I HATE Windows 11

 Change for the sake of change. And more advertising of microsoft products every time I load a page.

I had to walk up the escalator once or twice in my life

It's not such a problem, really. It's like walking up stairs.

Economic decline

The phrase "economic decline" occurs increasingly in Google Books from the early 1970s to the early 1990s. These dates match two decades of low productivity of the US economy.

Usage of the phrase declines from the early 1990s to 2008, the period that contains the high-productivity "new economy" Greenspan talked about. That period that ended with the financial crisis.

Usage of the phrase increases from 2008 to 2015 -- a good match to the years the Fed held interest rates at zero. Things were improving at a snail's pace, give or take.

After 2015, things were improving enough you could see improvement. Trump took credit for that improvement -- and he still does, today. I credit the decline of private-sector debt.

"The world's wanker"

For "wanker" read "banker". 

The four short fragments below are from "Today Is Our Dependence Day" (Aug 26, 2025) by Maia Mindel at Some Unpleasant Arithmetic, on Substack.

The topic is foreign exchange, trade deficits, and US economic policy. Mindel writes:

"But the US [dollar] isn’t just any currency. It’s the global reserve currency. This means, basically, that the US has to export a lot of services like lending currency to other countries, at the expense of having an artificially strong dollar..."

"The way the system works is that everyone agrees to give the United States free stuff in exchange for financial assets, and in return the Ameriburgers act as a mix of banker, venture capitalist, insurance company, and central banker, which borrows short-term in safe dollars to invest long-term in risky ventures worldwide, and provides safe assets to other countries during global crises. This dynamic is the bedrock of the global economy, but its stability is entirely contingent on one thing: the credibility of the United States."

"To retain its global economic hegemony, the US must stay a reliable and well-run country. Its number one responsibility is to provide an unlimited supply of truly safe assets that every single other country in the world can depend on."

"The consequence of a crisis of confidence against America would be total global economic bedlam. Fearful investors would dump U.S. assets, sucking liquidity out of the American economy and wrecking all global currencies as they tried to [find] somewhere to park. The last time the global hegemon failed so badly was in 1929."

It'll be worse, this time. 

Roger Farmer on tariffs and the trade deficit

 

Tariffs and the Trade Deficit
June 28, 2025

https://www.rogerfarmer.com/rogerfarmerblog/2025/6/28/tariffs-and-the-trade-deficit 

The Fed says 2 percent. The economy says 3 point 3

Inflation targets before and after the so-called Biden inflation:

Find the FRED Graph at https://fred.stlouisfed.org/graph/?g=1oTwm

The graph is from mine of June 15, 2024.

Eleven in favor, one against

Yesterday morning, before the FOMC met to pick an interest rate, from The Hill:

Trump’s pressure on Powell to lower rates comes to a head
Wednesday, 17 Sept 2025, 6:00 AM

"Trump has sought to reshape the Federal Reserve, pushing to remove board of governors member Lisa Cook and tapping White House economic adviser Stephen Miran to fill a vacancy.
...
Wall Street is fully expecting a rate cut, which is expected to be announced Wednesday afternoon. Futures markets were pricing in a quarter-point cut with a 96 percent probability on Monday afternoon, with a 4 percent chance of a larger, half-point cut."

 

Yesterday, after the meeting, from Reuters:

No big push for a larger rate cut, Fed's Powell says
17 Sept 2025, 2:49 PM

"There wasn't widespread support at all for a 50 basis point cut today," Powell told reporters at a press conference following the Fed's two-day meeting.

"You know ... we've done very large rate hikes and very large rate cuts in the last five years, and you tend to do those at a time when you feel that policy is out of place and needs to move quickly to a new place."

 

And this, from the Fed's Press Release after the meeting:

September 17, 2025
For release at 2:00 p.m. EDT 

"Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Michael S. Barr; Michelle W. Bowman; Susan M. Collins; Lisa D. Cook; Austan D. Goolsbee; Philip N. Jefferson; Alberto G. Musalem; Jeffrey R. Schmid; and Christopher J. Waller. Voting against this action was Stephen I. Miran, who preferred to lower the target range for the federal funds rate by 1/2 percentage point at this meeting."

(15Sept2025) Dear Audie Cornish

On CNN This Morning with Audie Cornish, this morning, Audie says she finds lots of people who diagnose the Democrats' problem, and none with solutions. What I have to say is that everyone sees the Dems problem as a political problem. Likewise, everyone sees America's problem as political. 

America's problem is economic decline, long-term economic decline. It is an economic problem. It does not have political solutions. There is an economic solution, which is to significantly reduce the debt of the private sector:

However, most everyone who does focus on econ is focused only on reducing federal debt.

 

A guest on CNN's Audie Cornish show this morning -- Sara somebody -- was saying Democrats don't pick up on how hard it is for people (or young people, Sara might have said) to get jobs. Dems do not focus on the economy at all -- until after any upcoming election, and even then, only briefly. Dems make no economic argument.

The next bit of news I noticed on CNN this morning was that the New York State Governor on 14 September endorsed Mamdani for NYCity mayor -- some 2½ months after the July 1 certification of the vote count. 

The only thing I know about Mamdani is that somebody on CNN (or maybe MSNBC) once referred to him as a commie (or maybe as a socialist). I still remember that, from months ago. Maybe the Governor remembers it, too. A typical Democrat, Governor Hochul hesitated to endorse until the hesitation itself became the news.

Here. I said this before:

I don't know what's going on in their minds. But it looks to me as if Democrats have something like "math anxiety" about economics. Dems seem to think that if they go for sound economic argument, they will necessarily come to the same conclusions as the Republicans.

I don't know how they could possibly think this, as it is based on the flawed premise that Republican economics is sound. Actually, the problem is

This little piggy has bad policy

That little piggy has none

All we need, really, is a few tweaks to policy, and to vote for people who understand that the financial sector is more than big enough already.

Scott Sumner, 16 July 2024

In "Now do you see the problem?" Sumner said

I pay a lot of attention to politics in other countries. I noticed that as the nationalist right gains strength, their views on economics moved sharply to the left, away from free markets. I predicted that this would eventually happen to the GOP.

Economic improvement since 2010

Re-posted from mine of 24 October 2024:

Another look at US economic decline. I started with annual FRED data on Real GDP growth, inspected it, and added two trend lines -- one before the economic disaster of 2008-09 and one after:

The black line shows Real GDP, annual rate of growth. I omit the years before 1950, eliminating data from the Depression and World War Two.

The red trend line is based on the data for 1950-2000 and is displayed for the years 1950-2009.

The blue trend line is based on the data for 2010-2019 and is displayed for 2008-2023.

The 1950-2007 trend is visually indistinguishable from the 1950-2000 trend so I have excluded the years 2001-2007 from the trend calculation.

The 2010-2023 trend, excluding 2020 and 2021, is to my eye indistinguishable from the 2010-2019 trend as far back as the mid-1990s, so I have omitted the years after 2019 from the calculation.

The transition from down-trend to up-trend seems to occur during the Financial Crisis and Great Recession years, 2008-09.

The source data values are annual percentage rates. The trend lines are based on annual percentages. I read the trend values as percentage values.

The red trend runs from 4.326772247 (4.3%) in 1950 to 2.801315234 (2.8%) in 2009. The difference, spread over 59 increments, comes to a 0.026 percentage point trend loss per year or 0.26 per decade.

The blue trend runs from 2.02969697 (2.0%) in 2008 to 2.884242424 (2.9%) in 2023. The difference, spread over 15 increments, comes to a 0.057 percentage point trend gain per year or 0.57 per decade. The uptrend, so far, is rising twice as fast as the downtrend was falling. If it hadn't started from such a low level -- and if we didn't have the covid interruption -- the improvement would be obvious.

Assuming that the transition occurred in 2008-09, we can say that during the one year transition, trend growth fell by 0.7405 (0.74%) or, for comparison, just over 7.4% at the per-decade rate. That one-year trend-transition shock is equal to approximately 28.5 years of the 1950-2000 trend decline.

(untitled)

In the midst of the great depression with the capitalist economies in dire straits, while the totalitarian threats were mounting on both left and right, it was surely exceedingly difficult to maintain a balanced perspective on the «fatal flaw» in the economic system that Keynes thought he had identified.

- Leijonhufvud

Inflation is still reaching for that 3 percent rate

The graph shows inflation (blue) and unemployment (red) from May 2023 thru August 2025. The black line shows the interest rate that the Fed moves up or down to influence inflation and unemployment. The interest rate shows weekly data thru September 3. Next week, at FRED, the interest rate may change.

Inflation (blue), Unemployment (red), and the Interest Rate (black): 2023-05-01 to 2025-09-03
Click the image for a bigger version. Click this text to see the graph at FRED.

At a glance, the red and blue line form an "X" pattern: The red line is trending upward and the blue is trending down. The changes are not big ones, but the red line starts out below the blue line, and ends up above it.

Unemployment (red) shows a trend of increase for almost the whole time the interest rate (black) sits at the high level. We might say that as the interest rate comes down (2024-09 to 2025-01 on the graph) the red line runs flat or tries to go down a little. But after 2025-01, with the interest rate unchanged, unemployment was again rising. This suggests to me that at its current level, the interest rate is too high.

The  Federal Reserve uses a 2 percent target for inflation: They try to keep inflation close to a 2 percent annual rate. 2 percent is at the bottom edge of the plot window on the graph, and on the left-side scale. As the graph shows, the Fed has not been able to bring inflation down to the target level. If they tried harder, unemployment would increase more. I think the Fed is trying to avoid that outcome.

The new BLS data, out today, reports that the CPI "rose 2.9 percent over the last 12 months". Again, almost 3 percent, and still trying to get to 3 percent. This is not the Fed's doing. Not Trump's doing either, I  think, as inflation has been stubbornly refusing to go below 3 percent since July 2023. It is the result of economic forces. That's what I think. The fundamentals of our economy are not really strong. That's what I think. Too much debt: too much private-sector debt. That's what I think.

After the Biden inflation: What Happened?

Feel free to skip the "Context" section below, and jump to the second part of this post.

 

Context 

I looked at inflation back in June of '24 in The Biden Inflation: What Happened? This is the graph I showed at that time:

Graph #1: June 2019 to January 2025

The blue line shows CPI inflation; each blue dot on the line pinpoints one month's data. In the early months of 2021, the path of inflation turns upward and crosses the solid red line. The next blue dot after the lines cross represents March 2021, the month that Jerome Powell warned us inflation was coming.

The gray line shows the Federal Funds Rate, the interest rate that the Federal Reserve raises when they want to fight inflation and lowers when they want to encourage jobs and growth. The Federal Funds Rate runs flat and low, near the zero level, from early 2020 to early 2022. The first increase came in March 2022, a full year after Powell's March 2021 inflation warning.

CPI inflation in March 2022 was 8.5 percent, as the blue line indicates.

Three months later, in June 2022, CPI inflation peaked at 9 percent, and by July inflation was coming down. The fall in the rate of inflation, once it finally started, was about as rapid as the increase. (Unfortunately, it was not prices that were coming down, but only the rate of increase of prices.)

The downtrend of the CPI stopped suddenly in June of 2023 at 3.06 percent. As if it hit a hard surface, the blue line bounced up a little, came down, and then bounced a bit more before there was no more data available. The last blue dot represents April 2024. (The above graph, remember, is from June of that year.)

The red line on the right represents the "hard surface" where the rate of inflation was bouncing. That dashed red line runs just above the 3 percent level. The red line on the left indicates the 2 percent level. It shows the inflation target, the 2 percent annual inflation that the Fed thinks best for our economy. From start-of-data to early 2020, the blue line shows the annual rate of inflation running close to the target level. Inflation then dropped rapidly during the pandemic recession of 2020, but increased rapidly beginning in March 2021 as noted above.

In March of 2022 the Fed began increasing the Federal Funds rate, at a fairly rapid pace. The rate of inflation peaked in June 2022 and started to come down. Inflation stopped coming down a year later, in June 2023. The Federal Funds rate continued increasing until August 2023, when it reached 5.33 percent.

On the graph above, the interest rate (gray) that the Fed uses to keep inflation down continued at the 5.33 level, and the rate of inflation (blue) continued at roughly 3 percent, to end-of-data. Graph #2, below, shows the same datasets, updated thru July (for inflation) and August (for interest) of 2025:

Graph #2: January 2020 to August 2025

The rate of inflation came down from the June 2022 peak until June 2023, when it hit that "hard surface" just above the 3 percent level. With the interest rate running high since August 2023, inflation was not free to increase, but still refused to go below the 3 percent level until mid-2024.

Inflation fluctuated in small steps until March 2024. The Fed, however, was still holding the interest rate high and unchanged at 5.33 percent, and at that point the forces of inflation seemed to give up. The blue line shows a gradual but persistent, almost purposeful decline from March to September of 2024.

The Fed evidently noticed this fall of inflation to slightly below the 2.5 percent level, and relaxed ever so slightly: They reduced the interest rate a little in September 2024 and again in October. 

In October, the rate of inflation started rising again.

In every month from September 2024 to January 2025, the Federal Reserve reduced the interest rate. And every month from October 2024 to January 2025, the rate of inflation increased.

The Fed acted responsibly. They did not reduce the interest rate until inflation went below the 3 percent level. And they stopped reducing the interest rate when the rising inflation reached 3 percent. From January thru August of 2025 the Fed has held the interest rate steady at 4.33 percent, waiting for inflation to return to the 2 percent target level.

The Fed thought they had things under control. The economy didn't cooperate.

The Fed last reduced the interest rate in January 2025. They held it steady from February to August, where the data ends.

During this second phase of high-but-steady interest rates, the rate of inflation 

• fell from 3 percent in January 2025 to below 2.5 percent in March; 
• stabilized near 2.4 percent from March 2025 to May; and then
• rose in June and July, near the 2.75 percent rate and approaching 3 percent, again.

Before reducing the interest rate further, the Fed was waiting to see what inflation would do. Between March and September 2024, the Fed waited 5 months, with inflation falling every month, and did not reduce the interest rate until inflation went below 3 percent and continued going down.

In September 2024 the Fed was satisfied that they had inflation under control, and reduced the interest rate. The next month, inflation increased. The Fed remained confident, and continued reducing the interest rate in small steps. But inflation continued rising until January 2025 when it again reached 3 percent. Since January, the Fed has not changed the rate of interest.

 

That "hard surface" is the inflation target that our economy wants.

The Federal Reserve still trusts its 2 percent inflation target and still wants to see the rate of inflation running close to that level.

But the economy has a mind of its own, and wants a 3 percent inflation target, or perhaps 3.3 percent. The rate of inflation hit that hard surface in June 2023, stayed there until July 2024, and even now is not far from 3 percent.

There is a contest going on, a struggle between the Federal Reserve and economic forces; a contest between the Fed's 2 percent target, and the 3 percent target that our economy seems to want. How could this have happened?

Do you have too much money? No? Then the problem is not "too much money chasing too few goods." The problem is not demand-pull, but cost-push inflation. You know: the inflation that makes the economy slower rather than faster. The inflation that no one studies; instead they say "there's no such thing."

"Too much money" leads to too much spending, and too much spending pulls prices up. That's not the problem. If we had too much money, people would be saying the economy is great.

Our problem is "not enough money". Everyone knows it but the billionaires. We solve the problem by using credit: by borrowing money: by accumulating debt. The more we rely on credit, the greater is the cost of finance -- and the greater the cost of finance, the more it eats into wages and profits. 

And the more the cost of finance eats into wages and profits, the more we have to increase our reliance on credit. It's not a sustainable situation, and everyone knows it. 

Over time, debt accumulates more rapidly than income, and financial cost grows. I think that's what happened around the time of the pandemic. Before the pandemic, the 2 percent inflation target was working. During the pandemic we did a lot of borrowing. Consumers did, and businesses, and so did government. And now, after the pandemic, our debt-to-income ratios are higher, and our financial costs are higher. 

Before the pandemic, the 2 percent inflation target was still working. But costs increased, so 2 percent isn't enough anymore. That's why the endogenous 3 percent inflation target arose. And that higher target is the reason the Fed has such difficulty getting inflation down to 2 percent.

It's more than 2 years, now. Inflation stopped falling in June 2023. The Fed's continuing reliance on its 2 percent target -- and its attempt to push inflation below the endogenous 3 percent target -- has slowed and weakened our economy. The recent large downward revision in job growth may be just one of the consequences.

Plunging lumber prices pose warning sign for U.S. economy - WSJ

Following up, as promised. Here is a short list of crucial topics from today's Google News:

Inflation, still a problem:

• Inflation is climbing. Trump might still get lower rates. 29 August 2025. Politico

 

Jobs, largely a result of economic uncertainty. It didn't have to happen:

• August Job Cuts Leap in Blow to Trump Economy, 4 September 2025. Newsweek
• CNBC Daily Open: U.S. jobs report in August reveals damage the Fed should mend, 8 September 2025. CNBC. 

Tariffs are developing into a problem, on schedule:

• The US factory spending $100,000 a month more due to tariffs, 7 hours ago. BBC News.

 

Trump Dissing the Fed, a behavioral problem making things worse:

• Trump's calls to dismiss Fed governors undermine independence, Citadel CEO writes in WSJ op-ed, 8 September 2025. Reuters
• Ken Griffin Speaks Out Against Trump’s Attacks on the Fed, 8 September 2025. NY Times
• Trump’s Risky Game With the Fed, 7 September 2025. WSJ. 

And evidence that the Trump Recession is going to be a Depression. This is new. Now I'm worried:

• Lumber price slump signals broader slowdown in U.S. housing and wood demand, 8 September 2025. Lesprom. 
• Plunging lumber prices pose warning sign for U.S. economy - WSJ, 8 September 2025. Seeking Alpha. 

 

Remember, inflation had not settled down to the 2 percent target as of Trump's second inauguration in January of this year. Inflation was still a problem, then. On top of that inflation, Trump has added the tariffs -- tariffs which  increase prices more, and slow the economy besides. And now, despite the inflation, despite the tariffs, despite all the rising prices, lumber prices are "plunging". It is a "warning sign" indeed. It warns of a most severe slowing of the economy.

Economic stability is a good thing. Prices rising a little is a little troubling. Prices rising more because someone decided to put tariffs on everything is more troubling -- and worrisome, because the tariff is not normal policy. Many of Trump's policies and decisions are unusual and worrisome. The economy does not respond well to abnormal and worrisome behavior.

The most important point I want to make is that optimists may think Musk was right when he said his work at DOGE would "necessarily involve some temporary hardship."

Optimists may agree with the anonymous Twitter user who said

“If Trump succeeds in forcing through mass deportations, combined with Elon hacking away at the government, firing people and reducing the deficit - there will be an initial severe overreaction in the economy…Market will tumble. But when the storm passes and everyone realizes we are on sounder footing, there will be a rapid recovery to a healthier, sustainable economy.”

Severe overreaction, the anonymous user says. But severe is an understatement. And overreaction is an incorrect assessment; it will not be an over-reaction. Finally, the anonymous user's references to sounder footing, rapid recovery, and a healthier, sustainable economy are baseless, overly optimistic assessments.

Such optimism about the economy, these days, is a dangerous thing. If there are signs that our economy is moving into recession -- or worse, into depression -- our only sane move is to reverse course immediately and rescue ourselves from the slump before it is too late. The Trump administration will say they warned us about "temporary hardship". They will expect us to give their policy time to work. But we are doing that now. 

We  must not give the economy time to get worse and worse again.

The problem that must be resolved is the growth of finance. The solution is to recognize that the growth of finance increases financial cost, that debt is a mechanism which moves income from borrowers to lenders, and that financial cost pressure drives the long-term decline of our economy. Once these principles are well understood, economic policy must be changed to help people get out of debt -- not to encourage people to go into debt and remain in debt, as existing policy has done for the past 75 years.

Hemingway

"The first panacea for a mismanaged nation is inflation of the currency; the second is war. Both bring a temporary prosperity; both bring a permanent ruin. But both are the refuge of political and economic opportunists."

 - Ernest Hemingway, "Notes on the Next War", Esquire, Sept. 1935. Quoted by Robert J. Gordon.

Friedman, Free to Choose, page 309

 

We have been forgetting the basic truth that the greatest
threat to human freedom is the concentration of power

Is this stuff still called "news"?

"A lot of people think that Covid is amazing," Trump said, referencing the vaccine, not the disease. - Politico

Comedy, maybe?

Unemployment as of August

I made the graph tall this time instead of wide:

Unemployment  2009 to 2025

I made the graph tall to make the vertical differences bigger in the red circle.

I made the graph narrow to make the data points close together so we can see a horizontal trend near the 3.5 percent level, an up-slope from the 3.5 level to the 4 percent level, and a horizontal near the 4 percent level. So I can summarize and say unemployment has increased, but I don't see any great crisis in the numbers -- not like there was in 2009, and not like there was in 2020. And not like what I see in the Google News. There is too much wishful thinking that passes for news these days.

I don't want to say I'm hoping Trump fails, because that would be bad for me and bad for us. But I do expect him to fail, because he is doing things that make no sense to me. 

The red circle highlights the recent years. In the red circle, unemployment comes down rapidly from the pandemic recession, then levels off and runs flat, in the neighborhood of 3.5 percent, from mid-2022 to mid-2023. Then it runs uphill for about a year, to the 4 percent level. Then it runs flat for a year, near the 4 percent level. And that brings us to where we are today.

I looked at it because the news is not good:

Yeah, 22,000 new jobs is a low number. But I don't see "dismal" in the red circle on my graph. Not yet, anyway.

////////////

UPDATE. --  7 Sept 2025  --  I'm finding plenty more bad-news-on-jobs. The news is certainly not good. 

From ABC News:

Job cuts soared in August, offering the latest evidence of a slowdown in the labor market as some economists warn of a possible recession, according to data released on Thursday by outplacement firm Challenger, Gray and Christmas (CGC).

U.S. companies announced nearly 86,000 jobs cuts in August, which amounted to a 39% increase from the previous month, CGC said. The figure indicated the largest number of job cuts in the month of August since 2020, which coincided with the onset of the COVID-19 pandemic.

Couple days, I will follow up with a follow-up post. 

Tight Money 2005-2008