Thank you for the extended Le Guin quote (and of course the whole piece). I think about this quote all of the time:
“We live in capitalism. Its power seems inescapable. So did the divine right of kings. Any human power can be resisted and changed by human beings. Resistance and change often begin in art, and very often in our art, the art of words.”
Kyla is pretty high up the food chain in the art of words! AND, if she is abandoning the word creative, why would I not follow? “The creative imagination is a tremendous plus in business! We value creativity, we reward it!” In the marketplace, the word creativity has come to mean the generation of ideas applicable to practical strategies to make larger profits. This reduction has gone on so long that the word creative can hardly be degraded further. I don’t use it any more, yielding it to capitalists and academics to abuse as they like. But they can’t have imagination. Thanks as usual for another brilliant piece of writing and thoughts.
Creativity is why culture starts in the Arts be it music, paintings etc. You can know what the plus of the economy is by listening to the top 10 most popular songs. I believe Harvard did a study on it being a better predictor of the market then most other indicators. NO matter, ultimately joy is found in gratitude and what someone values which is why we are in such a difficult period. My generation defined success/happiness as "things" only to discover they are wrong. The younger generation understands this hence a spiritual awakening. is occurring
What is the part about having someone drive to your house pick you up and bring you back for cheap have to with nostalgia, how about instead you get in your new 1969 dodge charger that you paid cash for from your one job at the grocery store and drive it anywhere because gas cost 69 cents a gallon. Never been in an Uber, the last time and the next time will be a taxi or my feet.
The tweet about Uber prices going up is a prefect case in point for how "non-econ nerds" view the economy. Not only do they not care at all about the abstracted numbers on the graphs, but they're also grouping Uber's inevitable unit-profitability focused rate hikes with the broader govt-spending caused inflation. Not at all the same cause! But both are affecting their personal prices and are therefore "inflation" (and probably blamed on Biden)
Much of what you write about here — cynicism, loud people permeating discourse, institutional nihilism — got me thinking about The Deficit Myth: Modern Monetary Theory and the Birth of the People’s Economy by Stephanie Kelton.
This brought me on a kyla.substack binge sesh cause I was curious about what your thoughts are on the book and debt. I noticed a lot of what you’ve written about debt focuses on The USA and China. I’m curious if you think Kelton’s ideas can be applied to all countries and cultures or only work in a few.
General ideas of her book:
Kelton challenges the conventional understanding of deficits as inherently bad and argues that deficits can actually strengthen economies and lead to faster growth.
The book challenges the common notion that taxes primarily fund government spending. According to Kelton, taxes serve multiple purposes, such as regulating aggregate demand, reducing income inequality, and promoting specific social and economic outcomes.
Kelton challenges the notion that taxes primarily fund government spending. According to Kelton, taxes serve multiple purposes, such as regulating aggregate demand, reducing income inequality, and promoting specific social and economic outcomes.
The book challenges the conventional role of central banks as inflation fighters. Kelton argues that central banks should focus on maintaining price stability and full employment, and that fiscal policy (government spending and taxation) should take precedence in managing the economy.
I connected this book to the cynicism and distrust right-leaning populists have towards government. No matter where I travel — Belgium, Spain, Italy — those who vote for ultra-right populist parties always have the same argument “Socialists put us in debt. Our party is going to cut down on social spending on [insert racial slur] to get the economy back on track.”
In Belgium, I can point out that Flemish people collectively have more money than the deficit and that the most economically stable countries in Europe are the ones with the most social democracies, but for some reason they go back to saying something along the lines of “Extreme problems need extreme solutions from extreme parties.”
I can't find the video, but around 2012 (I believe) there was a hedge fund manager on a business TV show (CNBC I believe) that said 50% of the people are in a recession. The panel laughed at him, saying is this is hidden recession that we can't see. And he explained, that for 50%+ of people real incomes have fallen and not gone up in decades. They're experiencing an actual recession.
You do touch on these points in this piece but I do wonder what is really the importance of the term "recession". What is being referred is "vibecession" is a jocular term for something that is important. If my real income is lower, I'm worse off. If we use a simple math calculation - the bottom 80% of income earners have approximately 47-50% of the income share. Thus, if the top 20% experience a 2% income growth, the bottom 80% could see a 2% income drop and the economy would not be in a recession. But 80% of people are worse off. That's where the issue of looking at aggregates becomes problematic.
Ironically, we've started talking about vibecession, because for the first time in decades, it's actually the low income earners that see real wage growth while the top income have real wage reductions. No one talked about vibecession over the past several decades.
Love this comment! This makes you think about how, by limiting the measurements we use in the discussion, our view of reality is skewed. Are we approaching the point where we need to consider alternative metrics for what is good for the world? Historically a good economy has been the rising tide that lifts all boats but it doesn’t seem like all boats are lifted anymore. Should the conversation be changed to how can we lift all boats? Or should we change the definition of our terms and metrics so that a good economy would require that all boats are lifted? These are some of the thoughts that trouble me during the “vibesession”.
Appreciate the kind words! Yes - its an important discussion to have, since measures such as GDP play an important role in framing conversations. Interestingly, just the other day I had a Twitter conversation where I pointed that if you look at countries after say about 50,000 GDP per Capita, GDP no longer seems useful in predicting happiness and well-being.
Several institutions and economists have actually been working on a concept called Beyond GDP. One such idea takes into account inequality (to ensure everyone benefits) and also leisure, as well as leisure inequality. I wrote about it below:
Haven't heard many big developments coming from these pushes, but its definitely something on economists' radar (maybe insufficiently, but better than nothing)
I love your closing words and I think it’s funny that it’s almost like a completely different take from the rest of the article. It seems like the point that you’re trying to make is arguing that we are not in a recession by the definition of the economic terms we use but others dissagree because they understand a recession vs no recession to be an appraisal of whether life is getting better and we are building a better future for more people. Seems like there is a disconnect due to the fact that we don’t use wealth distribution metrics or housing affordability metrics or lower class wages to buying power ratios as measures of good vs bad economic conditions and so there important elements of “are we driving the economy in a good direction” are absent from our discussion.
Thank you also for sharing Maria Popova's speech. I found it sincere and powerful and challenging.
After reading these, I thought, kyla's newsletter is like a (serialized) commencement address: guiding our attention to things, offering her experience and perspective, sending us into the next week or month a little more informed, thoughtful, hopeful.
Thank you for the extended Le Guin quote (and of course the whole piece). I think about this quote all of the time:
“We live in capitalism. Its power seems inescapable. So did the divine right of kings. Any human power can be resisted and changed by human beings. Resistance and change often begin in art, and very often in our art, the art of words.”
Came here to say this! Enjoying Kyla's diverse sources, but Le Guin unexpected and perfect.
Kyla is pretty high up the food chain in the art of words! AND, if she is abandoning the word creative, why would I not follow? “The creative imagination is a tremendous plus in business! We value creativity, we reward it!” In the marketplace, the word creativity has come to mean the generation of ideas applicable to practical strategies to make larger profits. This reduction has gone on so long that the word creative can hardly be degraded further. I don’t use it any more, yielding it to capitalists and academics to abuse as they like. But they can’t have imagination. Thanks as usual for another brilliant piece of writing and thoughts.
Creativity is why culture starts in the Arts be it music, paintings etc. You can know what the plus of the economy is by listening to the top 10 most popular songs. I believe Harvard did a study on it being a better predictor of the market then most other indicators. NO matter, ultimately joy is found in gratitude and what someone values which is why we are in such a difficult period. My generation defined success/happiness as "things" only to discover they are wrong. The younger generation understands this hence a spiritual awakening. is occurring
What is the part about having someone drive to your house pick you up and bring you back for cheap have to with nostalgia, how about instead you get in your new 1969 dodge charger that you paid cash for from your one job at the grocery store and drive it anywhere because gas cost 69 cents a gallon. Never been in an Uber, the last time and the next time will be a taxi or my feet.
The tweet about Uber prices going up is a prefect case in point for how "non-econ nerds" view the economy. Not only do they not care at all about the abstracted numbers on the graphs, but they're also grouping Uber's inevitable unit-profitability focused rate hikes with the broader govt-spending caused inflation. Not at all the same cause! But both are affecting their personal prices and are therefore "inflation" (and probably blamed on Biden)
A brilliant and heartening mix of economics and inspiration. Thank you!
Much of what you write about here — cynicism, loud people permeating discourse, institutional nihilism — got me thinking about The Deficit Myth: Modern Monetary Theory and the Birth of the People’s Economy by Stephanie Kelton.
This brought me on a kyla.substack binge sesh cause I was curious about what your thoughts are on the book and debt. I noticed a lot of what you’ve written about debt focuses on The USA and China. I’m curious if you think Kelton’s ideas can be applied to all countries and cultures or only work in a few.
General ideas of her book:
Kelton challenges the conventional understanding of deficits as inherently bad and argues that deficits can actually strengthen economies and lead to faster growth.
The book challenges the common notion that taxes primarily fund government spending. According to Kelton, taxes serve multiple purposes, such as regulating aggregate demand, reducing income inequality, and promoting specific social and economic outcomes.
Kelton challenges the notion that taxes primarily fund government spending. According to Kelton, taxes serve multiple purposes, such as regulating aggregate demand, reducing income inequality, and promoting specific social and economic outcomes.
The book challenges the conventional role of central banks as inflation fighters. Kelton argues that central banks should focus on maintaining price stability and full employment, and that fiscal policy (government spending and taxation) should take precedence in managing the economy.
I connected this book to the cynicism and distrust right-leaning populists have towards government. No matter where I travel — Belgium, Spain, Italy — those who vote for ultra-right populist parties always have the same argument “Socialists put us in debt. Our party is going to cut down on social spending on [insert racial slur] to get the economy back on track.”
In Belgium, I can point out that Flemish people collectively have more money than the deficit and that the most economically stable countries in Europe are the ones with the most social democracies, but for some reason they go back to saying something along the lines of “Extreme problems need extreme solutions from extreme parties.”
I can't find the video, but around 2012 (I believe) there was a hedge fund manager on a business TV show (CNBC I believe) that said 50% of the people are in a recession. The panel laughed at him, saying is this is hidden recession that we can't see. And he explained, that for 50%+ of people real incomes have fallen and not gone up in decades. They're experiencing an actual recession.
You do touch on these points in this piece but I do wonder what is really the importance of the term "recession". What is being referred is "vibecession" is a jocular term for something that is important. If my real income is lower, I'm worse off. If we use a simple math calculation - the bottom 80% of income earners have approximately 47-50% of the income share. Thus, if the top 20% experience a 2% income growth, the bottom 80% could see a 2% income drop and the economy would not be in a recession. But 80% of people are worse off. That's where the issue of looking at aggregates becomes problematic.
Ironically, we've started talking about vibecession, because for the first time in decades, it's actually the low income earners that see real wage growth while the top income have real wage reductions. No one talked about vibecession over the past several decades.
Love this comment! This makes you think about how, by limiting the measurements we use in the discussion, our view of reality is skewed. Are we approaching the point where we need to consider alternative metrics for what is good for the world? Historically a good economy has been the rising tide that lifts all boats but it doesn’t seem like all boats are lifted anymore. Should the conversation be changed to how can we lift all boats? Or should we change the definition of our terms and metrics so that a good economy would require that all boats are lifted? These are some of the thoughts that trouble me during the “vibesession”.
Appreciate the kind words! Yes - its an important discussion to have, since measures such as GDP play an important role in framing conversations. Interestingly, just the other day I had a Twitter conversation where I pointed that if you look at countries after say about 50,000 GDP per Capita, GDP no longer seems useful in predicting happiness and well-being.
Several institutions and economists have actually been working on a concept called Beyond GDP. One such idea takes into account inequality (to ensure everyone benefits) and also leisure, as well as leisure inequality. I wrote about it below:
https://www.nominalnews.com/p/the-usefulness-of-the-gdp-measure
Haven't heard many big developments coming from these pushes, but its definitely something on economists' radar (maybe insufficiently, but better than nothing)
I love your closing words and I think it’s funny that it’s almost like a completely different take from the rest of the article. It seems like the point that you’re trying to make is arguing that we are not in a recession by the definition of the economic terms we use but others dissagree because they understand a recession vs no recession to be an appraisal of whether life is getting better and we are building a better future for more people. Seems like there is a disconnect due to the fact that we don’t use wealth distribution metrics or housing affordability metrics or lower class wages to buying power ratios as measures of good vs bad economic conditions and so there important elements of “are we driving the economy in a good direction” are absent from our discussion.
Thank you for preparing and sharing this, kyla.
Thank you also for sharing Maria Popova's speech. I found it sincere and powerful and challenging.
After reading these, I thought, kyla's newsletter is like a (serialized) commencement address: guiding our attention to things, offering her experience and perspective, sending us into the next week or month a little more informed, thoughtful, hopeful.
Thank you for being here.
I forget how old I am most of the time, so much of what I write may seem odd.