Wrap Up for June 2022

Does fiscal policy create better distributional effects?

Poor life prospects as a contributor to political violence.

Colorado sets an example for housing reform.

"Solving the Housing Crisis will Require Fighting Monopolies in Construction." Alex Tabarrok provides additional references and comments.

Shinzo Abe was good for Japan.

What happens when low income men lose their health insurance coverage?

"Friend-Shoring" isn't as desirable as it may seem.

Low income groups are more vulnerable to climate change.

The land rent associated with mobile home ownership, has destabilized. Even as the cost of mobile homes on these properties has skyrocketed. I would add that until better land use options are available, traditional housing (with its extensive maintenance costs) is still the only real ownership choice for the majority of us. Which in turn limits many lifestyle and social mobility options.

A visual representation of U.S. exports.

Land based aquaculture is now producing healthier fish.

College enrollment is still down.

More job openings than unemployed as the new normal.

David Beckworth reflects on the Fed's recent obstacles.

Some basic patterns for human capital.

Cancer research makes a big step forward.

At least now, societies have a better idea what inflation is.

A visual chart for renewable energies. Also, a portable nuclear reactor is in the works. Nuclear power is changing.

The hardest thing to reshore is tacit knowledge for production line specifics.

3D printers are being utilized for Ukraine's war efforts.

How long will the Fed continue to be the "only game in town?"

When it comes to inflation, energy is just part of the problem.

Which countries beckon to millionaires, and which countries are they leaving?

How does wealth just "disappear"?

Is state capacity still a viable option with higher interest rates?

Both sides could be getting it wrong, when it comes to global warming.

Supply factors continue to dominate contributors to inflation.

Four inflation mistakes made by the Fed.

Europe turns to new sources for natural gas.

Measurement has practical purposes, yet also underlies societal expectations.

Chances are, no new refineries will be built.

Adam Tooze details the "polycrisis" with help from the BIS.

Is a fast growing economy inflationary?

Divisions between red and blue states only continue to grow.

Noah Smith interviews Olivier Blanchard.

Which inflation expectations really count?

Healthcare companies outspent everyone else on lobbying. I would note they may have the most to lose in governmental support, once crowding out effects from additional oil costs start to set in. Especially since OPEC may not actually be capable of increased production.

"Job cuts are rolling in."

"33 Problems With Media in One Chart"

Too Many Market Claims on Nominal Income

I've been anxious to start writing again regularly. However, much has come to pass since posts here were frequent, and not all of it has been good. Unfortunately, our political and social circumstance have continued to deteriorate. How will I proceed? How might others proceed? 

For now I'll need to focus less on how I feel things could be improved, and more on structural explanations why our unfortunate economic reality has come about. At the very least, a better understanding what led to this impasse, might encourage warring factions to lighten up on the destructive cultural wars. Nevertheless I've lost confidence that a cultural/political peace can be achieved during the course of my own lifetime. We simply waited too long to make supply side improvements at local levels, and the consequent fighting over scarce resources - even though many were artificially induced - won't be easily eradicated.

Meanwhile, we are in danger of losing more personal, market, and political freedoms in the years to come. While a relative few still defend free markets, the majority of these seek solutions along the margins. Alas, this approach mostly accrues to those who already benefited from recent sources of prosperity. Yet societies struggle to remain free, when economic progress doesn't occur in ways which lead to gains for all of society - not just those who have already won. 

In particular, the winners have all but cancelled the game for many participants, by making too many claims on nominal income. One reason this matters, is that the Fed learned the hard way decades earlier, what would happen once it allowed too many winners to insist on their excess claims! Yet the Fed monetary policy tool is a blunt tool. Meaning, the Fed can't choose who wins and loses once the monetary limits are drawn. For that matter, governments shouldn't have to choose, either. Instead, economic inclusion and the good deflation which encourages it, should be the responsibility of millions who participate in supply side activities. Yet many supply side decision makers have instead stood by, while societies lay blame - or excess expectations - in places where they really don't belong. 

Both the pandemic and the unexpected circumstance of primary market (originating wealth) turmoil, has meant hard lessons for this writer. Like many, I had taken "efficiency" aspects of primary markets for granted. What I never realized, was the fact such efficiency can take decades to achieve, in times of general equilibrium change. Plus, oil production is so central to how our most recent equilibrium became defined, in the first place. I should have understood well before now, that primary markets would need more nominal income space as absolute necessity, for wealth origin activity to continue as before. This, in contrast to the nominal income which secondary market participants demanded, in some instances for no better reason than knowledge providers were morally worthy of the sacrifice populations "should" make. 

As it turns out, our most direct sources of wealth have little choice but to make additional claims on nominal income, instead. Until now I'd believed secondary markets would try to keep pushing originating wealth sources out of their way, for Fed handouts. Instead, cutbacks in applied knowledge as it is currently utilized, are already underway. What recently happened to some of our most important markets, is also a reminder how peak oil finally arrived, despite recent fracking gains. Yep, we worried about peak oil decades too soon. 

Going forward, I will continue to focus on the lack of overall balance in general equilibrium conditions. For now, the Fed needs to make space for primary market evolution, but that doesn't mean citizens can't find ways to further evolve the human capital of secondary markets. Recall also that housing is a bridge between primary and secondary markets, for its monetary value represents both originating wealth and services generation. The paradox of traditional housing is that too many claims on nominal income now exist, while millions continue to need housing. Yet the Fed had little choice but to pull back early, well before existing need could be met. It's time for housing to further evolve. Due to its very nature as a bridge between primary and secondary markets, housing is paramount in equilibrium balance. Housing and its associated ownership frameworks must change into more realistic forms, or societies will continue to suffer.