Well, I'm not the world's most passionate guy.
 

It was really more of a summary of what Bernake was saying, but ok.

Re: Well I'm not dumb, but I don't understand.
 

It's not a win, believe me. It's a complete tragedy for the country. People with no clue of running businesses imposed rules on businesses, and the end result will be the middle class worker will have far worse health care.

Re: Well, I'm not the world's most passionate guy.
 

And Blodget's is a sober summary of what's going on in the economy, and why QE is not, and will not, spur the needed demand.

Bernanke's points outline an academically sound strategy that may or may not work. Blodget's are a mere look at actual facts on the street. Which matters more - prediction, or impact?

ETA: Thinking about this more, the disagreement I have with Adder comes down to a matter of expectations, and how one defines success of monetary policy. Bernanke has kept us afloat, and kept us out of a full blown repeat of the Great Depression. The problem is, his blunt instrument (monetary policy) can't create demand. He succeeds in keeping us in a stasis where demand could occur, and keeping the situation from worsening. But he can't get us to the next level because however he tries:

1. The private and public debt overhang is so enormous it can't even be inflated away on any timetable that matters; and
2. Nobody's got anything to spend because they have nothing, or in the case of the well off/comfortable/rich/corporations, they're scared.

There is a lack of confidence perpetuating the paradox of thrift here which is grounded in very solid reasoning. If you ask me to invest in a stock market which is basically just a casino, and addicted to liquidity injections, I will say, "Sure. Why not?" It's like going to the blackjack table. The odds are pretty good if you know what you're doing, you can profit.

BUT, if you say to me, "Invest in expanding your business. Take on some debt, purchase some illiquid materials/equipment/etc., or hire some workers, to grow your business in the hope these investments will help you achieve growth and pay for themselves" in an economy like ours, I will say this to you:

"No. I'm going to wait it out. When I see an economy that is not dependent on easy monetary policy, and one where employment of workers with discretionary income is growing, then I will expand. Then I will hire, or buy. Until then, I will do the bare minimum in terms of purchasing inventory, and use technology to avoid taking on labor costs."

The world waits for a US economy that can stand on two feet without Bernanke feeding it the monetary equivalent of methadone. He's doing all he can, and he's doing it well, and its better than doing nothing. But everyone knows, alone, monetary policy cannot fix what ails us. Suggesting otherwise is a dangerous and silly academic argument. It allows us to avoid discussing the lack of demand, disequilibrium between labor and capital, over-financialization, misallocation of excess wealth in the hands of non-spenders, lack of competitiveness in our labor force, broken education system, and political dysfunction (read: impossible entitlement promises and govt growth) at the root of our problems.

Re: The case for a Sebby-style health care system
 

No, I am arguing that if you don't keep total nominal incomes growing on a steady path, you will, by definition, have inadequate demand. That household will consume more, and more importantly, small and medium size businesses will invest more, if they have more income.

But hey, what I think would be even better is for the Fed action to be coupled with normal rates of government hiring. Things would look substantially better if state and local governments were still in all out freefall.

Speaking of failing to see inconsistencies...

The CPI is meant to approximate the bundle of goods that Joe Sixpack buys. Yes, that means housing too, which is Joe's single biggest expense. The best estimate of the price of the whole bundle has been growing at below target rates. You can't look at the price of one, or three, or six items and say, inflation! That's not how it works.

And cell phones and cable? You're kidding, right? Cell phone prices have been plummeting (via escalating quality at relatively stable prices). Cable prices are relatively steady.

Wait, what? A moment ago you said the Fed was propping up asset prices? Now it's not the Fed, it's just fear of assets elsewhere? That's a pretty strange statement given the sustained rally in U.S. equity markets since March of 2009, during most of which China was still rip roaring.

But I've got to say, flight to quality doesn't usually bring to mind equities. If I think China and Europe are going to drag the world economy down, I'm generally going for treasuries, but you can tell yourself whatever story you want.

I have very little contact with "retail advisers," so I wouldn't really know.

I do think it's funny that you seem to believe that there are super secret Wall Street insiders who have the real dope. I'm sure you just can't wait to get some money in with the hedge fund you heard about from Muffy at the club.

Have you watched the pontifications of Bill Gross over the last few years? They are great for demonstrating that there is no class of insider who understands it all.

Re: Well, I'm not the world's most passionate guy.
 

I'm not sure that I understood why you generally vote republican right now. You honestly believe that a lack of knowledge and understanding is superior to the best available knowledge and understanding.

Well, I guess that sums that up.

Re: Well, I'm not the world's most passionate guy.
 

I have long contemplated just what gives here. My conclusion: despite past history, Sebby believes he will get to keep more even though he will make less if ignoramuses (ignorami?) are in charge, and he rather likes listening to sweet nothings about what a job creator he is and what sponges everyone else is.

Re: Well, I'm not the world's most passionate guy.
 

stp.

Re: Well, I'm not the world's most passionate guy.
 

Did you read what I just wrote this morning? Did you see that I made fun of the concept of "job creators" yesterday? If I say there's a disequilibrium between capital and labor, how exactly am I accusing workers of being sponges?

The only job creator is the consumer.

I figured I might be called a closet socialist for some of what I penned this morning. How you conclude I'm a country club elitist (oxymoron that that is) I've no idea.

ETA: And did I write anything about politics? No. I didn't. How the fuck do you inject that into this discussion?

Re: Well, I'm not the world's most passionate guy.
 

NotBob believes the Dems have killed small business as a source of jobs that allow workers to live a complete life. Of course I told you that would happen.

Re: The case for a Sebby-style health care system
 

Any inflation in core essentials coupled with wage contraction and stagnation has an adverse impact far above what can be calculated looking at mere inflation. You get that elementary math, right?

And I can break certain expenses out of the basket and use them to show that there is pernicious inflation in essentials. It's exactly what I'm trying to do because the broad stroke numbers obscure a more detailed story explaining why demand still lags.

Re: Well, I'm not the world's most passionate guy.
 

Just reacting to Adder's comment that he couldn't understand how you write what you do yet still regularly vote Republican. Did you read what Adder wrote?

As to reading what you write, generally assume I stop at the first paragraph that doesn't at least give me a chuckle. On a good day, you are fully readable. Not today. Or any other day Bernanke is mentioned.

Re: The case for a Sebby-style health care system
 

No, your elementary math is wrong. The CPI includes the inflation you're seeing in core essentials (later I'll look for some data, but I'm pretty sure you're suffering from confirmation bias and noticing only the ups and not the downs). The elementary math says that consumers are facing historical low levels of inflation.

Maybe chicken wings or bacon costs more at the grocery store, but those increased costs are more than offset by declines (or stagnation) in things like housing costs.

Wage stagnation, to the extent that it is even a thing, is a different problem, but also one that can be addressed two ways: (1) more growth overall, and (2) more redistribution. Our political system makes (2) nearly impossible, sadly.

But I say "to the extent that it's even a thing" for an important reason. It's not clear to me that wages are actually stagnating. Instead, I think what may be happening is the mix of compensation is shifting from wages to health care benefits, the costs of which are ever increasing.

That means that "stagnating wages" do not necessary mean declining consumption, but rather a shift in the mix of consumption into health care industries.

Which might be good or bad for non-macro reasons, but is neutral in terms of growth impact (as there may not be a ton of reason to care whether people are consuming iPhones or health care). Although I guess to some degree consuming health care services necessarily requires employment here, so maybe there is some net benefit?

But one things is absolutely certain: tight money and low inflation does not help the wage stagnation problem.

You can, but your point would be meaningless.

But if you go carrying pictures of Chairman Mao.
 

Word. But it's cool I'm for anything that heightens the contradictions, bay-bee. Workers of the world, unite!

Charts
 

The St. Louis fed has a tool for creating all kinds of charts (you've seen them if you read economics blogs). I'm not that familiar with data that's available, but I'll bring you a few that I find.

Here's the price level food for all urban consumers (I'm not sure why it's urban only):
http://research.stlouisfed.org/fredgraph.png?g=biJ

Note the increase in growth rate in 2008, folowed by the big slow down in 2009 and the return to long term trend in 2011.

ETA: Looking at it some more, that may actually be higher than the long term trend on the right. I'd like to be able to show changes period to period (first derivative), but I'm not sure how to do that.

EATA: Well, look at that. Percent change month to month (back to 1990 for more context):
http://research.stlouisfed.org/fredgraph.png?g=bjq

Pretty stable within a band.



Here's similar data for energy:
http://research.stlouisfed.org/fredgraph.png?g=biK

There's a ton of noise here, but the overall picture since the great commodity run up of 2007-2009 is prices below the long term trend (to the extent that one can tell from my arbitrarily chosen starting point of 2000.

Here's gasoline:
http://research.stlouisfed.org/fredgraph.png?g=biL

Note the very similar story as energy overall.

Here's natural gas at the Henry Hub (not sure if that's the best choice, but it was there):
http://research.stlouisfed.org/fredgraph.png?g=biM

Note a few spikes, but an overall trend that is flat or slightly down. That's probably the effect of the fracking revolution.

Are there other essentials you want to look at? Because none of these seem to be telling your story from this admittedly not terribly precise information.

Re: Charts
 

How about the cost for health care over time for those that choose not to buy it, but will have to pay going forward? Spike coming?