Friday, May 14, 2021

Remembering Recent History

Inflation in the United States is rising. Paul Krugman is circumspect:

It’s true that while almost everyone was expecting a spike in consumer prices, the actual spike was bigger than expected. The one-year inflation rate went above 4 percent, surpassing its previous recent peak, in 2011.

It’s not silly to ask whether unexpectedly high inflation means that the economy has less room to run than both the Biden administration and the Federal Reserve have been assuming; that could be true, and if it were, Biden’s spending plans might be excessive and the Fed might need to consider raising interest rates sooner rather than later.

However, Krugman argues, the inflation numbers are driven by bottlenecks in the economy, not overall inflation:

Sure enough, those April price numbers were driven to a large extent by peculiar factors obviously related to the economy’s restart. When people talk about underlying inflation, they rarely have the price of used cars in mind; yet a 10 percent monthly rise in used car prices — partly because people are ready to travel again, partly because a shortage of computer chips is crimping new-car production — accounted for a third of April’s inflation. There was also a 7.6 percent rise in the price of “lodging away from home,” as Americans resumed going places amid a waning pandemic.

The same thing happened in 2011:

And inflation hawks went wild. Representative Paul Ryan (remember him?) grilled Ben Bernanke, the Fed chairman, over his easy-money policies, intoning, “There is nothing more insidious that a country can do to its citizens than debase its currency.”

Bernanke wasn't rattled:

The Fed stayed focused on “core” inflation, a measure that excludes volatile food and energy prices and that it (rightly) considers a better gauge of underlying inflation than the headline number. And the Fed’s cool head was vindicated: Inflation quickly subsided, and the dollar was not debased.

Things calmed down. What lessons can we draw from this?

First, you shouldn’t have a hair-trigger reaction to short-term fluctuations in inflation. Second, when you do see a bump in prices, look at the details: Does it look like a rise in underlying inflation, or does it look like a blip driven by temporary factors?

As inflation numbers rise here, we should keep that recent history in mind.

Image: chase.com


Thursday, May 13, 2021

Another Pipeline Problem

Gretchen Witmer, the governor of Michigan, wants to shut down the pipeline which supplies half the fuel needs of Ontario and Quebec. Lawrence Martin writes:

This line has been in operation for 67 years without a leak into the Straits, but that doesn’t cut it with the uncompromising governor, a rising Democratic Party star. She alleges it is in ill-repair and could cause a horrific spill. She’s ignored a compromise reached by the previous governor, Republican Rick Snyder, that would see Enbridge bore an underground tunnel connecting Lake Huron and Lake Michigan as a replacement for the pipeline.

It serves as a reminder of where we're going. Oil is on the way out. But that doesn't mean it will be easy writing its obituary. Fortunately, Biden's energy secretary was born in British Columbia and she has a sense of what it's like to navigate relations between Canada and the United States. 

 Solving this problem will be difficult.

Image: cbc.ca


Wednesday, May 12, 2021

When Truth Is No Longer Self Evident

Former senator Jeff Flake opens an op-ed in The Washington Post with a quotation from George Orwell:

“The further a society drifts from the truth, the more it will hate those who speak it.” 

Then he quotes from the Declaration of Independence:

“We hold these truths to be self-evident.”

These days, in the United States, truth is no longer self-evident. Flake writes:

It seems a good time to examine how we got to a place where such a large swath of the electorate (70 percent of Republican voters, according to polling) became willing to reject a truth that is so self-evident.

This allergy to self-evident truth didn’t happen all at once, of course. This frog has been boiling for some time now. The Trump period in American life has been a celebration of the unwise and the untrue. From the ugly tolerance of the pernicious falsehood about President Barack Obama’s place of birth to the bizarre and fanatical fable about the size of inauguration crowds, to the introduction of the term “alternative facts” into the American lexicon, the party’s steady embrace of dishonesty as a central premise has brought us to this low and dangerous place.

Flake is flummoxed by his former party mates:

When I became an unwitting dissident in my party by speaking in defense of self-evident truths, I assumed that more and more of my colleagues would follow me. I remain astonished that so few did. Congresswoman Cheney, I know how alone you must be feeling. But just know that history keeps the score, not Kevin McCarthy or Elise Stefanik.

It is elementary to have to say this, but we did not become a great nation by believing or espousing nonsense, or by embracing lunacy. And if my party continues down this path, we will not be fit to govern.

Perhaps he should have included one more quotation -- From Thomas Macaulay, Lord Acton:

" All power tends to corrupt and absolute power corrupts absolutely."

Flake's former party is hellbent on achieving absolute power. Acton would tell him that none of this is surprising.

Image: iracing.com


Tuesday, May 11, 2021

Much More Than Cowardice

The conventional wisdom these days is that Republicans are doing what they're doing because they're cowards. Greg Sargeant writes:

As a broad description of our current moment, this is profoundly insufficient. It risks misleading people about the true nature of the threat posed by the GOP’s ongoing radicalization.

Obviously fear of attacks from Trump — or from right-wing media or primary challengers — is one motivator. But by itself, this simply won’t do: It implies that Republicans would prefer on principle to stand firm in defense of democracy but are not doing so simply out of fear of facing immediate political consequences.

The truth is much more sinister than that:

It’s impossible to chalk this effort up to “cowardice” or “fear of Trump.” It is a deliberate action plainly undertaken to manufacture fake evidence for the affirmative purpose of further undermining faith in our electoral system going forward.

The Republicans have made careful calculations. They know exactly what they're doing:

Republicans are employing their own invented doubts about 2020 to justify intensified voter suppression everywhere. [Jim] Banks neatly crystallized the point on Fox, saying those doubts required more voting restrictions — after reinforcing them himself.

Indeed, with all this, Republicans may be in the process of creating a kind of permanent justification for maximal efforts to invalidate future election outcomes by whatever means are within reach.

The lies about 2020 and the increasing dedication to destroying democratic institutions in the quest for power are inextricable from one another. As Jay Rosen says, the press is comfortable calling out the former — it can be packaged as a “fact check." But being forthright about the latter requires depicting one party as far and away the only primary threat to our democratic stability. That’s accurate, but it’s uncomfortably adversarial.

Relatedly, describing Republicans as “cowards” who “fear Trump” casts their machinations as mere reluctant efforts to cope with externally imposed circumstances they’d prefer not to be dealing with. This lets Republicans off the hook in a very fundamental way. It risks misleading the country about the true depths of GOP radicalization — and the real dangers it poses.

The Republicans crave power. And they're willing to destroy democracy to get it.

Image: The Medium

Monday, May 10, 2021

Cheney's Long Game

A civil war is being waged within the Republican Party. It appears that Liz Cheney will be a casualty of that war. But Conrad Yakabuski writes that the Cheneys settle scores   -- and they play the long game:

The Cheneys supported Mr. Trump in 2016 as the lesser of two evils, Ms. Clinton constituting, in their eyes, the devil incarnate. And during Mr. Trump’s term in office, Ms. Cheney voted in Congress to advance his agenda. But it is now clear she was biting her tongue all along.

The Cheneys began to reap their revenge against Mr. Trump even before the Jan. 6 Capitol riot that forever cast a stain on the Trump presidency and U.S. democracy. Axios reported that Ms. Cheney had been responsible for a Jan. 5 Washington Post op-ed signed by all 10 living former defence secretaries, including her father, that called on the country’s military leaders to reject any attempt by Mr. Trump to cling to power. Axios called it a “power play” by the Cheneys.

Ms. Cheney was hailed as a brave heroine for voting, along with nine other GOP House members, to impeach Mr. Trump following the riot he stood accused of inciting. By then, however, she had already declared war on Mr. Trump, so there was nothing particularly gutsy about her vote. It was just the next salvo in her war to reinstate the old guard atop the GOP.

She may lose this current battle. But don't count her out:

Ms. Cheney is playing a longer game than most of her House colleagues. While they fear Mr. Trump’s wrath in next year’s midterm elections, she is betting his influence over the GOP will soon wane. Privately, most Republicans acknowledge they are eager to move on from Mr. Trump. And his reign may increasingly look like an aberration as the GOP embraces its traditional stands on foreign policy and fiscal management, only minus the endless wars.

If she's right, lots of the present Republican house caucus could disappear -- along with Donald Trump.

Image: The Globe And Mail


Sunday, May 09, 2021

The Way We Were

The pandemic entente between Doug Ford and Justin Trudeau is over. Susan Delacourt writes

This back-and-forth is a sign that the 2020 entente between the Ford and Trudeau governments is probably over. Gone are the days when Ford and Deputy Prime Minister Chrystia Freeland held late-night “therapy” calls and when the Ontario premier lavished daily praise on all Ottawa was doing to help out with the pandemic.

Ford has recently released an ad demanding that Trudeau close Canada's borders to international travel. This week, at one of his daily briefings, Trudeau responded:

Trudeau . . . betrayed some frustration with Ford’s government on the same score on Friday when he spoke to reporters and was asked about the ad.

“Doug Ford asked me to restrict international students. There’s been about 30,000 international students come into Ontario over the past months because they were approved by the Ontario government,” Trudeau said.

“If the Ontario government wants to do more to restrict the volume of people coming into Ontario, we are more than happy to work with them on it, but it’s been a week since we’ve received that request directly from the premier (and) they haven’t followed up, except with personal attacks which doesn’t make sense and quite frankly won’t help Ontarians.”

That response was followed up by a letter from Inter-Governmental Affairs Minister Dominic Leblanc:

“We welcome your specific requests for further refinements to the mutually agreed list of acceptable international travellers,” LeBlanc writes in the letter, sent formally to Health Minister Christine Elliott and Solicitor-General Sylvia Jones, in reply to a missive they dispatched to Ottawa in the last week of April.

“The federal government stands ready, however to date we have not received such a request.”

Ford's strategy is pretty transparent:

Most political observers have recognized Ford’s anti-Ottawa salvos for what they are: an attempt to shift blame away from himself as Ontarians grow weary, frustrated and angry with the never-endemic.

The latest polling from EKOS shows that Trudeau’s Liberals now enjoy 42 per cent support in Ontario, while approval for Ford’s handling of the pandemic has dropped from 80 per cent last year to just 19 per cent this month. In a post on Twitter highlighting the tumble, EKOS chief pollster Frank Graves said: “That is unimaginably low. Biggest issue of last 80 years. Worst marks ever.” 

We're back to the way we were.

Image: CTV Toronto News


Saturday, May 08, 2021

Killing Reaganomics

 


The United States has been living with Reaganomics for fifty years. Joe Biden wants to send that policy catastrophe to its well-deserved death. Linda McQuaig writes:

"Trickle-down has never worked," declared Biden in his address to Congress last week, as he rolled out a massive agenda that would drive a hole through the heart of Reaganomics and its small-government fetish (at least when it comes to government helping ordinary people).

Biden wants to spend $6 trillion on things that would significantly improve the lives of regular Americans -- family benefits, paid medical leave, free preschool and community college, infrastructure and green new jobs, enhanced rights for workers.

And he wants to pay for it by raising taxes on corporations and other high-fliers last seen buckled over laughing at how massively they've swindled the American people.

To accomplish his goal, Biden is calling on other nations for help:

In a potentially game-changing move, Biden is trying to enlist major nations (through the Organization for Economic Co-operation and Development) to support a global minimum tax, which corporations would be required to pay on their worldwide income, regardless of whether it was reported in a tax haven.

Washington is proposing a minimum rate of 21 per cent. So if a U.S. corporation reports income in a country where the corporate tax rate is 5 per cent, Washington would impose an additional tax to bring that corporation's tax rate up to 21 per cent. This would mean much higher taxes for corporate giants -- Amazon, Facebook, Google, etc. -- that make extensive use of tax havens.

International tax expert Gabriel Zucman says that if other countries follow the U.S. in policing their corporations this way "it's the end of tax havens."
Germany and France have pledged support for Biden's corporate minimum tax -- but not Canada.

Trudeau said he's open to the idea, but declined to commit to it, insisting instead that Canada will always ensure its taxes are competitive with other nations. This kind of tax competition is exactly what Biden's global minimum corporate tax is designed to avoid.

As the U.S. Congress lines up to kill Biden's program, this is precisely the time for Justin to support it -- enthusiastically.

Image: The Rabble