Stay-At-Home Macro (SAHM)

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Gloves off. It's sickening. Fight for workers, fight against the Fed #TeamWorkers

stayathomemacro.substack.com

Gloves off. It's sickening. Fight for workers, fight against the Fed #TeamWorkers

We are living the first job-full recovery in twenty years. Consumers are buying more, even after adjusting for high inflation. Families who have never had money in the bank, have some. That's good!

Claudia Sahm
Jan 5
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Gloves off. It's sickening. Fight for workers, fight against the Fed #TeamWorkers

stayathomemacro.substack.com

Update: "Total nonfarm payroll employment increased by 223,000 in December, and the unemployment rate edged down to 3.5 percent." Inflation is cooling, and unemployment is staying low. GOOOOOOOOD! #TeamSoftLanding

Tomorrow is Jobs Day. Regardless of the print, it will seal the deal: The Person of the Year was the American workers. The Fed tried hard but is not winning its ‘War on Workers.’ With inflation coming down, wage growth solid, jobs coming back, and income up, THE FED WILL LOSE. So, do not tell me good news tomorrow is bad.

Source: Getty Images.

Also, please tell Gita and all the macroeconomists who will be gnashing teeth tomorrow that “resilience” in the labor market is a BLESSING. The United Kingdom, Europe, Asia, and the entire Global South would love to have this ‘concern.’

Twitter avatar for @elerianm
Mohamed A. El-Erian @elerianm
From the @FT interview with @GitaGopinath, the IMF's First Deputy Managing Director, in which she warns "US #inflation has not ‘turned the corner yet’" The next key data release pertaining to this debate and beyond: is tomorrow's monthly jobs report #economy #EconTwitter @IMFNews
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10:47 PM ∙ Jan 5, 2023
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I am done being nice. I tried. Read my Substack, and you will see it over and over again. American workers, not Wall Street, not price stability, not the Fed, are THE backbone of our country and our economy. Here are three of many posts:

The best way to solve a labor shortage is with labor.

The pandemic caused shortages of goods and workers, leading to inflation. More workers, not fewer customers, is best solution. Higher wages can get us more workers, and Fed interest rate hikes get us fewer customers.

Stay-At-Home Macro
The best way to solve a labor shortage is with labor
Source: Getty Images Jobs Day was a good day. Workers getting a new paycheck and many getting a bigger one are things to celebrate on a human level. On the economic level, they are, too. The sizable payroll gains as an encouraging sign that labor shortages are easing. During the recovery, ‘missing’ workers are right up there with broken …
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8 months ago · 25 likes · 8 comments · Claudia Sahm

Get the people to the table

The Fed must hire a real person. Here’s an idea: hire one of the contract workers in the cafeteria full-time to work with Jay. Rather than being hell-bent on smaller raises for workers and your credibility, listen to the people your policies affect. Ya ain’t losing your job. Your paychecks at the Board aren’t too shabby now. And I promise you will make a shit ton [technical macro term] of money after you finish with Wall Street jobs and in speaking fees.

Stay-At-Home Macro
We need to restore balance: a recession is not the path to balance
At the last press conference of 2022, Fed Chair Jay Powell said it again: Although job vacancies have moved below their highs and the pace of job gains has slowed from earlier in the year, the labor market continues to be out of balance, with demand substantially exceeding the supply of available workers…
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3 months ago · 25 likes · 14 comments · Claudia Sahm

Here’s some pushback I got on that argument from an economist:

I question whether she has ever talked to anyone who wasn’t a researcher or lawyer in government employ in DC. Some of the service and facilities workers, they can barely form sentences.

I grew up on a four-generation hog farm in Indiana, shoveling hog shit and holding pigs while my mom castrated them. Since the pandemic, I have talked with her every day. She is a Trump voter, a recently retired medical technician, and my hero.

My mom would be an excellent policymaker as would all my high school classmates, from the Amazon warehouse worker to the car mechanic to the junkyard owner, the lunch ladies and janitors at my junior high, and the men and women who worked on our farm, especially, the Mexican man who did not speak English.

I am not the one out of touch. Elite macroeconomics is.

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Trash the tools that don’t work in the real world.

Clinging to the Phillips Curve threatens the U.S. economy. We don’t need a recession; we don’t need sky-high interest rates. We need more workers and investment. This is not an academic debate; our future is on the line.

Stay-At-Home Macro
Ban the Phillips Curve
Yesterday we learned that U.S. inflation, albeit too high, stepped down again in November, even as unemployment remains low and consumer spending, adjusted for inflation, is rising solidly. The pandemic and war in Ukraine have been incredibly difficult for everyone and tragic for many. We are not at the finish line but on the right path. Keep going. We…
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4 months ago · 52 likes · 37 comments · Claudia Sahm

The NARIU [the sustainable level of unemployment] is a made up number.

Twitter avatar for @KRooneyVera
Kathryn Rooney Vera @KRooneyVera
Surveillance: Phillips Curve with Sahm: ⁦@KRooneyVera⁩ says remain defensive, Claudia Sahm, Former Fed Economist ban the Phillips curve, ⁦@KristinaHooper⁩ ⁦@InvescoUS⁩ Chief Strategist on ⁦⁦@BloombergTV⁩ ⁦@bsurveillance⁩
bloomberg.comBloomberg - Are you a robot?
2:51 AM ∙ Jan 5, 2023

In closing.

I am taking tomorrow off macro. I am pulling for American workers. I am cheering.

Instead, tomorrow morning, I am discussing a research paper on how families spent their Child Tax Credit in 2021. The Fed hiking rates are not the only war we are waging against people.

Poverty, as with jobless recoveries, is a policy choice. Choose better!


My approach to macroeconomics is data-driven, non-partisan, and distinctive. To live that principle, I am self-employed. Your support is greatly appreciated. Here I make the case:

Stay-At-Home Macro
Come walk with me ...
Long walks are a daily ritual for me. I walk through neighborhoods with million-dollar homes, high rises near the metro, and cheap apartments full of immigrants. You likely saw my reflections from those walks if you followed me on Twitter. I captured visually and in words the pandemic’s effect on our lives and livelihoods. I also write in my head. ‘Shoe…
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3 months ago · 25 likes · 13 comments · Claudia Sahm

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Gloves off. It's sickening. Fight for workers, fight against the Fed #TeamWorkers

stayathomemacro.substack.com
31 Comments
scott cunningham
Writes Scott's Substack
Jan 6Liked by Claudia Sahm

I am going to make a shirt and the only thing it’s going to say is

“I grew up on a four-generation hog farm in Indiana, shoveling hog shit and holding pigs while my mom castrated them.”

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1 reply by Claudia Sahm
Douglas Tengdin
Jan 5Liked by Claudia Sahm

Dr. Sahm: I may be biased from my work on Jay Forrester’s National Economic model (in the late ‘70s), but it seems to me that the culprit here is the assumption of cost-push efficacy in creating inflation. Try as we might, we could not create inflation via a wage-price spiral. Demand *always* slackened, hitting profits and subsequent wages.

The wage-price spiral is a just-so story, like so many macro models that have mathematical elegance but lack empirical support.

It’s just as likely that sticky services inflation will lead to goods disinflation. Thank you for fighting the fight. We need to get the FOMC back into the real world.

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