Inflation erased U.S. income gains last year
wsj.com
wsj.com
Population is confused on what the actual problems are vote for politicians solving wrong problems making things worse.
In order to make it mathematically possible for a third party to compete, we need to switch to something with more nuance than single vote, first-past-the-post winner-take-all elections. Ranked Choice Voting has some momentum right now, and AFAICT is no worse than any of the other options (they all fail in certain edge cases, I believe; it's just a matter of which ones).
People might appreciate having had the chance to express their first choice, but when they're forced to settle for their second, third... hundredth choice, I'm not sure they'll be any happier.
There are ways to do away with the single-winner system, such as party lists. They, too, have drawbacks, but they'd at least be different drawbacks.
Even just allowing people to provide more than one vote means that people can support third-party candidates without that vote effectively robbing their preferred major-party candidate of a vote. (eg, if you're broadly left-wing, and like the Green Party, you can rank their candidate first, then the Democratic candidate second—and then if the Green Party candidate doesn't win, your vote counts for the Democrat) That's a big, big change.
I don’t think it does [1].
[1] https://www.law.cornell.edu/constitution/articlei#section4
And yet most actual Congressmen have a high approval rating within their district. Incumbents have an extremely high return rate.
The problem is never your Congressperson. It's always because Congress is filled with other districts' Congresspeople.
I don't think you'll fix that by un-gerrymandering. If anything, I bet you'll get even higher approval ratings for the incumbents, since you'll have fewer "cracked" districts (boundaries drawn to make a group a minority in two districts instead of the majority in one).
Ending gerrymandering might get a Congress that better reflects what people want. But mostly, what people want is for "the other guys" (whoever is not in your party) to win.
That will likely benefit hard assets like real estate and those with big stock portfolios, as top blue chips generally have some pricing power to offset increased cost, but I think real income will drop and you’ll get all sorts of weird second order consequences.
If I had enough confidence in it, an interesting bet might be borrowing to invest in big tech blue chips. You’re betting that Trump gets his way with the Fed politically, tech benefits from low rates, tech has power to raise prices, and that Trump will inflate away your debt.
Won’t be good for most Americans, but if you can’t beat em, join em?
{not financial advice}
Plus, while the real estate market on a whole might go up, I have a hunch the chances of one individual house appreciating are more varied than the chances of one of the big tech stocks appreciating… as they are the market at this point.
Edit to add: I think for the average American, real estate is the only plausible way to invest on margin, as you’ll never get 5:1 leverage at your brokerage, if you even have a brokerage.
Margin trading is for the already-wealthy. You can get a home with near-zero assets.
The next step if that happened could well be the puppetized Fed expanding the balance sheet to buy long term bonds. That would probably be bad for everything. Except perhaps gold.
Anyways inflation is actually declining and is well below 2022 levels.
https://www.bls.gov/charts/consumer-price-index/consumer-pri...
They also are a price increase. Whether that winds up being inflationary or deflationary depends on how much that price change impacts demand, which will likely vary from good to good.
Inflation is everywhere and always a monetary (or money supply) phenomenon.
Reposting my original claim:
Tariffs are deflationary, actually. They are a form of taxation and act to inhibit demand.
Inflation is actually declining and is well below 2022 levels.
https://www.bls.gov/charts/consumer-price-index/consumer-pri...
That being said, one hypothetical scenario is that tariffs shift demand to domestic manufacturing, causing the price of domestic manufacturing to increase due to supply and demand imbalance. This would result in prices going up without any tariffs being paid. Theoretically. I don’t think that will actually happen in the short term.
It's also a prices going up phenomenon. I trump puts 100% tariffs on imports and Walmart marks prices up 100% then you have inflation. No monetary change there.
https://www.bls.gov/charts/consumer-price-index/consumer-pri...
Employment figures are different and have had lots of problems in recent years.
Now if you’re happy comparing 12 month CPI averages ending in July then sure 2025’s July was 0.2% lower than 2024’s July. But I’m assuming you’re talking Jan-Dec 2024 which we have vs Jan-Dec 2025 which IMO is to early to call.
> Does it really matter as long as you have a years worth of data including all seasons?
Using the correct words for something makes a big difference for communication. After jumping through all these hoops we understand what we each mean at this point, but it definitely didn’t need to take this much back and forth.
But no, macroeconomics is understood from sound general principles, but it is not a robust predictive theory. The analogy upthread to Navier-Stokes is apt.
There are multiple schools of thought on causes of inflation, but generally I agree with late Milton Friedman that it is "everywhere and always a monetary phenomenon". Money supply expansion growing faster than GDP expansion causes inflation.
But… that was correct? It went up, then back down, due to a very unusual (almost unique, thus far) external cause.
https://www.statista.com/statistics/273418/unadjusted-monthl...
>...In 2021, Krugman tweeted: "I like it and plan to steal it. This report does look like what you'd expect if recent inflation was about transitory disruptions, not stagflation redux".
As Smith pointed out:
>...But in late 2021, inflation spread to become very broad-based. Services inflation was always significant, and took over from goods inflation as the main contributor in 2022.
>The notion that this was just some transient supply-chain disruptions that was only affecting specific products was absolutely central to Team Transitory’s claims in the summer of 2021. And that was incorrect.
>...Team Transitory also called the end of the inflation at least a year and a half too soon. On October 13, 2021 Krugman tweeted "Three month core inflation. Why isn't everyone calling this a victory for team transitory"
>...So they didn’t entirely whiff here. They just greatly overstated their case. And their complacency in 2021 probably fed into the Fed’s decision to delay the start of rate hikes until 2022, which in retrospect looks like a serious mistake.
What did get vindicated was mainstream economics as taught in our textbooks.
As Smith wrote:
>...Mainstream macro’s first victory was in predicting that the inflation would happen in the first place. In February 2021, Olivier Blanchard used a very simple “output gap” model to predict that Biden’s Covid relief bill would raise demand by enough to show up in the inflation numbers. His prediction came true. He didn’t get everything right — he thought wages would rise more than consumer prices, and he neglected the lagged effects of Trump’s Covid relief packages and Fed lending programs. But his standard simple mainstream model got the basic prediction right when most people made the opposite prediction, and this deserves recognition.
>More importantly, mainstream macro appears to have gotten policy right.
https://www.noahpinion.blog/p/grading-the-economic-schools-o...
No, it wasn't correct. By "transitory" the Fed meant "no need to do anything, inflation will go down on its own". It didn't go down on it's own, and the Fed had to act, too little too late, which is now causing prolonged inflation problems.
> It went up, then back down, due to a very unusual (almost unique, thus far) external cause.
The cause wasn't external, neither unusual nor unique, it was the Fed's start of interest rate increases, precisely at the time the inflation trend reversed.
You can note this in the buying power of the USD during the 1800s: https://www.officialdata.org/us/inflation/1800?amount=1
It ignore other factors that impact demand and supply.
To me the answer is very simple, the primary (not sole) driver is govt printing currency indiscriminately.
Basically why everybody decided to go with money printing during COVID btw, people realised in 2008 that a 2B default is the equivalent to printing 2B, so if that's the case, why not print money instead (that's a bad calculation imho, in my opinion in a capitalist market economy you need defaults for the market to work, and I would say, you need defaults that pierce the corporate veil).
if i loan you 100. in my head i have 100 of assets coming to me, and you have 100, so the system now has 200.
if you default, "so sorry throwaway you ain't seeing it", i have to write down the expectation im getting that 100 back. which means that i have 0, and the 100 is out in the system, spent. the system now has 100.
it is the case that some people refer to things like bailouts and inflating away your debt as soft "defaulting" but those are special cases and not the general case.
(btw: i don't know the number, but my uncle insure companies and their loans for Alliance, i'm pretty sure it's more than 50% that's deduced from taxes when he register a loss, i can't seem to remember our conversation though)
I think that loss counting as tax break is an important part of the system, but in this very case, it does create inflation. Also loan insurers have insurances themselves and the loss is counted multiple time, i'm not sure exactly how the complete system work here works but it seems very efficient at claiming a tax break at multiple level.
Friedman is wrong, inflation is primarily caused by supply side shocks.
There isn't a single reason why someone might raise a price. It could be that they have some ideology about the size of the money supply (i.e. "printing money") or it could be that the costs of their inputs went up ("inflation") due to tariffs, or other supply chain problems. Or it could be a cynical bet that the market would bear a higher price ("using inflation as an excuse").
Blaming inflation on this-or-that cause is most definitely a political rather than theoretical exercise.
You are not offering an argument about why can't it be investigated.