Inflation Hawks Are Waging War Against Their Own Hallucinations
Earlier this week the Bureau of Labor Statistics released its monthly inflation report. The numbers came in at 1.7 percent a year for all items. Excluding the ever-volatile food and energy, it was 1.9 percent.
That's about as low as inflation has been in the last 50 years. Only 1986 (1.1 percent), 1998 and 2001 (1.6 percent), 2008 (0.1 percent) and 2010 (1.5 percent) have come in lower, and a few years in the mid-2000s registered the same.
The disappearance of inflation over the past 20 years, however, has barely dented the pervasive belief that inflation remains one of the greatest threats to economic stability. These convictions persist in spite of all evidence to the contrary: Inflation is nowhere visible. For many, that is just proof that we are living in a lull -- a phony war soon to be disrupted when that age-old enemy reappears and wreaks havoc.
At the Federal Reserve -- legally mandated guardian of price stability and responsible for monitoring and containing inflation -- the president of the Richmond Fed, Jeffrey Lacker, has been warning that the current policy of very low interest rates and expansion of the balance sheet is almost certain to spark inflation in the near future.
Apple: The Slaying of a Tech Hero
Apple's quarterly results this week drew a flood of reactions - almost all negative. Given how well the company did under almost any absolute measure, this is odd, though, for Wall Street, not necessarily surprising.
But the arc of Apple's rise and temporary fall tells a more troubling story about our current inability to maintain positive momentum about any aspect of our culture. We slay our heroes with casual abandon. Then we wring our hands about the absence of positive catalysts in our world today.
Apple's stock, already in relative free fall from an all-time high of more than $700 a share, plunged nearly 12 percent on the news. The company has now lost 35 percent of its value in four months - which represents an astonishing $235 billion. This decline alone is larger than all but three companies in the S&P 500, and larger than the gross domestic product of more than 140 countries.
Climate Change Doesn't Have to Mean the End of the World
This week the National Climate Data Center confirmed what most had long believed: 2012 was the warmest year on record for the United States. Ever. And not just a bit warmer: a full Fahrenheit degree warmer than in 1998, the previous high. In the land of climatology statistics, that is immense. In the understatement of one climate scientist, these findings are "a big deal."
Almost every news story reporting on this juxtaposed the record with a series of disruptive climate events, ranging from the drought that covered much of the United States farmland and punctuated by Hurricane Sandy in its tens of billions of dollars of devastation. Many also pointed out that eight of the 10 warmest years have occurred since 1990 (though it should be noted that official records only extend to 1895). Not surprisingly, these observations were almost always followed by warnings of more warming and substantially worse consequences to come.