The FT has a new article by Rana Forooher entitled “How innovation could stop inflation“. The article focuses on how innovation is transforming all sort of industries, from energy to transport to computers. Lots of exciting things are happening.

After reading the article, I wondered why the FT had not entitled it “Why innovation could boost real GDP”. After all, you could remove all mention of “inflation” from the article, and still make the same basic points. So why are these issued framed in terms of inflation, and not in terms of RGDP growth?

If we were on the gold standard, the title would make perfect sense. Under a gold standard, global NGDP tends to rise at roughly the same rate as the gold stock. Anything that boosts global RGDP without boosting global gold stocks (a big assumption, BTW), tends to push the price level in the opposite direction. This explains why there was almost no long run inflation under the international gold standard.

For the same reason, if we currently had NGDP targeting then the title would also make perfect sense.

But we don’t have a gold standard and we don’t have NGDP targeting. We have inflation target, at 2%. So why would anyone expect long run technological change to have any impact on inflation? Why wouldn’t faster RGDP growth merely lead to faster NGDP growth, leaving the inflation rate stuck at 2% on average, over the long run?

Just to be clear, in this post I’m not being sarcastic, and I’m not taking some sort of weird market monetarist perspective. Unless I’m mistaken, a New Keynesian or an Austrian would be equally perplexed by this FT article. I’m sincerely asking the following question:

When reporters talk about inflation in this way (and it occurs quite often), exactly what are they assuming about the monetary regime?

Are they claiming that although the major central banks claim to target P, they actually target NGDP? If so, I hope they are correct. But does that assumption actually seem plausible?

Woke people are like unicorns. I often read about them, but can’t say I’ve ever spoken with one. Nonetheless, their impact is now so great that a backlash is setting in.

From the far left you have Freddie deBoer:

Tom Scocca is going for the “it’s just a ginned-up controversy that no liberals have been pushing for.” Scocca obviously knows that thousands of liberals have in fact gone to war for CRT in that span, arguing that CRT is good actually and every student should be taught it. . . .

The bigger question for the entirety of American progressivism is this: who is Scocca talking to? To whom is he making this appeal? This is something liberals do relentlessly, appealing to some shadowy and vague arbiter of what’s fair. Hey, Republicans are pulling dirty tricks!, they complain again and again. But who is listening? What tribunal of wise judges does Scocca think is reading his tweets? What arbiter is ready to dispense justice? Too many in the left-of-center intelligentsia in this country grew up in contexts where fairness matters, where you could always count on mom or the teacher or the HR department to mete out justice. But life doesn’t work that way. There are no refs. “Republicans only won because of racism.” Yes, it’s impossible to imagine voters rejecting the party of Andrew Cuomo and Kyrsten Sinema and Gavin Newsome for any reason other than racism, agreed. So what? Who do you think is going to come and correct that injustice for you? The only opinion that matters is that of the voters, and they think your whining about unfairness makes you look weak.

From the right, you have Razib Khan:

Politically speaking, deBoer and Khan have little in common, except a strong distaste for bullshit. In this case, that’s enough. You want someone center-left who doesn’t like bullshit?

James Carville

You ever get the sense that people in faculty lounges in fancy colleges use a different language than ordinary people? They come up with a word like “Latinx” that no one else uses. Or they use a phrase like “communities of color.” I don’t know anyone who speaks like that. I don’t know anyone who lives in a “community of color.” I know lots of white and Black and brown people and they all live in … neighborhoods. . . .

Sean Illing

Sounds like you got a problem with “wokeness,” James.

James Carville

Wokeness is a problem and everyone knows it. It’s hard to talk to anybody today — and I talk to lots of people in the Democratic Party — who doesn’t say this. But they don’t want to say it out loud.

Sean Illing

Why not?

James Carville

Because they’ll get clobbered or canceled. 

Wokeness is the left wing version of Trump. Every thinking person knows it’s mostly nonsense (beyond the obvious “don’t be racist and sexist”). But the world is full of cowards who are afraid to say so. Just as GOP politicians are afraid to criticize Trump, left-wingers are afraid to criticize wokeness. So they deny that it exists.

American politics is actually quit simple. It contains three elements:

1. Donald Trump
2. The Donald Trump Personality Cult.
3. The Committee Ensuring the Election of Donald Trump in 2024.

The second group is sometimes called the “Republican Party”, while the third group is sometimes called the “Democratic Party.”

Years ago, you guys laughed when I said America was becoming a banana republic. Still laughing?

PS. What’s wrong with the woke? They claim that all racial and gender differences in achievement are proof of racism and sexism. They make anti-racism into a religion, while making crude generalizations about people based on nothing more than their race. They are opposed to free speech, preferring shaming over honest debate. They indirectly help white nationalists by promoting identity politics. They are too tolerant of crime. They obsess about unimportant symbolic issues and completely ignore important issues that affect people’s lives. They promote destructive (statist) economic policies. They oppose cultural appropriation.