The graphs above illustrate the increases in the producer price indices for selected European countries. As you may note they are substantially up and increasing fast. Germany just announced the greatest increase in producer prices in 70 years—since 1951.

Producer price indices are generally considered a leading indicator for consumer prices.

So much for “transitory”.

Do foreign alliances and partnerships make the U. S. more secure? Or do their entanglements lead us into war? The answers provided in this RAND study by Miranda Priebe, Bryan Rooney, Caitlin McCulloch, and Zachary Burdette may surprise you:

Key Findings

• Entanglement dynamics contributed to, but were not the only cause of, U.S. involvement in wars in Korea, Vietnam, and Libya and in two conflicts short of war in the Taiwan Strait.
• Entanglement dynamics in these cases involved a U.S. desire to maintain its reputation with allies and adversaries for upholding its commitments or a U.S. willingness to take on allies’ interests as its own.
• More research is needed on how prevalent and consequential entanglement dynamics are in U.S. decisionmaking.
• Scholars have not identified any cases of U.S. entrapment in war, in which the United States fought to defend an ally or partner that risked conflict because a U.S. commitment emboldened it to behave aggressively.
• The United States has allied with states that it believed posed entrapment risks, but it sought to minimize these risks through conditional alliance terms.
• Globally, states in conditional alliances have generally been less likely to initiate conflict, but U.S. alliances could still lead individual states to adopt policies that risk conflict.
• The United States has attempted to restrain allies and partners from initiating conflict in the past by leveraging military and economic aid, and it has had both successes and failures.

at least if you’re a foreign policy idealist. It doesn’t surprise me. In theory alliances and partnerships could make us more secure but in practice they’re dangerous as well for a simple reason. Our allies and partners have interests of their own which are not necessarily aligned with ours. They have fewer problems pursuing their own interests than we do pursuing ours as far as I can tell.

I found this piece by Barry Eidlin in The Nation thought-provoking:

So the question before us is not whether we can afford to pay for new social programs and benefits. It’s how to best cover social expenses that Americans are already paying for.

There are three possible answers to the question of who pays for social expenses. First, governments can pay by taxing their citizens to fund social programs. Second, employers can pay by using corporate revenues to provide employment-related benefits. Third, individuals and families can pay out of pocket, rely on unpaid labor from friends and relatives, or make do without.

For much of the twentieth century, the United States had a workable answer to the “Who pays?” question that drew on a mix of all three sources. Government provided certain social benefits like Social Security, Medicare, and public education. Aided by government tax incentives, many employers offered a wide range of benefits like health insurance and pensions, creating what political scientist Jacob Hacker refers to as a “public-private welfare regime.” And with one-third of the labor force unionized, and even nonunion employers pressured to match union-scale wages and benefits, many workers earned enough to support their families and handle the social expenses not covered by government- and employer-based programs.

which I found oddly skewed. So, for example, I think a better characterization of the trio of revenue sources in the second paragraph would be:

• taxpayers
• customers and employees
• individuals and families

At this point “taxpayers” means one or both of two things: workers who pay FICA and the top 10% of taxpayers who pay personal income tax. My understanding is that the top 10% of income earners presently pay 71% of all personal income taxes broken down as Top 1%—40% of taxes; next 4%—20% of taxes; next 5%—11% of taxes. I’ve already given my definition of “the rich”. I use the term to describe people in the top .1% of income earners who derive most of their income from the ownership of assets. I honestly have no idea to whom the Biden Administration are referring to as “the rich”.

If the Administration means the same thing I do, I’m honestly curious how they plan to increase taxes on that group. IMO federal wealth taxes are unconstitutional and I’m skeptical that increasing the top marginal rates will have much effect. Congress’s power is largely derived from how it allocates tax breaks and I’m confident that it won’t surrender that power eagerly. “Tax the rich!” may be a crowd-pleasing slogan but it’s easier said than done.

I don’t oppose paying more taxes to help those genuinely in need but I do have a problem paying more in taxes to subsidize lifestyles. My reading of circumstances today is that most of the people in genuine need today live in rural areas and on Indian reservations. Subsidizing childcare costs right up into the highest quintile of income earners is not helping people in need—it’s subsidizing their lifestyles. A decade ago I would have supported federal subsidies for rural broadband but, now that private companies are already satisfying that need, I think it’s behind the curve.

In the absence of an expansion of the supply of healthcare I think that additional subsidies for healthcare will have the perverse effect of increasing healthcare prices for reasons I have already explained.

That leaves me with the question of why should we be increasing the amount of “social spending”? Is the problem that we don’t spend enough or that we aren’t getting value for what is spent?

As I read this editorial in the Wall Street Journal:

The Biden Administration recently declared climate change an “emerging and increasing threat to U.S. financial stability.” The regulators must have missed a new New York Federal Reserve Bank staff study, which finds extreme weather may actually benefit banks. The real risk to the U.S. economy and financial stability is regulators, like Mr. Biden’s nominee for Comptroller of the Currency Saule Omarova, who want to bankrupt fossil-fuel companies.

The Fed staff study comes as the Administration ramps up plans to regulate how banks deploy capital in the name of protecting the financial system from climate change. But the authors find that banks are already doing an excellent job of managing risks from extreme weather that climate change will supposedly make worse.

Examining disasters declared by the Federal Emergency Management Agency from 1995 to 2018, the Fed staff found “insignificant or small effects on U.S. banks’ performance.” Disasters boosted loan demand, which offset losses and boosted income. Income at larger banks increased the more exposure they had to disasters.

Local banks tend to avoid mortgage lending where floods are more common than flood maps would predict, which suggests “that local knowledge may also mitigate disaster impacts,” say the authors. Unlike the federal flood insurance program, banks have a financial motive to accurately calibrate disaster risks. FEMA aid didn’t explain banks’ resilience.

The Fed staff note that their findings “are generally consistent with the few papers that study the bank stability effects” of climate change, including on German and Caribbean banks. Yet they contradict a report last month by the Financial Stability Oversight Council (FSOC), established after the housing meltdown to monitor systemic risks, that endorsed more climate regulation to prevent financial instability.

a thought occurred to me. Is it possible for the banking system simultaneously to be stable and unstable? For very nearly 15 years the Federal Reserve has been behaving as though the banking system were unstable, discouraging lending and providing subsidies to banks in their place.

When a system is stable, in general it is resilient to changing circumstances. When unstable any change can be disastrous.

Which is it, Federal Reserve? Are the banks stable or unstable?

Back in September a section of our backyard fence literally blew down during a windstorm. We went into our backyard following the storm and were treated to the site of an empty space where the fence used to be and the fence lying on the ground. That event moved forward our plans to replace our backyard fence from next spring to ASAP. We began soliciting bids which was harder than you might think. As it turned out we could only identify a couple of candidate vendros—the others had either gone out of business or been acquired by one of the two candidates.

Work on our new fence began on Tuesday:

continued on Wednesday:

As you can see they made substantial progress. At end of day on Wednesday the workers asked if they might return on Thursday to finish up. That was fine with us. On Thursday they finished the job by installing the gates and cleaning up the worksite.

We’re delighted with the results. Not only does it look great but it’s considerably more substantial than the previous fence particularly the gates. You can see the gate hardware has keyed entrance and substantial latches.

We’ve already received favorable comment from our neighbors.

I think I have an answer to the implicit question raised by Iddo Wernick in this piece at RealClearScience:

Confidence that green technologies can scale to dominate national energy systems remains based more on marketing claims than on demonstrated operational experience. The national goals set for 2050 present a supreme technological challenge to reduce environmental fallout while raising living standards for billions around the globe. Neither rich nor poor nations can afford to invest in technologies that achieve questionable benefits at the expense of accessible, reliable energy services for its citizens. Technologies that do not scale are destined to remain boutique technologies, the purview of the rich, environmental activists, and politicians that seize upon them to make empty promises.

Vaporware will always be a great way to rake in subsidy dollars.

Making the Tesla EV a status symbol for the top 10% of income earners was a stroke of genius on Elon Musk’s part. If you genuinely want to reduce carbon emissions, that’s the right way to do it. Subsidizing status symbols for the top 10% of income earners is unconscionable stupidity.

You might find this report at Al-Monitor interesting. TL;DR: it’s down but not out.

Not unlike COVID-19 radical religion-inspired violence is endemic in Islam among Arab populations and has always been so unless forcibly suppressed by local, mostly foreign authorities, e.g. the Turks. I would further argue that will always be the case with any sola scriptura sect without a magisterium (it’s based on a holy book, the individual decides the meaning of the holy book, and there is no authoritative office saying that interpreting that book as encouraging violence is not valid).

Furthermore our interests in the Middle East are largely limited to Europe’s dependence on Middle Eastern oil and Israel which I contend are not really U. S. interests at all.

The hand-wringing over the “omicron” variant of COVID-19 has achieved epic proportions. Every outlet I frequent now has multiple articles and opinion pieces offering varying, conflicting, and mostly counter-productive advice. Here’s my view:

1. Contracting COVID-19 is stochastic not deterministic.
2. How long immunization is effective whether through having previously contracted COVID-19 or inoculation against it is stochastic not deterministic.
3. Asymptomatic transmission is possible.
4. There is no perfect failsafe treatment for COVID-19.
5. The virus mutates fairly rapidly.

As long as those five facts remains true, we can’t seal the virus out, we can’t lock it out, and “zero COVID” is simply not possible. Our focus now should be living with the risk of COVID-19 rather than trying to reduce the risk to zero.

or “things aren’t like I expected them to be and I’m made as hell about it”. Or “Waddaya know? Different people have different opinions!”

I encourage you to read this post by Morgan Housel at Collaborative Fund, a brief history of the post-war American economy titled “How All This Happened”. I think it’s largely accurate. No real heroes or villains.

Here’s the conclusion:

But a central theme of this story is that expectations move slower than reality on the ground. That was true when people clung to 1950s expectations as the economy changed over the next 35 years. And even if a middle-class boom began today, expectations that the odds are stacked against everyone but those at the top may stick around.

So the era of “This isnt working” may stick around.

And the era of “We need something radically new, right now, whatever it is” may stick around.

Which, in a way, is part of what starts events that led to things like World War II, where this story began.

History is just one damn thing after another.

I would sum it all up a bit differently with several observations. First, when you produce a lot you can consume a lot. And second there are declining returns to investment in what the present administration refers to as “human capital”. The difference between an illiterate working age population and a literate one is huge. The difference between a working age population that ended its formal education at 8^th grade and one that graduated high school is real but less. And so on. You can do a similar analysis of healthcare. The difference between a life expectancy at birth of 54 and one of 68 is substantial. Boosting that to 72 is not such an enormous improvement and even with the enormous increases in spending life expectancy is actually declining. And that’s true of all social spending.

And relying on China for all production while we specialize in consumption is not a workable strategy.