Real disposable income and real consumer spending fell in May

Personal income rose 0.5 percent in May, according to the Bureau of Economic Analysis (see first chart). Over the past two and a half years, personal income data has been sharply distorted by lockdown policies that have led to massive layoffs, and government stimulus programs that have skyrocketed transfer payments. As the distortion decreases the personal income trend is moving closer to increasing (see first chart).

Excluding personal transfer payments, personal income rose 0.7 percent in May and 8.3 percent over the last 12 months. It is also significantly above the recent trend line (see first chart).

In real terms (adjusted for price changes), personal income excluding transfers rose 0.1 percent in May, while actual disposable income fell 0.1 percent. In the last twelve months, real income excluding transfers has increased by only 1.8 percent whereas real disposable income has declined by 3.3 percent.

Weak growth for real personal income concerns for real consumer spending outlook. Total personal spending (PCE) rose 0.2 percent in May after rising 0.6 percent in April (see second chart). Among components, sustainable products fell 3.2 percent, while attic-product costs rose 0.7 percent and services spent 0.7 percent month-on-month.

In real terms, PCE fell 0.4 percent (see second chart) because actual sustainable product costs fell 3.5 percent, actual non-sustainable product costs fell 0.6 percent, and actual service costs rose 0.3 percent.

Personal savings increased in May, reaching 5.4 percent of disposable income after a 5.2 percent gain in April. Nevertheless, it is below the pre-epidemic rate of 7.3 percent in December 2019 and at a relatively low rate by historical comparison (see Chart 3).

Price indicators from personal income and expenditure reports are the primary measures followed by the Federal Reserve. The total PCE price index rose 0.6 percent in May as prices of durable-goods rose 0.3 percent, prices of non-durable-goods rose 1.2 percent and prices of services rose 0.4 percent. Excluding food and energy, the PCE price index rose 0.3 percent for the month.

Over the past year, the PCE price index has risen 6.3 percent, the same pace as the previous month but down 6.6 percent in March. The core PCE index, which excludes food and energy prices, rose 4.7 percent from a year earlier, compared to 4.9 percent in April and 5.2 percent in March.

Overall, ongoing disruptions in labor supply and production, material shortages, and logistical and transportation constraints continue to put upward pressure on prices. Moreover, the result of Russia’s aggression in Ukraine and periodic lockdowns in China continue to disrupt global supply chains while an intense policy tightening cycle by the Fed raises the cost of debt. For consumers, rapidly rising prices are hurting real incomes and eroding confidence in the outlook, suggesting a threat to real spending. The outlook for the economy is highly uncertain and caution must be exercised.

Robert Hughes

Bob Hughes

Robert Hughes joined AIER in 2013 for more than 25 years researching economic and financial markets on Wall Street. Bob was previously head of Brown Brothers Harriman’s Global Equity Strategy, where he developed an equity investment strategy combining top-down macro analysis with bottom-up fundamentals.

Prior to BBH, Bob was a senior equity strategist at State Street Global Markets, a senior economic strategist at Prudential Equity Group, and a senior economist at Citicorp Investment Services and a financial markets analyst. Bob holds an MA in Economics from Fordham University and a BS in Business from Lehigh University.

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The average weekly initial demand increased for the fourth consecutive week

The initial claim for regular state unemployment insurance fell 2,000 in the week ended June 25, to 231,000. The previous week was revised from 233,000 to 229,000 (see first chart). By long-term historical comparison, initial claims are very low but have increased significantly since hitting a low of 168,000 for the week ended April 1, 2022.

The four-week average has risen eleven times in the fourth consecutive week and in the last twelve weeks, coming in at 231,750, up 7,250 from the previous week and at its highest level since November 26, 2021. Weekly initial demand data suggests a very tight labor market, although the recent upward trend is a growing concern.

The number of ongoing claims for the state unemployment program was a total of 1.286 million in the week ended June 11, an increase of 17,836 from the previous week (see second chart). State continued claims have now risen for three consecutive weeks and four in the last five weeks although the level is very low (see second chart).

The latest results from the combined federal and state programs put the total number of people seeking benefits in all unemployment programs for the week ended June 11 at 1.314 million, up from 1.297 million in the previous week. The latest result is below 2 million in the 18th week.

Early claims remain at very low levels by historical comparison, but an upward trend has become more apparent in recent weeks. Weekly initial claims for unemployment insurance are an AIER leading indicator, and could be an early warning sign if the trend continues in an upward trajectory.

Nevertheless, the overall low level of demand combined with the high number of open jobs has left the labor market very tense. The tight labor market is one of the strongest parts of the economy, providing support for consumer spending. However, continued price increases are affecting consumer sentiment and consumers may begin to moderate spending despite having a strong labor market.

With labor shortages and turnover, material shortages, logistical problems, and supply chain disruptions are likely to hamper productivity growth in the economy as a whole and keep upward pressure on prices. The outlook remains highly uncertain.

Robert Hughes

Bob Hughes

Robert Hughes joined AIER in 2013 for more than 25 years researching economic and financial markets on Wall Street. Bob was previously head of Brown Brothers Harriman’s Global Equity Strategy, where he developed an equity investment strategy combining top-down macro analysis with bottom-up fundamentals.

Prior to BBH, Bob was a senior equity strategist at State Street Global Markets, a senior economic strategist at Prudential Equity Group, and a senior economist at Citicorp Investment Services and a financial markets analyst. Bob holds an MA in Economics from Fordham University and a BS in Business from Lehigh University.

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The perpetual tragedy of rent control in New York

Last week (June 21), at its biennial circus, New York City housing regulators again decided how much landlords could raise rents. Despite having a 40-year high of 8.6%, they have decided to increase to 3.25%. In fact, it estimates the cost of building a rent * reduction * of 5.35% (3.25% minus 8.6%), in line with inflation.

It is a tragedy on multiple levels. Owners of rental property in New York must face the challenge of managing a building because costs such as labor, supplies, and taxes (yes, taxes are never limited) increase at a much faster rate than landlords can legally rent. We have been on this path before. The last time inflation was at this peak was in the 1970s, when annual inflation averaged 7%. The cost of operating buildings increased much faster than the legal rent and the result was catastrophic.

Take a look at these two pictures. One of these is Warsaw, Europe’s most devastated city since World War II in 1945. The other shows a neighbor in the South Bronx of New York City in 1977. Which one? Read to the end for answers. *

In a frequently quoted quote from Milton Friedman, Swedish economist Asar Lindbeck says, “In many cases rent control seems to be the most effective strategy to destroy a city at the present time – without bombing.” Judging from the photographic evidence, he is correct.

The tragedy of rent control goes beyond the visible devastation caused by high inflation and backward rent increases, although we can go there again.

Every day a quiet tragedy happens in the life of everyone who suffers from the stunts of the New York housing market due to rent control. Landlords suffer, who have unjustly reduced the value of their property and even destroyed it economically, when their legal rent cannot support the maintenance of their building. An example of this tragedy is given in an episode I read a few years ago at a biennial rent increase hearing. In an exciting hearing where dozens of “pro-tenant” activists demanded rent refrigerators and rent rollbacks, the owner of a small building approached a jar who would determine his fate. He said, “You are killing me.” I may have to leave my building, and with that, my family’s savings, which it bought to pay for retirement. ” [landlords] There are twenty of them [tenants]”

The hearing ended with a 2% approved rent increase. The fate of that landlord and his building is not known, but the fate of thousands of landlords in similar positions whose property has been completely destroyed under rent control is known.

Tenants also suffer, although many tenants understand their immediate situation and scream for lower rents. Landlords suffer when their buildings cannot be properly maintained. For thousands of tenants in the 1970s, they suffered losses when their landlords were forced to vacate their buildings. They have completely lost their homes. They suffer in other ways as well, because their garbage is “tied up” in poorly maintained rent-controlled apartments because they can’t afford to move. In Manhattan, more than a third of rent-controlled tenants have lived in their home for 20 years or more, compared to less than 3% of tenants living in market-priced housing. These extra years are spent in horrific, soul-destroying years, often controlled tenants clinging to their downstairs-market apartments, living alone after a spouse dies and children leave.

The other group who are suffering are all newcomers to the city. Rent control puts future New Yorkers at odds with existing ones, as much more “market” rent offered by newcomers partially subsidizes low-market controlled rent. It is not uncommon for two tenants living across the hall in the same apartment to pay separate rent, say A 5,000 / month for two bedrooms in Apartment A and $ 700 / month for multi-decade-long rented tenants. Apartment b. The transfer of these government-directed assets is unfair and unreasonable.

The result of the rent control fiasco

Due to rent control and violations of landlords and tenants rights, New York has experienced a serious lack of new rent construction. For many years in the 1970s and 1980s, more units were * abandoned * than were built each year by landlords. This coincided with a decline in New York City’s population of about 1 million people from 8 million to 7 million. There were other reasons for this decline, such as sky-high and fancy taxes, which typically pay New Yorkers the highest combined city / state / federal income tax in the country. But rent control had a particularly devastating effect on the city. It effectively “bombed” a vast area of ​​New York in a Mad Max-style wasteland.

Another consequence of rent control is the rapid occupation of the government and the seizure of the housing market, as the city tries to fill the gap of private construction in an expensive and coercive fashion. These include:

  • City, state and federal construction of public housing and subsidized housing,
  • Indicates that builders set a high percentage of up to 50% of new units for vulnerable tenants (resulting in higher construction costs), and
  • Government-directed housing “lottery” for lower-market units.

New Yorkers face a catastrophe that could only get worse if the government does not reverse these policies. This will be especially bad if inflation rises. If the city continues to reduce actual rents by capping growth below the inflation rate (as it is doing now), and if inflation continues for more than a few years, we will see the building abandoned again. But while the situation in the city may not be dire enough for a repeat of the 1970s rent-control “bombing”, landlords and tenants will remain quietly frustrated. Landlords will keep an eye on the value of their investments and tenants will become destitute in dilapidated, dilapidated apartments as soon as they feel the “benefits” of rent control.

This New Yorker offers some advice for those locals who have recently imposed rent control or are considering doing so: Before the problem becomes more political, cancel it as soon as you can. And if you’re thinking of imposing it: don’t.

*The picture on the left shows the South Bronx in 1977. Pictured right is Warsaw in 1945, after the devastation of World War II.

Raymond C. Niles

Raymond C. Niles is a Senior Fellow at the American Institute for Economic Research. He holds a PhD in Economics from George Mason University and Leonard N. from New York University. He has an MBA in Finance and Economics from the Stern School of Business. Prior to beginning his academic career, he worked on Wall Street for more than 15 years as a senior equity research analyst at Niles Citigroup, Schroeders and Goldman Sachs and a managing partner of Hedge Fund, an investor in energy securities. Niles has published a book chapter and numerous articles in scholarly and popular publications.

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You should take care of Martin van Buren

Even the most ardent history lover can be forgiven for not knowing much about Martin van Buren – at least out of the source of “OK”. Time magazine named him one of America’s 10 Most Forgotten Presidents, and C-Span’s 2021 Presidential Historians Survey ranked him as America’s 34th best president, putting Van Buren close to the worst from the first.

I am not claiming that Van Buren was secretly the greatest president of America; He was not to blame for his weak response to the terror of 1837 and his reluctance to deal with the evils of slavery until it was too late to blame his administration and subsequent political career. Much like his political rival John Quincy Adams, however, what Van Buren did outside of the presidency is far more interesting (and important) than what he did as president.

This is because Van Buren’s political philosophy has undergone one of the most important and enduring institutions of American politics – the modern political party. And in a polarized political environment like ours, understanding the mechanics and concepts behind the initial wave of formal bias is important for understanding American politics as a whole. These first steps would not have happened without Van Buren. Therefore, despite his apparent unpopularity, Van Buren deserves your attention.

Although many blame Thomas Jefferson and Alexander Hamilton for the origins of American political parties, these early parties were not ubiquitous political instruments that would emerge later. They were ideologically highly divided, and regional and personal differences provoked widespread internal conflicts – especially in the post-war era of so-called good feelings.

Van Buren wanted something different. Like any politician, he wanted to win, but political parties were also important to Van Buren on a philosophical level. Van Buren argued in his autobiography that “the nature of the abuse of power, so deeply ingrained in the human heart, cannot be tested more effectively than in any other way.” [than by a political party]; And so it has always struck me as more dignified and masculine … recognizing their needs, giving them the credit they deserve. “

In other words, Van Buren sees political parties as an essential mediating institution that prevents an individual from gaining too much power. Party leadership, he hoped, would limit any influence that a particularly ambitious or popular person could achieve. This approach was consistent with Van Buren’s Jeffersonian liberalism, as he was more broadly skeptical of non-local government and government intervention.

He dedicated his life and his political career to building a political machine that was competent, intellectual and united. This effort has given birth to two organizations. The first was the Albany Regency, which effectively controlled New York politics from 1822 to 1838. At his height, the Regency was so strong that the now-infamous Tamani Hall in New York City served at his behest. It was in 1828, when the Tamani Regency was under control, that the organization began to organize Irish immigrants for the first time, a move that has since influenced city politics.

Van Buren’s second, more complex and more important project was the founding of the Modern Democratic Party. As Donald Cole describes in his Van Buren biography, the old Democratic-Republican Party was the subject of frequent disputes between the North and the South, and Van Buren hoped that a political alliance between New York and Virginia would heal these divisions and allow a unified organization. . Initially, this method was successful. The New Democratic Party won the 1828, 1832, and 1836 elections with a broad coalition of states.

Of course, like today’s political parties, Van Buren was unable to keep everyone united forever. Regional differences (especially over slavery) intensified again and Van Buren (probably unsolicited) was blamed for the 1837 terror. His defeat at the hands of William Henry Harrison was inevitable. After another failed presidential campaign as part of the Free Soil Party in 1848, Van Buren faded into obscurity.

But his fingerprints remain in American politics. The Democratic Party has survived for nearly 200 years, and many of Van Buren’s structures and institutions have proven stable. Furthermore, historian Robert Remini writes American Biographical EncyclopediaVan Buren “emphasized the importance of the popular majority and … the perfect political strategy that would appeal to the people …. previously parties were considered evil enough to tolerate.”

Martin van Buren may not be everyone’s favorite president, but he deserves study. After all, an estimated 28 percent are familiar with the American Democratic Party. People should at least know how their political party came to be and why it lasted.

Garion Frankel

Garion Frankel is a graduate student at the Bush School of Government and Public Service at Texas A&M University, with a focus on education policy and management. He is a graduate fellow of AIER, a young voice contributor and a breaking news reporter for Chalkboard Review.

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10 Thursday AM read – big picture

My morning The train WFH reads:

A Artwork, anyone? In the case of investing in offbeat Alts Alternative options, such as lawsuit funds and pro sports, redefine non-related assets. (Chief Investment Officer)

A The lights are going out for the crypto laser-eyed gripper Bitcoin’s latest market journey has calmed influential people on social media. This is a welcome development. (Bloomberg) See more Crypto crashes widen a divide: ‘Those who have money will be better off in the end’ No cryptocurrency investor has escaped the pain of falling. But the consequences of losses of more than 700 700 billion are far from over. (New York Times)

A Fight the beer-market blues with the Roth IRA conversion: Roth IRAs are the best retirement plans, and this year’s market crash sold them out (Wall Street Journal)

A Big Japan shorts are back for traders betting against BOJ: The Bank of Japan says it is committed to keeping yields low despite global pressure to raise rates. With the yen depreciating, investors are again skeptical of its intentions. (Bloomberg)

A How Coved Tracking Apps Are Pivoting For Commercial Profits In the early days of the epidemic, government-backed public health apps gained millions of users — a ready-made audience developers eager to tap. (Wire)

A Goldman Sachs has seen losses from consumer push surpassing $ 1.2 billion this year The bank expects new venture losses to accelerate this year, seeing the Main Street venture as the key to lifting Goldman stock. (Bloomberg) But look Has the consumer ever been more prepared for the recession? But if consumer spending is the main driver of economic activity, then from a financial point of view 70% of the economy is in pretty good shape right now. You could argue that the consumer economy was not more prepared for the recession.? (Common sense resource)

A Rural counties are growing, but can it be sustainable? Epidemics and home-based work-movements led to economic revolutions in sparsely populated areas as workers left the big cities. (Wall Street Journal)

A Social media sites can slow down the spread of deadly misinformation through polite intervention According to a new survey, Twitter’s initial efforts could halve the sharing of inaccurate information. (Grid)

A Republicans can rise to victory. Here’s why they don’t. Yet for some reason, the GOP is not working particularly hard to keep these legal developments at the forefront of voter awareness. Instead, Democrats have been loudly drumming up recent Supreme Court rulings, declaring abortion rights a “ballot,” and megaphone economic, social, and medical outcomes as a result of losing the constitutional right to abort. . (Washington Post) See more The The end of Roy means we need a new civil right to privacy We need to consider intimate privacy as a civil right. Civil rights are legal and moral rights whose protection is essential for the development of human beings, for the enjoyment of respect and for the recognition that they belong to themselves. Civil rights guarantee our participation in a democratic society. These are moral rights: they cannot be traded or denied without a valid reason. Civil rights are fundamental rights for everyone. (Slate)

A Wild solar weather is pushing satellites out of orbit. It’s just going to get worse. The change coincides with the start of a new solar cycle and experts believe it could be the start of some difficult years. (Space)

Be sure to check out our Masters in Business next week with Perth Toll, the index provider and sponsor of the Freedom 100 Emerging Markets ETF, founder of the Life + Liberty Index. The first type of strategy uses the metrics of personal and economic independence as the primary cause of its investment process. Prior to the formation of the Life + Liberty Index, Perth was a personal wealth advisor to Fidelity Investments in Los Angeles and Houston, and lived and worked in Beijing and Hong Kong, where his observations led him to explore the relationship between freedom and the market.

Trump vs. Dissent: Who will win the 2024 Republican presidential nomination?

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Good explanation for inflation AIER

There are many bad explanations for inflation. I address some of them here. So let’s explore some good ones. They are not iron-clad, but they are understandable in terms of basic economic theory.

As always, the starting point is the exchange equation: MV = PQ, where M is the money supply, V is the velocity of transmission (on average, how many times the same dollar is spent for goods and services), P is the price level, and Q is the real (inflation-adjustment) ) Output. The equation of exchange is an identity. It just tells us that the total amount spent (MV) must be equal to the nominal value (PY) of the cost.

We need to add some assumptions to make the exchange equation suitable for economic analysis. In particular, we will assume that the velocity and the actual output are independent of the money supply. This is not always true. Many economic recessions can be partially explained by a sudden decline in V, which means a sudden increase in liquidity demand. However, this is often a good guess for short to medium-driven predictions.

The dynamic equation of exchange is more effective, which is the same formula expressed in growth rate: gM + gV = gP + gQ. First, note that when discussing Level Among these variables, we multiply them, but when discussing Growth rate, We add them. This will be important later. Second, the dynamic version tells us directly what inflation (GP) is happening. This is why this version of the equation is so helpful.

Decreasing productivity

One possible explanation for inflation is declining productivity. We are less good at converting inputs into outputs. In the dynamic equation of exchange, it will show as a sudden fall in gQ. The economy does not have to shrink. It grows more slowly than before. Assuming that the rate and speed of growth of the money supply remains unchanged, the GP must increase, which means that inflation will increase.

Theoretically, it makes sense. But why is productivity declining? There are several explanations for the continued production disruption from the epidemic, as well as the war in Ukraine. A quick look at the data shows that real income and productivity are increasing, but a bit slower than before. This probably contributes to inflation. But magnitude has no meaning as a primary explanation.

Covid post-war and the Ukraine war

These important events demand more thorough treatment. Again, both are admirable, but we should be careful.

It has been more than two years since the epidemic began. Does it really take so long to solve Covid’s interruptions and attendant supply-chain problems? And even if they are not completely resolved, the problems today are expected to be less serious. Yet inflation is rising.

How about the war in Ukraine? As many commentators have noted, prices began to rise a year before the Russian invasion. President Biden’s repeated line about “Putin’s price hike” is a bad attempt at political rotation. However, it is reasonable to assume that important values ​​such as food and energy have been affected by the conflict. But are they the leading factor? Probably not.

We can compare US inflation with inflation in other countries to better understand what is happening. The push of the above supply has affected all the countries to different extent. For example, the invasion of Ukraine has hit Europe much harder than the United States. According to Jason Furman, who served on President Obama’s Economic Advisory Council, skyrocketing natural gas prices have played a major role in European inflation. He added that core inflation – which excludes food and energy prices – was significantly higher in the United States (6.5 percent) than in Europe (3.8 percent). It goes without saying that supply disruptions are not contributing to the rise in U.S. prices. But we clearly need something else to explain the level of inflation in the United States.

Government spending

Casual observations suggest that rising government spending is the cause of inflation. But casual observations are often wrong. Expenditure does not necessarily increase total expenditure. It may crowd out personal expenses. Uncle Sam takes a large slice of pie, but no more or less pie is available at all.

Whether government spending increases total spending depends, in large part, on whether it shifts with loose monetary policy. So the impact of government spending on inflation is indirect.

Starting in 2020, Congress ran extraordinary deficits: about $ 3.1 trillion and $ 2.8 trillion in 2020 and 2021, respectively. As a share of GDP, it is 15 percent and 12 percent. It covers these deficits by issuing bonds, adding national debt. And many of those bonds have found their way into the Fed’s balance sheet.

Between 2020 and 2022, the Fed bought about 3 3.3 trillion in government debt. That’s about 55 percent of the deficit in those years. It is difficult to avoid the conclusion that the Fed has indirectly financed large budget deficits through money laundering. All that new liquidity contributes to our current inflation phase.

Money mischief is ultimately the Fed’s fault. But financial inconsistencies have played a helpful role. Undoubtedly, fiscal policymakers have felt the pressure to be wary of the wind and to backstop huge revenue expansion. We never know how much pressure politicians put on technocrats behind the scenes, but we don’t need to. Cooperation between fiscal and fiscal policymakers explains the upward trend in overall demand, which we can see in the overall spending growth above the trend.

A cautious conclusion

We need both supply and demand to explain inflation. At the moment, there seems to be a demand for driver’s seats. But that may change. We will know more after finding out whether the actual output growth in 2022Q2 was positive. Real-time assessment of overall supply and overall demand on inflation is quite difficult. Nevertheless, we have enough information to put an end to policy mistakes, especially in terms of demand, which can go a long way in explaining today’s inflation.

Alexander William Salter

Alexander W. Salter

Alexander William Salter is Georgie G. Snyder is an associate professor of economics at Rolls College of Business and a comparative economics research fellow at the Free Market Institute at Texas Tech University. He is its co-author Money and the rule of law: generality and predictability in financial institutions, Published by Cambridge University Press. In addition to his numerous scholarly articles, he has published nearly 300 opinions in leading national outlets such as The Wall Street Journal, National Review, Fox News OpinionAnd Mountains.

Salter earned his MA and PhD. He holds a BA in Economics from George Mason University and a BA in Economics from Occidental College. She was a participant in the AIER Summer Fellowship Program in 2011.

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The death of separatism and the life of school choice

Reprinted from Law and Freedom

Many fruitful decisions of the Supreme Court in one term, Carson vs. Makin Its potential stands for lasting legal and political impact. Inside Carson, Which was handed over on Tuesday, the court said Maine could not stop parents from using its tuition assistance for rural residents at communal religious schools. As Chief Justice Roberts put it, “A state does not need to subsidize private education. But once a state decides to do so, it cannot disqualify some private schools simply because they are religious.”

The lawsuit is the culmination of a series of judgments in which Roberts’ court ruled that any condition that unconstitutionally withheld state aid was generally available from religious institutions. Previous lawsuits have refrained from withholding aid based on the organization’s religious identity. The case expands the policy to prevent it from being used on the basis of religious practices in which the institution provides tuition assistance — in a school that includes religious instruction. The free exercise clause requires neutrality between religious and non-religious organizations and citizens can offer their government-provided assistance.

The doctrine of unconstitutional status is known throughout the breadth of constitutional law. A state, for example, cannot prevent citizens from using the tuition aid commonly available for private schools based on what a teacher said about the American Revolution, because it would be an unconstitutional condition of freedom of speech. Carson Explains that the doctrine of unconstitutional conditions applies to free practice as well as other constitutional rights.

The end of separatism

Its broad significance Carson vs. Makin The court made it clear that the free exercise clause would be treated like any other right and would not be limited by the unconstitutional principle of separation of church and state. The case does not seem fundamental on its surface এটি it takes very little time to quote the founding formula on the meaning of the Free Exercise or Establishment Clause. Yet it is informed by the movement towards fundamentalism, because what has historically distinguished the treatment of free exercise from other rights is a non-fundamental aspect of the establishment, i.e. it includes a broad and furry policy of separation of church and state. And that view is sometimes supported by a flawed originality, relying on a few snippets of materials from the founding era, such as in response to a letter from Thomas Jefferson’s “Separation Wall” commentary to his Baptist Church in Danbury, Connecticut.

If the Constitution actually establishes a principle of complete isolation, then it is admirable that a state would have a compulsory or at least sufficient interest to prevent parents from using the commonly available help in a religious school. Separatism would suggest that there should be no relationship between religious institutions and the state. Separatism also animates the notion that there must be at least some “joint play” between the two sections, which means that a state’s concern about the establishment clause can justify restrictions on the right to free exercise. This procedure may maintain the limitations of free practice which would not be tolerated in the case of other constitutional rights. But Carson The majority do not significantly place the phrase, “Play in the joint.” Disagreements between Justice Stephen Breyer and Sonia Sotomayor relied on the phrase nine times in total. Dissent also clearly relied on separatism, while the majority rejected any separatist concerns. So, that means Establishment The clause is what ultimately divides the court.

The main background to Roberts’ doctrinal approach

In fact, there was not much originality in the face Carson It goes without saying that it did not play an essential background role. There is a division of labor between the scholar and the court, especially when a theorist who avoids quoting scholars, such as Chief Justice Roberts, writes opinions. Debunking the separation of church and state as the main principle behind the founding clause is crucial for the recent development of the scholarship curriculum, as it provides the background. Carson’s Doctrinal steps. Especially the Magistrate of Philip Hamburger Church separation And the state Shows that there were very few opinions at the time of framing which connected something like this principle to the establishment trend. It was very unusual to use the term Thomas Jefferson (not a framer, of course).

Instead, according to Hamburger, what the Establishment Clause animated was the concern of religious dissidents that they would not be discriminated against and that the state, as Hamburger said, did not take “knowledge” of religion by creating religious experiments and incorporating other religiously connected requirements. Measured against this understanding of the meaning of the law “establishment” and its dangers, Carson’s insistence that religious schools should not be discriminated against in generally available programs is fully consistent with the strictness of the establishment. A program that is secular and non-dominant in any religious education rarely establishes a religion. In fact, in Hamburger’s account, Carson’s The insistence on the principle of non-discrimination makes it more consistent with Clause’s animating policy than dissent.

Furthermore, Hamburger reminds us that most framers felt that the Republican government depended on continued religious sensitivities among its citizens. Religion was necessary for individual self-restraint which allowed the republican government to exercise less restraint than other regimes. Again, understanding this background makes it difficult to exclude religious schools from a government program. Roberts’ opinion would have improved if he had relied more on the work of hamburgers and others, but not in his style, as opposed to more transparent originality like Gorsuch or Thomas.

The impact of its political economy Carson

Carson What this establishment does for law is not only important but also what it does for the school choice movement. That movement has already gained political momentum. First, many public schools have been widely criticized for being closed for too long during the epidemic, especially for the poorest students. Second, many parents are angry at what their public schools are teaching, viewing the commonly used history curriculum as particularly trendy and patriotic. Many are also concerned about the emphasis on equity over excellence. As a result, the parental rights movement is emerging as a strong electoral force.

School choice is a logical institutional expression of parental rights. A parent who chooses which school his or her child will attend has a greater impact on his or her child’s education. In a traditional public school, a parent can only vote in a school board election, and once the school board is elected, he or she does not retain significant benefits at all. The school provides the invaluable right to opt out.

Carson Those who want to send their children to religious schools are assured that religious choice can never be excluded from the program of choice. Thus, it encourages parents who want a religious alternative to traditional public school to join their parents who want an alternative for secular reasons. Thus governance gives us more strength among the most important contemporary social movements.

What is open Carson

In a footnote Carson Shows what the next battlefield will be for religious schools. Dissenters argued that case schools should not receive state funding because of their teaching (a curriculum that pays close attention to the Bible) and their criteria for admission (which explicitly includes religious allegiance and sexual orientation considerations). The Chief Justice rightly said that these issues were not before the court, as the Maine program excluded all community schools, regardless of their specific admissions criteria and courses.

Whether a state can determine the practice and curriculum for admission to a state-funded religious school will be determined, at least primarily in a lower court, on the basis of another recent Supreme Court case.Fulton v. Philadelphia. In that case, the court said Philadelphia could not exclude a Catholic service company from participating in a pastoral program for refusing to certify gay couples. The court said it violated the free exercise clause. Because the city had the prudence to make exceptions to the certification requirement, the rule was not a neutral rule and thus had to be justified under strict scrutiny.

Thus, states may be able to enforce admissions and curriculum rules, but they must be strictly neutral and enforce without the power to grant exceptions. This provision would probably defeat many of the rules that religious schools would find burdensome, as any intelligent school monitoring system would be able to provide exceptions due to special circumstances such as the location and mission of a school. It would be especially difficult to get political support for strict rules, given that Likes The whole thrust of the school choice movement. And under FultonOnce the state has the authority to grant exceptions, it will only be able to enforce a rule against a religious school on the basis of compulsory state interests – a high barrier.

In other cases there will be more headlines during this period. But Carson May prove to be the most important in the long run. It permanently frees the practice practice from the constitutional penumbra shadow of the separation of church and state. It strengthens a political movement that is essential for the development of the next generation of human capital as well as for the maintenance of ideological and religious diversity for a pluralistic society.

John O. McGuinness

John O.  McGuinness

John O. McGuinness is George C. of Constitutional Law at Northwestern University. Dix is ​​a professor and a contributing editor Law and freedom. His book Accelerate democracy Published in 2012 by Princeton University Press. McGuinness is also the co-author of Mike Rapport Originality and good constitution Published by Harvard University Press in 2013.

He is a graduate of Harvard College, Balliol College, Oxford and Harvard Law School. He has published opinion reviews in leading journals, including Harvard, Chicago and Stanford Law Review and Yale Law Journal, and Opinion Journals in National Affairs and National Review.

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Peak Inflation Revisiting – Big Picture

A month ago, I asked: Has inflation risen to the top? There were persuasive hints that the three main drivers of inflation – automobiles, housing and wages – we have seen the end of broad price increases.

My colleagues Tracy Alloway and Joe Weizenthal, a little tongue in cheek, mentioned a few more specific items whose prices looked up and rolled over: Rolex watches, graphics chips, industrial metals, board apps, trucking, yages, shipping rates, used cars, (some ) House, and wood.

It is not that any of these items are so significant, but rather that in most cases of 2H 2021 and 1H 2022 the types of board price increases are starting to get easier.

Broadly speaking, we see these 6 large categories as encouraging price restraints:

1. Product price: Wood, copper, other industrial metals close significantly from their peaks; Even the energy closed its high.

2. Inventory: Target, Walmart and other retailers have stockpiled lots; Too many things that will lead to discounts in the near future;

3. The price of the house: Bidding war is declining, sales are declining. Homes stay on the market longer and offer many more price reductions More supplies are coming as well.

4. Wages: A growing number of layoffs suggest a reduction in the ability to demand higher wages, especially in the hottest sectors (technology, warehousing, crypto, AI and autonomous driving).

5. Automobile: Production is increasing, and the list of new cars is improving.

6. Travel: Airline ticket prices are coming down in June, see also here

Apollo Group’s Torsten Slock Note:

“The bottom line is that inflation may be higher for another month or two, but considering the trends listed above, the likelihood is rising that inflation may come down faster than market expectations in the second half of this year.”

I agree. Official economic data is released at intervals, and we have probably already surpassed the maximum inflation a month or two ago.

Who is responsible for inflation, 1-15 (June 28, 2022)

Inflation peaks? (May 26, 2022)

Normalization vs. Inflation (March 14, 2022)

Products vs. Services (June 3, 2022)

From chips to Rolexes, 10 things where prices are actually falling
By Joe Wijenthal and Tracy Alloway
Bloomberg, June 26, 2022

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The “endless” world of global warming is much richer than it is today

Global warming is real, and it is a problem. But how big is the problem? According to some, the very existence of humanity seems to be under threat. When our response to global warming snaps like a rubber band, economist Paul Krugman warns, “then the Great Depression will begin,” a claim he said, not hyperbole, just realism. A popular book warns about the uninhabitable world. And UN Secretary-General Antonio Guterres, using his pulpit, told us that we are “firmly entrenched in an uninhabitable world.” Will be. “

But does science really say that the earth will become uninhabitable? More specifically, does the Authentic Sixth Assessment Report of the Intergovernmental Panel on Climate Change give us the slightest indication that our current energy policy puts the Earth at serious risk of becoming uninhabitable?

The unequivocal answer is “no.” In other words, Krugman, Guterres and others are involved in hyperbole, exaggeration and fiction. Because what the IPCC actually says is that 1) our current energy policies are better than theirs at the time of writing the Fifth Assessment Report, so our predicted warming growth paths are shorter than then, and 2) the world will be twice as rich by 2050, global warming or not. Its most dire economic prediction is for a slowdown in economic growth in a time when there will be an uninhabitable world, if necessary, one of catastrophic economic collapse.

This does not mean that there will be no challenges from climate change, some regions face more challenges than others. And that doesn’t mean we won’t get better if we mitigate it or at least invest in adaptation strategies. But this means that there is a concerted effort by some elite actors to get involved in the politics of fear. I will not try to understand how wrong these otherwise intelligent people are and how much they are consciously dishonest. What I will do here is to argue for a brighter future for humanity directly from the IPCC report.

Myth # 1: RCP 8.5 and very high levels of warmth

The most frightening predictions come from simulations conducted under a scenario called Representation Centralization Path (RCP) 8.5, sometimes called the “Business as usual” path, which will lead to about five degrees warming by the end of the century (WGIII, 3-118, or Working). Group III, ch. 3, p. 118 – pages are quoted so that others may verify the claims made here). In the Fifth Assessment Report, this was seen as the most likely future, but it is now considered less likely, with potential future pathways much lower – although still detrimental – to the level of warming. This is primarily because countries have changed their policies and their future carbon emissions objectives, even if not fast enough to satisfy climate workers.

RCP8.5 is, according to ICPP, no longer traded as before. The report concludes that such high-emission conditions cannot be completely ruled out, but that temperatures above 4 সেল C will “indicate the opposite of current technology and / or mitigation policy trends” (WGIII: SPM-22). The current “business (now) normal situation, which is consistent with the continuity of policies implemented by the end of 2020” leads to a temperature rise of only 2.2 – 3.5 degrees Celsius. The report itself assumes that current policy trends are not going to be reversed Gradually, they “grew increasingly strict. . . Climate policy “(WGIII 3-26). A good rough estimate, then that subsequent warming may be below the estimate.

Unfortunately, although the RCP.5 scenario is no longer viewed as scientifically valid, it continues to be widely used. And even as the Sixth Assessment diminishes its relation to reality, the report collected contains more than 1,000 references to it, providing ample opportunity for intimidators to cherry-pick a situation of unimaginable disaster.

Myth # 2: We will all be worse off in the future

Doomsday is apparently the catalyst for a united Khundia and their subsequent emergence as a galactic power. Scenes of food riots and the violent collapse of social order come to mind. And yet the Sixth Assessment Report very clearly states that “on the way to the assessed model, global GDP will at least double (at least 100% increase) between 2020-2050” (WGIII, SPM-) 49). So even in the worst case scenario, the IPCC expects world resources to double in the next few decades (which will certainly positively affect our ability to adapt to any level of warming).

However, global warming is predicted to have a negative impact on GDP growth, in the order of .04-.09 percentage points per year, the total net decline in 2050 is 1.3 – 2.7 percent (ibid). Sustainable normal growth over the years, problematic, but rarely after the catastrophe it ordered a severe recession in 2050.

Looking further, the model estimates of economic growth between 2050 – 2100 are lower on an annual basis, only 1.3 to 2.1 percent per year. But it still reflects a growing economy. Whether this assumption is correct is relevant – the key issue is that models are anti-doomsday models. By 2100 they are much richer in their foundations, albeit much warmer, the world assumes, even if we do not work to reduce the increasing levels of carbon dioxide in the atmosphere. So they provide no basis for predicting a complete catastrophe. Science does not support the claim of an existential threat to humanity.

Case Study: Africa

Of course, climate change will affect different regions differently, and some will suffer much more than others, both due to location and limited capacity for adaptation. One of the most risky regions is sub-Saharan Africa, due to its low-latitude location and its constant underdevelopment. The Africa Chapter of the IPCC Working Group II prepares for serious reading. A selection:

  • “In Africa, climate change is happening [already] Decreased crop yield and productivity (Moderate confidence) Agricultural productivity growth has declined by 34% since 1961 due to climate change, more than in any other region ”(WGII, 9-7);
  • “Climate has changed [already] Economic growth has slowed across Africa. . . One estimate suggests that Africa’s GDP per capita was 13.6% lower for 1991-2010 if climate change had not occurred “(WGII, 9-6);
  • Sickness and mortality will increase as global warming increases, putting additional strain on health and the economy.High confidence): At 1.5 C. . . The spread of vector-borne diseases and seasonal infections is expected to increase, exposing a few million more people, mostly in East and South Africa (High confidence) ”(WGII, 9-7).

And yet, close readers will see that there is good news out there as well. Although the report does not give a continental-wide GDP estimate for Africa, nor does it give one for the sub-Saharan region, it does not suggest a perfect fall in GDP, but rather indicates continued growth. For example, the report argues that “across almost all African countries, per capita GDP will be at least 5% higher and 10-20% higher by 2050 if global warming is maintained at 1.5 degrees Celsius versus 2 degrees Celsius” (WGII9) -7 ). These are significant numbers, but they again indicate that the question How much? Rich Africa became a warm future, no Whether Africa is rich.

And although such questions are not addressed directly in the IPCC report, it is clear that the larger implications for Africa’s economic development will be questions of governance rather than climate issues.

There are other indications of a positive, though difficult, future for Africa. Increased mortality and morbidity have been linked to the statement that warming is a “risk”[s] To reduce the improvement of health from future socio-economic development ”(WGII, 9-7). Flash out, this means that a richer Africa can better address the risks of illness and death, and instead of ensuring a perfect increase in mortality and morbidity, there will be a limited reason for how much climate change will benefit.

Again, far from the uninhabitable world, we also see a world in Africa that will be more livable because it will be richer. In the absence of significant global warming it will not be as livable and it will lag behind the more developed regions of the world.

Finally, the report notes that even in Africa, adaptation can be effective in response to global warming, making it “cost-effective” (WGII, 9-4). This means that in the absence of mitigation of CO2 emissions, and despite effective assurances that we will not limit the world to 1.5 degrees Celsius warming – at least in the medium term – investing in adaptation strategies can even help with sub-materials. Saharan Africa maintains significant growth through the warmer world.


None of the above is a call for inaction. The IPCC report emphatically argues that the net effect of reducing atmospheric CO2 concentration is a rich world in the future, albeit in small amounts. The mitigation strategy, if the report is correct, will pay for itself, on time. Of course this is an empirical claim that is the subject of debate, and the correct answer is an important, but not the only, factor in determining our best public policy response.

Beyond the empirical question, there is a moral question that a contemporary generation should be asked to pay for the benefit of a future generation that is going to be much richer than the previous generation. Imagine if we could go back in time and tell the people of 1922 or 1962 to make themselves a little poorer so that we could be five percent richer today. They will, at least, look to us, especially if we can move them forward in time so that they can see the unprecedented benefits that our vast resources have provided for us. Most importantly, we should be wary of throwing energy into poverty through unreliable energy sources because they are characterized by the ideological mantra “renewable”.

But if we don’t pay for mitigation, we must start adaptation plans. Many adaptation measures, such as coastal expansion, conservation of open space for flood management, and improved disease management, will be immediately funded, which will benefit our own generation as well as future generations. Working Group III reports, “Some of the most significant health, wellness, and equity benefits associated with climate action stem from investing in basic infrastructure: sanitation, clean drinking water, clean energy, affordable health food, clean public transport, and improved air quality. Quality “(WGIII, 3-106).

But it is a far cry from surrendering to the politics of fear, which is often the role of the politics of oppression. After all, if one truly believes that the very existence of humanity is at stake, no rule goes too far to save our species and no social control is too strict. And it’s a price we don’t have to pay anyone.

James E. Hanley

James E. Hanley

James E. Hanley is a senior policy analyst at the non-partisan Empire Center for Public Policy. He has earned his Ph.D. He taught political science and economics at the University of Oregon in political science, then at the post-doctoral fellowship and at the collegiate level for nearly two decades under the 2009 Nobel Prize in Economics winner Eleanor Ostrom. The ideas expressed here do not reflect the views of his employer. He can be followed on Twitter at @empire_hanley.

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10 Wednesday AM Read – Big picture

Morning in the middle of my week The train WFH reads:

A Invest as a lifestyle choice: Will today’s investment trend survive in the beer market? (Dry stars)

A The reduction of fossil fuels is going to be costly The declining demand for gasoline does not mean that prices will automatically fall. (Bloomberg) See more The biggest myth about gas prices Explaining the political theater about the price of gas. (Vox)

A ‘Unreasonable outburst’ on a plate: counterfeit burger bubbles burst. When one thinks of asset bubbles, one might think of cryptocurrencies and non-fungible tokens. But an account has also been found in the one-time bustling market lately. It turns out that not all consumers are interested in a synthetic food that is more expensive than real food at a time of high inflation. (Wall Street Journal)

A Do we need to raise unemployment to fight inflation? No, we have to protect our jobs: 5.8 million to 15 million Americans are talking about unemployment to reduce inflation in the summer. (Los Angeles Times)

A Indonesia: The most amazing development story in the world? A vast and yet multifaceted country (Noapinion)

A A $ 2 trillion free-fall rattles crypto to the core A market that has gone through several major downdrafts in its short life may face its biggest test. (Bloomberg)

A Why you can buy your next car online Tesla has gone on to sell cars entirely online in 2019. Now, some established automakers, such as Ford, are talking about taking a similar approach. (New York Times)

A The rise and uncertain reign of China’s battery king Zheng Yukun is China’s most popular battery billionaire. Its ascent has a big impact for the increasingly dependent world on electric vehicles. (Wire)

A The Postal Service is already one of the leading abortion providers in the United States As some U.S. states move to ban abortions, pill-by-mail will become one of the legal challenges as well as one of enforcement. While states can control access to health within their borders, they cannot control federal mail. And monitoring the contents of each of the millions of packages running through the national postal system is unrealistic in an epidemic in a post-health world where healthcare has gone beyond brick-and-mortar clinics. (Quartz)

A The designer of Formula One’s sharpest car is also the master of his loophole Faced with the most dramatic rule change in a generation, Red Bull’s Adrian Newey is proving that he can still dominate — and designing পাশে 6 million supercars on the side. (Wall Street Journal)

Be sure to check out our Masters in Business interview with Jonathan Miller this weekend to discuss real estate, home sales, rent and whether cities are dead. Miller is the CEO and co-founder of Miller Samuel, whose real estate-related data and analyzes have become the norm for the residential real estate appraisal and brokerage industries.

How many EVs can be made? Much less than expected

Source: Information

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