On BlueSky, asked

"ok then if we have a vibrant and intelligent EconSky community riddle me this: what would the microfoundations be for 'voters dislike inflation much more than they dislike unemployment, even in a rising real wage environment with strong asset values'? what preferences would make that true?"

I posted the following thread in response. bsky.app/profile/dsquareddiges

great thread you’ve provoked! i think the obvious answer is still the best, inflation affects everyone, unemployment a relative few. the exit poll demographic counter is weak. the biggest electoral factor was low D turnout, rather than share within demographics. 1/

in reply to self

there are Simpson’s Paradox issues as well. some demographics may have high unemployment risk overall, but greater segmentation between the precariously and securely employed. if so, such a demographic would prefer on average increased unemployment. 2/

in reply to self

others have mentioned volatility. inflation brings several volatilities. 3/

in reply to self

for each worker, inflation occurs continuously, wage gains match discretely. so there are periods of real losses, matched by periods of anticipatory real gains. the two are symmetrical, but under diminishing utility of real wages the net is a loss. 4/

in reply to self

higher overall inflation corresponds to higher relative variability of individual prices. which requires agile substitution of shifting consumption bundles. in simple consumer theory this is costless. in real life it’s obviously not. 5/

in reply to self

this is fun to think about, because it brings portfolio theory into consumer theory. say in Period 1 relative prices suggest it’s worth investing in an induction stove, but under Period 2 prices you just would have chosen to eat out. 6/

in reply to self

you may still eat in, given the forward looking costs, but you’ve suffered an investment loss in either case. this kind of cost grows with inflation even if real wages perfectly match. 7/

in reply to self

as @guan points out, it’s not mere money illusion, the “i earned my raises but then inflation snatched it” story. raises require enduring conflict costs. if we bring in common behavioral ideas, reference points, endowment effects, the snatches may hurt more than raises help. /fin

in reply to self

[tech notebook] Supporting single-item RSS tech.interfluidity.com/2024/11

omg it’s finally happening. i’m going fungal.

“Kamala Fell to the Same Cabal That Destroyed University Presidents” by prospect.org/power/2024-11-11- ht @ddayen

enter, withdraw. enter, withdraw.

Paris Agreement is for lovers.

a very possible future for US jews, i think.

rather than, or supplementing, rank old-school antisemitism…

“i think it may look more like, hey, of course we love you, but you were never more than visitors here. we just cleared out some nice beachfront real estate in your true homeland. don’t you think you wouldn’t be happier there? we’ll increasingly insist you would be happier there.”

( quoting myself, transplanted from a BlueSky conversation bsky.app/profile/interfluidity )

“The Party Should Throw Them a Party” by @resnikoff resnikoff.beehiiv.com/p/the-pa

// excellent on the need for thick ties between real-life humans to build coalitions and realities resilient to a captured, fickle parasocial online

@ItsThatDeafGuy the advice stands.

when history is on the march, run.

This post is all I’ve done with my life.

way, way ahead of me is @ouguoc! mastodon.online/@ouguoc/109520

his growing scandal will become known as elongate.

@Canevecchio until around Y2K, i don’t think it was obvious that China was the essential rival or partner. but around Y2K, yeah. that’s when the US ought to have been doing some hard thinking about what kind of relationship it wanted to forge with an ascendant China. instead of hard thinking, we adopted a wooly market triumphalism that presumed commerce and development would automatically turn everybody into friends.

in reply to @Canevecchio

@ayo youtu.be/v0nmHymgM7Y

in reply to @ayo

one path by which this event may mark the end of the American century is that whatever vestiges of a soft power / aspirational advantage the United States still had over China are lost.

if the indispensable nation is going to be a venal autocracy anyway, China may seem a lot more attractive than the United States. alliances and inclinations of the US’ erstwhile foreign partners may quickly reconfigure themselves to that.

@dedicto @MamasPinkyToe immoral purposes are now obligatory here. you can transport yourself across a border if you intend moral purposes.

in reply to @dedicto

@BenRossTransit The thing is, I don’t think he really presents as a strong man on “intimate” social media. I think he presents as a nice, reasonable guy who says some crazy things people who like him are willing to look past. And even if you don’t fully buy “Trump will fix it”, if you think he’s a fundamentally decent who exaggerates, you think “well, he’s going to do his best, he’a going to try”. 1/

in reply to @BenRossTransit

@BenRossTransit it’s a bit like the “aim for the stars and you will never reach them, but you will go much higher than if you’d aimed for the tree” inspirationals. if what you see in Trump is a venal, self-interested con man, his grand claims just sound like deception. but if you think he’s a decent guy who overstates stuff but fundamentally means it, it signals ambition on your behalf. /fin

in reply to self

@BenRossTransit yeah. i think that’s right too. although i think by emphasizing “strong man” rather than “fix everything” we deny for ourselves an ethical path to compete. he said he would fix everything! he said things would be great, a new golden age. dems are too “reality based” to let themselves promise that anything will fundamentally change. it’s hard to get people excited over the slow boring of hard boards when the other guy is offering an amazing (if brave) new world.

in reply to @BenRossTransit

@BenRossTransit i mostly think the campaign was lost not because of bad targeting or particular issues, but because the Trump campaign used new media to create a kind of tribe, in which belonging and (mostly false) worldview reinforced one another, in which the tools of a confidence man did their core work, engendering trust. drafts.interfluidity.com/2024/

in reply to @BenRossTransit

“We're still the same country that we were on Monday. We just have changed our form of government.” youtu.be/D7cKOaBdFWo