trans apparent c


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autumn abstract


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shaping smooth from brown to blue


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purple pink i think


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break through

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Deflating the Inflation Attribution

In its latest minutes, the Fed says it is still concerned about persistently low inflation; but it also says it is “transient.”

“Transiently persistent” is an empty interpretation¬† that characterizes the problem, operating with missing attributes considered to be ideologically repugnant.

The low-inflation phenomena that persists is slow-to-no wage and salary growth for about 90% of the US population. We are to believe that it just happens, driven by the invisible hand; but no, it is caused by increasingly non-competitive pricing, against globally competitive wages and salaries, by means of consolidating industry and markets.

What is missing is a description of the intended effect that correlates with the economy-of-scale efficiency factor.

Industry and markets continue to consolidate, operating with the efficiency of the natural-monopoly model. The result, more and more: employees pay employers to have a job, operationalized with the tax system.

Currently, legislators, down to the local level, are looking at tax reform, correlated with incentives for economic growth and job creation.

Job creators will create a job if they are paid to do it (which economists call “paying the economic rent”), and the reason why is because of the economy-of-scale efficiency factor (combined with competitive forces, down to the local level). Systematically structured, operating with intention, on demand (and paying the rent), this is referred to as tax-incentive financing.

The result of the missing, analytical value is a rising tax burden for almost everybody, and record corporate profits.

Although inflation is measurably low, it is due to deflation of wages and salaries, being taxed to inflate corporate profits, using structured incentives that appear to legitimately operate on demand. The tax system, however, operates with command attributes.

The tax code operates with the force and legitimacy of public authority. It is legitimately coercive (commanding you to pay the rent whether the price is too high or not) since it intends to provide “the greatest good” for the greatest number of people. The affordable “utility” is by projection of an expanding pie (what you pay — the rising rent — to rent a job, thus existing on demand), not its more equitable distribution (which would make the rent more affordable). Inflation of the rent, and deflation of the ability to pay it, is where tax-incentive financing fails the test. Ironically, failure is then attributed to “being taxed too much.”

The expected result of policy analysis that operates with missing values, resulting in attribution error, is this:

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