before the Air Force and then with no other plans after I left the Air Force, I finished that MS at Tech and then went to the University of North Carolina for a PhD in economics. 

I was a pretty good student by then and it turns out that the Business Economics Department at Indiana University wanted to hire someone like me in 1976. They offered me a job but it was contingent on my finishing my doctoral dissertation in one year. Yikes. My topic was the Nixon Wage and Price Controls. I did finish it in a year and concluded that the controls were a failure. No, they didn't control wages or prices. The process colored my approach to research all these years -- taking a skeptical eye toward many government policies. No, I am not very impressed by President Joe's policies. 

So what? If anything, the words above remind me that life is a crap shoot. None of it could have been predictable. I feel so fortunate to be 76 years old, to have friends & family, and a lot of wonderful memories. It is very much the time to be thankful and compassionate. 

Thanks for listening. 

PS While the above might be long and boring it omits many people who helped me through life. I intend no ill will towards the friends, family, teachers, and colleagues who were a big part of my life. I hope to embarrass them in subsequent posts. 

Silver Linings: Lower Inflation and Greener Energy?

I get access to a free online version of the Economist Magazine. Unfortunately the free version is not complete. You can't read a whole article. One of the article summaries on 7/27 was titled "The Silver Linings of a Recession: Lower Inflation and Greener Energy are worth the price of a Short Recession."

So my comments here are based on the title without me reading the actual article. 

The title suggests it might be a good thing if policy was aimed at lowering inflation and reducing pollution from oil and gas. It implies that if such a policy were to cause a recession it would be worth it to attain lower inflation and greener energy. 

Interesting. We now have recessions that are not worth it and recessions that are worth it. I thought that recessions were bad but now we have a major policy periodical saying that some recessions are good. I wonder if they talked to the people who will be unemployed or otherwise adversely affected by the recession in coming to this conclusion. 

Who gets negatively affected by a recession? Laid off workers come to mind. What about all those bright and optimistic young people or other people who are new to the job market? Moving in with mom and dad after graduation might not be that great. Stockholders often see declines in their savings during a recession. Companies have to adjust to a recession. Some quit buying new plant and equipment. That hurts plant and equipment providers. Some find their own markets collapsing. They have to figure out how to adjust to that. What do they do with all those unsold goods? 

Recessions never have been and never will be fun. Even if they are short. Of course the article doesn't say how short short is. 

What about the silver lining -- apparently the article believes that a recession will have some really cool impacts. A short recession will reduce the inflation rate and it will somehow make energy greener. 

Will a short recession really do those two wonderful things? Where is the evidence? Maybe the authors have never heard of stagflation. It is quite possible that a recession will come with higher, not lower, inflation. Think about the theory. A recession means unemployed resources. Those unemployed resources quit buying as much. After enough time, the lack of demand finally sends a clear signal to producers that they better lower prices or nobody is going to buy their stuff. 

In today's economic and inflationary environment, how long do you think it will take before producers decide inflation's back has been broken and it's okay for them to start lowering their own prices? How deep or how long a recession will be required to get people to think the worse is over and they can go back to buying? 

My hands are cramping after discussing inflation. The green energy part of this story seems even more ludicrous than the inflation part. So I will leave it to you, my precious readers, to let me know how a quick recession is going to reduce inflation and move the green energy agenda ahead. 

Teaching Pigs How to Fly

The Editorial Board of the Wall Street Journal on 7/26/22 wrote about the "Economic Mess We Are In."

It is about time the WSJ awakened to the well known tradeoff between inflation and output. The economic mess is simple. The Fed and the Congress tried to stimulate the economy and now that they have a little growth going on they realize that they created a firestorm of inflation. Why this is a surprise to our learned friends at the WSJ is quite puzzling.  I am old as dirt and I remember teaching this simple truth in the 1970s. 

Anyway, what interests and amuses me is what the WSJ thinks we should be doing about the confluence of economic weakness and high and rising inflation.  They seem to have learned or relearned the simple lesson -- if you fight inflation, then you might get a recession. Since they don't want to cause a recession it is beyond funny to see what policymakers are now talking about -- please whisper this -- supply-side economics. 

No, they didn't actually say the four-letter word supply-side but they are basically proposing what amounts to what we used to call supply-side policy. They advocate using tight money to squeeze out the inflation. But to offset the impacts of the decline in aggregate demand, they recommend "economic growth" policies to stimulate supply. If that isn't resurrecting old fashioned supply-side economics, then I don't know what else they have in mind. 

When I was teaching I would use chalk on a blackboard. This kind of policy was popular in the 1970s and it was shown by a downward shift in aggregate demand coupled with an outward shift of aggregate supply. The diagrammatic result was a new equilibrium with higher output and lower inflation. Economic Nirvana! 

Sophisticated economists and journalists laughed at this kind of macroeconomics. I always thought it made sense but then I also thought Bevis and Butthead were funny. 

That's all history. Today the reality is that some people want to see tight money coupled with a fiscal policy inducing economic growth. The words are a little different but it all amounts to a leftward shift in Aggregate Demand and a rightward shift in Aggregate Supply. 

Will it work? Maybe. It depends on a couple of things. First, the Fed has to tighten money enough to reduce the growth of aggregate demand and inflation.  Second, Congress has to use taxation and spending in such a way as to promote more output directly without increasing aggregate demand. 

Maybe? I say maybe because neither the current Fed nor Congress has much experience with either of these policy actions. What are the odds that they know how to do this and are willing to try? Not very high. Kinda like teaching pigs how to fly. 

What's It all About Alfie?

That title is misleading but those words came to mind as I was thinking of a title. It was a good movie and a great song. 

Maybe a simpler title would be What's It All About? More specifically, I was born in 1946 and I was wondering what I should have learned during all those years between then and now. 

I will admit that one personal issue is memory. What I learned is not necessarily what I remember. But that's another issue that we can leave aside today. 

Being born in 1946 means that World War II had passed and is only a story that my parents told me. I read about it in school too. But WWII was not really my thing. It was before me. I am not trying to diminish WWII as I know it had big impacts on many of you who are still alive. It just wasn't my thing. My Dad came back from the war and life went on. 

Hopefully wars and similar one-time events do not define us nor tell us what it is all about. I went to Vietnam in an Air Force uniform but I lived and I don't think it defines me in any particular way. Luckily I spent most of my time there in an office and was not involved with with fighting. So I don't think Vietnam defined me. It did cause me to have an international experience and to meet and get to know some really special Vietnamese people. 

There is always religion. For many people accepting Christ or otherwise following spiritual paths is what its all about. In college I was mesmerized by a Christian evangelist but that didn't last very long.  I like to think I am a good person even though I am pretty much an agnostic. I doubt that tells me what its all about. 

It could be all about fame and riches. I doubt either one of those dimensions defines me. I am pretty much in the middle of the road on either of those scores. Some friends would acknowledge that I am famous but only in my own mind. :-)

Another value might relate to being a good family member. Maybe that's the toughest one of all. Divorces are on my permanent record and I doubt I have been the model father or grandfather. I'd like to think I have tried but some would say I didn't try hard enough. 

What it is all about might be finding a way to make use of the precious time we have to live life in a way that let's us sleep at night. Few of us will get it right the first time. But hopefully we converge on something good. 

As in baseball, we come to bat and strike out. We try to learn from out mistakes so next time we get a walk or a hit. Unless we do something really terrible most of us get a second or third chance. 

Seems to me -- that's what is is all about. We get a chance to bat and we try to learn from our mistakes and failures. So long as we keep trying, that seems to me to be the best we can do.  

Biden and Inflation Policy

President Biden recently gave a speech in which he outlined his plans to combat rising inflation. Below are the major elements in his plan.  

The interesting common denominator among these items is that Biden assumes absolutely no blame for inflation. He is going to ride in on his dragon and save the damsel in distress.

 

The other thing to note is his preference for an approach that makes no economic sense. There are remedies that make more sense.  

The first three items (below see Major Elements of Biden's Plan) focus on his government working with other governments to intercede into petroleum and gas markets. It’s as if the people who manage those commodities suddenly decided to gouge the world.

There is little understanding of the economics of those markets by Biden and he doesn’t explain to us what will happen when the government waddles into something it really doesn’t understand.  

In his speech he says nothing – nada – about what factors are part of the supply chains of the items he intends to control. Does he really know enough to not screw up those supply chains?Does he explain whose ox is going to get gored as the heavy hand of government intercedes in complicated markets?  

As for “giving the Fed more room to fight inflation,” that is the biggest piece of misinformation (malarky) in the speech.

The Fed gets more room to fight inflation when the government takes its foot off the pedal. When the government instead spends huge amounts – that puts pressure on the Fed to monetize that debt. Monetary policy is much affected by government fiscal policy. If the Fed puts on the monetary brakes while Biden’s friends slam down the spending accelerator – it is not going to be a pretty picture.  

That's about it. It might sound good to Biden to point his boney finger of blame at providers of oil, gas, healthcare and a few other sectors. But the country would do better if he would look in the mirror and ask himself why he is unable to put a lid on government spending.

 

Major Elements of Biden's Plan to Reduce Inflation

Release more oil from reserve 

Put cap on the price of Russian Oil 

Translate lower oil prices into lower gas prices 

Work with Congress to reduce everyday expenses for drugs, utilities, and health insurance 

Stop Republicans from reducing Social Security and Medicare – and from raising taxes generally. 

Give the Fed the room it needs to combat inflation.