Re: your thoughts on the nostalgia cycle loop - I was thinking about this over my commute this morning in the context of some theological podcast I’d just listened to...
Hope is the one virtue that requires imagination, in the sense that we consider the past and imagine a better future. The nostalgic content being churned out via movies, books, even music(!) requires less imagination on our part because it comes from already-established world building. It’s easier to imagine the context around a new Star Wars or Marvel sequel when we’ve already seen what Tatooine looks like or know what Loki thinks of Thor. It’s easy. Just like it’s easier to not go to the gym or out for a run, it’s easier to not exercise our imaginations when given the option. And, like all virtues, hope requires practice - we risk our ability to hope when we let our imaginative muscles atrophy. The inability to hope is a spiritual problem, but it can extend to a very visible economic reality, too.
In short: higher saturation of nostalgia -> less imaginative capacity -> reduced ability to hope -> ?
Love your Substack btw - always feels like a springboard for jumping into further thoughts
Lovely stuff. Reminds me of Bhutan and their 'Gross National Happiness' measure. Life is a constant pendulum swing & never gets quite to the right place - as you say money is not bad, but not everything should be run to make maximum profit if it means they don't operate correctly.
I can sing the entire Toys 'R Us theme! It's stunning to recognize how Great Things can get trashed by avarice and myopia. Can we reframe the world through a big enough lens to unequivocally demonstrate interconnectedness and interdependency? I pine for a return of the local newspaper. Thank you for casting a wide net, ms. Kyla.
Love your article. Thank you. I’m just wondering if the Fed wants to increase further why not do it get over with it now instead of pausing it in the first place.
Thank you for the great reporting and thoughts. I have a request - I would like to see the financial media press the fed harder on the rational for the 2% inflation target. At first glance it seems arbitrary to risk financial stability and the jobs of millions of Americans to bring inflation back to 2%. Why not a 3% or 4% inflation target?
The fed will not discuss this publicly, but the rationale for the 2% target is that this is the rate that will allow short term nominal treasury yields to settle in the ~3% range (1% real + 2% inflation = 3% nominal). The US government cannot afford to refinance / add to its $25T public debt balance at a rate much above 3%. Additionally, the fed knows that it will need to finance a portion of the government’s future borrowings. Notice how forcefully Powell denied Edward Lawrence’s question yesterday on whether the fed would help finance future federal deficits.
Powell knows the fed will absolutely need to finance future deficits. He knows that if inflation becomes unanchored it will be harder for the fed to credibly finance future deficits. He knows that the government cannot float its debt at a rate much higher than 3%. This is what the struggle to get inflation back to 2% is all about.
We don’t know what caused inflation? What ever happened to more money supply without a significant increase in goods and services? ELI5 plz
Re: your thoughts on the nostalgia cycle loop - I was thinking about this over my commute this morning in the context of some theological podcast I’d just listened to...
Hope is the one virtue that requires imagination, in the sense that we consider the past and imagine a better future. The nostalgic content being churned out via movies, books, even music(!) requires less imagination on our part because it comes from already-established world building. It’s easier to imagine the context around a new Star Wars or Marvel sequel when we’ve already seen what Tatooine looks like or know what Loki thinks of Thor. It’s easy. Just like it’s easier to not go to the gym or out for a run, it’s easier to not exercise our imaginations when given the option. And, like all virtues, hope requires practice - we risk our ability to hope when we let our imaginative muscles atrophy. The inability to hope is a spiritual problem, but it can extend to a very visible economic reality, too.
In short: higher saturation of nostalgia -> less imaginative capacity -> reduced ability to hope -> ?
Love your Substack btw - always feels like a springboard for jumping into further thoughts
Lovely stuff. Reminds me of Bhutan and their 'Gross National Happiness' measure. Life is a constant pendulum swing & never gets quite to the right place - as you say money is not bad, but not everything should be run to make maximum profit if it means they don't operate correctly.
I can sing the entire Toys 'R Us theme! It's stunning to recognize how Great Things can get trashed by avarice and myopia. Can we reframe the world through a big enough lens to unequivocally demonstrate interconnectedness and interdependency? I pine for a return of the local newspaper. Thank you for casting a wide net, ms. Kyla.
Love your article. Thank you. I’m just wondering if the Fed wants to increase further why not do it get over with it now instead of pausing it in the first place.
Which do commenters (theoretically?) find more useful- Instapot or Reddit?
One-word answers (Instapot, Reddit, neither) are fine. But this is the chance to get philosophical, pour out your feelings, speak truth to power, etc.
I'm actually in the It Depends camp. And the list of what It Depends on is long and convoluted.
Kyla,
Thank you for the great reporting and thoughts. I have a request - I would like to see the financial media press the fed harder on the rational for the 2% inflation target. At first glance it seems arbitrary to risk financial stability and the jobs of millions of Americans to bring inflation back to 2%. Why not a 3% or 4% inflation target?
The fed will not discuss this publicly, but the rationale for the 2% target is that this is the rate that will allow short term nominal treasury yields to settle in the ~3% range (1% real + 2% inflation = 3% nominal). The US government cannot afford to refinance / add to its $25T public debt balance at a rate much above 3%. Additionally, the fed knows that it will need to finance a portion of the government’s future borrowings. Notice how forcefully Powell denied Edward Lawrence’s question yesterday on whether the fed would help finance future federal deficits.
Powell knows the fed will absolutely need to finance future deficits. He knows that if inflation becomes unanchored it will be harder for the fed to credibly finance future deficits. He knows that the government cannot float its debt at a rate much higher than 3%. This is what the struggle to get inflation back to 2% is all about.
Hi