Inflation and Politics

 

• I'm trying to get my head around the so-called surge in inflation. The reason for my skepticsim is that there seems to be little linkage between this and interest rates. Passbook savings rates are still essentially zero. You need to go out 3-5 years to get 1% on a bond or CD. My interpretation is that "the market" doesn't view the inflation issue as permanent. Or at least something that's in some sectors but not general or across the board.

• Things are always framed in the press in a way that blames the left when Democrats get their butts kicked in elections. In my lifetime, we got Nixon twice largely because a lot of centrist/conservative Dems (I refuse to use the word "moderate" in this context) voted for him. But the left was blamed for being too radical or something. (Back then most Dems were in favor of the Vietnam War, though most would deny it today.) It wasn't the left that put Nixon in power. Nor was it the left that voted overwhelmingly for Reagan. There is a good chance that Biden's agenda will be stymied because the conservative Dems are reneging on their deal, but I can see the press already framing it in a way that blames the left for demanding too much. If the centrist swing voters abandon the party every time it tries to do something worthwhile, perhaps the Dems should be trying to appeal to more reliable coalition partners.

• Jonathan Chait--no lefty there--has a pretty good article in New York magazine today, properly framing the peril of Build Back Better as a refusal of the conservative Democrats to negotiate in anything approaching good faith. On a Twitter thread today he further expanded on this. If the reconciliation bill fails to pass, then Biden left only with an  infrastructure bill that is mediocre all by itself. It is really a glorified highway bill, with lots of stuff for the fossil fuel industry, big telecoms, and other corporations. A pretty typical top-heavy spending bill. Chait then posits--correctly I think--that if that is all Biden gets, he is left with a failed presidency. While I think it is at least possible for the Dems to keep the House and Senate in 2022, it's better for them to act as if they won't. They have less that a year and a half to accomplish something (which may not be there again for ten years or more). If that happens, there might well be revolt of the left flank of the party. If the conservative Dems sabotage the Biden presidency, maybe a realignment will be a good thing. I am ready to give up on the Democratic Party as it is today.