59 thoughts on “Carl Walsh Blogging “Thoughts on Fed Policy”

  1. pgl

    “The mid-1970s and late 1970s cases (in the upper right and low left panels) are the most interesting from today’s perspective. Both were associate with oil shocks. In both cases, CPI inflation, which includes food and energy prices, dropped relatively quickly. In the case shown in the upper right panel, inflation fell, but not back to its starting level, before rising again, leading into the inflation surge seen in the lower left panel.”

    Back to when some of us were in graduate school debating whether the rise in inflation was demand pull or cost plus. Gee – we are having that debate again.

      1. pgl

        You are a pathetic troll. Most of us would prefer you to just disappear. Now if you insist on stalking me – please send me your address so I can the authorities come and arrest you.

        1. Moses Herzog

          I’m trying to get the “Mr Tibbs” reference, Can someone clue me in?? I know about the Sidney Portier and Spencer Tracy film (my Dad was a fan of both men’s acting), which was way ahead of its time (and “woke” idiots now think was behind the time, because 98% of “woke” morons have ZERO sense of history or generational contexts) but I’m trying to think on what the hell it has to do with pgl.

          1. pgl

            I baited this pathetic troll when he kept wanting to call my Shirley or whatever. Of course it is generally a mistake to ever engage with such trolls. My bad.

            But didn’t our host banned this troll? Good if he did.

          2. Moses Herzog

            Ohp, I think I have embarrassed myself, the line was from “In The Heat of The Night”. Well, at least I got the actor right. Both were good films. Rod Steiger was his co-star in that one. So, I type VERY red-faced~~~my apologies.

          3. Moses Herzog

            It makes me think of Sammy Davis and Reggie Jackson on “All in the Family”. Or the (way ahead of its time) 1980s show “Benson”. Virgil Tibbs is always the smartest guy in the room, but keeps the justified seething inside, and lets people believe as they like as in some ways it’s to his advantage they underestimate him.

  2. Ivan

    There is room for improvement. To me he is just going; “look at this curve and that curve and maybe we will be like this or maybe like that”. I know scientists don’t like to go out on a limb and take a firm position, but at least give us a deeper analysis of what was driving inflation then and how that looks similar and different from today.

    I will dare to suggest that the oil price increases back then were much stronger and more embedded that todays temporary supply restricted oil and food supply problems and price increases. Today we have a number of realistic substitutions for hydrocarbon energy that are making any oil driven price increases less severe and less sticky. We are also much better prepared for energy conservation to curtain the actual use in response to price increases.

    1. Moses Herzog

      I don’t know Mr. Carl Walsh. But a suspect he is a very hard-working, way above average intelligence, kind, well-meaning individual~~~who BTW, has biases the same as every human being on the planet. And his very cerebral but somewhat milquetoast defense of JD Jerome Powell comes not from ANY deep fear of out of control inflation, but from 80% feelings of collegiality. You know, those things professors pretend they don’t have~~emotions, kinships, and stuff. Kind of like the medical doctor who gives you “a referral” to the crappy MD that he loves golfing together with.

      1. Menzie Chinn Post author

        Anonymous: I have determined you have violated the terms of use for posting comments on Econbrowser. Your use of homophobic/misogynistic/racist [I won’t specify which category] has warranted immediate and permanent banning.

    1. pgl

      “Several Republican governors – many with presidential ambitions – responded to Youngkin’s success by championing parental rights in their states, enacting bills that give parents and guardians unfettered access to school curricula, books and learning materials, and, in some instances, requiring school principals to review parental complaints about textbooks and lesson plans before they can proceed with using the material in classrooms.”

      Just imagine if Princeton Steve had kids who attended Dr. Chinn’s class. Would Stevie demand that Dr. Chinn abandon any macroeconomic texts and class notes that dared to teach Keynesian models. No – Stevie’s children must be taught the velocity theory of money and “suppression” theory. Or imagine Bruce Hall got to dictate what kids in Michigan learned about American history. After all, slavery allowed the South to keep food prices low. MAGA!

      1. Ivan

        The result of all this “morons-tell-professionals-what-to-do” panic is that professionals get tired of trying to help communities that are controlled by morons. In Florida (a prime example) they have then decided that any military veteran is just as good at teaching as a person who spend 4 years in college being trained to teach. Problem solved right? Even worse the morons actually believe that their children will get just as good a preparation for living in modern society if “one of us” is doing the teaching rather than “one of them smarty pants people”. It will take them about 20-30 years to find out that it probably wasn’t a great idea. By then we will have a lower class who never learned anything but to be angry and bitter at “others” and an upper class who’s children went to private schools and learned something. We also will no longer have a democracy because the upper class will have lost the ability to control the lower classes within a pretend democracy. The upper class is already working on pumping up the “danger must be suppressed” narrative so they can supplant democracy – they just have to turn it against their minions who constructed it for them.

        1. Moses Herzog

          @ Ivan
          There is also something referred to in slang terms known as “expert-itis”. That can spring out of real experts (say a John B. Taylor, just grabbing one in the front of my forehead), and those posing as experts (Arthur Laffer). That is “because I say it, it must be true” methodology. Without naming names, we have seen that here in the comments portion of this blog. And that is also damaging to the discourse, and society’s future—and what often times makes people (you called them “lower classes”) cynical towards experts. It’s like “good” cops defending “bad” cops. What “good” cops (or real experts) don’t realize is when “good” cops defend “bad” cops (those with “expert-itis”), it spews mud up on the good cops (real experts). And it is amazing how very few “good” cops (real experts) are cognizant of this phenomenon.

  3. pgl

    An interesting update on that China “weather” balloon:


    I found this telling:

    Craig Singleton, a senior fellow at the Foundation for the Defense of Democracies, said Chinese surveillance balloons have been sighted on numerous occasions over the past five years in different parts of the Pacific, including near sensitive U.S. military installations in Hawaii.

    So this happened when Trump was President and he never ordered the balloons to be shot down. Odd as MAGA Republicans attacked Biden for not doing so earlier. Guess what dudes? We did just take this balloon down. Which is to say Trump is the wimp not Biden.

    1. Ivan

      Furthermore, GOP is throwing fits that Biden let the Military decide when the downing would be of the greatest benefit to US. So he made the sacrifice to allowed a political BS feast for the clowns at Fox and GOP headquarters, so the Military had the opportunity to learn more about these balloons. Trump instead didn’t want to let the information out for fear of political damage to himself and his tough guy image. Trumps lack of action was what got the Chinese to try sending one over US mainland, but now there’s an actual leader in the white house.

      Our military knew how to prevent this thing from collect anything important that wasn’t already out via satellite imaging. But by allowing it to fly across the US they could gather intel on its operation and communication – then shoot it down at the exact latest moment so they can get and study the hardware. This is what competence in the white house looks like – but the GOP is blinded by the political hay in their eyes.

      1. pgl

        That the Republicans have turned this into BalloonGate is going to blow in their pathetically little faces. Pass the popcorn.

  4. pgl

    Kevin Drum has more on that China balloon story. Best comment?

    Didn’t they mean to say “The Trump administration quietly allowed at least two Chinese spy balloons to traverse the country amid a controversy about the Chinese government acting to help Ivanka Trump’s sales of clothing and jewelry in China”?

  5. pgl

    Marjorie Taylor Greene on that Chinese balloon:


    Several conservatives took to social media over the weekend to mockingly deride Representative Marjorie Taylor Greene, a Georgia Republican, over her idea for civilians to take down the suspected Chinese spy balloon themselves….In response, some Republicans have openly supported the notion of civilians using their personal firearms to try and shoot down the balloon, despite police urging against it. This included Greene, who said that “regular Americans can do everything better than the government.” “Literally every regular person I know is talking about how to shoot down the Chinese Spy Balloon,” the GOP lawmaker wrote on Twitter on Friday. “It would be great if an average Joe shot it down because China Joe won’t. Regular Americans can do everything better than the government and actually care about our country.”

    YEA – she is one nutty woman. BTW – the balloon was taken down by our government.

  6. Macroduck

    Jamie Galbraith’s writing has the twin virtues of clarity and precision. He sums up better than just about anybody. Here is a concise grand tour of inflation, monetary thinking and the current policy situation:


    The peril, for me, in Galbraith’s essay is that I agree with nearly all of it, so am tempted to grin and stop thinking. Your mileage may differ.

    Here’s a little taste, demonstrating the clarity withwhich ue addresses one of the topics recently worn thin in comments here:

    “For the overall price level, there was a further, fateful, illusion of persistence. The Bureau of Labor Statistics reports the change in the CPI on a 12-month basis, evidently to avoid the flux endemic to a monthly survey. This practice has the consequence of generating eleven additional headlines after any one-month shock to the price level, each of which may contain no new information whatever.”

    1. pgl

      “For the overall price level, there was a further, fateful, illusion of persistence. The Bureau of Labor Statistics reports the change in the CPI on a 12-month basis, evidently to avoid the flux endemic to a monthly survey. This practice has the consequence of generating eleven additional headlines after any one-month shock to the price level, each of which may contain no new information whatever.”

      Similar to what Alan Blinder recently wrote but even better put. Thanks for the excellent essay.

      1. Moses Herzog

        I would have very happily put this comment up on Carl Walsh’s blog (in a courteous non-snarky way believe it or not), but he doesn’t allow comments unless you use your Google ID. And I would have included and adjoining comment complementing him on the first edition of his textbook, which I learned alot from (and have probably forgot 75% already some 20 years later). Something tells me Professor Walsh will “get over” missing my comment. But basically my comment is mild plagiarism, because I stole it from this lady who used to be the Chief economist at the U.S. Dept of Labor. Take it away Chief:

        This also relates to labor’s negotiating power on wages, not that Larry Summers and “orthodox” economists like Carl Walsh would give a damn about such a thing, since mainstream economists know who butters their bread.

    2. JohnH

      “ First, there is a problem of gross markups. In normal times, with general price stability, these are stabilized by convention and habit, by the economic equivalent of good manners. Businesses are cautious about antagonizing their customers; they do not like to acquire the reputation of a price gouger. (This is why, for instance, hardware stores do not generally jack up the price of plywood when a hurricane is on the way). But in a general melee, with prices going up all around, a different mentality sets in, an impulse to grab what one can, and not be the sucker left behind. An inflation driven by profits (Bivens 2022), not wages, can therefore reverberate for some time. Unlike a wage spiral, a profit spiral gets little media attention and policy response – for obvious reasons.” Touché.

      And the notion of a profit spiral even gets rejected by the vast majority of economists…for the same obvious reasons.

      1. pgl

        Touché? Some random quote unsourced that still wants us to believe lumber prices were high because of retail stores? Ah Jonny boy – this has been thoroughly covered by the grown ups who have noted that the sawmills who convert timber to lumber are the ones raising the wholesale price?

        Now I guess you have been hired by this sawmill cartel to be their expert witness to defend them against that lawsuit. Which is to say the plaintiff attorneys are now high fiving themselves that the defendants have hired the dumbest witness in the history of litigation.

        Be careful Jonny boy – you may be violating your little NDA here. And whatever you write for the sawmill cartel is going to be tossed by the court under a Daubert motion.

        1. JohnH

          pgl goes off on a stupid rant that has absolutely nothing to with Galbraith’s observations about a profit spiral. (He probably didn’t even bother to read what Galbraith wrote. And he certainly isn’t about to acknowledge economists’ denial of profit driven inflation…for obvious reasons.)

          Instead of addressing Galbraith’s spot-on comments, he tries to impugn the messenger with a bunch of hooey and nonsense!

          1. pgl

            Hey lying troll. I commented on his long discussion well before you did. You plunk out one paragraph towards the end and then tries to high jack for your stupidity? Yea – par for the course for Jonny boy.

      2. pgl

        I had to dig until the near the end of Jamie’s long winded and multi-faceted discussion to find that paragraph which never mentioned John’s bogus Home Depot lumber fairy tale. But I did read what Josh Bivens had to say about this:

        Do fatter profit margins imply more corporate power—or just power channeled differently?
        The rise in profit margins that account for a disproportionate share of price growth in the current recovery have led to speculation that increased corporate power has been a key driver of recent inflation. Corporate power is clearly playing a role, but an increase in corporate power likely has not happened recently enough to make it a root cause of the inflation of 2021–2022. In fact, the rapid rise in profit margins and the decline in labor shares of income during the first six quarters of the current recovery is not that different from the rise in the first few years following the Great Recession and financial crisis of 2008.

        Gee Jonny boy – you forgot to mention what Bivens wrote. How come? Oh yea Bivens is certainly not supporting your intellectual dishonesty.

        No wonder you did not let us know where in Jamie’s very long discussion this paragraph appeared. I guess you were hoping no one wold follow up to see what Bivens had to say.

        1. JohnH

          Galbraith’s observations have to do with corporate profiteering in general, not just the lumber industry.

          Did the esteemed economists in the IGM survey and here at this blog ever stop to consider that concentrated corporate power (either established or recent) was a driving force behind the inflation of 2021? Of course not (for obvious reasons!) Economists in the IGM survey basically denied the role of corporate power with the ridiculous assertion that corporations hadn’t done price gouging before, so “logically” (LOL) they couldn’t possibly have been doing it then!!! It appears that economists’ need to provide cover for corporations muddles their vaunted grey matter!

          As for lumber prices, last time I checked, the esteemed commenters here had taken to blaming Putin for high lumber prices, even thoughindustry insiders never mentioned that as a factor until just before the war, when prices had already risen significantly! The same is true for many other commodities whose prices started rising long before traders started factoring in the likelihood of a war in Ukraine. Wheat started rising in 2019 and WTI in 2020.

          It seems that the hunt is on to find scapegoats for Team Transitory’s huge misread of inflation back in 2021! These folks wouldn’t countenance a student saying that the dog ate their homework, but if the student said that it was Putin who ate their homework, they would believe it!!!

          1. pgl

            “Galbraith’s observations have to do with corporate profiteering in general, not just the lumber industry.”

            Well duh. That was my point troll. Neither he nor Bivens was focused on your stupid and discredited Home Depot alleged scandal. That was my point dumb a$$.

        2. JohnH

          Awwwww….did poor pal have to read the whole article !?! How sad! Cruel and inhumane.

          But even pgl would have to admit that it was an important part of the article. It beagan with “ There are three reasons to fear additional problems on the cost front in the period ahead.”

          Or maybe pgl doesn’t really care to know underlying reasons for could easily happen!

          1. pgl

            And you were asking what’s my point? You notice a single observation in an entire quarter of a century and you think you have a trend? Yea – you are the moron we thought you were. Awwwww! ,

        3. JohnH

          pgl never ceases to amaze on how low he will stoop to fabricate a lie. Galbraith made a reference to Bivens. I paste in the paragraph containing that reference, and then pgl accuses me of being the one who is lying about what Bivens said!!!

          Apparently pgl doesn’t have the courage to accuse Galbraith of lying, so he just attacks the messenger. pgl is a real POS.

          1. pgl

            Galbraith made a reference to Bivens.

            Yea but his spin on the Bivens evidence was very very different from what Bivens said. I guess you never read Bivens. Or maybe you are too stupid to understand what he said.

            OR – you are just too dishonest to note how Bivens interpreted his own research. No Galbraith was not lying but you do. ALL THE TIME.

          2. JohnH

            So pgl actually that he thinks that Galbraith was lying…but then accused me of being the one who lied. What a POS!

          3. JohnH

            Funny! I didn’t reference Bivens at all. But I did quote Galbraith, who did.

            Yet pgl accuses me of being the one who misrepresented Bivens!!!

            Pgl’s lies have an air of desperation and panic…and so we can look forward to Mt. Trashmore gushing yet more BS!

          4. pgl

            February 6, 2023 at 6:07 pm
            Funny! I didn’t reference Bivens at all. But I did quote Galbraith, who did.

            Yet pgl accuses me of being the one who misrepresented Bivens!!!”

            So Jonny boy did not read what Bivens said. Good to know he admits to be the most clueless troll ever! Hey Jonny boy – wer have been over this before. Learn to READ.

          5. JohnH

            My. Trashmore erupts again! I said I didn’t reference Bivens, so pgl claims that I didn’t read him!!! In what world outside of pgl’s addled brain does that any sense?

            Actually, I linked to Bivens’ article and quoted from it months ago, since it had been overlooked here by economists who apparently think that Corporate America’s role in driving inflation is outside their Overton Window. However, Galbraith spoke of Corporate America’s role quite forcefully, so I saw no reason to quote Bivens too.

      3. pgl

        Bivens also wrote:

        Since the trough of the COVID-19 recession in the second quarter of 2020, overall prices in the NFC sector have risen at an annualized rate of 6.1%—a pronounced acceleration over the 1.8% price growth that characterized the pre-pandemic business cycle of 2007–2019. Strikingly, over half of this increase (53.9%) can be attributed to fatter profit margins, with labor costs contributing less than 8% of this increase. This is not normal. From 1979 to 2019, profits only contributed about 11% to price growth and labor costs over 60%, as shown in Figure A below. Nonlabor inputs—a decent indicator for supply-chain snarls—are also driving up prices more than usual in the current economic recovery.

        His charts confirm that the recent events are very different from the events from 1979 to 2019. Yea – events of late have shown a lot of noise. Of course within that noise Jonny boy loves to cherry pick isolated temporary effects as if they are the norm. Yea – Jonny boy have never been exactly an honest little boy.

        1. JohnH

          So what’s pgl’s point? Has he suddenly had an epiphany and realises that he was wrong in denying Corporate America’s role in driving inflation and the price spiral?

          Hint: if pgl keeps yammering long enough, he may yet be able to convince himself that there really was a corporate driven price spiral. And then he’ll start bragging that he was the first to notice it!!!

          In fact, it was Robert Reich, who is not an economist, who was among the first to publicise Corporate America’s role in inflation!

          1. JohnH

            Where’s the beef, pgl? Give me the exact quote where I cited Bivens and then misrepresented what he said, put up or shut up!

            Now I will quote Bivens for the first time on this thread. “ Corporate profits have contributed disproportionately to inflation. ”

            Bivens is a definite outlier among economists. Per the IGM survey the vast majority of economists thought, apparently without having done much if any homework, that corporations were not an important factor in driving inflation. Bivens disproved that nonsense.

      4. pgl

        ” (This is why, for instance, hardware stores do not generally jack up the price of plywood when a hurricane is on the way).”

        That Jamie used lumber as an example is really funny because Jonny boy is using what Jamie wrote to support his little thesis that lumber prices rose because retail margins rose. But no – neither Jamie nor Josh said it was retail margins that were the sole source of high prices. In fact in the lumber market there is lots of evidence that the wholesale price rose as sawmills gained market power. An issue that Jonny boy never bothered to acknowledge.

        Now one might be SHOCKED, SHOCKED I tell you – that jonny boy misrepresents what economists have said. But rest assured – there is nothing shocking here. Jonny boy has been doing this for literally a decade. Get used to it.

        1. JohnH

          If pgl ever bothered to read the IGM survey he would see that the vast majority of economists denied the role of Corporate America in inflation (for obvious reasons!)

          1. pgl

            Yea – economists are all stupid and Jonny boy is the only one who gets it. Seriously dude – take up basket weaving when you are not justifying Putin’s war crimes.

          2. pgl

            I read what David Autor said. You clearly never did:

            I don’t see the logic: U.S. markets have been concentrating for decades but high inflation is < one year old

            Exactly my point. Which of course a barking clown on a soap box would never bother to grasp. The obvious reason for Jonny boy's rant here. He flunked Econ 101 but he wants to pretend he is the smartest person in the room. Seriously?

          3. JohnH

            With pgl it’s always easy to tell when you’ve hit paydirt…like a volcano in the middle of Mt Trashmore, he just gushes insults, recriminations, misrepresentations, and endless BS…all in attempt to impugn the person who pointed out an important, inconvenient point Galbraith was making. Oh, dear, did Galbraith say unkind things about Corporate America?

            So, pgl, are you finally willing to admit that Corporate America, the folks you think to be choir boys, may have been a major factor in driving inflation? I mean, aren’t they the ones who set the prices we pay? I mean, Wouldn’t they be the first, most obvious suspects? Does Occam’s Razor not apply to economics? The vast majority of economists apparently don’t think so, as evidenced by their responses to the IGM survey!

            For such impertinent questions, I expect nothing less that another eruption of Mt. Trashmore!

          4. JohnH

            BTW—I graduated from an Ivy League school that had the Greek god of merchants and thievery as its symbol. They harboured no illusions.

          5. pgl

            Autor was also questioning your new pet hobby horse. Or do you not know how to read? For obvious reasons? Yea Autor is just another corporate lackey? Seriously dude?

          6. JohnH

            I never accused economists of being stupid…but many are cleverly duplicitous in who they select as being the drivers of inflation. Many like to blame workers for inflation as real wages are falling. Others choose to be willfully oblivious to the role of the folks who set prices (for obvious reasons.)

          7. pgl

            I graduated from an Ivy League school – SO sayeth Jonny boy. Really Jonny – did you major in basket weaving? I bet that school is reviewing its records to see how such a moron got past his freshman year.

          8. pgl

            February 6, 2023 at 9:01 am
            I never accused economists of being stupid…but many are cleverly duplicitous in who they select as being the drivers of inflation. Many like to blame workers for inflation as real wages are falling.”

            Jonny boy is basically calling David Autor and perhaps our hosts liars. Which is rich since Jonny boy has been lying about almost everything for over a decade.

  7. Moses Herzog

    I think Carl Walsh having his own blog is super super cool. Why?? Uhm, I think he was the author of one of my Money and Banking related textbooks I used when I was in college (said the self-absorbed dork). I’ll have to double check, but I am pretty sure he was. It was a course taught by one of my favorite college professors I ever had (and I had some good ones), who BTW, of no consequence to this conversation, I strongly suspected was gay. He once hinted he could maybe help me get a scholarship for a Master’s at a small University in Nebraska, and like an idiot I turned him down. But I had a lot of affection to him as a person and he was a super classy person. One of my better memories of college. I’m tempted to give his name but I don’t want to give a hint on my identity. I suspect he’s dead now anyway.

    1. Moses Herzog

      The 3rd edition of Walsh’s text looks VERY similar to one of the texts I used in college so I am 99.99% sure it was Walsh’s text. I may even have it out in the garage somewhere. I took the class before the 2010 edition came out, so I assume he just kept the cover the same for at least one of the following editions.

        1. Moses Herzog

          That sounds about right. Had the wintergreen (sorta dark green) cover with white and gray highlights ( ?? ). Pretty groovy cover. Had great lectures so made the course easier. Nearly has to be the edition time wise.

Comments are closed.