"But it’s a mistake to think that the long arc of history bends toward whatever progressive activists are currently pushing for."
Thank you for this. This has been a tough one for me to deprogram from over the past decade. For so much of my life, I've thought "The Left is always correct, and you're on the wrong side of history if you disagree."
But no. Sometimes the left is correct and sometimes it isn't.
Yes, we need both liberal and conservative instincts. Liberals to say he let's "try" and make things better, conservatives to say slow down have you thought this through. Their is a reason for the fence
I don't know, when I see a complex statistics argument that goes back and forth sometimes eyeballing helps provide some clarity.
When Joe Manchin ran in 2012 he was +24 and Obama was -26. Show me a leftist who can outrun a very popular president by 50 points and I'll take Bonica's results more seriously.
Manchin obviously benefited from being moderate himself, but one could argue that he wouldn't have benefited from the rest of the party moderating; heck, he may even have benefited from being able to draw a clear contrast between himself and more mainline Dems. (Progressives' ire at him surely helped him burnish his centrist image.) That would be consistent with Bonica's claim, that individual candidates benefit from moderation but the party as a whole does not.
1.) I agree that "moderation", as you define it here, is good for its own sake. Moderate policies, in a normal, prosperous, regular-order world--which we still seem to have for the time being, at least in the lived experience of most citizens--are commendable and good. We should do them.
2.) I think increasingly "moderation", as a concrete policy and reality, has fuckall to do with politics.
Joe Biden and Kamala Harris were moderates, par excellence. People will debate me on that for some reason (and many on this Substack in particular have), but it's true.
Biden and his staff took advice from moderates, were constrained by moderates, even wrote most of their big legislation to please moderates. They achieved all the things that sensible, thoughtful moderate minds wanted them to: A damn good economy, a soft landing from inflation, a reduction of the deficit (after an initial surge to beat COVID), a reduction in crime, a muscular foreign policy, sticking with traditional allies.
Heck, they even did most of that in a "bipartisan" fashion, after much of their party wanted them to go all FDR and avenging angel. Joe Manchin and Kyrsten Sinema, the textbook definition of "moderate senators", practically dictated their agenda in the final three years.
And, well. Look where it got them.
Don't get me wrong: It is never a bad thing for a politician to be thought of as "middle of the road"--most voters, of all stripes, imagine themselves to be just that. It's practically mandatory for a politician to claim themselves to be median and safe and "what the people want"--after all, democracy is literally about appealing to the majority, on paper.
But perception and reality are two different things--violently, wildly different things in today's world.
And policy, with all due respect to all the wonks and nerds out there, is *not* politics.
"Moderation", for all its intrinsic goodness, is increasingly orthogonal to political success, and insufficient as a main tool for victory over tyrants. The sooner Democrats and other opponents of Trump figure that out, the better.
See immigration, see Trans issues, see spending (remember they actually were pushing for a freaken 6 trillion BBB till Manchin shut the whole thing down)
And yes, Manchin rewrote their agenda--exactly my point. Bill Clinton did the same, when faced with an uncooperative Congress.
I do not define "moderation" by how a fantasy version of politicians govern. To the his credit, neither does Noah. But I guess Biden is just special, in that regard, for some people.
Please peruse those links at your leisure and explain, in great detail, what un-moderate, partisan, and extreme-lib policies they describe.
That is the moderate position, not what Biden dud,
Their immigration bill didn't come till 2024 after years of a crisis at the border. And while it was better than the status quo, it still wasn't a great bill.
Yes, the IRA bill was paired way back. But that's still after the extra $2 trillion in unneeded Stimulus Biden pushed through on a party line.
The basic, small-conservative argument for moderation: Relative to most human polities in history (taking all the world into account), modern America is pretty good in a lot of ways, in terms of both material prosperity and freedom.
That is not to say we can't work to make it better. But there's a long way to fall if we change things haphazardly.
(Some would call this Burkean, though Burke had a much larger and richer argument against the French Revolution than just "too-rapid change is bad").
On the topic of how far left vs moderates is defined, it seems that people who argue in favor of moderation define "Far left" as people who advocate for left wing policies that are currently unpopular.
Here, Noah cherry picks..
He asks how Harris would have done if she ..."had come out as a progressive fire-breather (...) Suppose she had railed against systemic racism, called for an end to military aid to Israel, proposed cutting police budgets, and offered a full-throated defense of Biden’s tolerant immigration policies. "
His cherry picking leaves out what could be very popular "far left" positions. First among them is increasing taxes on the very wealthy and corporations. But all so green and economically beneficial policies to increase solar and wind while phasing out fossil fuels. To name two.
But it goes beyond cherry picking pet peeves...In this quote he also puts left wing policies in the worst light using right-wing language to denigrate far left values that HE shares. While Biden's immigration policy was not popular, it was good for the economy. https://www.theargumentmag.com/p/actually-we-need-more-people,
I'm sure Noah shares the "Far Left" position that immigration is very good for the economy and quintessentially American. I'm not sure if Noah is a believer in systemic racism, but I'd be shocked if he didn't think racism is a big chronic problem for America. Noah has expressed support for the "Far left" desire for Big government intervention in the economy to boost environmentally friendly and economically advantageous technologies. Yet if you only heard his criticisms of the "far left" you'd never know he fundamentally is on the same side.
Noah, like a lot of the "Moderate to win win movement" disagrees with the far left more on tone and niche policies than the big picture. It's too bad that he and others like him have become agents for polarization among liberals. They adopt the right wing's language and criticisms of the left and attack their natural allies instead of finding common ground and attempting persuasion.
Thank you for your final section, making the point that substance matters. The stats are nice and may eventually be refined enough to be persuasive. At the moment, they may describe the past, but should not be allowed to determine the present. Substance matters, and labeling something "progressive" does not make it right or saleable. You made that clear in your discussion of the defunding the police movement. Defunding was the dumbest thing I've ever heard for many reasons, most importantly because it would not have corrected police misconduct. It might even have made it worse. Ignoring the border just because Trump and the GOP made it seem that any action was inhuman was not progressive or moderate or anything else except irresponsible political pandering, and we Dems have paid a heavy price for that. Going forward, let's focus on crafting smart, caring policies and marketing them truthfully. Let's advocate solutions, not philosophies. And let's do that loudly and aggressively and while calling out Trump and company for the criminals they are.
There are a few issues here (characterizing blocking housing as a “lefty position” doesn’t really reflect reality), but the one I’d probably take issue with is the characterization of fiscal policy.
If you think that the risk of recession had really receded when Biden took office, then, sure, going big on stimulus was a risk. But if you thought the risk of recession had receded, there also really wasn’t any reason at all to do stimulus, period. A conventional model will tell you that stimulus will put idle resources to work, but doing more stimulus in a fully deployed economy is just inflationary. Christy Romer was correct in explaining to Tim Geithner a decade and a half ago that stimulus was medicine and not a sugar rush. But there’s no value to taking medicine when you’re not sick.
So if the diagnosis was that we were still sick, the balance of risk was still recession vs. elevated inflation. And while we can probably attribute at least a bit of the elevated inflation during Biden’s term to fiscal policy, it’s equally true that Krugman et al appear to have been right that the inflation was mostly caused by a supply shock and would be transitory. And in fact, it receded in fairly short order.
It’s common now to rant about how terrible the Biden inflation was, but it’s just very wrong to say that the pain was anything remotely in the same ballpark as the prolonged slump in the post-2008 economy. Evaluated in that light, there’s a balance of risks, and somewhat too much stimulus was probably the less risky path.
The best research I've seen says that the last unneeded stimulus caused about 3% extra inflation. So definitely not the whole cause, but definitely made it worse.
Moreover, even if you argued that the uncertainty at the time justified going big "just in case" when inflation started, why not pull back the unspent money?
What makes the researched you've cited "best"? Estimates varied. Mark Zandi and Jason Frankel from Harvard estimated that the amount attributable to fiscal policy was quite small. Jason Furman estimated it at 1-4%. AEI estimated 3%. Have you dug into their methodology? Or is 3% the number you picked and liked best?
And I don't know what pulling back the unspent money would mean. A big chunk of that was just the $1400 checks. You can't put that cat back in the bag (even though it was probably the worst part of the bill). A significant chunk was Covid-related funding to distribute vaccines, pay for testing and contact tracing and related things. A chunk went to funding schools' Covid adjustments. A chunk was enhanced UI. You could phase that out legislatively, but unemployment was already dropping rapidly. It went below 5% by September and below 4% by December. So enhanced UI was petering itself out.
So trying to pull back on overshooting fiscal policy by reversing stimulus doesn't make any sense-- it's filling a flat tire through the hole. When inflation got too high, it was exceptionally tough to disentangle the portion that was attributable to fiscal policy (and still is). So the smart game in town was to let the Fed deal with it. And they did, pretty effectively, to the point that inflation was pretty much back to normal by the beginning of 2024 (and was in sharp decline throughout 2023). To the extent there was a deficit problem, the way to do that was to hike taxes and cut spending on ordinary budget items, not try to claw back emergency spending.
I know people who have seen Bonica’s DIME code and from what I hear it is thousands of lines of spaghetti R code, with no tests of any kind, and, because its unsupervised, no way to validate the results. Until he open sources the code and somebody either validates correctness or, more likely, rewrites the whole thing, I don’t trust any research derived from DIME. You might as well just consult an rng.
It's worth pointing out that during the civil rights era national public opinion had already turned against Jim Crow (albeit not in the South).
So those civil rights laws weren't passed OVER public opinion, but WITH public opinion.
Those fighting for civil rights literally spent decades slowly moving public opinion. THEN they heavily policed their movement to keep public opinion on their side.
If they hadn't done that public opinion could have easily shifted back taking away whatever gains they had made.
Moderation did indeed win the day with Civil Rights.
More recently, whichever party tries to be a moderate sensible sane majority party will almost certainly clean up. If Republicans had nominated someone like Nikki Haley they would have had a much bigger victory.
Likewise, if Biden had governed like Bill Clinton, Dems would probably still be in the white house.
I'm interested in how these data analysis companies define the difference between a liberal, a moderate and a conservative. It might account for some of the differences.
But in the case of Split Ticket that, "consistently found that moderate candidates do better than strongly ideological ones on both the Democratic and the Republican sides", I'm very suspicious of what they think a "moderate" Republican is.
By my personal criteria, moderate republicans have been voted out of the party over the last decade. Basically, moderates hardly exist in the GOP.
I'm not a moderate, but I can see the practicality of pretending to be one: it makes you seem professional in front of donors and potential voters. Sure, a candidate can pull a fluke and be both highly charismatic and ideological (Bernie Sanders, Donald Trump, etc.), but those kinda political candidates are rare; a more mediocre candidate can get much further by conforming to the mean and riding out the political cycle. Most people have extreme political beliefs but also a preference for stable governance, which is probably why moderates do somewhat better electorally.
Which is a shame, given how bad moderate policies often are.
"American Rescue Plan probably did lead to increased inflation, bringing down real incomes for millions of Americans."
No, ARP did not lead to inflation; Fed policy led to inflation and to an uncertain extent, raised rather that bring down real incomes. An increase in the average price level was necessary to allow relative pries to adjust to the COVID shocks when some absolute prices can scarcely fall. The failure of relative prices to adjust means some market do not clear and some resources are unemployed. But how much inflation was necessary? When should the the Fed have started to disinflate by raising the EFFR? The Fed really ought to do a retrospective to tell us what they now think policy should have been, but my guess is August-September of 2021.
a) Inflation expectations (for the CPI) had just gone above the CPI equivalent of the Fed's 2% PCE target
b) Unemployment was falling rapidly
The American Rescue Plan, although not causing inflation, could have reduced real incomes by diverting private investment to expenditures that had net present values -- even when project inputs are evaluated at marginal cost rather than market prices (unemployment was falling so the difference woud not be great) -- less than zero.
I understand that Noah wants to stay above the fray. But Morris’s piece is an all-out takedown of Matt, essentially arguing he can’t be taken seriously as an analyst. If it’s valid, it’s quite a demolition job. I don’t have the statistical chops to evaluate- but I’d be interested in a take from some who does.
On the whole, the piece raises interesting questions about the dynamics of punditry. How can you retreat from a position if it’s your brand.
I wonder whether moderation based on culture or candidate background vs ideology or policy is more important to voters.
Biden moderated on policy but part of his appeal to voters was being an Irish Catholic son of a factory worker. Which in turn added to his "just another old guy" image among younger voters.
"Biden moderated on policy" Maybe compared to someone like Sanders or Warren, but definitely still WAY left of what he campaigned on, or what voters were expecting
I subscribed to the Working Class Project on Substack and the contributors to their focus groups consistently said that they wanted messages for Democrats that are relevant to their everyday struggles. The ideological scores given to these messages may be secondary.
"But it’s a mistake to think that the long arc of history bends toward whatever progressive activists are currently pushing for."
Thank you for this. This has been a tough one for me to deprogram from over the past decade. For so much of my life, I've thought "The Left is always correct, and you're on the wrong side of history if you disagree."
But no. Sometimes the left is correct and sometimes it isn't.
Yes, we need both liberal and conservative instincts. Liberals to say he let's "try" and make things better, conservatives to say slow down have you thought this through. Their is a reason for the fence
The pro-Stalin and pro-Mao left certainly weren't correct.
I don't know, when I see a complex statistics argument that goes back and forth sometimes eyeballing helps provide some clarity.
When Joe Manchin ran in 2012 he was +24 and Obama was -26. Show me a leftist who can outrun a very popular president by 50 points and I'll take Bonica's results more seriously.
Manchin obviously benefited from being moderate himself, but one could argue that he wouldn't have benefited from the rest of the party moderating; heck, he may even have benefited from being able to draw a clear contrast between himself and more mainline Dems. (Progressives' ire at him surely helped him burnish his centrist image.) That would be consistent with Bonica's claim, that individual candidates benefit from moderation but the party as a whole does not.
So, a couple responses here:
1.) I agree that "moderation", as you define it here, is good for its own sake. Moderate policies, in a normal, prosperous, regular-order world--which we still seem to have for the time being, at least in the lived experience of most citizens--are commendable and good. We should do them.
2.) I think increasingly "moderation", as a concrete policy and reality, has fuckall to do with politics.
Joe Biden and Kamala Harris were moderates, par excellence. People will debate me on that for some reason (and many on this Substack in particular have), but it's true.
Biden and his staff took advice from moderates, were constrained by moderates, even wrote most of their big legislation to please moderates. They achieved all the things that sensible, thoughtful moderate minds wanted them to: A damn good economy, a soft landing from inflation, a reduction of the deficit (after an initial surge to beat COVID), a reduction in crime, a muscular foreign policy, sticking with traditional allies.
Heck, they even did most of that in a "bipartisan" fashion, after much of their party wanted them to go all FDR and avenging angel. Joe Manchin and Kyrsten Sinema, the textbook definition of "moderate senators", practically dictated their agenda in the final three years.
And, well. Look where it got them.
Don't get me wrong: It is never a bad thing for a politician to be thought of as "middle of the road"--most voters, of all stripes, imagine themselves to be just that. It's practically mandatory for a politician to claim themselves to be median and safe and "what the people want"--after all, democracy is literally about appealing to the majority, on paper.
But perception and reality are two different things--violently, wildly different things in today's world.
And policy, with all due respect to all the wonks and nerds out there, is *not* politics.
"Moderation", for all its intrinsic goodness, is increasingly orthogonal to political success, and insufficient as a main tool for victory over tyrants. The sooner Democrats and other opponents of Trump figure that out, the better.
"Joe Biden and Kamala Harris were moderates,"
This is just factually incorrect.
See immigration, see Trans issues, see spending (remember they actually were pushing for a freaken 6 trillion BBB till Manchin shut the whole thing down)
1994 Bill Clinton is what moderation looks like.
Like I said: Perception is often at violent odds with reality. I consider this reply a shining example.
Their trans policy:
https://www.cnn.com/2023/04/06/politics/title-ix-transgender-student-athletes-biden-rule
Their immigration bill:
https://www.americanimmigrationcouncil.org/blog/what-is-the-bipartisan-border-bill/
Their actual spending, under the remains of Build Back Better:
https://www.mckinsey.com/industries/public-sector/our-insights/the-inflation-reduction-act-heres-whats-in-it
And yes, Manchin rewrote their agenda--exactly my point. Bill Clinton did the same, when faced with an uncooperative Congress.
I do not define "moderation" by how a fantasy version of politicians govern. To the his credit, neither does Noah. But I guess Biden is just special, in that regard, for some people.
Please peruse those links at your leisure and explain, in great detail, what un-moderate, partisan, and extreme-lib policies they describe.
Regarding Trans a super majority of people oppose all instances of biological men playing women sports
https://www.pewresearch.org/short-reads/2025/02/26/americans-have-grown-more-supportive-of-restrictions-for-trans-people-in-recent-years/
That is the moderate position, not what Biden dud,
Their immigration bill didn't come till 2024 after years of a crisis at the border. And while it was better than the status quo, it still wasn't a great bill.
Yes, the IRA bill was paired way back. But that's still after the extra $2 trillion in unneeded Stimulus Biden pushed through on a party line.
The basic, small-conservative argument for moderation: Relative to most human polities in history (taking all the world into account), modern America is pretty good in a lot of ways, in terms of both material prosperity and freedom.
That is not to say we can't work to make it better. But there's a long way to fall if we change things haphazardly.
(Some would call this Burkean, though Burke had a much larger and richer argument against the French Revolution than just "too-rapid change is bad").
Burke liked the English revolution just fine ;)
*small-c conservative
On the topic of how far left vs moderates is defined, it seems that people who argue in favor of moderation define "Far left" as people who advocate for left wing policies that are currently unpopular.
Here, Noah cherry picks..
He asks how Harris would have done if she ..."had come out as a progressive fire-breather (...) Suppose she had railed against systemic racism, called for an end to military aid to Israel, proposed cutting police budgets, and offered a full-throated defense of Biden’s tolerant immigration policies. "
His cherry picking leaves out what could be very popular "far left" positions. First among them is increasing taxes on the very wealthy and corporations. But all so green and economically beneficial policies to increase solar and wind while phasing out fossil fuels. To name two.
But it goes beyond cherry picking pet peeves...In this quote he also puts left wing policies in the worst light using right-wing language to denigrate far left values that HE shares. While Biden's immigration policy was not popular, it was good for the economy. https://www.theargumentmag.com/p/actually-we-need-more-people,
I'm sure Noah shares the "Far Left" position that immigration is very good for the economy and quintessentially American. I'm not sure if Noah is a believer in systemic racism, but I'd be shocked if he didn't think racism is a big chronic problem for America. Noah has expressed support for the "Far left" desire for Big government intervention in the economy to boost environmentally friendly and economically advantageous technologies. Yet if you only heard his criticisms of the "far left" you'd never know he fundamentally is on the same side.
Noah, like a lot of the "Moderate to win win movement" disagrees with the far left more on tone and niche policies than the big picture. It's too bad that he and others like him have become agents for polarization among liberals. They adopt the right wing's language and criticisms of the left and attack their natural allies instead of finding common ground and attempting persuasion.
Thank you for your final section, making the point that substance matters. The stats are nice and may eventually be refined enough to be persuasive. At the moment, they may describe the past, but should not be allowed to determine the present. Substance matters, and labeling something "progressive" does not make it right or saleable. You made that clear in your discussion of the defunding the police movement. Defunding was the dumbest thing I've ever heard for many reasons, most importantly because it would not have corrected police misconduct. It might even have made it worse. Ignoring the border just because Trump and the GOP made it seem that any action was inhuman was not progressive or moderate or anything else except irresponsible political pandering, and we Dems have paid a heavy price for that. Going forward, let's focus on crafting smart, caring policies and marketing them truthfully. Let's advocate solutions, not philosophies. And let's do that loudly and aggressively and while calling out Trump and company for the criminals they are.
There are a few issues here (characterizing blocking housing as a “lefty position” doesn’t really reflect reality), but the one I’d probably take issue with is the characterization of fiscal policy.
If you think that the risk of recession had really receded when Biden took office, then, sure, going big on stimulus was a risk. But if you thought the risk of recession had receded, there also really wasn’t any reason at all to do stimulus, period. A conventional model will tell you that stimulus will put idle resources to work, but doing more stimulus in a fully deployed economy is just inflationary. Christy Romer was correct in explaining to Tim Geithner a decade and a half ago that stimulus was medicine and not a sugar rush. But there’s no value to taking medicine when you’re not sick.
So if the diagnosis was that we were still sick, the balance of risk was still recession vs. elevated inflation. And while we can probably attribute at least a bit of the elevated inflation during Biden’s term to fiscal policy, it’s equally true that Krugman et al appear to have been right that the inflation was mostly caused by a supply shock and would be transitory. And in fact, it receded in fairly short order.
It’s common now to rant about how terrible the Biden inflation was, but it’s just very wrong to say that the pain was anything remotely in the same ballpark as the prolonged slump in the post-2008 economy. Evaluated in that light, there’s a balance of risks, and somewhat too much stimulus was probably the less risky path.
The best research I've seen says that the last unneeded stimulus caused about 3% extra inflation. So definitely not the whole cause, but definitely made it worse.
Moreover, even if you argued that the uncertainty at the time justified going big "just in case" when inflation started, why not pull back the unspent money?
What makes the researched you've cited "best"? Estimates varied. Mark Zandi and Jason Frankel from Harvard estimated that the amount attributable to fiscal policy was quite small. Jason Furman estimated it at 1-4%. AEI estimated 3%. Have you dug into their methodology? Or is 3% the number you picked and liked best?
And I don't know what pulling back the unspent money would mean. A big chunk of that was just the $1400 checks. You can't put that cat back in the bag (even though it was probably the worst part of the bill). A significant chunk was Covid-related funding to distribute vaccines, pay for testing and contact tracing and related things. A chunk went to funding schools' Covid adjustments. A chunk was enhanced UI. You could phase that out legislatively, but unemployment was already dropping rapidly. It went below 5% by September and below 4% by December. So enhanced UI was petering itself out.
So trying to pull back on overshooting fiscal policy by reversing stimulus doesn't make any sense-- it's filling a flat tire through the hole. When inflation got too high, it was exceptionally tough to disentangle the portion that was attributable to fiscal policy (and still is). So the smart game in town was to let the Fed deal with it. And they did, pretty effectively, to the point that inflation was pretty much back to normal by the beginning of 2024 (and was in sharp decline throughout 2023). To the extent there was a deficit problem, the way to do that was to hike taxes and cut spending on ordinary budget items, not try to claw back emergency spending.
I know people who have seen Bonica’s DIME code and from what I hear it is thousands of lines of spaghetti R code, with no tests of any kind, and, because its unsupervised, no way to validate the results. Until he open sources the code and somebody either validates correctness or, more likely, rewrites the whole thing, I don’t trust any research derived from DIME. You might as well just consult an rng.
> “dunk on” each other with 280-character denunciations
I'm old enough to remember 140-character denunciationa
It's worth pointing out that during the civil rights era national public opinion had already turned against Jim Crow (albeit not in the South).
So those civil rights laws weren't passed OVER public opinion, but WITH public opinion.
Those fighting for civil rights literally spent decades slowly moving public opinion. THEN they heavily policed their movement to keep public opinion on their side.
If they hadn't done that public opinion could have easily shifted back taking away whatever gains they had made.
Moderation did indeed win the day with Civil Rights.
More recently, whichever party tries to be a moderate sensible sane majority party will almost certainly clean up. If Republicans had nominated someone like Nikki Haley they would have had a much bigger victory.
Likewise, if Biden had governed like Bill Clinton, Dems would probably still be in the white house.
I'm interested in how these data analysis companies define the difference between a liberal, a moderate and a conservative. It might account for some of the differences.
But in the case of Split Ticket that, "consistently found that moderate candidates do better than strongly ideological ones on both the Democratic and the Republican sides", I'm very suspicious of what they think a "moderate" Republican is.
By my personal criteria, moderate republicans have been voted out of the party over the last decade. Basically, moderates hardly exist in the GOP.
"moderate republicans have been voted out of the party over the last decade"
There's some truth to that (especially at the national level). But I think it's clear that someone like Nikki Haley would have far out performed Trump
But GOP primary voters didn’t want Haley; they wanted Trump.
Very much agreed.
Primary voters clearly nominated the worst candidate
I’d like to believe that.
I'm not a moderate, but I can see the practicality of pretending to be one: it makes you seem professional in front of donors and potential voters. Sure, a candidate can pull a fluke and be both highly charismatic and ideological (Bernie Sanders, Donald Trump, etc.), but those kinda political candidates are rare; a more mediocre candidate can get much further by conforming to the mean and riding out the political cycle. Most people have extreme political beliefs but also a preference for stable governance, which is probably why moderates do somewhat better electorally.
Which is a shame, given how bad moderate policies often are.
Bernie Sanders ran behind Kamala Harris.
"American Rescue Plan probably did lead to increased inflation, bringing down real incomes for millions of Americans."
No, ARP did not lead to inflation; Fed policy led to inflation and to an uncertain extent, raised rather that bring down real incomes. An increase in the average price level was necessary to allow relative pries to adjust to the COVID shocks when some absolute prices can scarcely fall. The failure of relative prices to adjust means some market do not clear and some resources are unemployed. But how much inflation was necessary? When should the the Fed have started to disinflate by raising the EFFR? The Fed really ought to do a retrospective to tell us what they now think policy should have been, but my guess is August-September of 2021.
a) Inflation expectations (for the CPI) had just gone above the CPI equivalent of the Fed's 2% PCE target
b) Unemployment was falling rapidly
The American Rescue Plan, although not causing inflation, could have reduced real incomes by diverting private investment to expenditures that had net present values -- even when project inputs are evaluated at marginal cost rather than market prices (unemployment was falling so the difference woud not be great) -- less than zero.
I understand that Noah wants to stay above the fray. But Morris’s piece is an all-out takedown of Matt, essentially arguing he can’t be taken seriously as an analyst. If it’s valid, it’s quite a demolition job. I don’t have the statistical chops to evaluate- but I’d be interested in a take from some who does.
On the whole, the piece raises interesting questions about the dynamics of punditry. How can you retreat from a position if it’s your brand.
I wonder whether moderation based on culture or candidate background vs ideology or policy is more important to voters.
Biden moderated on policy but part of his appeal to voters was being an Irish Catholic son of a factory worker. Which in turn added to his "just another old guy" image among younger voters.
"Biden moderated on policy" Maybe compared to someone like Sanders or Warren, but definitely still WAY left of what he campaigned on, or what voters were expecting
I subscribed to the Working Class Project on Substack and the contributors to their focus groups consistently said that they wanted messages for Democrats that are relevant to their everyday struggles. The ideological scores given to these messages may be secondary.
*from* Democrats. Can't write today--at first typed "over water" where I meant "above water" somewhere else