Renewable Revolution

by Wolf Richter • Feb 10, 2022 • 259 Comments


SNIPPETS:

OK, the Fed and American consumers and wage earners have, excuse the technical jargon here, a serious-ass problem on their hands that has just gotten worse. The broadest Consumer Price Index (CPI-U) jumped by 0.6% in January from December, and by 7.5% from a year ago, the worst since February 1982, according to data released by the Bureau of Labor Statistics today. ... ...

The narrower “core” CPI-U, which removes the volatile commodities-dependent food and energy components from the measure to show how inflation has seeped into the broader economy, spiked to 6.0%, the highest since August 1982: ... ...

But back in 1982, Volcker was cracking down, interest rates were in the double digits, and inflation was heading lower.

Now, Powell has the foot still on the gas by still buying assets though at a slower pace, and by still repressing interest rates to near-zero.  The last time inflation spiked in this glorious manner was in 1978, but the Fed back then was pushing the federal funds rate toward 10%. Now the Fed is still repressing the federal funds rate to near 0%, which makes this Fed the most reckless Fed ever.

And folks, it’s no longer just supply chains, labor shortages, chip shortages, factories in China, used cars, and new cars.

It’s services that have begun to spike. The CPI for services spiked by 4.6% year-over-year, with big price increases now infesting every part of the economy:

Full article:
https://wolfstreet.com/2022/02/10/whoosh-goes-the-dollars-purchasing-power-in-january-as-inflation-now-infests-services/

SilentC Feb 10, 2022 at 1:25 pm
Forgot to mention rents up 20%, on point with your comment. Anyway I know where I am directing my anger on this as a renter.

Gelbert > SilentC Feb 10, 2022 at 4:42 pm
Well, I suspect that the actual inflation increase is far closer to 20% than the Greenspan gamed CPI index number of 7.5%.

Unlike the Chapwood Inflation Index, which is reality based, the BLS CPI Index is methodically low balled to avoid “upward adjustments” in the government “poverty level” numbers and inflation triggered government pension increases. Furthermore, a reality based approach to computing inflation would force our government to modify the tax tables which now (AND for the last 40 years or so) bracket creep punish we-the-people for income increases and reward “unearned” income dividend beneficiaries, populated mostly by the rich.

The published BLS CPI is perception management propaganda that Goebbels would envy.

Djreef Feb 10, 2022 at 1:37 pm
We’ve gotten to where we buy food and gas. Some used stuff, but that’s about it. We don’t need to make big purchases, so we don’t.

Gelbert > Djreef Feb 10, 2022 at 4:15 pm
Same here. As our purchasing power drops, we-the-poor-and-middle-class-people tighten our belts. Thus the economy is strangled as a result of Government directed Inflation theft on behalf of the morally bankrupt Social Darwinist (i.e. Capitalist) rich.

“By this means the government may secretly and unobserved, confiscate the wealth of the people, and not one man in a million will detect the theft.” — John Maynard Keynes

“Capitalism is the astounding belief, that the most wickedest of men, will do the most wickedest of things for the greatest good of everyone.” — John Maynard Keynes

Augustus Frost > Gelbert Feb 10, 2022 at 5:30 pm
Unfortunately, the majority of the population is irrelevant to economic “growth”. It also seems to show in economic (fiscal and monetary) policy.

Look at median household income and net worth since about 2000. Both have flatlined. Whatever “growth” the lower 60%+ of the population contribute is presumably from increased government transfer payments or debt. Where else would they get the money?

It’s the top 5% of the income and wealth distribution accounting for most increased consumption spending over the last 20 years.

WolfGoat > Gelbert Feb 10, 2022 at 5:38 pm
“Capitalism is the astounding belief, that the most wickedest of men, will do the most wickedest of things for the greatest good of everyone.” — John Maynard Keynes

Classic! Thanks for THAT! 👍

historicus🎩🍌 > Gelbert Feb 10, 2022 at 8:41 pm
This is NOT capitalism!
This is a managed arrangement by unelected central bankers who act unsupervised and expand the money supply on their whims….and lay an inflation TAX on the People. Rife with insider knowledge.

Connect that with “capitalism”.

cb > historicus 🎩🍌 Feb 10, 2022 at 11:24 pm
@ historical –

You are right, The FED was not elected. They were put their by BIG money ……………. Owners of big capital ………. Capitalists!

How’s that for a connection. 


Brian 🎩🍌 > Gelbert Feb 11, 2022 at 1:31 am
Keynes advocated for the central control of everything. Consolidation of power is the opposite of what you want to do to defuse the inherent selfish nature of man.

RT 🎩🍌 > Gelbert Feb 11
I believe what you railed again is not capitalism. Capitalism is the private control of means of production. This manipulation of the currency and monetary system by the government (state) is not capitalism. It is socialism. Socialism is the control of the means of production and the control (manipulation) of the market by the collective (state or any collective group). The state right now is devaluing our currency through the Fed, through inflation. It is not private citizens that are doing the devaluing. It is the state or the collective that is doing it. So that’s exactly the definition of socialism. Socialism always requires control from the state (collective) and always requires coercion. This is not free market and it is not capitalism.

And btw, I believe the situation you are complaining about, is what generally called Keynesian economics. So I think the quote of Keynes is particularly ironic. Keynesian believe in government spending and debt. When the government like the US has the ability to print its own currency without immediate consequences (for it is the reserve currency of the world), then it is natural to see the US gov’t and the Fed prints currency into oblivion. Runaway inflation is a natural result of Keynesian economics.

Also Social Darwinian are not capitalism. They are two different concepts. Capitalism is about who controls the means of production (capitals). Social Darwinian believes in the continual struggle between individuals or groups of individuals in the process of social evolution to a better society (progressives). Social Darwinian are not necessarily capitalist.

Gelbert > RT 🎩🍌
RT, you labor under the happy talk version of Capitalism. Think about how contradictory your statements are.

For example, anyone that believes Capitalism "fosters competition by keeping sources of production in private hands" is completely mentally at odds with the fact that the purpose of any and all Capitalists is to concentrate wealth in the fewest hands in order to dictate product prices. That is de facto concentration of wealth. That is de facto central control. That is de facto monopoly.

The claim that Capitalists are "against" anti-competitive government central control conveniently ignores the fact that it is the Capitalists that corrupt the government to stifle competition AND game the tax code so Capitalists can play their corrupt "unearned income" low tax game.

As to equating Socialism with central control, that is a meme that Capitalists conveniently associate with Soviet Russia, which was NOT a socialist government, regardless of their claims. The Soviet Russian Government was a dictatorial single corporate owner of all the resources, which is precisely what a Capitalist corporation seeks to do in any country it operates in. Even the Russian government structure was exactly (i.e. CEO = Chairman, Board of Directors = Politburo, Stock Holders = Party - nobody else has ANY say in how it is run) like that of Exxon or any other large multinational corporation.

Don't pretend that large corporations "foster" competition. They do all they can to OWN the market and destroy all competitors, often using government, which they corrupt, as their cat's paw to do the destroying.

Yes, central control is deleterious to human society, regardless of the ideology supposedly "justifying" it, but socialist ideology defends the welfare of the majority of the population, while Capitalist ideology, which is Social Darwinist to the core, regardless of anyone claiming otherwise, defends only those with the lion's share of property and actively punishes the rest for not being as "fit" as the "fittest" (i.e the rich). That fosters gross inequality, which destabilizes society.

Social Darwinists believe that ethics based principles are 'limitations pretending to be virtues'. To them, ethics are 'feel good illusions' that humans invented to pretend our species has empathy. To Social Darwinists, empathy is irrefutable evidence of inexcusable weakness. To them, all who are guided by ethics are deluded fools that should be eliminated from the human 'apex predator' gene pool for the "good" of our species.         

Social Darwinism is the morally bankrupt world view that spawned the profit over people and planet neoliberal ideology. Neoliberal intellectuals like Friedrich von Hayek, Ludwig von Mises and Milton Friedman were all Social Darwinists long before they renamed laissez-faire liberalism (that had been thoroughly discredited by the Great Depression) with the catchy title of "Neoliberalism".
 
The celebrated social theorist and geographer David Harvey explains that neoliberal ideology serves the following principle:

"There shall be no serious challenge to the absolute power of money to rule absolutely. And that power is to be exercised with one objective: Those possessed of money shall not only be privileged to accumulate wealth endlessly at will, but they shall have the right to inherit the earth, taking either direct or indirect dominion, not only of the land and all the resources and productive capacities that reside therein, but also assume absolute command, directly or indirectly, over the labor and creative capacities of all those others it needs. The rest of humanity shall be deemed disposable."

If the above isn't Capitalism = Social Darwinsim, I don't know what is.