Nice piece, always appreciate your insightful commentary.
RE - Pool Party Progressivism; the more I read of your newsletters, the more the I believe in the idea of there being a disconnect between how we measure the success of our economy on a macro level (GDP! Low unemployment! Headline CPI/PCE numbers!) and how the individual feels about the economy and their own personal experiences in it.
As Charles Marohn points out in his book "Strong Towns", we long ago started focusing on developing cities to chase high level growth metrics without considering how it really impacted the lived experiences of the individuals in the cities. It feels like this is a recurring (and growing) theme in how America is planning it's not just its cities, but also its economy. There's so much coverage on the big, "easy" to measure stuff that we lose the details of our personal experiences within it. If 1 death is a tragedy while a million is a statistic, it feels like many personal experiences in the modern economy are tragedies that are being overlooked in favor of the statistic of our aggregate output.
Anyway, appreciate the broad insight you always seem able to provide in your newsletters. Happy Thursday!
ok I grew up surrounded by elitist smart educated liberals, and I know exactly what they think is fun.....which is to discover a landscape totally untouched by human hands, no sign whatever of human endeavor or what you call "ownership" or "assets"....an empty beach or mountain valley.
I have spent most of my life mingling with and serving the poor. Because I can, yes, but also because they are usually more valid and honest than rich elites. Whenever a rich person uses the words "urban renewal" then what they hear is "negro removal", for example.
I buy houses so that I can make rentals available for a price the poor can still afford to pay. But also because when the government meddles with businesses, the businesses suffer. When they meddle with the poor, the value of money declines and the poor get even poorer. But whenever they meddle with housing, the prices of houses go up.
If you want me to behave differently then you need to change the basic philosophies behind our government. I am only responding to what they do.
Urban renewal is just plain lethal. I just saw in the WSJ that redevelopment is becoming a hot item again, so I imagine we are about to be in for another decade of this nonsense idea.
I did my thesis on Khaldun and he also said that societies without that social cohesion fall. This is usually, he thought, due to corruption and becoming “soft” (urbanism being a major culprit). And then he spent a thousand pages proving that cyclical history.
Vibes are everything for Khaldun. ‘Asabiyah is just vibes across social groups.
I am really sympathetic to pool party progressivism and the need for fun. Having worked at a wave pool in high school, the number one thing I remember is how gross it could get and how much work it kept to keep things clean. When I think of other public resources I use today like trains and parks, it's hard not to notice the grime from both neglect from the administrators and how the public actually treats that space. It seems indicative of something bigger—a lack of will on the government's part to make the case it's worth preserving and a lack of shared, lived cultural values about how to treat public places. Without correcting those, it feels like they're making new places you wouldn't want to spend a lot of time in. On the flip side, if we can fix them, you might see a lot more public support for bigger infrastructure projects that truly only the government could attempt.
There's a lot in here. Some I agree with, and some not. But the following stopped me in my tracks:
"One of the reasons that I think people are upset is because they saw what the government could do during the pandemic - freeze rents, send stimulus, help people out. And then all that stopped."
I'm sorry, but that statement is, well, whacky. As I have often said, the government can print money, but it can't print prosperity. When you freeze rents, do you know what happens? Developers stop building housing. Housing costs real money, both to build and to maintain. NYC found out years ago what happens when you freeze rents; construction of rental housing stops. Now, ever more people are trying to rent, but there isn't enough housing being built. And now, it's a national problem, for largely the same reasons.
Let's look at the other whacky idea; that printing more money (stimulus checks) means we can all buy more. No, it doesn't. Before you can buy more, you have to PRODUCE more. The government sent out all this printed money, but with no increase in production, and guess what happened? Inflation. The inflation was inevitable. Inflation is simply defined as too much money chasing too few goods.
So, now we have dollars that are worth less, trying to buy houses that can't be built because of regulations that disincentivize building. This is reality, folks. You cannot pass a law, make a regulation, or print money that can do an end-run around the fact that we have only what we produce. If you want more housing, it's going to cost money. Where is that money going to come from? If you print it, you only get inflation, not productivity. Take it from the rich? Perhaps. Contrary to myth, the rich already pay the vast majority of taxes. Perhaps we can tax them a bit more. But the rich don't just stuff their money under their mattress, they invest. They invest it, for instance, in housing development. Nearly everything we own is a result if rich people investing in productivity. I'm not saying there aren't productive changes that can be made, but do NOT kill the Goose That Laid the Golden Egg.
I think you have a fundamental misconception as to what inflation means for the majority of people, and the economy in general. Inflation can't be described as simply good or bad, it's bad for some people and good for some people. You also say that free money can't come without a cost, but seem to not consider that the free money benefits people who need it and barely harms people who don't need it at all.
If the value of money is less and less every year, it makes no sense to hoard it like the rich love to do. Inflation is harmful to the rich, so if it's high they're going to spend money, which stimulates the economy. What can they spend their money on? They can start a business or fund an existing one, which creates jobs and distributes money. Investing in equities is simply an indirect way to do that. At some point people are playing hot potato with the dollar because they'd rather have a real asset (a raw material, a piece of art, a car, a house, something REAL) than money that is worth less next year. That's extremely GOOD and does NOT require an increase in production - money can be used for many things such as services, digital goods that have an infinite supply, the purchase of things that already exist such as antiques, land, etc...
And what does everyone who isn't rich do with free money, as for example the stimulus checks? They pay off debt with variable rate, and the debt with a fixed rate becomes less of a burden.
IMO, inflation can only be seen as a bad thing if you want the rich to stay rich and are opposed to wealth redistribution.
I appreciate your sentiment, but I think you miss on some important points.
First, is the obvious. You say that the rich don't suffer so much from inflation, and you are absolutely correct. It's the poor and the middle class. I never implied anything different. Our dollar is now worth eighty cents, just since Biden took office. And it HURTS. But why do we have all that inflation? I explained it. It's largely BECAUSE the government sent out all that money. People had more money to spend, but there wasn't more stuff to buy. The supply/demand curve is a real thing, and there is no getting around it. Prices were bound to go up. Now, that productivity is getting caught up, and there is no more free money, things are leveling out. But we will NEVER, and I mean NEVER get back to 2020 prices.
As for the rich hoarding their money, that's exactly what they DON'T do. You don't get rich by hoarding money, you get rich by investing it. I also explained that above. There is no point to more money, without more goods to buy with it. Governments print money, rich people produce the goods. Think about it.
No, I said the rich don't suffer from inflation because the rich don't suffer - they still have more than they need - and the poor don't suffer because inflation is beneficial to them.
"People didn't have anything to buy" is the biggest bullshit I've ever heard. Most people used their checks to pay off debt. The majority of people have debt, man. If they used their checks for luxury goods there are plenty of options.
Lastly... investing IS hoarding wealth. Buying tangible goods or services so that money changes hands is what stimulates the economy. Inflation forces that to occur more frequently.
Huh? You seem to want to disagree with me for the sake of disagreeing. For the THIRD time, yes, the poor and middle class suffer from inflation more than the rich. Yes, yes, and yes. Is that enough yeses for you?
Hoarding money, as I see it, is stuffing money under the mattress. What do you WANT rich people to do with their money? Give it to you? Why should they? What have you done for them? Typically, wealthy people do support charities in a big way. No, they don't give so much that they feel any pain. I'm stating fact, but neither praising nor condemning the wealthy.
And I know that it is those mean greedy capitalists that are the reason we have very nearly everything we have. That includes clothes, electronics, electricity, cars, buses, bicycles, food, HOUSING, and on and on. What good is the government's money, if there's nothing to buy? Check out Venezuela, where there is in fact plenty of money, but nothing to buy. It's not pretty.
At about this point, I would expect you to say that it is the people who produce the products, not the capitalists. There's some truth in that, but I'll completely go along with that, just as soon as you singlehandedly provide me with the electronics, electricity, housing, etc that I need and want.
Perhaps you failed to notice that there's a shortage of housing for EVERYONE. If being a slumlord was immensely profitable, they would build more slums. They don't. No, we don't want more slums, but we do want more housing, and it ain't happening. You'd best do just a little better than to blame it all on slumlords.
Okay, it’s the NIMBY assholes who would rather pay police to clear out encampments than allow development. Same thing. Anything but actually increasing supply
I am one of the many folks who don’t see the IRA doing much to combat climate change. It’s more business as usual but with money thrown at certain favored sectors. Our car-dependent lifestyles won’t change one iota as a result of this legislation, yet the transportation sector creates the most emissions. Until the feds and state governments start throwing real money at public transit and safe bike/e-bike infrastructure, and local governments have the political will to invest that $$, we will continue to be climate laggards.
I agree that transitioning more people away from cars is critical
But electrifying our industries and homes is equally, if not more, important, and that's where the IRA is taking really big swings.
Yes, lots of this is being done through subsidies that will make existing business owners wealthier. No two ways about it, it's a capitalist solution to the problem.
But it *is* a big part of solving greenhouse gas emissions!
It’s not really electrification since industries and homes already run on electricity. And it’s not really a solution since the intermittent nature of wind and solar means there will still be a need for fossil fuel baseload power.
FWIW “bike” infrastructure only has to exist because of cars. In pedestrian only areas that allow bicycles, everyone flows freely without special infrastructure
Wonder what you think about Matt Bruenigs take on baby bonds: that (a) they are set up to fail because they pay out in 18 years and in the meantime there’s costs and nothing to show for them, and (b) why not just pay 18 years old money now? if we’re going to be spending the money, why not just spend it now, in to people’s pockets, rather than leaving it in limbo for 18 years?
“One of the reasons that I think people are upset is because they saw what the government could do during the pandemic - freeze rents, send stimulus, help people out. And then all that stopped.
It’s like when you’re first dating someone and it’s perfect and you’re like “wow they care and are kind” and then they just kind of… stop trying? Like the potential is still within them, but they just started mailing it in. That’s what the government did to its citizens - showed them what they could do, and then just stopped doing it."
I was in my second year of studying PolSci during the peak of COVID and this resonates so hard. It's difficult not to see it cynically - that shutdowns were enacted to protect the boomers who would re-elect the Conservative Party in Britain. Republicans like to pretend that the state is this big scary entity that is inefficient because the 70s taught them that over-zealous micromanagement of scarce resources (see Panic at the Pump) was bad, so the baby had to be thrown out with the bathwater, instead of identifying the key issues with the Department of Energy. Yet, when the young generation is asking for policies that will help the environment (green new deal in the US/UK, taxing kerosene in the EU so you can't just take £20 flights willy-nilly), politicians shrug and say 'yeah but the market won't like that'. Ridiculous and disenchanting.
Nice piece, always appreciate your insightful commentary.
RE - Pool Party Progressivism; the more I read of your newsletters, the more the I believe in the idea of there being a disconnect between how we measure the success of our economy on a macro level (GDP! Low unemployment! Headline CPI/PCE numbers!) and how the individual feels about the economy and their own personal experiences in it.
As Charles Marohn points out in his book "Strong Towns", we long ago started focusing on developing cities to chase high level growth metrics without considering how it really impacted the lived experiences of the individuals in the cities. It feels like this is a recurring (and growing) theme in how America is planning it's not just its cities, but also its economy. There's so much coverage on the big, "easy" to measure stuff that we lose the details of our personal experiences within it. If 1 death is a tragedy while a million is a statistic, it feels like many personal experiences in the modern economy are tragedies that are being overlooked in favor of the statistic of our aggregate output.
Anyway, appreciate the broad insight you always seem able to provide in your newsletters. Happy Thursday!
thank you :)
great coverage as always, thank you!
thank you!
ok I grew up surrounded by elitist smart educated liberals, and I know exactly what they think is fun.....which is to discover a landscape totally untouched by human hands, no sign whatever of human endeavor or what you call "ownership" or "assets"....an empty beach or mountain valley.
I have spent most of my life mingling with and serving the poor. Because I can, yes, but also because they are usually more valid and honest than rich elites. Whenever a rich person uses the words "urban renewal" then what they hear is "negro removal", for example.
I buy houses so that I can make rentals available for a price the poor can still afford to pay. But also because when the government meddles with businesses, the businesses suffer. When they meddle with the poor, the value of money declines and the poor get even poorer. But whenever they meddle with housing, the prices of houses go up.
If you want me to behave differently then you need to change the basic philosophies behind our government. I am only responding to what they do.
Urban renewal is just plain lethal. I just saw in the WSJ that redevelopment is becoming a hot item again, so I imagine we are about to be in for another decade of this nonsense idea.
I did my thesis on Khaldun and he also said that societies without that social cohesion fall. This is usually, he thought, due to corruption and becoming “soft” (urbanism being a major culprit). And then he spent a thousand pages proving that cyclical history.
Vibes are everything for Khaldun. ‘Asabiyah is just vibes across social groups.
would love to read it or hear more!
Hi Helen, I did a piece for Front Porch Republicans about Khaldun among other things! You might like it https://www.frontporchrepublic.com/2023/05/theres-no-more-room-toward-an-anarcho-pastoralism/?amp=1
I am really sympathetic to pool party progressivism and the need for fun. Having worked at a wave pool in high school, the number one thing I remember is how gross it could get and how much work it kept to keep things clean. When I think of other public resources I use today like trains and parks, it's hard not to notice the grime from both neglect from the administrators and how the public actually treats that space. It seems indicative of something bigger—a lack of will on the government's part to make the case it's worth preserving and a lack of shared, lived cultural values about how to treat public places. Without correcting those, it feels like they're making new places you wouldn't want to spend a lot of time in. On the flip side, if we can fix them, you might see a lot more public support for bigger infrastructure projects that truly only the government could attempt.
There's a lot in here. Some I agree with, and some not. But the following stopped me in my tracks:
"One of the reasons that I think people are upset is because they saw what the government could do during the pandemic - freeze rents, send stimulus, help people out. And then all that stopped."
I'm sorry, but that statement is, well, whacky. As I have often said, the government can print money, but it can't print prosperity. When you freeze rents, do you know what happens? Developers stop building housing. Housing costs real money, both to build and to maintain. NYC found out years ago what happens when you freeze rents; construction of rental housing stops. Now, ever more people are trying to rent, but there isn't enough housing being built. And now, it's a national problem, for largely the same reasons.
Let's look at the other whacky idea; that printing more money (stimulus checks) means we can all buy more. No, it doesn't. Before you can buy more, you have to PRODUCE more. The government sent out all this printed money, but with no increase in production, and guess what happened? Inflation. The inflation was inevitable. Inflation is simply defined as too much money chasing too few goods.
So, now we have dollars that are worth less, trying to buy houses that can't be built because of regulations that disincentivize building. This is reality, folks. You cannot pass a law, make a regulation, or print money that can do an end-run around the fact that we have only what we produce. If you want more housing, it's going to cost money. Where is that money going to come from? If you print it, you only get inflation, not productivity. Take it from the rich? Perhaps. Contrary to myth, the rich already pay the vast majority of taxes. Perhaps we can tax them a bit more. But the rich don't just stuff their money under their mattress, they invest. They invest it, for instance, in housing development. Nearly everything we own is a result if rich people investing in productivity. I'm not saying there aren't productive changes that can be made, but do NOT kill the Goose That Laid the Golden Egg.
I think you have a fundamental misconception as to what inflation means for the majority of people, and the economy in general. Inflation can't be described as simply good or bad, it's bad for some people and good for some people. You also say that free money can't come without a cost, but seem to not consider that the free money benefits people who need it and barely harms people who don't need it at all.
If the value of money is less and less every year, it makes no sense to hoard it like the rich love to do. Inflation is harmful to the rich, so if it's high they're going to spend money, which stimulates the economy. What can they spend their money on? They can start a business or fund an existing one, which creates jobs and distributes money. Investing in equities is simply an indirect way to do that. At some point people are playing hot potato with the dollar because they'd rather have a real asset (a raw material, a piece of art, a car, a house, something REAL) than money that is worth less next year. That's extremely GOOD and does NOT require an increase in production - money can be used for many things such as services, digital goods that have an infinite supply, the purchase of things that already exist such as antiques, land, etc...
And what does everyone who isn't rich do with free money, as for example the stimulus checks? They pay off debt with variable rate, and the debt with a fixed rate becomes less of a burden.
IMO, inflation can only be seen as a bad thing if you want the rich to stay rich and are opposed to wealth redistribution.
I appreciate your sentiment, but I think you miss on some important points.
First, is the obvious. You say that the rich don't suffer so much from inflation, and you are absolutely correct. It's the poor and the middle class. I never implied anything different. Our dollar is now worth eighty cents, just since Biden took office. And it HURTS. But why do we have all that inflation? I explained it. It's largely BECAUSE the government sent out all that money. People had more money to spend, but there wasn't more stuff to buy. The supply/demand curve is a real thing, and there is no getting around it. Prices were bound to go up. Now, that productivity is getting caught up, and there is no more free money, things are leveling out. But we will NEVER, and I mean NEVER get back to 2020 prices.
As for the rich hoarding their money, that's exactly what they DON'T do. You don't get rich by hoarding money, you get rich by investing it. I also explained that above. There is no point to more money, without more goods to buy with it. Governments print money, rich people produce the goods. Think about it.
No, I said the rich don't suffer from inflation because the rich don't suffer - they still have more than they need - and the poor don't suffer because inflation is beneficial to them.
"People didn't have anything to buy" is the biggest bullshit I've ever heard. Most people used their checks to pay off debt. The majority of people have debt, man. If they used their checks for luxury goods there are plenty of options.
Lastly... investing IS hoarding wealth. Buying tangible goods or services so that money changes hands is what stimulates the economy. Inflation forces that to occur more frequently.
Huh? You seem to want to disagree with me for the sake of disagreeing. For the THIRD time, yes, the poor and middle class suffer from inflation more than the rich. Yes, yes, and yes. Is that enough yeses for you?
Hoarding money, as I see it, is stuffing money under the mattress. What do you WANT rich people to do with their money? Give it to you? Why should they? What have you done for them? Typically, wealthy people do support charities in a big way. No, they don't give so much that they feel any pain. I'm stating fact, but neither praising nor condemning the wealthy.
And I know that it is those mean greedy capitalists that are the reason we have very nearly everything we have. That includes clothes, electronics, electricity, cars, buses, bicycles, food, HOUSING, and on and on. What good is the government's money, if there's nothing to buy? Check out Venezuela, where there is in fact plenty of money, but nothing to buy. It's not pretty.
At about this point, I would expect you to say that it is the people who produce the products, not the capitalists. There's some truth in that, but I'll completely go along with that, just as soon as you singlehandedly provide me with the electronics, electricity, housing, etc that I need and want.
There's nothing to buy in Venezuela? That must mean everyone there has everything they need.
Oh no, if slum lords can’t slum houses won’t exist 😱
Perhaps you failed to notice that there's a shortage of housing for EVERYONE. If being a slumlord was immensely profitable, they would build more slums. They don't. No, we don't want more slums, but we do want more housing, and it ain't happening. You'd best do just a little better than to blame it all on slumlords.
Okay, it’s the NIMBY assholes who would rather pay police to clear out encampments than allow development. Same thing. Anything but actually increasing supply
I am one of the many folks who don’t see the IRA doing much to combat climate change. It’s more business as usual but with money thrown at certain favored sectors. Our car-dependent lifestyles won’t change one iota as a result of this legislation, yet the transportation sector creates the most emissions. Until the feds and state governments start throwing real money at public transit and safe bike/e-bike infrastructure, and local governments have the political will to invest that $$, we will continue to be climate laggards.
I agree that transitioning more people away from cars is critical
But electrifying our industries and homes is equally, if not more, important, and that's where the IRA is taking really big swings.
Yes, lots of this is being done through subsidies that will make existing business owners wealthier. No two ways about it, it's a capitalist solution to the problem.
But it *is* a big part of solving greenhouse gas emissions!
It’s not really electrification since industries and homes already run on electricity. And it’s not really a solution since the intermittent nature of wind and solar means there will still be a need for fossil fuel baseload power.
FWIW “bike” infrastructure only has to exist because of cars. In pedestrian only areas that allow bicycles, everyone flows freely without special infrastructure
almost predictive of the election !
Wonder what you think about Matt Bruenigs take on baby bonds: that (a) they are set up to fail because they pay out in 18 years and in the meantime there’s costs and nothing to show for them, and (b) why not just pay 18 years old money now? if we’re going to be spending the money, why not just spend it now, in to people’s pockets, rather than leaving it in limbo for 18 years?
“One of the reasons that I think people are upset is because they saw what the government could do during the pandemic - freeze rents, send stimulus, help people out. And then all that stopped.
It’s like when you’re first dating someone and it’s perfect and you’re like “wow they care and are kind” and then they just kind of… stop trying? Like the potential is still within them, but they just started mailing it in. That’s what the government did to its citizens - showed them what they could do, and then just stopped doing it."
I was in my second year of studying PolSci during the peak of COVID and this resonates so hard. It's difficult not to see it cynically - that shutdowns were enacted to protect the boomers who would re-elect the Conservative Party in Britain. Republicans like to pretend that the state is this big scary entity that is inefficient because the 70s taught them that over-zealous micromanagement of scarce resources (see Panic at the Pump) was bad, so the baby had to be thrown out with the bathwater, instead of identifying the key issues with the Department of Energy. Yet, when the young generation is asking for policies that will help the environment (green new deal in the US/UK, taxing kerosene in the EU so you can't just take £20 flights willy-nilly), politicians shrug and say 'yeah but the market won't like that'. Ridiculous and disenchanting.