James Hamilton has somehow worked out how much the higher oil prices of recent months might affect the US economy. You can’t be purely mechanistic about it – the hit to disposable incomes caused by having to send $$$s abroad – but also look at consumer shifts, caused by asymetric reactions to oil price changes. His conclusions?
we wouldn’t have to worry about another oil shock until the oil price series in the top figure gets back above the values of 2008:M6 or until the 2008 highs recede farther into memory … I do have doubts that the mechanisms that were a factor in the first half of 2008 could operate with the same force in the current environment. I’m doubtful of a renewed plunge in light vehicle sales, in part because the levels are still so low and so many purchases are still being postponed …And with retail gasoline prices still a dollar a gallon below what consumers have recently seen, I’m doubtful that gasoline prices have the ability to induce as much consumer anxiety as we observed two years ago.
Paul C’s selective reading of Conservative policies is nevertheless an interestingway of organising the question: do a party’s policies restrict freedom for individuals or corporations? I can’t say I like most of the policies he lists – not unambiguously. But I don’t get the idea of treating corporations like they are people themselves – or somehow opposed to real people. In terms of money, as Dillow points out, taxes on corporates often end up on employees*. In terms of activities, when you restrict what a company could do – where and what and how it could sell, say – you are ultimately restricting the freedom of individuals at the company too – and the customers, and shareholders. Companies are conduits between individuals. Yes, they can agglomerate power. But this ‘them ‘n us’ is not as clean as Marxists need it to be for their clockwork theories.
I can’t even remember what got me linked to Macroeconomic Resilience, but this post on the micro-economic foundations of the claim that a macro-economy can exhibit sudden fragility is, well, awesome. The last few lines summarise the case:
If behaviour is a selected adaptation and not a specific application of a general logic of choice, then the introduction of substantial novelty – a change not of weather but of climate – is liable to be severely disruptive, as Schumpeter also insisted. In biological systems it can lead to the extinction of species, sometimes on a very large scale.” Extended periods of stability narrow the scope of events that fit the script and correspondingly broaden the scope of events that appear to be anomalous and novel. When the inevitable anomalous event comes along, we either adapt too slowly or in extreme cases, not at all.
Am I the only person to find this map rather pointless? What is the point of a Global Debt Map without a Global Asset map as well?
*But (2nd Dillow post), the powerful workers get an increasing chunk.