I've written before about the alarming consensus developing in certain wonkish circles that suddenly labor markets are tightening up, and accelerating inflation is just waiting in the wings. Paul Krugman has now weighed in several times against these "inflationistas," and his latest effort is the most comprehensive.
He adduces four arguments: First, measured wage growth is probably to some extent a statistical artifact representing the fact that during bad weather hourly workers, who are paid less, tend to be idled — making measured wages only seem to increase. Second, if you look closely at the data, the case for wage growth even existing at all is barely there. Third, wage increases are well below what they were before the financial crisis, and everything we've learned since then suggests that a greater fraction of GDP coming in the form of wages would be highly beneficial.
The fourth is especially interesting, though:
Fourth, there's good reason to believe that everyone is working with the wrong paradigm here. Ever since the 1970s, textbook macroeconomics — reflecting the experience of the 1970s — has assumed an "accelerationist" framework, in which low unemployment leads not just to rising wages but to an ever-rising rate of wage increase. But the actual data haven't looked like that for a long time. Since the mid-1990s, in fact, they have looked much more like an old-fashioned Phillips curve, with a relationship between the unemployment rate and the level of wage increase, not the rate of change of wage increase. [New York Times]
This brings to mind a Steve Randy Waldman post arguing that the economics profession has completely misinterpreted the 1970s, and the accelerationist view was wrong even back then. By this reading, inflation is even less of a concern than people assume. If true, this loads the policy scale even more heavily on the side of stimulating like mad.
Of course, as Krugman says, regardless of who is actually right about this, the relative risks involved clearly militate on the side of stimulus. One doesn't have to buy the Waldman view of the '70s for that — it will hold regardless.
In other words: Damn the inflation, Captain Yellen, full speed ahead! Ryan Cooper
A Civil War-era facility at the Baltimore City Detention Center that critics say should have been "condemned decades ago" will finally be shut down, Maryland Gov. Larry Hogan (R) announced Thursday.
— The Daily Record (@MDDailyRecord) July 31, 2015
The governor considers the Men's Detention Center, which houses 750 pretrial inmates, a "black eye" and "embarrassment" to the state. The inmates will be moved to other detention centers, officials said, but the women's jail, central booking facility, and other pretrial buildings will stay open. By closing the facility, Maryland will save between $10 million and $15 million annually "without compromising detainees' access to legal protections," Stephen T. Moyer, secretary of public safety and correctional services, said.
In 2013, federal prosecutors charged several people, including corrections officers, with letting a gang operate a drug-trafficking and money laundering ring from inside the facility, The Washington Post reports. Hogan said it "makes no sense to keep this deplorable facility open. ... The practice of continuously dumping hard-earned taxpayer money into this disastrous facility will not continue under my watch," and pinned the center's woes on previous administrations, who "ignored" what was going on.
Democratic state lawmakers and union officials criticized Hogan for not discussing the shutdown with them before it was announced. Advocates like David Fathi, director of the ACLU's National Prison Project, told the Post it's a move in the right direction, but won't solve a host of other problems. "This critical step...will have no impact on the dangerous physical conditions and shockingly deficient medical and mental health care in the jail facilities that will remain open," he said. Catherine Garcia
In New York City, two people have died in a Legionnaires' disease outbreak, with 31 cases reported in the South Bronx since mid-July.
— Capital New York (@capitalnewyork) July 31, 2015
In the Bronx, water cooling towers at Lincoln Medical and Mental Health Center and a commercial complex have tested positive for the disease, Capital New York reports. Legionnaires' disease is a respiratory bacterial infection that is not transmitted from person to person but rather through water mist from showers, cooling towers, and air conditioning. A 1976 outbreak in Philadelphia, which mostly affected people attending an American Legion convention, led to its name. Symptoms include fever, chills, and a cough, and the U.S. Centers for Disease Control says that most people recover, but five to 30 percent of those who come down with the disease die.
Officials will test the water from other potential sources in the area, CNN reports, but Dr. Mary Bassett, commissioner of the New York City Health Department, said the city's water supply "does not pose a risk, so people should continue to feel confident in drinking tap water to stay cool during this period of hot weather." Mayor Bill de Blasio recommends that those who have symptoms get tested, but assured the public that most New Yorkers are not at risk Catherine Garcia
ISIS fighters looking for love were instead taught a lesson in catfishing by three women in Chechnya.
— Dazed (@DazedMagazine) July 30, 2015
The women have been arrested on charges of fraud after tricking the fighters into sending them money for plane tickets they never planned to purchase, the San Francisco Chronicle reports. One woman said she was contacted on social media by a militant in Syria, who asked her to come join him as a "jihadi bride." She said she didn't have enough money to get there, so he sent her 10,000 rubles ($167). Instead of buying a one-way ticket, she blocked him, kept the money, and moved onto two other targets (adding 35,000 rubles, or $585, to her coffers).
The woman told Russia's Life News that she actually was contemplating going to Syria, but decided against it because "a lot of people I know have gone, but it did not end well for any of them." All three are facing a maximum of six years in jail if convicted. Catherine Garcia
On Thursday, six people were stabbed at the annual gay pride parade in Jerusalem, and two are believed to be in serious condition.
— Brian Ries (@moneyries) July 30, 2015
The suspect, Yishai Shlissel, is in police custody, Mashable reports. He is the same man who stabbed three people at the gay pride parade in 2005, and was convicted of attempted murder. He was sentenced to 12 years in prison, but served 10 and was released three weeks ago.
Calling the attack a "most grave incident," Prime Minister Benjamin Netanyahu said Israel would "mete out justice to those responsible for the act. In the state of Israel, freedom of choice of the individual is one of the basic values. We must ensure that in Israel every man and woman will live in security whichever way they choose to live." Before the event, organizers told Haaretz they expected about 5,000 people to attend the parade. Because of threats from protesters, there were several police officers on the scene. Catherine Garcia
The death of Cecil the lion — an animal supposedly beloved by the people of Zimbabwe — had many people in the capital city of Harare scratching their heads over the uproar in America.
"You are saying that all this noise is about a dead lion? Lions are killed all the time in this country," a used-clothes hawker on the streets of Harare told Reuters. "What's so special about this one?"
"It's so cruel, but I don't understand the whole fuss, there are so many pressing issues in Zimbabwe — we have water shortages, no electricity, and no jobs — yet people are making noise about a lion?" another resident of Harare, Eunice Vhunise, told The Chicago Tribune. "I saw Cecil once when I visited the game park. I will probably miss him. But honestly the attention is just too much."
Even the acting information minister of Zimbabwe, Prisca Mupfumira, was confused.
"What lion?" he said when asked for a comment. Jeva Lange
When Supreme Court Justice Ruth Bader Ginsburg first heard her nickname, Notorious RBG, she had no idea where it came from.
"I will admit that I had to be told by my law clerks, what's this Notorious," Ginsburg confessed last July. Since then, Ginsburg has been studying up on the legendary late rapper Notorious B.I.G., and she proudly showed off what she learned Wednesday night at a Duke University School of Law event. The hip-hop artist has more in common with the Supreme Court justice than one would think, she said: "Both of us were born and raised in Brooklyn," Ginsburg told the audience. Becca Stanek
Former major league baseball DH Jose Canseco plans to dress like a woman in an attempt at solidarity with Caitlyn Jenner. Canseco's performance will be documented in his internet reality show, Spend a Day with Jose, and TMZ reports that the former Bash Brother will be golfing, playing softball, and going bowling "as a woman" for the seven days his project lasts.
"Move over, Caitlyn," Canseco — who is not transgender — tweeted Thursday morning.
It appears Canseco is, at least, well-intentioned: "In the beginning, I didn't understand [Jenner's transition], so I was kind of, like, against it," he told the New York Daily News. "Once I watched it more and more, and realized what it really entailed, what he was going through, I started supporting him." Jeva Lange