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Matt Stoller Profile picture
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9 Jan, 5 tweets, 2 min read
Economists hand wave away supply disruptions and market power because the keys aren't under the lamp post.
If oil went up to $400 a barrel and it often wasn't available, no one would wonder about the cause of inflation. But since the input at hand is semiconductors and there's not really much public pricing info, it's not in the inflation models.
Firm behavior and bottlenecks affect prices. The outsourcing of large amounts of production by auto firms impacted inflation. Auto availability was a big part of the initial inflationary spike. nytimes.com/2022/01/08/bus…
Here's a rough analysis of the semiconductor shortage and its impact on pricing in semiconductor dependent manufacturing, which is 40% of the manufacturing sector. deliverypdf.ssrn.com/delivery.php?I…
I believe this analysis understates the inflationary impact of semiconductors, because there are plenty of manufacturers who don't use chips directly but do indirectly rely on firms that use them. But it's still a useful chart.

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More from @matthewstoller

Matt Stoller Profile picture
10 Jan
The Ivy League is a cartel. Like an actual cartel. wsj.com/articles/yale-…
At my newsletter BIG @samhaselby went into the historical roots of the cartel behavior of the Ivy League network. But yeah they also engage in straight-up price-fixing, which we've known for decades. mattstoller.substack.com/p/break-up-the…
This is a fun complaint on the Ivy's. "In addition, such Defendants are committed to maintaining admissions as a zero- sum game, by limiting growth in the number of undergraduate seats to maximize perceptions of exclusivity and prestige." @profgalloway
Read 12 tweets
Matt Stoller Profile picture
9 Jan
I'm so old I remember when President Trump was an all powerful being.
No one will believe me when I say this but the Biden administration has almost no one in positions of power who know how to govern. We haven't governed in 30 years so there's just no knowledge. Example is Pete Buttigieg - he doesn't know anything.
Imagine if we hadn't made movies in 30 years. And then one day someone said 'ok we want to build a movie-making town called Hollywood go staff it up and made a slate of great films in a year.' That's our political order. No one knows how to pull the levers to do things.
Read 4 tweets
Matt Stoller Profile picture
5 Jan
Susan Rice knows very little about domestic policy and was put at the head of the White House Domestic Policy Council as a favor to Obama. It's classic incompetence.
While personally I think student debt cancellation is a good idea, it's ok if the Biden White House goes in a different direction. But they have to do something somewhere about some problem. There's no one doing anything about anything.
An irony here is that Susan Rice's mother was key to creating the Pell Grant program.
Read 4 tweets
Matt Stoller Profile picture
3 Jan
This is good. It shows the Biden administration has recognized that the forty year experiment of consolidation in every industry is a failure.
If concentration is systemic, then taking on monopolists is an inflation-fighting strategy. 60% of inflation increases are going to corporate profits. mattstoller.substack.com/p/corporate-pr…
Meat is an obvious case. Back in October I pointed out that the economists blocking action on meatpacking consolidation had manipulated data to protect monopolists. Higher beef prices are one result. mattstoller.substack.com/p/economists-t…
Read 24 tweets
Matt Stoller Profile picture
2 Jan
Here’s a useful @JosephPolitano piece attacking my argument on inflation and concentration. (Ht @GeorgeSelgin) apricitas.substack.com/p/are-rising-c…
I think my response to @JosephPolitano is that his analysis is divorced from the underlying reality of commerce. Like most macro-economists, he assumes that individual markets are generally competitive, and that concentration is not the norm.
Take this argument on how meatpacking monopolists don't really matter because meat is a small portion of the CPI. This only makes sense if you assume that meatpacking is an outlier. But is it? No.
Read 12 tweets
Matt Stoller Profile picture
2 Jan
Rather amusing to see a debate over price controls as if we have a functional government who could implement them in time to do anything about inflation. Adorable!
People who cite John Kenneth Galbraith as controlling inflation often neglect to point out that there was a large competent bureaucracy and public support to implement them. What are we gonna do today? Hire McKinsey?
The anti-monopoly movement spent years studying how to organize the bureaucracies and it’s still really hard to turn the ship around. The idea you can snap your fingers and return to a WWII model of economic organization should be embarrassing to its proponents.
Read 4 tweets

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