I’m up bright and early this Friday.
Lots to do, and while he said something particularly stupid Wednesday I simply refuse to pay for NYT to lie to me. So I will have to just leave you this one here.
One of the sad paradoxes of politics is that few economic indicators matter more for public opinion — for voters’ evaluation of the government in power — than energy prices, especially the price of gasoline. This isn’t just a U.S. phenomenon: Inflation driven by soaring energy prices has undermined the popularity of leaders across the Western world.
Why do I call this a sad paradox? Because while policy can have a big effect on overall inflation, it doesn’t have much effect on energy prices. The rates for oil, in particular, are set on world markets; even the U.S. president (let alone the leaders of smaller nations) has very little influence on that global price.
Gee, how does the Petrodollar work again? If the overall value of the dollar is based on the idea every country in the world that uses oil will first have to buy dollars in order to do so, the price of everything will be affected. More dollars created by policy means less oil purchased by a single dollar. I will never understand how this relationship of supply and demand is such a difficult paradox for you to shove up your ass and hit vibrate.
The reaction to his remark was, however, savage. Most notably, Jeff Bezos in a tweet assailed Biden for “a deep misunderstanding of market dynamics.”
Hmmm. Did Bezos check out what we know about the market dynamics of gasoline prices (or order an underling to do it)? Because if he had, he would have learned that there are some peculiar things about those dynamics — things that suggest at least some justification for Biden’s appeal. Serious research offers a lot more support for the idea that market power has played a role in recent inflation than you’d imagine from the ridicule heaped on that notion, including from Democratic-leaning economists.
I am all for making sure we all know Bezos is a bum that leaves a really shitty tip. Bezos however owns thousands of commercial vans that all run on gasoline, so given gasoline is a cost center for him, I can’t help but assume you and other Team Cunt leaning economists are a bunch of dumb shits that didn’t consider Bezos might actually have a fucking point because this shit costs him money and eats in to his already thin margins to deliver your weekly bottle of Wesson Oil.
Monopoly power isn’t the principal cause of inflation, which has been driven by an overheated economy plus external shocks like Russia’s invasion of Ukraine. But there’s a reasonable case that monopoly power is a cause of inflation — and blanket attacks on the mere possibility reflect, well, a deep misunderstanding of market dynamics.
So, about those gas prices. As economists at the St. Louis Fed recently pointed out, there’s a long-standing phenomenon in the fuel market known as asymmetric pass-through or, more colorfully, rockets and feathers. When oil prices shoot up, prices at the pump shoot up right along with them (the rocket). And when oil prices plunge, prices at the pump eventually fall, but much more gradually (the feather).
Why this asymmetry? There have been a number of economic papers trying to understand it, pretty much all of which stress the market power of companies that face limited competition (something Bezos surely knows a lot about).
The clearest explanation I’ve seen is in a relatively old paper by Severin Borenstein, Richard Gilbert and A. Colin Campbell. I’d summarize their argument as follows: When oil prices shoot up, owners of gas stations feel empowered not just to pass on the cost but also to raise their markups, because consumers can’t easily tell whether they’re being gouged when prices are going up everywhere. And gas stations may hang on to these extra markups for a while even when oil prices fall.
Let me explain why. If supply of my product worked the way the average gas station worked, my supply of Eastern European hookers would have to delivered by my Romanian contact once a week, because you can only use Eastern European hookers once (not really they’re quite hardy but I’m going somewhere with this). The price I charge at the brothel would be relative to the number of hookers I have on hand relative to the demand for hookers. Hookers don’t come cheap, and they don’t grow on trees either so my contact in Romania doesn’t always have a steady supply and thus prices hookers on his end in the same way I do. My price is relative to what I paid for delivery and human trafficking is a dirty business so he can’t deliver daily.
In the same way Habib at the corner station paid for his delivery a week? Two weeks? A month ago? He has to charge a certain price per gallon to cover his margins that were set sometime in the preceding weeks. This is why it takes so long for the price to come down, Habib had to buy when he had to buy and he can’t just drop his price just because his supplier did that morning.
The reverse scenario? If you buy low when your product is high, sell high. Its called CAPITALISM. Had Krugman done something with his life besides academia and writing bullshit articles he might understand that.
Competition, or lack thereof, plays a part. Is there evidence for this story? Yes. Notably, the rockets and feathers phenomenon seems to be strongest in areas where individual gas stations face relatively little competition.
In such a situation, badgering gas stations to get their prices down may actually make some sense. We can argue about its effectiveness, but it’s not stupid, given what we know about the relevant market dynamics.
What at least a few readers may notice is that the market power explanation of rockets and feathers — an explanation with an impeccable academic pedigree, developed by economists who had no obvious political ax to grind — is pretty much the same argument politicians like Sen. Elizabeth Warren, D-Mass., have made about how monopoly power may have contributed to recent overall inflation. That is, some politicians argue that corporations have taken advantage of a generally inflationary environment to jack up their markups, in the belief that they will face less public backlash than they would in normal times. And this exploitation of market power has pushed inflation even higher.
Such arguments have been greeted with ridicule and horror, even from some Democratic-leaning pundits and economists. But they make sense, as illustrated by the economic literature on gasoline prices. And what appears to be true for gasoline prices could be true more generally.
New research by Mike Konczal and Niko Lusiani of the Roosevelt Institute, a progressive think tank, finds that recent price increases have been largest in industries that had limited competition — as indicated by high markups — even before the pandemic. That’s the same kind of evidence that supports the view that asymmetric adjustment of gasoline prices reflects market power.
Pictured: the economy as viewed by the retards Krugabe is citing.
The mystery to me is why so many of my colleagues, in both the economics profession and the economics punditocracy, have had such an extremely negative reaction to any suggestion that market power might be playing a role in inflation and that presidential jawboning might make some contribution to anti-inflation strategy.
Because it isn’t, and the market is simply reacting to the phenomenon of having more money relative to the number of goods available?
Are they afraid that Biden is about to turn into Turkey’s president, Recep Tayyip Erdogan, who has rejected conventional macroeconomics and sent inflation soaring, officially to 79 percent and probably much higher in reality? Look, that’s not going to happen. Biden isn’t even going to do a Richard Nixon and try to use price controls to suppress inflation while urging the Fed to keep interest rates low. Unlike Donald Trump, who yelled at the Fed a lot, the current administration has been scrupulously hands-off as the Fed tightens policy to bring inflation down — a policy, by the way, that I support, even though there’s a real risk of recession.
The only thing I can conclude is that even supposedly center-left members of the economics commentariat are viscerally appalled by anything that even hints at populism. And this, I’m afraid, says more about the profession than it does about the economy.
Do you know who else was a populist?
I like Big Firsts and I cannot lie…
Let me tell you a little joke on Paul Krugmans level…
Why do ducks have tails?
To cover their butt quacks.
Love you, Winstons Mom.
Great article, thanks.
I…uh…also enjoyed the legs ARTICLE, I mean I enjoyed the article!
Me too! Me too!!!
There was an article?
I’m sure in the morning those ankles will be hidden by rolls of leg blubber hanging over them.
“Biden isn’t even going to do a Richard Nixon and try to use price controls to suppress inflation”
So, price controls coming in 3…2…
+1 gas rebate check brought to you by Gavin Newsome. PS. don’t forget to vote! 😉
Newsom is so stupid he thinks he needs to do it. He is going to walk away with his reelection. If he wanted to burnish his credentials for a presidential run, he would lower taxes.
When he has to face a press corps that asks him questions, he is going to wilt.
I admire your optimism.
Right? I think I’m out black pills. I want whatever Chafed is on.
Heh.
Newsome will face some questions during the Democratic primary if he’s not the front runner at the time. It’s when you when the nomination that they circle the wagons and memory hole any questions they asked before while painting the opponent as a fascist.
Vote Buying 2: Electric Boogaloo
1..Liftoff.
Price caps on Russian oil – that’ll show Putin
Curse your nimble gunslinging fingers
It just occurred to me, this dipshit mispelled axe
“Ax” is ‘Murican, sweetie.
Sure…take his side.
I thought ‘punditocracy’ was a bigger gaffe… Shouldn’t he just use punditry? Hopefully we aren’t being ruled by pundits.
In all honesty, I think we are being ruled by a punditocracy right now. Dip shits who have never done a single thing but will tell you how to do it.
AXE is body spray.
AXE is a sure sign of a beta cuck, who would rather I peg him in order for me to save time.
What a hack.
“The mystery to me is why so many of my colleagues, in both the economics profession and the economics punditocracy, have had such an extremely negative reaction to any suggestion that market power might be playing a role in inflation and that presidential jawboning might make some contribution to anti-inflation strategy.”
Yes, it’s a real mystery. This must be completely baffling to a big brain like yourself. Surely it’s because they have not big brain like you. You too smart. They ideas too simple for you big brain. Yes, that it.
That or plenty of published economic research he is surely familiar with. 🍅 Tohmahto.
there’s a long-standing phenomenon in the fuel market known as asymmetric pass-through
Something something replacement cost.
Biden isn’t even going to do a Richard Nixon and try to use price controls to suppress inflation while urging the Fed to keep interest rates low.
Place your bets, ladies and gentlemen.
Yep. That’s his lefty dog whistle for price controls next fiscal quarter.
Wait until prices start reflecting inflation.
Shortages of everything.
A complete mystery
Hey, if those greedy corporations refuse to their goods at fair* prices, maybe the government just needs to step in and take them over.
* As determined by government experts.
Serious research offers a lot more support for the idea that market power has played a role in recent inflation than you’d imagine
Assume a model.
Assume a spherical cow…
+1 science!
“Serious research …”
Exactly what is market power? Collusion? Only is the government is involved in keeping product off the market
“Look,
Jack,that’s not going to happen”He asserted…
It’s the”Jack” that let’s you know to take it seriously.
If I had known what she was dealing out, I’d have dealt it back.
Whelp, Judi just came home with the Commie Coof. Wish me luck, I’m going in.
Good Luck!
Take your vitamins!
Drink your Ovaltine!
Pro tip: Dark rum goes well with Ovaltine.
The voice of experience. When did your mother find out?
Mmmm….
You’re indestructible Festus. Go help your wife.
Festus is a Firster, so of course he is indestructible.
Krugman is classic if you can’t dazzle them with brilliance, baffle them with bullshit.
Winston’s Mom gets it.
/not a euphemism
Winston’s mom has got it goin’ on.
I’ll let someone else take the bait to post the video.
Fine
https://twitchy.com/gregp-3534/2022/07/15/watch-rochester-police-officer-under-investigation-after-arresting-an-emt-worker-inside-a-hospital/
CWAA.
I still can’t believe channel 10 is NBC.
/native
That’s what you took away from the story?
a pic of Kennedy from (I assume) FreedomFest wearing a copy of the white AOC gown with “Taxation is Theft” on the butt. lol
https://pbs.twimg.com/media/FXwb8BiUUAI5ayZ
oh looks like twitter pics don’t link directly, so here’s the tweet it came from if that works
https://twitter.com/DeAngelisCorey/status/1548143096784834562
Fabulous! Some Glibbroad should wear a knockoff to the celebration on the 30th – if I may be so presumptuous, I think SP would have approved. I nominate Tulip. (Any chance you’ll be there, o.t.a.? IIRC, you’re on the wrong coast.)
tragically yes I am in So Cal so that’s a bit far. Would love to hang with everyone though!
Yeah, we need to invade a more central – at least for North Americans – location. Like Mojeaux’s place.
GIRL GLIBS MEETUP!!!
Surely The First Of All Firsters is invited? I am, after all, pregnant.
I’m down.
I have a list of girl Glibs somewhere …
So what is this shit and where can I watch it?
https://twitter.com/OntWtf/status/1548016792672485380?cxt=HHwWiICqmcfE1PsqAAAA
Makes Ben Hur look like a wuss.
O.M.G.
Outstanding!
That is amazing.
Cry harder bitches
Obviously “go fuck yourself” is the proper reply.
Silly proles thinking they can do what they want on their own land.
https://twitchy.com/gregp-3534/2022/07/15/florida-gov-ron-desantis-latest-fec-filing-shows-a-bonkers-amount-of-cash-on-hand/
This article focuses on big donors… but I wonder what the spread is like?
I’ve never given money to any politician in my life, but I threw him a few bucks, because fuck the alternatives.
wow. he’s running. because why wouldn’t he with that kind of money on hand and he hasn’t even declared yet. Maybe that’s why Trump’s been making moves on announcing early because he knows he can’t wait for DeSantis to declare, and DeSantis needs to secure FL first.
PLEASE WORK IT OUT DUDES. maybe we can spread the rumor that Ivana’s last words were “kingmaker”? Do you think that might work?
Daily Quordle 173
8️⃣5️⃣
6️⃣3️⃣
quordle.com
Coffee…Check
Smoke…Check
Charcoal…Check
250 Deg American… Check
Pork Shoulder…Check.
Let’s start Saturday.
Suns coming up.
Need to water plants.
Saturday is started.
Good morning robo.
Good Morning:
Hope you get rain, cause we have not for about a month, and we are getting desperate.
Walk dog.
Water garden.
Coffee.
Coffee
Shorts and a T shirt
Bowl of ganja
Ready for a boring day at work
Mornin kids!
Morning Yusef.
Powerline, enjoy!
https://www.powerlineblog.com/archives/2022/07/the-week-in-pictures-tacox-edition.php
“Do you want hot sauce on those breakfast tacos? If so, just ask Hillary: she carries some in her purse.”
LOL.
Morning, Yusef.
And others!: Timeloose, Robodruid, Tulip 🌷,
Morning Hayek. Early for a Sat.
You just reminded me I need to make red pepper and mustard BBQ sauce later.
That taco line is the stupidest flub I’ve seen in a while plus you just know she didn’t write that speech, somebody actually got paid to write that line so someone on her team other than herself had to buy off on it. They need to get out of their bubble for sure.
No doubt. Again I’m reminded of Bill Burr’s bit about the First Lady. “You weren’t elected, stop trying to make or discuss policy.”
https://m.youtube.com/watch?v=YYxJUGjmuxE
Burr’s a funny guy, he occasionally veers towards knuckling under but he’s still one of the funniest around.
Heh, good stuff, sup TL?
You ain’t seen nuthin’ yet, wait’ll the 2024 election.
I’m in no rush.
Howdy HE, it seems my plans have stalled, I have no landing zone out there. But I will endeavor to persevere,
Cheers!
Good morning, Stinky, ‘loosey, hayek, Yu, Tulip, and ‘bodru!
We had rain overnight, so it’s a bit cloudy and damp at Tranquility Base this morning, but still pleasant. A moment ago, I saw two hummingbirds zip by, one in hot pursuit of the other. I suspect they’re in competition for the fresh nectar in the feeder. Dudes! There are four openings in the feeder! There’s room for both of you if you can bring yourselves to share the space!
Howdy GT, rainy afternoons are a drag, golf?
No.
Cheers!
I have no idea what I’ll do this afternoon, other than possibly drag myself over to the farmers’ market around the corner and down the block. The zucchini and yellow squash I got last time sauteed up nice and tasty, so I’d say more is in order. After that, maybe I’ll watch the Xfinity race from NH. (The name “Crayon 200” intrigues me.) Or I may take a nap – I allow myself the luxury on Saturday, but not on Sunday, so as not to disrupt my Sunday night sleep.
I too avoid Sunday naps😕
Little Black Cat LOVES when I take a Saturday afternoon nap, as he’s banished from the bedroom at night. He’s liable to park himself on my chest and purr loud enough to keep me awake. At least it’s not Big Fat Cat – he’d be liable to make me feel as if I have a collapsed lung.
It’s like the bumblebees and carpenter bees at my perennials. One spends the whole day just hovering aver the flowers aggressively attacking every bezzy come lately or random moth.
Whoever won the competition came back to the feeder and stuck his schnozz in one of the nozzles, in between chirping threateningly at me. “Back off, bitch! This is MY turf!”
Feh, I’m going to go mow the lawn.
My lawn is in a slow growth phase where it only needs a cut once every two weeks. We kept missing all of the T-storms over the past several days.
Good cutting sir.
They’re assholes like that, aren’t they. And mine stopped coming, though I was dutiful about cleaning and swapping the feeders and boiling nectar.
Oh, I don’t bother with that. I leave the nectar out until it’s about gone. It’s probably fermenting and getting the hummers drunk.
Mornin y’all. ☕
Who are you?
The real Sean would have philly links for us to see
Howdy!
Nothing noteworthy this morning.
Metoo
Good morning, Sean and 4(20)! ::raises mug of cold brew – not latte this time::
https://www.wfmz.com/news/area/berks/historic-crystal-cave-set-to-celebrate-150th-anniversary-of-tours-this-weekend/article_e461a5a6-02f4-11ed-bd9e-674ec7074dce.html
Happy anniversary to Crystal Cave.
Excellent stripper name…
Oooh, nice catch
That is true.
Stupid server error.