Inflation & Establishment Media

Larry Summers was on Ezra Klein’s New York Times podcast to discuss the state of the world economy (here is the transcript). It was worth listening to only to hear Klein getting mugged by reality, although he still seemed to want to beleive Covid and Ukraine caused high inflation. Say what you want about Summers, but he admitted he was wrong about secular stagnation, and was very clear that bad fiscal and monetary policies created too much demand. After a decade of obsessing about income inequality, progressives like Klein finally got the policies they wanted and the rising wages that went with them. But what we have appears to be a wage-price spiral resulting in accelerated inflation because, as Summers said, “wages are the ultimate measure of core inflation.” Inflation hurts lower income people more than anyone else, and to his credit I think Klein understands this. I’m hopeful this is a sign the Dems will go more liberal and less progressive. Still, I think the appeal of the far left’s policy agenda among younger people has more to do with innumeracy and economic ignorance than anything else. Finally, this did not come up in the podcast, but what worries me is the intersection of rising interest rates on massive US debt and the value of the US dollar in light of potential global competition with an alternative China-Russia economic system.

Biden made his share of gaffes in Europe, including an utterance about regime change in Russia. I’d like to think this was planned, but Biden’s style seems to be going off script whenever he feels like it. There were noises about the Russians changing their strategy in Ukraine, but I think that was gamesmanship. Also, Brett Stevens has a good column on Russian strategy, echoing some of the thoughts I shared last week. Stevens: “When Western military analysts argue that Putin can’t win militarily in Ukraine, what they really mean is that he can’t win clean.” 

Aside from academic reading, my news and podcast consumption falls in three categories: first, establishment media like The Atlantic, The New York Times, The Economist, and Financial Times; second, conservative, classical liberal, and “Beltway” libertarian organizations, which ranges from The Dispatch, Commentary, National Review, to Reason and Cato, and to podcasts from liberals like Bari Weiss, Andrew Sullivan, the guys on The Fifth Column, and Yascha Mounk; and third, the more radical intellectual an-cap and heterodox world (Mises Institute, David Stockman, Thad Russell).

I’ve mentioned before that the pandemic years have made me think far more practically about politics and political theory. I’ve had problems with that third category in my news/idea consumption. I will not name names. I will just say those newsletters and podcasts brag about being made for truth seekers, but too often the level of argument just comes down to conspiratorial speculation and reasoning that comes down to “they are lying to you.” There’s just too much narrative-slinging. There’s too much “they are the bad guys not the good guys.” All of my life I’ve tried to understand how the world works and I’ve been stymied by its complexity: law, economic, politics, finance, politics and government, culture, and history. Sometimes I love what I read and hear from that heterodox world because it adds to knowledge and is intellectually honest. But lately and too often I’m hearing and reading people who don’t even understand what they’re opining on. I’m not saying I’m such an expert, but I know more than many of those people.

To prove my lack of expertise, I’ll engage in some crazy thoughts of my own. I’m starting to feel like the changes in international relations issues in the last few years come down to center-left and center-right Western political elites reacting to the increased popularity of both nationalism/populism and far-left progressivism. The reaction entails a turn away from  “neoliberal” globalization and a return toward realism in foreign policy. A Russian-Chinese polarity justifies re-shoring industries and supply chains. I’m not asserting there’s some conspiracy at play; only that policy responses explain new political priorities. Evidence of this is the fact Biden has not dropped Trump’s tariffs on Chinese imports. Also, there is the unwillingness of the US or EU to broker a deal with Russia around Ukraine, backing Putin into a corner and forcing an escalation (this is not to say Russia isn’t at fault for the invasion; only that it is easy to imagine that if this crisis took place 20 years ago, it would be resolved with a deal on Ukraine requiring its neutrality but allowing for an EU membership).

Final note on last week: Will Smith is an asshole. 


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