What?  Like you clowns weren’t going to just post your own links. TPTB gave me editing access so I’m taking over this fucking place and ruling it like the shrieking harpy I am.

Bitches!

Here’s a bit of an oldie, but a goodie.  Sort of like me.

Rising prices will get worse before they get better. Russia’s invasion of Ukraine has caused the prices of oil, wheat and other commodities to soar. Official measures of the cost of shelter don’t yet fully reflect last year’s surge in the cost of newly rented apartments. So there’s still a lot of inflation in the pipeline.

The Federal Reserve, however, believes that high inflation will be a temporary phenomenon. Furthermore, the Fed believes that it can bring inflation down relatively painlessly, that it can achieve a so-called soft landing.

But doesn’t this fly in the face of history? After all, the last time America had to bring high inflation under control, during the 1980s, the cost was immense. The unemployment rate rose to 10.8 percent and didn’t get back to 1979 levels until 1987. Are there good reasons to believe that this time is different?

Because Yellen was dogpilled in the 90’s by a Shit Zoo, and Powell is a fucking idiot?

There are. The landing probably won’t be as soft as the Fed envisions, but this time disinflation shouldn’t, or needn’t, be an extremely painful process.

To see why, we need to look at history more closely and appreciate the important differences between the last big inflation and our current situation.

Forty years ago, as many economists will tell you, inflation was entrenched in the economy. That is, businesses, workers and consumers were making decisions based on the belief that high inflation would continue for many years to come.

Were they actually saying that, or were they pretending it didn’t exist like they are doing today?  Because it taken a year to go from if you were worried about inflation you’d be on board with the rampant spending plans. Now we see Nobel Laureates writing columns in the New York Times asking, “just how the fuck are we going to deal with inflation” because the partisan hacks he’s simping for are going to get their asses reamed.

One way to see this entrenchment is to look at the wage contracts–typically for three years–that unions were negotiating with employers. Even then, most workers weren’t unionized, but these deals are a useful indicator of what was probably happening to wage- and price-setting more generally.

What did those wage deals look like? In 1979, union settlements with large companies that didn’t include a cost-of-living adjustment specified an average wage increase of 10.2 percent in the first year and an annual average of 8.2 percent over the life of the contract. As late as 1981, the United Mine Workers negotiated a contract that would raise wages 11 percent annually over the next several years.

Why were workers demanding, and employers willing to grant, such big pay hikes? Because everyone expected high inflation to persist for a long time. In 1980, the Blue Chip survey of professional forecasters predicted eight percent annual inflation over the next decade. Consumers surveyed by the University of Michigan expected prices to rise by about nine percent annually over the next five to 10 years.

With everyone expecting inflation to continue, workers wanted raises that would keep up with rising prices, and employers were willing to grant those raises because they expected their competitors’ costs to be rising as fast as their own. What this did, in turn, was make inflation self-perpetuating: Everyone was raising prices in anticipation of everyone else raising prices.

So this isn’t happening now, in the last stronghold for workers unions known as government workers?  Maybe that’s a bit too obvious, so how’s about airport workers striking at the behest of a major union?  Then again, Jacobins are just going to Jacobin.

Ending this cycle required an economy so depressed that inflation fell and that workers were compelled to accept major concessions.

Things are very different now. Back then almost everyone expected persistent high inflation; now few people do. Bond markets expect inflation eventually to return to pre-pandemic levels. While consumers expect high inflation over the next year, their longer-term expectations remain anchored at fairly moderate levels. Professional forecasters expect inflation to moderate next year.

This means that we almost surely aren’t experiencing the kind of self-perpetuating inflation that was so hard to end in the 1980s. A lot of recent inflation will subside when oil and food prices stop rising, when the prices of used cars, which rose 41 percent (!) over the past year during the shortage of new cars, come down, and so on.

It wasn’t that hard, the jackasses at the FED just needed to raise interest rates to over 20%.  Better yet just do what the Russians did, and back their currency with something besides faith in the government.

I don’t know if you noticed, nobody with half a brain has any faith in the government.

The big surge in rents also appears to be largely behind us, although the slowdown won’t show up in official numbers for a while. So it probably won’t be necessary to put the economy through an ’80s-style wringer to get inflation down.

You sure about that, shithead?

And for what it’s worth, the Fed’s plan for gradual rate hikes, which has already led to a major rise in mortgage rates, is likely to cause that unfortunately necessary cooling-off, especially combined with the fact that fiscal policy has turned contractionary as the big spending of early 2021 recedes in the rearview mirror.

You sure about that, shithead?

So my message for those intoning dire warnings about the return of ’70s-type stagflation–which some have been itching to do for years–is that they should look at history more carefully. The inflation of 2021-22 looks very different, and much easier to solve, from the inflation of 1979-80.

Right, because anybody pointing out massive government spending of money that doesn’t exist except as numbers in a ledger is the same thing as wanting to go back to the 70’s economy.  What a delightful false dichotomy from credentialed retards.  The truth is, in the 80’s the US had an actual manufacturing base, and actually exported something besides marketable ideas to be built by people in third world countries slightly above slave wages.  Today, about the only thing we export is pork products and petroleum.

This means anyone that wants to protect what remains of their wealth is investing in safe places with value independent of Janet Yellen shitting in a paper sack, and igniting it on Jerome Powell’s doorstep.