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**SEPTEMBER 29, 2023**
On the Prospect website
* David Dayen on what the Writers Guild won
* Luke Goldstein on how extreme tech secrecy violates the securities
laws
* Francesca Fiorentini's seasonal guide to autumn B.S.
Kuttner on TAP
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**** Does Jay Powell Want to Elect Trump?
Most of the sources of inflation are either the result of the Fed's
own policy, or have nothing to do with domestic demand, such as the
rising price of oil.
The Federal Reserve is at risk of getting itself and the economy into a
doom loop where its own actions create the inflation that the Fed
supposedly is trying to extinguish and serve to kill the recovery.
Exhibit A is mortgage costs. Mortgage interest rates have risen to a
23-year high of 7.31 percent
,
according to a survey released by mortgage purchaser Freddie Mac.
And it isn't just higher mortgage costs but more expensive car
payments and credit card interest rates, as well as higher financing
costs to homebuilders and small businesses. All of this increased
inflation is the direct result of the Fed's own policies.
Weirdly, higher interest rates are not counted in the Consumer Price
Index.
But they are certainly experienced as inflation by consumers and
businesses.
In addition, there are extraneous sources of price inflation that have
nothing whatever to do with the supposed macroeconomic overheating that
the Fed's tight money is intended to squelch. Exhibit A is the rising
price of crude oil, now approaching $100 a barrel
,
up from around $75 a barrel as recently as July.
This shows up in higher consumer prices at the gas pump. But it's not
the result of increased motorist demand. It's entirely the consequence
of supply cuts by our enemy Vladimir Putin and our supposed new best
friend, Saudi Arabia.
Exhibit B is the exorbitant prices charged by monopolists-that
Biden's all-of-government competition policies are challenging,
including the two lawsuits by the Justice Department and the FTC against
Google and Amazon. Again, this has nothing whatever to do with
macroeconomic overheating.
But these price hikes will douse a still-fragile recovery and will
contribute to a softer economy in an election year, which will harm
Biden and the Democrats. And that increase in measured "inflation" will
give the Fed more ammunition to perversely keep money tight, destroying
the economy's soft landing and promoting 1970s style stagflation.
Where higher oil prices are concerned, Putin would surely prefer his pal
Trump to President Biden. But what about the Saudis, who are part of an
improbable partnership with Israel that Biden is helping to broker.
Trump would surely be a lot more indulgent of Netanyahu than Biden. And
what about Fed Chair Jay Powell, a Trump appointee whom Biden foolishly
reappointed?
There are enough variables in the coming election to make your head
spin. But let's not leave out the Fed, whose seats on the Board of
Governors are now 4-to-3 Democrats; and Biden's appointee Michael
Barr, the vice chair for supervision, is increasingly a thorn in the
side of Fed Chair Jay Powell.
Would Powell prefer Trump? He is certainly behaving that way.
~ ROBERT KUTTNER
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What the Writers Won
The Guild's agreement attempts to restore the elements of the
traditional system that made entertainment writing sustainable. It
mostly succeeds, with one caveat. BY DAVID DAYEN
Monopolist Secrecy Demands Are Overwhelming-and May Be Illegal
One anti-monopoly group contends that withholding basic financial
information violates federal securities laws. BY LUKE GOLDSTEIN
Your Guide to the Hottest Fall Trends of 2023
The leaves may change but the bullsh*t remains the same. BY FRANCESCA
FIORENTINI
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