The Price Level Shortfall

Had we run a 2% price level target since December 2007 (the beginning of the previous recession).

Figure 1: Personal consumption expenditure price level, chain-type (black), 2% target from 2007M12 (red), and CBO projection (teal). CBO monthly data interpolated from quarterly using quadratic match. 2% in log terms. Source: BEA via FRED, CBO (February 2021), and author’s calculations.

The shortfall is 6.9% as of January 2021 (% in log terms), and projected to widen to 7.7% as of December 2025. The February 2021 CBO projection omits the likely passage of the American Recovery Act, but does include the previous approximately $4 trillion in Covid-19 related expenditures.

 

76 thoughts on “The Price Level Shortfall

  1. pgl

    “The shortfall is 6.9% as of January 2021 (% in log terms), and projected to widen to 7.7% as of December 2025.”

    You have properly labeled the graph a price level target. But why would one target the price level as opposed to the inflation rate? So we missed 2% for a few years. Does that mean we have to target 4% for the next several years?

    Reply
      1. Macroduck

        Exactly so. Do we know that the FOMC started its clock in 2007? The size and duration of intended inflation overshoot depends on the period of undershoot the Fed aims to correct. That and the Fed assessment of inflation expectations, which is a big part of the logic behind the shift to price level targeting. The Fed is only ever on autopilot until it isn’t – so never really on autopilot.

        Reply
    1. Macroduck

      The Fed doesn’t need to raise inflation. It does need to avoid messing up. Monetary policy is a less powerful factor than had long neen assumed, but still matters a lot. Inflation, meanwhile, may rise in response to a combination of factors, real and financial. Until it does, the current plan is to provide monetary expansion.

      Reply
    1. pgl

      Remind me again – whose behavior does the ratio of GDP to M2 capture? Velocity is just an odd ratio and nothing more.

      Reply
    2. macroduck

      M2 gained prominence as a monetary policy gauge when monetarism was in vogue. That time has passed. You may be right about inflation and M2, but that doesn’t have much to do with Fed decision making. M2 growth is a reflection of Fed policy, no longer a guide to policy.

      Reply
  2. Moses Herzog

    Since the CBO and OMB work together on some things, and also do very similar work, I’m hoping this would be considered a “related” topic. I was extremely happy to learn Shalanda Young is going to be Biden’s head of OMB. Anyone who believes in non-political based appointments, and that jobs should never be awarded solely on the basis of social networking and DNC fundraising skills should be happy about this. The British have an old saying “horses for courses”. No one in their right mind actually thinks Neera Tanden was suitable to be head of OMB–because she wasn’t/isn’t suitable.

    As is shown in past numbers/”projections”—->> https://www.crfb.org/blogs/cbo-releases-its-own-estimate-presidents-fy-2021-budget one could argue OMB’s numbers are much more optimistic than CBOs numbers. How much more likely inaccurate, untethered from reality, and less convincing would OMB’s numbers be if a known Hillary crony is running the OMB??

    Or is it better to have someone who has actually “paid their dues” in the numbers crunching dept over numerous years, rather than, say punching people who ask “the wrong question” to a candidate for the Presidency of the United States??
    https://www.politico.com/news/2021/03/02/shalanda-young-neera-tanden-omb-472753

    Reply
      1. Barkley Rosser

        I agree that Young is a good appointment. However, it is pretty hilarious that on International Womens’ Day good old Moses Herzog cannot leave well enough alone by praising Young but has to throw in an inappropriate attack on Tanden, with an additional implicit attack on Hillary Clinton. I guess we should be grateful that he did not drag in any of his other fave female targets for abuse.

        Reply
          1. Moses Herzog

            Calling out “Racism!!!!” at every drop of the hat, really doesn’t help Democrats arguments a lot. It turns it into a joke, and waters down the power of the term. As a former semi-truck driver (fill in your preferred stereotype here) and a man who has dropped a fair share of vulgarity in his life, I do not go around dropping the F-bomb very other sentence like we hear in Hollywood films that couldn’t be bothered with writing a solid screenplay. A person uses F-bombs etc, when they are beyond an average level of anger to bring home an underlying point emphatically. You can run around calling out racism if it makes you feel good inside, but all you do is hand out ammunition to those who say the word no longer carries much weight in the current environment.

      2. Moses Herzog

        @ Menzie
        Let’s for the moment, take the assumption that the Republican Senators’ objections to Tanden largely related to skin color/race (which frankly, I thought was a stretch from the beginning). I am willing to concede, straight out concede (not just for argument but as a strong personal opinion) some Senators were against Tanden for mostly skin color (Neely Kennedy for example, probably a few others). Then the obvious question becomes, “Why were some of those same Senators nearly cheerleading for Shalanda Young for that same job??” It doesn’t add up. And BTW I have heard some Democrats claim Tanden was a “sacrificial lamb” from the get go, in essence, seemingly “red meat” so that Young’s ride would be easier. I don’t know your opinion on that latter theory, but for the record, I don’t buy that one—too much embarrassment and too much splashback on a bad nomination, that even Biden’s somewhat clueless team had to know was coming.

        Another question: Why does the Chamber of Commerce (with a strongly anti- raising of the minimum wage agenda) endorse Neera Tanden?? The U.S. Chamber of Commerce doesn’t like a raising of the minimum wage in ANY way, shape, or form. They don’t even like the $10 proposal. So I will give our PhD host one guess as to how that works out in the U.S. Chamber of Commerce calculus on an endorsement of a woman who NOW says she is “pro raising of the minimum wage”?? Choice A: Possibly because the Chamber are not village idiots who believe every word that comes out of Tanden’s mouth?? or Choice B The Chamber thinks Tanden is hiding a Macroeconomics secret to narrow the output gap she learned when a bright light from the sky shot her in the forehead, inducing an epileptic seizure that made her punch Faiz Shakir??? Don’t think too hard.

        Reply
        1. Barkley Rosser

          You are seriously out of it here, Moses. Tanden not turned down at all for racial or ethnic reasons. GOP mad at her for her mean tweets, just like you, although Bernie was going to vote for her, if not with much enthusiasm. But the GOP would not tolerate it, even though they tolerated mean tweets from Trump, who in contrast to Tanden never apologized for any or deleted any. Hey, she said Cruz had a heat like vampire, but Trump said his wife was ugly and his dad helped plot to assassinate JFK.

          She was a sacrificial lamb because no prez since Reagan in 81 has gotten all their appointments approved. At least one has to go down, and Tanden has been the least popular, given all those snowflake GOP senators so hurt by her mean tweets. Manchin could show his independence and pile on for the kill even though I do not think she did any mean tweets against him.

          As for Chamber of Commerce, like the vast majority of observers, most certainly including both Menzie and me, they considered her to be highly competent, although you have rejected that idea without a shred of evidence and in the face of massive evidence supporting that she is very smart and very knowledgeable. And also, that position is usually somebody very close to prez and pretty political. The whines that OMB director should be “above politics” is yet more hypocritical bs.

          Sorry, Moses, you are just totally off on this. We know you have not forgiven her for being rough on Bernie and some of his bros. So, please do not lie to us about what is involved here. This is just you looking like a Trump-suipporting GOPper again, as you have on many occasions.

          Reply
    1. Bruce Hall

      White House press secretary Jen Psaki on Thursday acknowledged that Young is a favorite on Capitol Hill for the position, but said there are a “range of individuals in the country who are qualified for the job.”

      “We certainly know there’s lots of support on Capitol Hill, and again (Biden) thinks so highly of her, he nominated her to serve in a senior role,” Psaki said at a White House briefing.
      https://www.msn.com/en-us/news/politics/capitol-hill-has-picked-shalanda-young-to-lead-omb-but-biden-hasnt-yet/ar-BB1eifhw

      Looks like an opportunity for “unity”.

      Reply
      1. pgl

        Young is certainly a LOT more qualified than any of the clowns Trump put in that job. Well at least Trump did not make your OMB director. Whew!

        Reply
  3. Moses Herzog

    It could be argued that the recent discussion on price levels is closely related to economic stimulus and therefore connected to government recovery packages. I was “late” or “asleep at the switch” when these two columns were written back in January.
    https://www.washingtonpost.com/opinions/some-of-the-progressive-priorities-really-help-the-rich-more-than-the-poor/2020/12/31/f3e1a2ac-4b70-11eb-839a-cf4ba7b7c48c_story.html

    https://www.crfb.org/blogs/debt-cancellation-and-salt-cap-repeal-would-benefit-higher-earners

    But I still believe it is pertinent to the discussion, and explains why we see some commenters like “JohnH” on this site, ardently saying the things that they say. As I have expressed to Menzie before, and like to think Menzie is “hearing me out” even if Menzie isn’t “buying into” all of it~~~there is a large thread of truth in what commenters like “JohnH” are expressing on this web site, and if Democrats ignore commenters like “JohnH” and wave them off with their hand—then Democrats are leaving the door wide open for another donald trump candidacy (whether it be trump himself, or ANOTHER sociopathic presidential candidate with similar psych profile flavorings)~~whatever that candidacy may entail for Democrat prez. candidates.

    Reply
    1. macroduck

      The U.S. has been suspected of being a unit root kind of economy for some decades. Can’t find an active link, but Nelson and Plosser published evidence back in 1982 and subsequent work using newer data and various statistical techniques often confirm Nelson and Plosser. Hysteresis and all that.

      Reply
    1. pgl

      “The dream of homeownership is out of reach for so many working people,” said Senate Banking Chair Sherrod Brown (D-Ohio). “Rising home prices and flat wages means that many families, especially families of color, may never be able to afford their first home.”

      Stevie pooh – you are even more dishonest then you are dumb. And you are dumber than rocks not to get that the fundamentals (low interest rates and high rental rates) are the reason housing prices are rising. The article is NOT about you pathetically dumb bubble thesis. Yea some politicians may be as dumb as you are but your bubble thesis is not what Senator Brown or the rest of this article. It is about the fairness issue. Now either you are too dumb to get even that or you are trying to deceive people here.

      Reply
    2. pgl

      “Most industry analysts say the current boom is not a “bubble” akin to that frenzy of more than a decade ago, which led to the financial crisis.”

      This Politico story notes a lot of reasons why one would reject Stevie’s ill informed bubble theory is not it as the fundamentals as they list may be driving higher prices. Now this is Stevie’s link so one has to ask: (1) did he choose to omit these discussions because he is the lying scum that I accuse him of being; or (2) is he really too damn stupid to get what the discussion in his own link is all about?

      I know – I’m being harsh but damn it this is an economist blog. The standard for comments need to be a bit higher than the intellectual garbage we routinely get from Princeton Steve.

      Reply
  4. pgl

    A Biden boom?

    https://www.voanews.com/economy-business/oecd-upgrades-world-economic-forecast

    The Organization for Economic Cooperation (OECD) Tuesday cautiously upgraded its 2021 global economic forecast, citing vaccine rollouts and the U.S. stimulus package passed last week as positive signs. At a virtual news conference at the organization’s headquarters in Paris, OECD Chief Economist Laurence Boone told reporters it expects the world economy to rebound and grow by 5.6 percent in 2021 and by 4 percent in 2022. In December, the group predicted global growth of 4.2 this year and 3.7 next year.

    Reply
  5. EConned

    I don’t understand “[h]ad we run a 2% price level target”… did I miss a change in the FOMC’s change? Or did you mean “had we hit a 2% price level target”? If the latter, how should monetary policy change to hit its target? If the former, where is the change in the committee’s target?

    Reply
    1. Moses Herzog

      It’s a hypothetical, with the red line representing the hypothetical “ideal” goal, had it happened, vs the reality of what actually happened, represented by the dark black line. The line which looks either green or a turquoise to my challenged eyes is a CBO forecast of the future, which, I don’t know the technical terminology for this, (I have a feeling there must be a more succinct term) if you take the difference between the green and the red is a kind of “lost output” that you “can never get back”, or is certainly a major challenge to get back after it is lost.

      Reply
      1. EConned

        I understand the graph completely – that isn’t my question. It’s that the author states “ Had we run a 2% price level target since December 2007”. The problem with such a statement is that the FOMC had an implicit (and later explicit) target of 2% during those years.

        Also, this is price level – not an output.

        Reply
        1. Moses Herzog

          Had we run”= hypothetical. Is English your 2nd language??

          Yes the number is more directly related to prices, but what do you think the point is in trying to get the steady 2% rate of inflation?? It is part of the end goal of maximizing output. No one is sitting around going “Oh damn!!! Prices are 7% lower than they would have been had the virus not struck us!!!”, It’s an indirect measure of economic activity.

          Reply
          1. EConned

            First, there is zero need for attacks. I expect Menzie to appropriately address this comment (and your others not germane to o.p. within this post) as per his policies.

            Second, the comment was “Had we run a 2% price level target since December 2007” and, as I stated, we have had such target. As such, what you’re suggesting is a hypothetical is in fact reality. Maybe you’re confusing policy target (implicit or explicit) with the observed estimates of price level. I just want to know Menzie’s thoughts on what I asked about his post. I have zero interest in entertaining some Moses Herzog who hasn’t brought anything of value to this discussion and I won’t respond further.

          2. Menzie Chinn Post author

            EConned: Actually, we have not had a 2% price level target since 2007, as far as I understand the world. We had a (tacit) 2% inflation target which meant that undershooting 2% inflation did not imply overshooting 2%. So in this case, Moses Herzog is correct in characterizing the “had” term as a hypothetical (I think technically, it’s the subjunctive or something like that).

          3. EConned

            Menzie – mea culpa as I totally misread your o.p. and that’s completely on me. It has “level target” in multiple places. I’m embarrassed. The assumption is still that the committee would have hit said price level target. They had a 2% inflation target and I seem to recall that they repeatedly failed to maintain that target despite nearly every FOMC statement suggesting they would soon hit their target.

            Looking forward to you addressing Moses Herzog and making good on the blog’s much needed new policies. Cheers.

    1. Barkley Rosser

      Yes, a real loss. I met him in what was then Leningrad in 1984. It was just after Reagan had made an embarrassing remark about the Soviets, and I got it confirmed from him. He was indeed “old school” and had genuine gravitas.

      Reply
      1. Barkley Rosser

        Guess I should tell this story about a now mostly forgotten snafu by Reagan. So in August 1984 just before one of his weekly radio addresses Reagan made a joke not supposed to be heard by anybody, but it got accidentally recorded and then leaked out several days later. He said, “I am outlawing Russia. We start bombing in five minutes.” This was a time when Chernenko was in power and less than a year earlier US and USSR had nearly come to nuclear war after Soviets shot down a civilian Korean airliner with lots of Americans on board. It was a seriously tense time, not the relaxation that came later after Gorbachev came to power.

        Anyway, when the Soviets heard about this they basically freaked out and went on a high war alert (this was not reported in US at the time) and for a couple of days blasted this top story all over their media, repeated over and over on TV as something dead serious. People in USSR were very seriously freaking out big time.

        So it happened at the peak of this my fiancee (now wfe, Marina) and I arrived in Leningrad from Moscow and were in the lobby of the downtown Hotel Astoria, where a TV was blaring about this and lots of people were upset, including my fiancee. Roger Mudd and a cameraman walked in to check into the hotel, there to cover some conference or other. I recognized him and went over to ask about this. He replied “There he goes again,” then explaining it was just a joke not supposed to be publicized and would blow over, which it did. In any case, his calm gravitas was very soothing in that disturbing moment.

        Reply
  6. Moses Herzog

    Thought this was interesting:
    https://apnews.com/article/joe-biden-donald-trump-politics-georgia-coronavirus-pandemic-10ec43cc878a3024a3c6a7a833ff016a

    When I read stuff like this, where Blacks are told they can’t vote by Georgia’s Republican state legislators, I wonder to myself in this thing I call my mind, “What Black person in America, or any person bothered by a racist litmus test for voting, would ever purchase ANY products that are manufactured in the state of Georgia???” This is why people who use the term “racist” in flippant ways bother the heck out of me. Because when there are much more severe examples of racism, then the term just numbs people’s ears. They no longer want or can stand to listen to REAL examples of racism, because they’ve been bludgeoned with a plethora of false claims. When someone is NOT qualified for a job at OMB, I am sorry, they are just NOT qualified. And if they had the same past as the former candidate for OMB had had, and they looked like Chris Pratt, Bradley Cooper, or Brad Pitt, guess what?? They would have gotten it just as bad or WORSE than Tanden got it. You can’t fist punch or violently shove people in your own political party, and then walk off like nothing happened. It doesn’t work. Name me a white dude, who said the things Tanden said who tweeted like she tweeted who worked as head of an important agency with either Obama or Biden AFTER saying such things?? Or even “W” Bush?? Name me ONE and I’ll shut-up.

    Reply
    1. Barkley Rosser

      Oh my, really losing it over this off-topic, aren’t you, Moses. Well, nobody was tweeting back in the W era. I note you avoid Trump, whose tweets were far worse than anything Tanden ever did, although he was not appointed head of an agency by Obama or Biden, much less W. As for your claim that Tanden is not qualified, that is simply utter bilge. She may have been naughty with her meanie twits, and shoving somebody once, but nobody serious has questioned her knowledge or brains.

      As it is, I cannot think of any mean tweeters appointed an agency head during O or B admins, but I can think of a Special Assistant to a cabinet official who was, the cabinet official being HHS Sec. Sebelius under Obama, with this person the main one who drafted the Obama healthcare plan, a pretty formidable and ultimately successful undertaking. That official? Oh, one Neera Tanden.

      Reply
      1. pgl

        My I call a time out between the two of you to note how utterly racist Trump is:

        https://www.wsj.com/articles/recording-of-trump-phone-call-to-georgia-lead-investigator-reveals-new-details-11615411561

        We know Trump was mad that he had lost in Georgia and that he tried to twist those who were honestly counting the votes. It turns out he was demanding the votes of Fulton County (Atlanta – my birth town) should be voted as bad things happened to Atlanta. What bad things? Oh yea a lot of black citizens were allowed to vote.

        Reply
  7. Moses Herzog

    If people want to “make their line in the sand” or a production out of head of OMB, while snoring over stuff like Judge Ellen Hobbs Lyle, and other judges like her now risking their jobs and life’s work to protect Blacks and other disadvantaged groups right to vote, they can have at it. Personally, I don’t think it’s an intelligent approach to the topic of racism:
    https://apnews.com/article/push-to-oust-tennessee-judge-over-absentee-vote-44062e88bc5bfc9dc957ba70f164e365

    Reply
  8. Moses Herzog

    It’s happening ALL over this nation. You want to tell people you were snoozing over Blacks and other minorities losing their right to vote because you were upset 1 person out of 20+ qualified to be head of OMB couldn’t run around on Twitter insulting members of her own party??
    https://apnews.com/article/legislature-voting-iowa-elections-campaigns-881cb8de23a9d9fd886c738a21aafa83

    This is an intentional effort by “ALEC” and Republicans across this nation to literally “steal the vote” from Blacks, minorities, and other disadvantaged groups. I suggest you pick your battles better if true racism bothers you.

    Reply
    1. pgl

      It is good you support voting rights but come on. A little racism is OK if you stand up for the 15th Amendment? BTW – HR4 is a must so screw this stupid Senate filibuster.

      Reply
      1. Moses Herzog

        @ pgl
        Gee, I wonder why Shalanda Young isn’t a lawyer/ DNC fund raiser / Hillary crony?? I guess when the people making the choice on Head of OMB don’t have you on speed dial, they’ll know where their mistake was NEXT time posting the work experience prerequisites . 14 years crunching numbers for Appropriations and memorizing federal budget numbers obviously proves Young’s secret connections to Stormfront. I saw it on the QAnon. Apocalypse starts at Young’s nomination hearing, we’re “rounding the corner”.

        Reply
        1. Menzie Chinn Post author

          Moses Herzog: As I mentioned in an earlier exchange, being a lawyer can be quite useful in one’s role as OMB Director, given the regulatory portfolio of the agency. Cap Weinberger was a lawyer; if you don’t find that example supportive of my assertion, then think Leon Panetta (as well as Jack Lew).

          Reply
          1. Moses Herzog

            @ Menzie
            I always kind of hate myself a little for adding these things, as I fear it might not be clarification I’m trying to get, but the “last word” in some kind of ego thing, and honestly I’d kind of hate myself if I found that to be true.

            But….. I think a very strong case can be made lawyers (similar to PhDs, not that I’d know on a personal level) tend to be very capable people, and with a toolkit that can make them “jack of all trades” and legitimate “jack of all trades”. And I will admit a certain something on subjective grounds which makes me dislike Tanden. I’m conceding my subjective views of her may color my view to a degree. But there are others I might strongly dislike who I wouldn’t argue with getting a job (let me think abit….. ) at the moment I can think of only one good example, OK, yes “white male” but I hate Steve Mnuchin as a person, but cannot argue with is “toolkit” as a Treasury Secretary excluding morality from the equation. I pretty much hate Pete Buttigieg as a person and would rather have seen Rahm Emmanuel get that job, but I can’t really argue, as much as I hate Buttigieg as a human being, that he doesn’t have the “toolkit” for Transportation Secretary. Maybe a couple “off the wall” examples, Jeane Kirkpatrick I couldn’t stand because she was a Reaganite, but I think she was capable in the jobs she held, Mickey Edwards, I think was pretty immoral (post office bank scandal) but very capable in most of his jobs. James Baker is another Reaganite I detest and think he was capable in most of his duties. Bill Richardson has the morals of a Kardashian sister, but if I needed someone to negotiate something for me, I might phone up Bill Richardson.

            But there is a kind of distasteful connection between the party fundraising, and yes the Hillary connection, but worse yet, the changing of her stances “on the turn of a dime” (which spells insincerity to me and person who has ZERO principles). And I think she just lies because she’s not for a real change on the minimum wage. Tanden looks like she’s about to crack a grin every time she says she supports a higher minimum wage because she can’t even sell the lie to herself. But the “overhanging feeling” that the reason she got the OMB job, is as a “thank you” for raising funds and being a Hillary crony, instead of “Who is the person best capable to run OMB??”. The question ended up being “What is a job, often held aloft by the longterm staff (of that particular agency, “agency XYZ”), that we can hand out to “our friends” in the DNC apparatus, and we played “mix and match” with “Our DNC friends” on the left hand side of the sheet, and “figure head agency titles/feather in their cap” jobs on the right hand of the sheet, and then played connect the dots. That part of it sticks in my craw to no end.

            I have a “sense” for these things. I’m very perceptive on some of these things. Now, I haven’t tooted my horn too much on this, but who was discussing Andrew Cuomo in a negative light on this blog before all the women popped up out of the woodworks?? believe it or not~~I’m kinda guessing you won’t believe it— I wasn’t doing that just to get under pgl’s skin. Tanden has something there that isn’t good, more than “a shove” there somewhere. I can smell it man. I can smell these types from 500 miles away man.

          2. pgl

            Are you sure Panetta is a lawyer? He seems to be too level headed to be a member of that profession.

          1. Moses Herzog

            Racism has nothing to do with Tanden, and it’s laughable, you think Alabama’s Shelby, would prefer a Black woman over Tanden, for reasons of racism. That’s a new one, and I don’t blame you for not wanting to “duke out” your “logic” there, that a Senator from Alabama wants a Black woman to head OMB for “reasons of racism”. I’ve seen you make very extreme stretches on claims of “misogyny” and “racism” before, but how you claim that a black woman getting a technocrat job “is racism” is a new form of mental gymnastics quite rare to my observation.

          2. pgl

            “Moses Herzog
            March 11, 2021 at 11:06 am
            Racism has nothing to do with Tanden, and it’s laughable, you think Alabama’s Shelby, would prefer a Black woman over Tanden, for reasons of racism.”

            Dude – I never made anything remotely close to that argument. Lay off the wine as you have me confused with someone else.

  9. Moses Herzog

    Some of the greatest people you will ever meet in your life, as far as their humanity, generosity, and kindness are concerned, are truckdrivers. However, they are not exactly well=known for their intelligence. When I drove semi, I kept it under my hat that I had attained my 4-year university degree because I found it did not garner much favor with my colleagues. In many ways semi truckdrivers “get a bad rap” because the vast majority of them are great people. But…… certain behavior patterns seem to hold strong in the profession……..
    https://www.yahoo.com/news/idaho-man-thought-virus-disappear-111811095.html

    Reply
    1. Barkley Rosser

      I have only known a few truck drivers, but as someone who has done a lot of long distance driving I have always respected the capability of the vast majority of them on the road, especially given how challenging it is. Something that has bothered me very recently is that it seems that this has changed, and i have seen in the last year or two a lot of really very bad driving by truckers, seriously dangerous. I do not know what is behind that, although perhaps I have just seen a small sample bias and there has been no general change in this.

      Reply
  10. AS

    Today’s February 2021 CPI index report (FRED series, CPIAUCSL) shows a value of 263.161 or a 1.7% change Y/Y. The March 2020 index was 257.989, so unless the March 2021 CPI index falls, we will see a Y/Y March 2021 index change of at least 2.0%. Due to several months of decline in early 2020, the CPI may well show 2.0% or more gains Y/Y for several months.

    I realize that the preferred metric is the personal consumption expenditure index as Professor Chinn mentions, but just looking at what the press will start reporting about consumer prices.

    Reply
  11. Moses Herzog

    Little did Dr. Wu know, just after his contributions to the world on fighting pandemics, that roughly 110 years later, American know-nothings would intentionally promulgate the false rumor that a Chinese lab with professional scientists had started Covid-19.
    https://www.google.com/doodles/dr-wu-lien-tehs-142nd-birthday <<—-Mainland Chinese can't see Google's celebration/tribute to Dr. Wu because Google search isn't allowed in China. Beijing prefers the common man think all Americans hate them, it's useful for easy manipulation of the citizenry.

    Oh well, ignorance rules supreme.

    In other news and off topic to the post, I thought this human interest type article was interesting and fun reading:
    https://www.nytimes.com/2018/09/07/technology/monopoly-antitrust-lina-khan-amazon.html?auth=login-email&login=email <<—You'll find a link to Khan's Yale paper in the article, no paywall for her paper.

    Reply
    1. Barkley Rosser

      Moses,

      Sorry, but it was people in China of Chinese ethnic origin who first claimed that the Covid-19 virus came out of a lab in Wuhan, not anybody in the US. Those people were forced to retract their claims by higher authorities.

      As it is, you are plain wrong that it is determined for sure that this is a “false rumor.” As has been noted here numerous times, unfortunately the data that might help determine the origin of the virus was destroyed way back last January, both the data in the suspect lab and also at the wet market that you are convinced was the origin (although it might have gotten to the market from the lab). So, as I have noted numerous times here and repeat again, what is certain is that it is now nearly impossible that we shall ever in fact determine with any degree of certainty what the origin was and how it got out into the public.

      Oh, Wu does deserve recognition and praise, and it is the origin in East Asia so long ago of mask wearing to prevent spread of diseases that has made it so much more common for people there to respond responsibly to this pandemic by indeed wearing masks in a responsible way, in contrast to many in the US.

      Reply
    2. Moses Herzog

      Apologies for the double post, I got an 52X (??) error from the server and assumed it hadn’t gone through, then attempted to replicate my original thoughts, which I am generally not good at once I lose the thought.

      Reply
  12. ltr

    Having learned about a cluster of pneumonia cases with unusual symptoms in Wuhan on December 30-31, 2019. ?I followed and collected multi-language records of unfolding events in China, each day from then to now. ?Chinese health authorities were informed and immediately began to take action, which included immediately and directly informing the CDC and the WHO.? A possible origin of the cluster was closed and completely disinfected?in a day.

    By January 7, viral samples had been genetically decoded. ?The virus was determined to be “novel,” and the genetic codes of the samples was sent to the WHO. ?Testing primers were developed just after the decoding.? Geneticists in China and the United States considered the virus naturally occurring?from the decoding on.

    I know of no mainland Chinese scientist who suggested a laboratory origin by construction or accidental?release.? WHO scientists have supported the in-nature?origin of the virus.

    Reply
    1. ltr

      Forgive me for my comment, which was not related to the topic chosen, but a passage that in effect defames Chinese scientists has to be responded to. The passage is mistaken and unfortunate, and unanswered would defame Chinese scientists.

      I only wish to be helpful.

      Reply
    2. Barkley Rosser

      ltr,

      Oh please. The first physician to report on Dec. 30, 2019 that the cases were probably a SARS virus (those being 7 cases of people who probably got it from the Wuhan seafood market, closed and cleaned out two days later) was the late Dr. Li Wenliang. We have been through this before. He was called in to the local Wuhan police station on Jan.3 and warned not to “spread rumors.” He would die of Covid-9 on Feb. 6. After that the national government changed the official view to praise Dr. Li as a heroic figure, thus putting the blame for suppressing him on local Wuhan officials, although some reports say they acted with approval from higher up officials.

      On the day Dr. Li died, Feb. 6 2020, Botao Xiao and Lei Xiao of South China University of Technology posted a report on a site arguing that the origin of the coronavirus was probably a lab in Wuhan. They were later forced to take this report down and it was prevented from being published or further disseminated by higher authorities.

      So, sorry, ltr, as I accurately said, the first people to claim that Covid-9 came out of a Wuhan lab were two Chinese academics in the PRC, not non-Chinese people outside of China. This does not mean that their report was ultimately correct, and it seems to have had some problems. But the alternative claims being made that it definitely came from the wet market in Wuhan have not been verified, and those making the claims that it could not have come from a Wuhan lab all have links that provide doubt on their statements.

      Again, the bottom line is that we do not know the origin, and statements by the Chinese government seriously lack credibility after their numerous actions to either suppress or outright destroy evidence and data related to this. Actions by the PRC government are the reason why we shall never be able to definitely determine where it came from.

      That said, once the PRC government began seriously moving against the virus after the Lunar New Year 2020, the effort was highly effective, as you have repeatedly reported here, lrr, even as you have never acknowledged that the performance of Taiwan on this has been superior by an order of magnitude.

      Of course this is all off-topic, but unsurprisingly it has been Moses Herzog who has violated the stated norms here to bring this troublesome topic up for discussion again by making inaccurate claims, although you happen to agree with some of those inaccurate claims, namely that it has definitely been shown that the virus could not have come from a lab in Wuhan. There are scientists who make that claim, but there are others who disagree with that claim, and the evidence to determine which group of scientists is right no longer exists, having been destroyed on orders of the PRC government, and that is a very hard and frankly disturbing fact.

      Reply
      1. Barkley Rosser

        There is an irony here, arguably a sad irony if in fact the real origin was purely zoonotic via some animal brought from the wild to the wet market in Wuhan, with the leading candidate for that based on what we know about genetic sequencing being a pangolin. It is that the way for the Chinese to show that this was the likely source rather than a lab would have been for more of what had been at that market to be preserved than apparently has been. But it was reportedly completely cleared out with everything gone on Jan.1, 2020, only two days after Dr. Li first reported it looked like it was probably a SARS virus, and two days before he was hauled into a Wuhan police station and told to be quiet.

        While the unpleasant perception is that the clearing out of everything there was part of a coverup, in fact it may have been simply a matter of local officials wanting safety from it spreading further out of there, where indeed we know quite a few people got the virus there. This arguably justifiable decision probably by strictly local officials happened at a time when nobody had any idea how bad it would get and how big of a deal it would become to determine exactly the origin and earliest history of the virus so that completely clearing everything out of the market would become such a big deal. But whatever the motive, simply trying to prevent further spread of the disease or some sort of coverup effort or some of both, there is no undoing it. What is gone is gone and cannot be put back there or recovered somehow to make a determination of how exactly the virus got to be at that market.

        Reply
  13. ltr

    ——- prefers the common man think all Americans hate them, it’s useful for easy manipulation of the citizenry.

    Oh well, ignorance rules supreme.

    [ Mistaken, and unfortunately fiercely offensive. There is no reason to be offensive.

    There is no reason to express disdain for a people. ]

    Reply
  14. ltr

    As for data, the data were and are carefully recorded, patient on patient from the earliest patients, location on location, and the data with the genetic codings were already being analyzed and published internationally in January 2020:

    https://www.nejm.org/doi/full/10.1056/NEJMoa2001316?query=featured_coronavirus

    January 29, 2020

    Early Transmission Dynamics in Wuhan, China, of Novel?Coronavirus–Infected Pneumonia
    By Qun Li, Xuhua Guan, Peng Wu, Xiaoye Wang, Lei Zhou, Yeqing Tong,?Ruiqi Ren, Kathy S.M. Leung, Eric H.Y. Lau, Jessica Y. Wong, Xuesen?Xing, Nijuan Xiang, et al.

    Abstract

    BACKGROUND

    The initial cases of novel coronavirus (2019-nCoV)–infected pneumonia?(NCIP) occurred in Wuhan, Hubei Province, China, in December 2019 and?January 2020. We analyzed data on the first 425 confirmed cases in?Wuhan to determine the epidemiologic characteristics of NCIP.

    Reply
  15. ltr

    ——- prefers the common man think all Americans hate them, it’s useful for easy manipulation of the citizenry.

    Oh well, ignorance rules supreme.

    [ Please, a people ought not to be defamed. ]

    Reply
  16. ltr

    ——- prefers the common man think all Americans hate them, it’s useful for easy manipulation of the citizenry.

    Oh well, ignorance rules supreme.

    [ This assertion is of course untrue, but what is so frightening and saddening is the disdain for an entire people that the comments reflects. Expressing such evident antipathy for a people is evidently beyond my understanding. Possibly counseling would be helpful.

    Possibly the writer will come to understand the harm caused by repeated expressions of prejudice. ]

    Reply
    1. Barkley Rosser

      ltr,

      I think it probably is a waste of time and certainly totally off topic to relitigate all this here. But last year you agreed that Dr. Li Wenliiang was unfortunately initially suppressed. Beyond that, your statement that my statement “is mistaken and misleading all though” utterly lacks crediblity. All of what I wrote is correct and you will be unable to disprove it. Do you deny that Bo and Lei posted a paper on Feb. 6 last year arguing the source was a lab in Wuhan, with that paper ordered to be taken down? Do you deny that the wet market was completely cleared out on Jan. 1, 2020 in Wuhan? Do you deny that outsiders were long kept from visiting the lab in Wuhan and that by the time WHO people were allowed to visit recently the original data on the key research there had been removed and was and remains unavailable due to orders from the government? Do you deny any of this? It is not misleading, ltr. It is true, and it is certainly not racist to note that ethnic Han Chinese academics living in the PRC were the first people to argue that the virus came out of a Wuhan lab.

      Again, ltr, my bottom line is that we shall not be able to determine the ultimate origin due to the unfortunate disappearance of the crucial original data. Claims by the PRC government that the source has been determined are simply false and those pushing these claims should understand that they undermine their own credibility by repeating these falsehoods. That does not just apply to you, ltr, but also to Herzog, who was the person who inappropriately introduced this whole sub-thread here and did so by himself repeating these not credible claims coming out of the PRC government, although he has his own weird motives, as he gets weird obsessions he must go on and on about, as he has done above with his irrational hatred of Neena Tanden, a woman of color, speaking of racism.

      Reply
  17. ltr

    https://stumblingandmumbling.typepad.com/stumbling_and_mumbling/2021/03/on-hans-in-luck-effects.html

    March 10, 2021

    But the totality of remarks and marginal decisions and mild stereotyping adds up to something wholly different – systematic racism which is experienced as stressful and exhausting….

    — Chris Dillow

    [ Yes, I so understand. For all the condescension, for all the cruel ridiculing laughter, I so understand.

    Chris Dillow happened to write brilliantly on the matter of prejudice yesterday. Also, the implications of prejudice are overwhelmingly economic or meant to be economic. ]

    Reply
    1. Menzie Chinn Post author

      ltr: I think I can be partially absolved from being racist in my remarks when I say that many of your comments have been remarkably one-sided in their boosterism for PRC policies. We can applaud the PRC government for the effectiveness (eventually) of their Covid-19 response, and for the government’s ability to lift hundreds of millions of Chinese out of poverty, without neglecting the incredibly poor record on human rights, both with respect to the Han Chinese, as well as the Uighur minority and native population of Tibet. In other words, not all of the criticisms directed at your comments are racially motivated.

      Reply
  18. baffling

    i have challenged ltr a couple of times to comment on flashpoint items related to china:

    https://www.cnn.com/2021/03/09/asia/china-uyghurs-xinjiang-genocide-report-intl-hnk/index.html
    ltr, what are your thoughts on the genocide occurring in china? or is that topic outside the bounds of your inquisitive mind? perhaps this should also be discussed by the general assembly? would you agree?

    https://www.cnn.com/interactive/2021/02/asia/china-wuhan-covid-truthtellers-intl-hnk-dst/
    or what about the detention of folks providing early warning of the extend of the coronavirus outbreak in wuhan and china? any comments on how these folks have been treated ltr?

    so far, there have been no responses from ltr on these topics.

    Reply

Leave a Reply

Your email address will not be published.