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Why is inflation rising while economic growth is slowing?
Howard Richman, 12/10/2021

Today the Bureau of Labor Statistics reported that U.S. inflation (as measured by the Consumer Price Index) was 6.8% from November 2020 to November 2021.  Meanwhile, economic growth has slowed to an annual rate of just 2.1% during the third quarter of 2021. Why has inflation been rising while economic growth has been slowing? From a macroeconomic standpoint, there are four things happening at the same time:

  1. Increased Aggregate Demand due to increased government spending.
  2. Reduced Aggregate Supply due to threatened tax increases, increased business regulation, increased business mandates, and other actions that raise business costs.
  3. Increased imports due to increased foreign mercantilism as foreign governments push up the dollar's exchange rate in hopes that we will buy their exports and pull them out of their economic slowdowns.
  4. Greatly increased money supply due to Fed Chairman Jerome Powell not raising interest rates for much too long so that he would get renominated to another 4-year term.

The Fed can't raise interest rates now without sending the economy into a recession, but it will try by raising the interest rates a bit whenever the stock market is high and lowering them back when the stock market is starting to crash. By doing this, the Fed will prevent the stock market from going higher than it is now, but will not reduce inflation. The Fed will eventually be forced by the momentum of the inflation to significantly raise interest rates, and, by doing so, it will cause a recession.

If you want to preserve your savings, put them into something whose value will rise with inflation but not crash when the worldwide recession happens. Meanwhile donate to campaigns to insure that a second term President Trump can solve America's economic problems by cutting taxes, cutting regulations and mandates, raising tariffs and cutting spending - in other words by doing exactly the opposite of what President Biden has been doing.


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Condorcet Jury Theorem and Voter Capacity
Jesse Richman, 12/7/2021

Review of “The People Cannot Choose a Constitution: Constituent Power’s Inability to Justify Ratification Referrendums” by Jeffrey A. Lenowitz.  Published in the Journal of Politics, Volume 83 Number 2.


In “The People Cannot Choose a Constitution: Constituent Power’s Inability to Justify Ratification Referrendums” Jeffrey A. Lenowitz argues that voter ignorance undermines the normative justification for including a ratification referendum at the conclusion of the process of drafting a new Constitution.  This argument, however, turns on a failure to distinguish between rampant ignorance on the part of individual voters, and the potential for highly accurate informed choices on the part of the voters collectively.  In brief, despite citing Condorcet, Lenowitz doesn’t fully consider the implications of the Condorcet Jury Theorem for the possibility of wise collective choice by voters in the context of the dichotomous choice to ratify or not ratify a Constitution.


Lenowitz is centrally concerned with the constituent power justification for constitutional referenda.  He defines constituent power as “the unique power of the people (or the people themselves when exercising this power) to make and unmake their constitution, the fundamental law that undergirds and creates their state” (p. 618).


Lenowitz asks “What kind of choice must the relevant portion of the population be capable of when they vote on the constitution?”  To which he answers that “voters must at a minimum be able to evaluate the proposed constitution and act upon their evaluation…. Voters must be aware of and understand what they are creating and authorizing… voters need to be able to accurately reference and apply their own values, beliefs, and interests when making their choice. Specifically, in order to satisfy the logic of CPJ, voters must be capable of making what I call a meaningful choice.”


The next paragraph provides a definition of a “meaningful choice” but engages in a critical element of redefinition.  Note that to this point all of the language has been plural.  The referendum choice is after all a collective choice.  Voters as a whole must have been able to do these things.  But in the next paragraph the language is about an individual voter.  “A voter makes a meaningful choice while voting on a ratification referendum: if she understands…” And after that turn the rest of the article points out a variety of evidence concerning the general flakiness of many individual voters, and their extension of that flakiness to their voting on referendums including Constitutional referendums.


This turn to the individual voter is, however, highly problematic in this context.  It ignores the possibility that voters acting collectively could be making a meaningful choice even in the context of widespread and profound ignorance.  It ignores the implications of the Condorcet jury theorem for the potential accuracy of voters’ choices. Jury theorems demonstrate that under a range of conditions, collective choices by highly uninformed voters can lead to an accurate collective choice.  If each voter has only a tiny probability above 50 percent of correctly perceiving the details of the constitution, none the less, the collective choice can exhibit a much greater degree of wisdom.  


Consider the following simple illustration... 


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  • [An] extensive argument for balanced trade, and a program to achieve balanced trade is presented in Trading Away Our Future, by Raymond Richman, Howard Richman and Jesse Richman. “A minimum standard for ensuring that trade does benefit all is that trade should be relatively in balance.” [Balanced Trade entry]

    Journal of Economic Literature:

  • [Trading Away Our Future] Examines the costs and benefits of U.S. trade and tax policies. Discusses why trade deficits matter; root of the trade deficit; the “ostrich” and “eagles” attitudes; how to balance trade; taxation of capital gains; the real estate tax; the corporate income tax; solving the low savings problem; how to protect one’s assets; and a program for a strong America....

    Atlantic Economic Journal:

  • In Trading Away Our Future   Richman ... advocates the immediate adoption of a set of public policy proposal designed to reduce the trade deficit and increase domestic savings.... the set of public policy proposals is a wake-up call... [February 17, 2009 review by T.H. Cate]