At Project Syndicate Mouriel Roubini issues a warning:

NEW YORK – In April, I warned that today’s extremely loose monetary and fiscal policies, when combined with a number of negative supply shocks, could result in 1970s-style stagflation (high inflation alongside a recession). In fact, the risk today is even bigger than it was then.

After all, debt ratios in advanced economies and most emerging markets were much lower in the 1970s, which is why stagflation has not been associated with debt crises historically. If anything, unexpected inflation in the 1970s wiped out the real value of nominal debts at fixed rates, thus reducing many advanced economies’ public-debt burdens.

Conversely, during the 2007-08 financial crisis, high debt ratios (private and public) caused a severe debt crisis – as housing bubbles burst – but the ensuing recession led to low inflation, if not outright deflation. Owing to the credit crunch, there was a macro shock to aggregate demand, whereas the risks today are on the supply side.

We are thus left with the worst of both the stagflationary 1970s and the 2007-10 period. Debt ratios are much higher than in the 1970s, and a mix of loose economic policies and negative supply shocks threatens to fuel inflation rather than deflation, setting the stage for the mother of stagflationary debt crises over the next few years.

He concludes:

Under these conditions, central banks will be damned if they do and damned if they don’t, and many governments will be semi-insolvent and thus unable to bail out banks, corporations, and households. The doom loop of sovereigns and banks in the eurozone after the global financial crisis will be repeated worldwide, sucking in households, corporations, and shadow banks as well.

As matters stand, this slow-motion train wreck looks unavoidable. The Fed’s recent pivot from an ultra-dovish to a mostly dovish stance changes nothing. The Fed has been in a debt trap at least since December 2018, when a stock- and credit-market crash forced it to reverse its policy tightening a full year before COVID-19 struck. With inflation rising and stagflationary shocks looming, it is now even more ensnared.

So, too, are the European Central Bank, the Bank of Japan, and the Bank of England. The stagflation of the 1970s will soon meet the debt crises of the post-2008 period. The question is not if but when.

The preponderance of the evidence suggests that a large public debt overhang impedes economic growth. There is no “cliff” at 100% of GDP as was once believed but the evidence still says that debt reduces growth. And politicians will never want to reduce spending. It’s no way to get re-elected. A crisis has been baked in for some time.

Stagflation I can live with. What worries me is the prospect of a catastrophic loss of confidence in the dollar and we’re doing the best we can to induce one.

I found Sean Trende’s discussion of poll results at RealClearPolitics pretty interesting:

For my regressions, I used the same controls for each aspect I examined: gender, age, race/ethnicity, and income.

With controls in place, Hispanic voters, for example, are less likely to consider themselves highly patriotic than white voters, but not nearly to the extent of black or Asian voters. Being Hispanic increases your odds, all other things being equal, of giving a less patriotic response than whites by 17%, compared to 48% for blacks and 89% for Asians.

Likewise, with controls in place, Hispanics were more likely to be Democrats than similarly situated whites, but not overwhelmingly so. With controls in place, the odds that a voter who was Hispanic would be a Democrat were 11% higher than that he or she would be Republican, compared to 62% for blacks. This is encouraging for Republicans, as it suggests that as Hispanic voters continue to climb the socioeconomic ladder, they may continue to pick up GOP voting habits.

Interestingly, and perhaps counterintuitively, with controls in place the racial groups in the survey exhibited no statistically significant divergence from whites on the question of whether illegal immigration is a major problem, a minor problem, or no problem at all. Likewise, with controls in place, Hispanics are no more likely than whites to say that immigration has done more good than harm. Blacks, however, are more likely than whites to say that immigration has done more harm than good, with controls in place.

While there is more Hispanic support for the DREAM Act than there is among whites, things like a pathway to citizenship show no significant differences between racial groups, once controls are in place.

The survey also asked about Hispanic subgroups. While the number of respondents is low, the regression analysis finds no significant differences between subgroups in levels of Republicanism. This is surprising, but is consistent with interpretations of Cuban American levels of Republicanism being attributable largely to socioeconomic status. Cuban Americans were, however, significantly more likely than other subgroups to respond that immigration did more harm than good. This could reflect the unique status of Cuban Americans with respect to immigration laws, or intra-Hispanic attitudes toward other groups. Cuban Americans were also more likely to support fining employers who employ illegal immigrants.

More than anything else it suggests to me that both Democrats and Republicans are making some pretty poor assumptions.

I’m getting whiplash. Here’s Josh Gerstein and Zach Montellaro’s take on the Supreme Court’s Voting Rights Act decision at Politico:

The Supreme Court’s ruling in a Voting Rights Act case Thursday may appear modest in scope and subdued in rhetoric, but it will have a sweeping impact — undercutting efforts to challenge a slew of new laws Republican-led states have passed imposing new restrictions on the ballot, lawyers and civil rights activists said.

“It will have a devastating impact on our ability, and other civil rights groups’ ability, to protect the rights of voters through the courts,” said NAACP President Derrick Johnson.

The 6-3 loss for voting rights advocates also resurfaced second-guessing of the Democratic National Committee’s decision to file the suit on which the justices ruled, targeting Arizona’s longstanding refusal to allow out-of-precinct voting and a 2016 law banning collection of mail-in ballots through a practice critics call “ballot harvesting.”

“Certainly in retrospect, one would say this case was not the best case to bring,” said David Cole, the national legal director of the ACLU, conceding that evidence of discrimination was “fairly weak” for the two practices challenged in Arizona.

“The fact that the court overturned the rulings, with respect to those two practices in Arizona, is not what’s disturbing about the decision,” he continued. “What’s most disturbing about the decision is how the majority has essentially rewritten Section 2, broadly, to make it more difficult in all future cases to challenge voter suppression methods.”

while here’s the reaction from the editors of the Wall Street Journal:

The Supreme Court issued its ruling of the year on Thursday in upholding two Arizona voting rules. In a single blow, the Justices shot down efforts to politicize the Voting Rights Act and saved federal courts from becoming super election commissions.

Democrats in Brnovich v. DNC challenged Arizona’s ban on ballot harvesting and a requirement that voters cast ballots on Election Day in the precinct of the county where they’re registered. They claim the rules have a disparate adverse impact on minority groups and violate Section 2 of the Voting Rights Act. A district judge found no evidence the rules were discriminatory in intent or effect. But liberal judges on the Ninth Circuit Court of Appeals overruled the lower court.

Progressives have been bombarding courts with challenges to state voting laws under Section 2 since the High Court in Shelby County v. Holder (2013) struck down the Voting Rights Act’s requirement that the Justice Department or federal courts sign off on election-law changes in states with histories of discrimination. The Biden Administration’s lawsuit against Georgia’s new voting law is based on Section 2.

I suspect that voter suppression and vote fraud are the opposite sides of the same coin. While I think that both happen regularly it’s probably at a much lower level than “activists” of either party believe. In other words both those who claim either one is rampant or that either one is nonexistent are wrong.

I’m also suspicious of centralizing power and in particular in granting authority to judges that the Constitution has given to the states.

Beyond that I have no particular view of the decision. Comments?

“The Blob” is the term used to refer to a large mass of relatively warm water in the eastern Pacific that contributed to the peculiar weather conditions on the West Coast of the U. S. from 2013 to 2016. The Blob was related to the even more amusingly-named Ridiculously Resilient Ridge, a static upper layer of water attributed to a static high pressure system. Some think these phenomena are related to the Pacific decadal oscillation, a cycle that repeats over irregular intervals. IMO it is almost certain that the Blog is back and is contributing to the extremely hot weather in the Pacific Northwest.

The Biden Administration attributes the weather to global warming and, indeed, the weather on the Pacific Coast may be affected by human behavior. Contrary to some of my readers I do believe that human factors are involved in what’s been going on. I differ from the administration, however, in that I think that human influence is much more notable in influencing local weather conditions than it is in global conditions and that the proposed strategy and timeframe are completely wrong.

It isn’t just me complaining about Mayor Lightfoot. The Washington Post’s Micheline Maynard observes:

The Chicago Tribune, in an article last month about Lightfoot’s staffing problems and “notoriously abrasive leadership style,” included an email in which the mayor blasted her scheduler. The email began, “Since my prior requests for office time are routinely ignored, I am now resorting to this,” then Lightfoot wrote 16 times in a row, “I need office time every day!” before eventually signing off by writing 13 times in a row “Have I made myself clear, finally?!”

Also last month, she told news organizations that she would do one-on-one interviews only with journalists of color to mark her two-year anniversary in office. A Latino reporter at the Tribune, Gregory Pratt, canceled an interview to protest the restriction, and Clarence Page, a veteran Black columnist at the paper, labeled the policy a “stunt,” saying, “thanks … but no thanks.”

In the latest contretemps, during a June 23 Chicago City Council meeting, Lightfoot got into a finger-jabbing argument, in full view of the public and journalists, with Black Alderwoman Jeannette Taylor over Lightfoot’s nominee to be the city’s top attorney.

Indeed, some of Mayor Lightfoot’s harshest critics are black women. They comprise many of those picketing her home.

She concludes:

Donald Trump frequently taunted Lightfoot while he was president, to the point where the mayor snapped back, “Keep Chicago out of your lying mouth.” Trump was an agent of chaos from the right. Lightfoot cannot become an agent of chaos from the left if she wants to build a legacy worthy of the promise that her election held.

I’d say the supply of chaos far exceeds the demand. I think there is a longing for change but change requires higher levels of knowledge and competence than appear to be available.

This piece from NJ.com conveys a somewhat different perspective on President Biden’s infrastructure spending bill:

President Biden nearly scuttled the bipartisan infrastructure deal last week by inserting his foot in his mouth, but he recovered over the weekend and put the compromise back on track.

Now, progressives like Sen. Bernie Sanders and House Speaker Nancy Pelosi are doing their best to kill it again, and it looks like their problem has deeper roots. If they don’t change their minds, the compromise deal will be back on life support soon.

That’s crazy. The compromise gives Biden roughly one-quarter of the new spending that he originally sought in his grab-bag infrastructure plan, so this glass is not even half-full, granted. But the compromise includes nearly $600 billion in new spending, making it the largest infrastructure plan in decades. (It’s been falsely advertised as double that amount by counting money that’s already agreed to or in the pipeline.)

The money is sorely needed, and would be spent over eight years, focused on traditional infrastructure programs like roads, bridges, broadband access, water and sewer pipes, and electric vehicles.

Now let’s stop right there. The bipartisan plan is focused on infrastructure; Sen. Sanders and his supporters insist on massively subsidized consumer spending. As Warner Wolf used to say, let’s go to the videotape. Here is what has happened to consumer spending recently:

There is not a shred of evidence that more consumer spending, powered by government debt, will bolster economic growth. Neither Keynesian economic nor Modern Monetary Theory would make that claim. If you think otherwise, I suggest a remedial economics course.

Let me provide an alternative explanation. While the lockdowns persisted consumer spending drooped. That was to be expected. People couldn’t shop and were afraid of what would come next. Rather than spending people saved as this graph avers:

Now that lockdowns have ended in most places consumer spending and savings are returning to their previous trajectories.

What will the impact of all of the debt-fueled spending be? And why do they insist on it? It isn’t to foster economic growth. It isn’t to help the poor since much of the money will go to the middle class and upper middle class.

Just when I thought I had finished posting about critical race theory they drag me back in. I didn’t want Clarence Page’s Chicago Tribune column questioning whether “the left” supports critical race theory or just hates those who criticize it to pass without taking note of it. He opens with an observation that deserves a reply:

CRT, in short, is an academic framework for looking at racism as systems, not an individual flaw.

which is true as far as it goes but, as John McWhorter has noted, it’s more than that. Like Keynesianism or Modern Monetary Theory there is both a formal version and a folk version and practically all of those promoting it, especially those in government and education, are promoting the folk version. As Dr. McWhorter has noted, Mr. Page’s observation is primarily a way of dismissing the concerns that have been raised about CRT rather than dealing with them in a serious fashion.

Mr. Page then makes a very good observation:

Many of the left’s most intelligent writers, he argues, are reacting to the anti-CRT movement with loud opposition to its conservative opponents without bringing up their own reservations about the excesses of the pro-CRT movement.

The “anti-anti-CRT,” as he somewhat awkwardly calls them, are making a mistake as big as “the folly” of Republicans who became “anti-anti-Trump in order to avoid calling out the obscenity of the man himself.”

He makes a good point. I am a strong enough believer in the Constitution to appreciate how, despite what some have called its “birth defect” of slavery, its text also contains the mechanism through the amendment process for its improvement.

And there are intelligent ways to improve the document as well as self-defeating ways. CRT scholars tend to call attention to those historical flaws to undermine other American values that I would just as soon leave alone.

For example, leading CRT scholars such as Richard Delgado and Jean Stefancic in their book, “Must We Defend Nazis? Why the First Amendment Should Not Protect Hate Speech and White Supremacy,” argue for curtailment of “dangerous” speech. I don’t have to be a legal scholar to believe that’s a very dangerous idea.

but that is precisely the view that those promoting the folk version of CRT propose and I believe that persons of good will need to push back on it. As far as I’m concerned they are simply Marcusists and enemies of genuine liberalism. That’s what distinguishes liberals from progressives.

In addition I would like those who favor promote CRT, especially the folk version, to be very explicit about the actions they wish to be taken. I’m afraid that’s too much to ask.

At the Chicago Tribune Gregory Platt reports that Chicago Mayor Lori Lightfoot attributes the criticism she’s receiving to her race and gender:

Mayor Lori Lightfoot said Tuesday night that “about 99%” of the criticism she receives over her temperament is due to the fact she’s a Black woman.

The mayor made the comment during an interview on WTTW-Ch. 11 after being asked about questions people have raised over temperament and how she reacts to criticism. The mayor has been known to be tough on staff and confrontational with critics, contributing to significant staff turnover.

When asked how much of the criticism has to do with the fact she’s a Black woman, Lightfoot said, “About 99%.”

“Look at my predecessors. Did people say that Rich Daley held tea sessions with people that he (disagreed with)? Rahm Emanuel was a polite guy who was a uniter? No,” Lightfoot said. “Women and people of color are always held to a different standard. I understand that, I’ve known that my whole life.”

I accept that’s what she believes. That is what it means to have been radicalized. Once radicalized you attribute every bad thing that comes your way to whatever it is you have been radicalized on. In Mayor Lightfoot’s case it is race and gender. It is to be expected under the circumstances that she attributes criticism to being black and a woman.

But she’s wrong. Any mayor who used the Chicago Police to disperse protesters at her home but allowing Michigan Avenue to be sacked would have been criticized. Any more Under whose tenure the number of homicides (and carjackings) soared would have been criticized.

There is a lesson here but I doubt id will be taken. Chicago can have a black woman mayor but choose carefully. I don’t believe that all black women have been radicalized with respect to race and gender. Were that to be the case Chicago should not have a black female mayor. It should not have a radical mayor. Radicalization impedes your ability to govern well. You will inevitably make bad choices for the wrong reasons.

Mayor Lightfoot was elected mayor for three reasons:

1. Not to raise taxes.
2. To improve the Chicago Police Force.
3. Not to be Toni Preckwinkle.

She has only succeeded at the last. Otherwise she is a failure as a mayor.

In a Wall Street Journal column remarking on how embarrassing it must be for progressive Californians to explain why they’re leaving the Golden State for other states, James Freeman observes:

Perhaps it’s best to remain vague about the reasons for escape. Announcing that one does not want to be ruled indefinitely by a governor issuing emergency decrees won’t necessarily lead to more projects in the entertainment industry. Noting that failed policies have led to the largest unsheltered homeless population in the United States won’t make the phone ring. Call these new Texans the Hollywood flight club. And you know the first rule of flight club.

I think they should just say what Davy Crockett did: “You can all go to hell. I’m going to Texas”.

Meanwhile, California continue to beckon to the rich and to the poor while members of the middle class are increasingly moved to flee the state.