Volume 2 Issue 14

February 20, 2003

Stagnant

Is stagflation returning, encouraging panic, and Demzilla rears its head

Well, looks like things in DC are returning to normal finally, even though many streets still aren't plowed, and the Metro still isn't running right. To those in charge of preparations for snow: It snows every winter. Prepare for it. To those in charge of mass transit: You are supposed to be there when other forms of transport are not. Do what you have to do. But then again, Metro is perhaps the most poorly managed public transit agency in the nation, though part of that is due to budget constraints.

Anyway, I will turn from the snow and weather (I'll do SUV's tomorrow or Monday) to an interesting issue that may develop over the next few months: is stagflation back? First, let me tell you how this thought came to mind. Yesterday, I needed gas. So, after picking up a friend who had gotten stranded by Metro, I went to a nearby Exxon station. Except they had no gas. Now, this was probably because of the storm disrupting the supply truck, but I thought of the huge gas prices I had seen in California over the weekend. Then, this morning, there was a report (there's an article below) that the Producer Price Index had risen due to energy costs, which was unusual, and spooked out the market a bit today.

For those of you that are not economists and can't remember the 1970's, stagflation is a situation when there is rampant inflation, along with poor economic growth and high unemployment. Basically, there are two ends to the business "cycle" which is more of a spectrum. On one end is recession, with low growth and high unemployment. On the other end is inflation, with fast growth and low-unemployment. The problem is that low unemployment can lead to workers demanding higher wages, which ripples through the system and causes prices to rise. Our ideal of course, is to get as much growth as possible without inflation. The stagflation of the 1970's was likely caused (or at least aggravated) by the high energy prices due to the oil embargo.

So that brings me to today...economic growth has been slow, but as oil and energy prices rise, could that result in stagflation today? We've already seen the economy buck any stimulus attempts, and it probably won't move until after the war threat with Iraq is passed. Except that a war in Iraq will cause the oil prices to increase, and scare the bejesus out of the rest of the economy. Further, as I understand it, no one was ever really able to figure a way out of stagflation through monetary policy, which means the Fed could be powerless. Just something else to look forward to, unless Maestro Greenspan has another rabbit he can pull out of his hat. Onto the insanity...

OK, I'll start out with some fun. Check this out -
http://www.sfgate.com/cgi-bin/article.cgi?file=/gate/archive/2003/02/12/fiorealerts.DTL

Iraq items of the day: One thing the US is trying to keep on the down-low is that this war will cost a bundle, not just to fight, but to pay off our allies. What, you thought they joined us because they liked us?
http://www.philly.com/mld/inquirer/5218800.htm
Turkey is a case in point. They are holding out on allowing US troops until they see how much money we will give them. -
http://news.bbc.co.uk/2/hi/middle_east/2784047.stm
Everyone knows that "old Europe" is against the war in Iraq, but another secret is that most folks in Eastern Europe oppose the war too, but I guess those nations need our aid money -
http://slate.msn.com/id/2078876/
Saudi Arabia is rumored to have floated a plan that would have them occupy Iraq after a war -
http://members.abcnews.go.com/sections/us/DailyNews/Insider_ 030220.htmlRegistration Required
Thomas Freidman says Bush should tell the truth about Iraq -
http://www.nytimes.com/2003/02/19/opinion/19FRIE.html

A Novel Approach: The anti-war movement is getting better, pushing aside the extreme elements, and doing what really gets politico's attention - occupy their staffs, by overwhelming them with phone calls and faxes. Looks like some interns are going to be pulling overtime -
http://www.philly.com/mld/inquirer/5218822.htm
Here's the site of the group doing the call-a-thon, which also features Martin Sheen in a new commercial -
http://www.winwithoutwarus.org/
Anti-war efforts have even crossed cultural and generational gaps -
http://abcnews.go.com/sections/world/2020/antiwar030220.html

Be Prepared...to panic: Tom Ridge issued another warning to be prepared but not to panic yesterday -
http://www.washingtonpost.com/wp-dyn/articles/A30113-2003Feb19.html
In fact, there's now a whole new "panic central" website. There will even be a TV campaign! Wow...bring panic to the masses! -
http://www.ready.gov/
Duct tape is not enough -
http://www.washtimes.com/national/20030220-311538.htm
New Jersey Governor Jim McGreevy said that he will not retreat to a bunker if the state is attacked. Um...then what are they for? I guess to keep the dozen people that would become governor when he gets himself killed. Bravado among people in charge of emergencies is not necessarily a good thing -
http://www.courierpostonline.com/news/southjersey/m022003p.h tm
A look back at the "duck and cover" drills of the 1950's, which have a lot of similarities to today's panic -
http://slate.msn.com/id/2078892/
Oh yeah, and there's still an Ebola outbreak in Congo. Just in case you were passing through there. -
http://www.washingtonpost.com/wp-dyn/articles/A32866-2003Feb19.html

Let's get rid of free speech here too: The erosion of rights continues. This time, a kid wearing an anti-Bush shirt was sent home from his high school. Now, I agree that perhaps the school wants to ban political messages or something like that, but you have to wonder, what if it was a pro-war shirt?
http://www.cnn.com/2003/US/Midwest/02/19/antibush.tshirt.ap/ index.html

Oil Shocks: The leader of the Venezuelan general strike has been arrested, meaning that the movement against President Hugo Chavez is coming to an end. Good thing too, because we need their oil -
http://www.msnbc.com/news/875037.asp?0cv=CB10
In fact gas prices in the US have surged recently
http://www.washingtonpost.com/wp-dyn/articles/A31006-2003Feb19.html
And oil prices have pushed the producer price index higher -
http://www.msnbc.com/news/875070.asp?0cv=CB10
And speaking of bad economics, the US is about to hit it's debt ceiling. Again. - http://www.cnn.com/2003/ALLPOLITICS/02/20/debt.limit.ap/inde x.html

That Other Country: North Korean fighters invaded South Korean airspace yesterday -
http://www.nytimes.com/aponline/international/AP-Koreas-Fighter-Jet.html

The Blizzard Thing: So now the attention is moving to Saturday's rain and resulting flooding (potentially). Here's how to protect your house -
http://www.philly.com/mld/philly/living/home/5218885.htm
In Philadelphia, a woman in need of a kidney transplant got the call at the height of the snowstorm that they had a donor. All she had to do was get to the hospital downtown. Taxi's couldn't get to her street...so she took the trolley and the subway. Which ran on time. Good thing she didn't live in DC -
http://www.washingtonpost.com/wp-dyn/articles/A32791-2003Feb19.html
Also in Philadelphia, a film crew had to hustle to move the snow in time for a shoot, including getting residents to move their cars. But, if someone offered to dig my car out for me, I'd be happy to move it -
http://www.philly.com/mld/philly/entertainment/columnists/ga il_shister/5218895.htm

Greg's Pick of the Day - Look Who's Running for President: Howard Dean is wowing them in New York. A good profile, that brings up a good point...for all his populism, Dean was born with a silver spoon, the son of New York socialites, yet he lives in a tiny house in Vermont, and even allowed a reporter to roam it while Dean shoveled snow outside. The article also discusses Dean and the Vermont civil-unions legislation, which would probably be a big issue on his campaign. If you need a reader on Dean, this is your article. -
http://www.newyorkmetro.com/nymetro/news/politics/national/n _8376/index.html
Rob Reiner, the actor and potential candidate for governor of California has endorsed him -
http://www.latimes.com/news/printedition/asection/la-me-dean20feb20,1,7720821.story?coll=la%2Dnews%2Da%5Fsection

Look Who's Running for President 2: Carol Moseley-Braun brings some issues to the campaign as well, as some old financial "transactions" may come up. Then again, she's from Illinois, where political corruption is almost a requirement it seems -
http://slate.msn.com/id/2078924/

Look Who's Running for President 3: Dick Gephardt made it official yesterday. He's got a lot of ground to make up -
http://www.washingtonpost.com/wp-dyn/articles/A32388-2003Feb19.html

Look Who's Running for President 4: Wesley Clark has told the chair of the Arkansas Democratic Party to hold off on endorsing a candidate, in case he decides to run -
http://www.usnews.com/usnews/issue/030224/whispers/24whisple ad.htm

Look Who's Running for President 5: John Edwards made some good impressions on a trip to New Hampshire over the weekend. Now if they could just remember who he is... -
http://www.charlotte.com/mld/charlotte/news/politics/5220223 .htm
Here's your Bad John Edward's Photo of the Day: http://story.news.yahoo.com/news?tmpl=story&u=/030217/16 8/3an2z.html

Look, I know it's an ugly tie, alright? My plane was late, and I had to buy whatever they had at the airport. Let's just move on. Thanks.

Look Who's Voting for President: The DC first-in-the-nation primary bill had a hearing yesterday -
http://www.washtimes.com/metro/20030220-85213280.htm
Marc Fisher, perhaps the best columnist in DC, urges an early primary -
http://www.washingtonpost.com/wp-dyn/articles/A32824-2003Feb19.html

Here comes Demzilla: The DNC has unveiled a huge voter database they are developing to raise money and increase turn out in 2004. Officially titled Project 5104, it is apparently known as "DemZilla" -
http://www.washingtonpost.com/wp-dyn/articles/A32283-2003Feb19.html

The issue that never goes away: In New Jersey, my home state, the issue that never goes away is car insurance. The prices are too high, most insurers won't work in the state, and it's hard to get. Yet, despite all the talk, no one ever does anything about it. What are some other issues that you have noticed never get moving? Perhaps we'll start a new feature. Anyway, the latest twist in NJ is that the one of the only insurers left in the state has been so inundated with calls they can barely keep up, and the whole state structure may come tumbling down...again. Wonder if anyone will do anything -
http://www.nj.com/news/ledger/index.ssf?/base/news-6/1045725289116600.xml

Some Good News: The teenager who received the wrong organs in a transplant has received another transplant -
http://abcnews.go.com/sections/us/GoodMorningAmerica/donor_f ound030220.html

Some (more) Bad News: Turns out that we could massively decrease greenhouse emissions, and probably slow global warming (which, to those not versed in it, actually means stormier winters as well) if we could only put out thousands of coal fires burning underneath our planet - http://news.bbc.co.uk/2/hi/in_depth/sci_tech/2003/denver_200 3/2759983.stm

Bad Sports Names: Anyone else notice the bad names of sports teams lately? Charlotte is dealing with this issue, as it decides on a name for it's new NBA team. The NBA is particularly bad with this. I mean, the Jazz (formerly New Orleans) play in Utah, which probably bans jazz, while the Hornets (formerly Charlotte) play in New Orleans, where I don't think there are any hornets. I mean, how about just a big name trade?
http://slate.msn.com/id/2078825/

But what if he gets his ass kicked? With all the hubbub over women and golf, a male golfer has announced his intention to try and qualify for the WPGA tour. - http://sports.espn.go.com/golf/story?id=1511394

Anti-Valentine Follow up: The Christian Science Monitor should not be doing stories about romance -
http://abcnews.go.com/sections/relationships/Living/findlove 030220.html

Another 70's rock group gets back together to make money: Simon and Garfunkel may reunite for a tour. Or at least part of a tour, until they duke it out on stage one night. -
http://www.thisislondon.com/news/showbiz/articles/3492775?so urce=Evening%20Standard