Tuesday, August 09, 2022


The threat of "inflation" was used to derail all the nice things in BBB, because serious people have decided that "giving not rich people nice things" is the only inflationary fiscal policy (hint: if you think fiscal policy is inflationary, you can offset the "nice things" policies with "increasing rich people taxes" policies).

Larry Summer made 3 predictions, and after running them through his economist supercomputer (lol I mean 'vibing like Nate Silver'), gave each a 1/3 chance of happening. Amazingly the thing that did happen was not one of his predictions, but somehow Larry was proved fucking right anyway.

"Team transitory" said inflation was transitory, not spiraling out of control, and was the result of the post-Covid return to normal, supply chain problems everyone is aware of, and abuse of market power. "Team inflation" said it was going to last forever and we'd be Weimar Germany if we didn't try to start a recession. After a few months of increasing CPI, team inflation declared they were correct, and the Fed started hiking rates.

The real freakout was that there would be actual decent social policy and rising worker wages for the first time in decades. It was necessary to kill that.

They won, of course, killing the policy and getting the Fed rate hikes. Inflation numbers come out tomorrow. They'll likely show improvement, and we'll see what the next step is. But they've established that not only can we never let people get raises (consensus for decades), but giving people a few bucks a month for child care, or whatever, will destroy the economy.

Good job everybody. Send money to my substack, which is not inflationary.