“The amount of lithium we need in any of our climate goals is incredible,” said Anna Shpitsberg, the U.S. deputy assistant secretary of state for energy transformation. “Everyone is trying to build up their supply chains and think about how to be strategic.”

But Washington has little sway in Bolivia, whose leaders have long disagreed with the American approach to drug policy and Venezuela. That may explain why some energy executives do not think Bolivia is worth the risk.

“You’ve had 30 years’ worth of projects in Bolivia with almost nothing to show,” said Robert Mintak, chief executive of Standard Lithium, a publicly traded mining company based in Vancouver, British Columbia, referring to lithium development efforts dating back to 1990. “You have a landlocked country with no infrastructure, no work force, political risk, no intellectual property protection. So as a developer, I would choose someplace else that is safer.”

Mr. Egan sees the odds differently.

‘I Need to Be Involved’

That Mr. Egan has gotten this far is a marvel. He learned about Bolivian lithium only by chance when he and a friend crisscrossed South America as tourists in 2018.

When they got to the salt flats, a guide explained that they were standing on the world’s largest lithium reserve. “I thought, ‘I don’t know how I’m going to do this, but I need to be involved,’” Mr. Egan said.

He had tried his hand as a sports and music agent and ran a small investment fund at the time. He had invested in Tesla in 2013 at $9 a share; it now trades around $975. (He would not reveal how many shares he had bought and how many he still had.)

But he felt that he wasn’t achieving much. Before Mr. Egan traveled to South America, his father, Michael, the founder of Alamo Rent A Car, advised him to make two lists — of his five biggest passions and of the five industries he thought would grow fastest in the coming decades. Renewable energy was on both lists.

Article source: https://www.nytimes.com/2021/12/16/business/energy-environment/bolivia-lithium-electric-cars.html

But Mr. Powell batted back that idea on Wednesday, providing a detailed look at his own evolution in thinking about inflation and the data that convinced him the Fed needed to speed up its plans.

“It had nothing to do with it at all,” he said of the reappointment, noting that other Fed officials were already setting up the change in policy before Mr. Biden’s decision was announced. “My colleagues were out there talking about a faster taper, and that doesn’t happen by accident.”

Mr. Powell, his colleagues and many economists had initially expected rapid price gains to fade fairly quickly as the economy got through a bumpy reopening period after lockdowns meant to contain the pandemic.

But Mr. Powell said his shift began after Labor Day, as the job market showed signs of strengthening and inflation readings remained elevated. Just before the Fed’s last meeting on Nov. 2-3, wages moved up sharply in the Employment Cost Index, which tracks how much employers are spending on their workers.

“We got the E.C.I. reading on the eve of the November meeting and it was very high,” Mr. Powell said, adding that index was so elevated he briefly considered announcing a faster end to the bond buying than what policymakers ultimately announced.

“I thought for a second there whether we should increase our taper,” he said. Then additional data poured in, showing signs of rapid inflation that was broadening into categories that were not simply roiled by the pandemic: Rents were rising, for instance. Labor market progress also proved “much faster,” prompting the change in tone and approach.

Many policymakers still hold out hope that inflation will fade back toward the Fed’s 2 percent annual average goal as global shipping routes clear through backlogs, factory production increases to meet demand, and consumers shift toward more normal spending patterns after scrambling to buy lawn equipment and stationary bikes during the pandemic.

Article source: https://www.nytimes.com/2021/12/15/business/economy/inflation-fed-fomc-meeting-december-2021.html

In the longer term, the (sometimes contested) theory goes, high inflation can become entrenched if workers begin to expect it and can successfully negotiate wage increases to cover their climbing costs. Companies, facing higher labor bills, may manage to pass the costs onto consumers — and voilà, you have a situation where pay and prices push one another steadily upward.

Is inflation bad?

Whether inflation is “bad” depends on the circumstances.

Most everyone agrees that super fast price increases — often called hyperinflation — spell trouble. They destabilize political systems, turn middle-class workers into paupers overnight, and make it impossible for businesses to plan. Weimar Germany, where hyperinflation helped to usher Adolf Hitler into power, is often cited as a case in point.

Moderate price gains, even ones a bit above the Fed’s official goal, are a topic of more-serious debate. Slightly higher inflation can be good for people who owe money at fixed interest rates. If I sell coconuts for $1 and owe my bank $200 today, but next year I am suddenly able to charge $1.05 for my coconuts, my debt becomes easier for me to pay back: Now I only have to sell a little bit over 190 coconuts plus interest.

But inflation can be tough for lenders. The bank to whom I owe my $200 is obviously not happy to get 190 coconuts worth of money instead of 200 coconuts worth. While politicians and the public rarely cry for bankers, the same is true for people with savings that bear low interest: Their holdings will not go as far. Inflation can be especially tough for people on fixed incomes, like students and many retirees.

For workers taking home paychecks, whether inflation is a good or bad thing hinges on what happens with wages. If a worker’s pay goes up faster than prices increase, they can still find themselves better off in a high-inflation environment.

Wages are growing quickly right now, especially for lower earners, but some measures suggest the growth is not keeping pace with inflation as it picks up steeply. Still, many households are also receiving transfers from the government — including an expanded Child Tax Credit — which could keep some families’ financial situations from deteriorating.

How does inflation affect the poor?

High or unpredictable inflation that isn’t outmatched by wage gains can be especially hard to shoulder for poor people, simply because they have less wiggle room.

Article source: https://www.nytimes.com/article/inflation-definition.html

As overall sales rose, spending — the key drivers of U.S. economic activity — at grocery stores and liquor stores, gas stations, clothing retailers and home improvement stores increased. Sales declined in several categories however: Spending at electronics and appliances stores fell 4.6 percent last month, while sales at car dealers and general merchandise stores, such as department stores, were down as well. Health and personal care stores, such as pharmacies, also saw a decrease of 0.6 percent.

Ms. Gramling said retailers were likely to face logistical issues in January, when consumers come back to stores with returns from the holiday season.

The latest measure of sales — the key driver of economic activity in the United States — comes as consumers are grappling with high inflation and a predicted surge in coronavirus infections. The sales data for November does not reflect how shoppers might have reacted to the emergence of the Omicron variant, which started to make headlines during the Thanksgiving weekend.

But for now, economists expect that sales will continue to rise in December.

A reading on consumer sentiment, measured by a University of Michigan survey on how Americans view the general state of the economy, increased in December after falling to its lowest level in a decade in early November. Those surveyed pointed to inflation as the most serious problem the country faces, according to preliminary results published on Friday.

Also on Friday, the Labor Department reported that consumer prices had risen at their fastest pace in nearly 40 years. The Consumer Price Index was up 6.8 percent last month compared with a year earlier as demand for products remained strong and the virus continued to disrupt manufacturing and transportation.

Article source: https://www.nytimes.com/2021/12/15/business/economy/november-2021-retail-sales.html

“I want the farmers to come tell me, ‘Sir, we can’t produce that much,’” he added.

When Mr. Trump signed the trade deal with China in January 2020, those estimates became enshrined as the word of the U.S. government. And though Mr. Biden and his deputies have criticized the trade deal for failing to address many of the most pressing trade issues that the United States has with China, they have since promised to uphold it.

In a call last month with President Xi Jinping of China, President Biden underscored the importance of China fulfilling the commitments, and his desire for “real progress” in conversations between Ms. Tai and her counterpart, Vice Premier Liu He, a senior administration official said.

Both Chinese and American officials have stressed that purchasing commitments are just one component of the trade deal. The deal also contained promises to streamline China’s import process for U.S. farm goods, ramp up penalties for intellectual property infringement and ease barriers for American financial firms doing business in China, among other reforms.

Ms. Tai has said she is pressing Chinese leaders on those other commitments, as well as on important trade issues that were not covered in the deal, like China’s use of industrial subsidies to bolster its industries.

But she called the trade deal, which is often referred to as Phase 1, “a living agreement.”

“This is the commitment that we bring as an administration to the agreements that the United States enters into with our trading partners, which is, yes, we are holding them accountable,” Ms. Tai said.

China has come closest to satisfying its target commitments on agriculture, fulfilling 83 percent of the purchases it was expected to have made by the end of October under the deal, according to tracking by Mr. Bown.

Corn and pork sales to China have been particularly strong, after an epidemic of African swine fever decimated China’s pig herds. But exports of American soybeans, lobster and other products appear to have fallen short, according to Mr. Bown’s estimates.

Article source: https://www.nytimes.com/2021/12/15/business/economy/china-trump-trade-deal-biden.html

Some employers regard applicants with long periods of unemployment unfavorably, research shows — even if many are reluctant to admit it.

“Employers don’t often articulate why but the idea, they believe, is that people who are out of work are damaged in some way, which is why they are out of work” said Peter Cappelli, the director of the Center for Human Resources at the Wharton School of the University of Pennsylvania.

Some economists believe the pandemic’s unique effects on the economy may have changed things. Notably, the pandemic destroyed millions of jobs seemingly all at once, especially in the travel, leisure and hospitality industries. Many people could not, or chose not to, work because of health concerns or family responsibilities.

“For people who were just laid off because of Covid, will there be a stigma? I don’t really think so,” Mr. Cappelli said.

Although monthly job-finding rates plummeted for both the short- and long-term unemployed during the early part of the pandemic, the rate for the long-term jobless has since rebounded to roughly the same level as before the pandemic, according to government data. While that does not imply the employment-gap stigma has disappeared, it suggests it is no worse than it has been.

That was what Rachel Love, 35, found when she applied for a job at Qwick.

After Ms. Love was furloughed, and then laid off from her sales job at a hotel in Dallas last year, she kept hoping that her former company would hire her back. She had been unemployed for about a year when she came to terms with the idea of getting a new job and became aware of a business development position at Qwick.

Interviewers did not press her about why she had been out of work for so long. “I hope now, just with everything going on, I think people can look at the résumé and look at the time frame and maybe just infer,” said Ms. Love, who began working remotely for Qwick in June.

Article source: https://www.nytimes.com/2021/12/15/business/economy/employment-resume-gaps.html

At the same time, Mr. Erdogan’s disdain for conventional economic theory has scared off some foreign investors, who had been eager to loan Turkish businesses hundreds of millions of dollars but now are losing faith in the currency.

And the lower rates go, the faster inflation rises. Over the past year, the lira has lost more than 45 percent of its value, and the official inflation rate has surged past 20 percent, although many analysts believe the rate on the streets is much higher.

By comparison, an inflation rate of 6.8 percent so far this year in the United States (the highest in nearly four decades) and a 4.9 percent rate in the eurozone are enough to set off alarms.

In Turkey, skyrocketing prices are causing misery among the poor and impoverishing the middle class.

“We can’t make a living,” said Mihriban Aslan, as she waited on a long line to buy bread in Istanbul’s Sultangazi district. “My husband is 60 years old, he can’t work much now.” He has a small pension of 1,800 lira — which at the moment is worth about $125. “I sometimes do needle work at home to bring in extra money,” she said.

Businesses would rather hoard goods than sell them because they don’t think they will be able to afford to replace them.

Ismail Arslanturk, a 22-year-old cashier at a neighborhood grocery shop, complained that the price of green lentils has nearly doubled. ‘’I don’t believe the economy will be fixed after this point,” said Mr. Arslanturk, who added he was forced to leave high school to help support his family. “I am hopeless.’’

Article source: https://www.nytimes.com/2021/12/14/business/economy/turkey-inflation-economy-lira.html

Given inflation and growth trends, Fed officials signaled clearly that they would discuss withdrawing support more quickly at this gathering, and economists think officials will signal a plan to taper off bond purchases so that the buying will stop altogether in March.

Policymakers will also provide their latest thinking on the path for interest rates in their updated quarterly economic projections, and could pencil in two or three increases next year. When they last released the projections in September, officials were split on whether they would raise rates at all in 2022. Lifting the federal funds rate is arguably the Fed’s most powerful tool for pushing back on inflation, because it would slow demand and economic growth by percolating through the rest of the economy, lifting borrowing costs on mortgages, business loans and auto debt.

In late November, Jerome H. Powell, the Fed chair, set the stage for the central bank’s shift from an economy-stoking stance to one that is more focused on keeping inflation under control.

“At this point, the economy is very strong, and inflationary pressures are high, and it is therefore appropriate in my view to consider wrapping up the taper of our asset purchases, which we actually announced at our November meeting, perhaps a few months sooner,” Mr. Powell said during congressional testimony on Nov. 30.

The Fed chair is expected to further explain during a post-meeting news conference on Wednesday how he is thinking about the central bank’s policy stance as it confronts rapid inflation and an uncertain economic path at a time when the virus shows no signs of abating and a new variant, Omicron, complicates the outlook.

Article source: https://www.nytimes.com/2021/12/14/business/economy/fed-meeting-inflation.html

People who experienced the Great Inflation are more likely to fear high inflation around the corner than the young, who have lived mostly in an era in which inflation has rarely exceeded 2 percent. The young’s experience of economic stagnation during their formative years, after the housing bubble burst in 2008, is more likely to convince them that inflation can be too low, as it was back then, stymieing efforts by the Fed to reinvigorate the economy.

Americans under 40 expect inflation to hit about 3.5 percent in three years, according to the most recent reading of the New York Fed’s survey. People over 60, by contrast, expect 4.7 percent. “Younger and older people tend to differ depending on the path inflation took in their past,” Mr. Nagel said.

Even the experts — the members of the Federal Open Market Committee, the Fed’s policymaking group, who pore through sophisticated economic models fed with reams of data — are influenced by youthful memories. “Whether and at what age they experienced the Great Inflation or other inflation realizations affects their stated beliefs about future inflation, their monetary-policy decisions, and the tone of their speeches,” according to another paper by Ms. Malmendier, Mr. Nagel and Zhen Yan from Cornerstone Research in Boston.

The researchers do not have insight into the current view of committee members. Individual forecasts from the semiannual Monetary Policy Report to Congress, on which they based their analysis, are made available to the public only with a 10-year lag, starting in 1992. But their research helps explain a longstanding puzzle.

The puzzle came in a study by the economists David and Christina Romer of the University of California, Berkeley, in the middle of the last recession, in 2008. They found that over time, forecasts from the members of the Federal Open Market Committee were less accurate than the collective forecast of the staff economists at the Federal Reserve. The deviation, according to Ms. Malmendier, Mr. Nagel and Mr. Yan is “explained by reliance on personal inflation experiences.”

People not schooled in economics may have little clue about how inflation and monetary policy work. One study by economists at the Federal Reserve Bank of Cleveland; the University of California, Berkeley; the University of Texas at Austin, and Brandeis University found that the Fed’s momentous switch announced in August of last year to a flexible inflation target, which would allow the Fed to let inflation rise above its long-term target of 2 percent, was greeted by a collective “huh?”

Corporate executives do little better. “Like households, U.S. managers are largely uninformed about recent aggregate inflation dynamics or monetary policy,” wrote another group of economists in a separate study. “Inattention to inflation and monetary policy is pervasive among U.S. firms as well.”

Article source: https://www.nytimes.com/2021/12/14/business/economy/inflation-age-region-education-income.html

Among his other books were “A Rabble of Dead Money: The Great Crash and the Global Depression: 1929-1939 (2017); “Comeback: America’s New Economic Boom” (2013); “The Sages: Warren Buffett, George Soros, Paul Volcker, and the Maelstrom of Markets” (2009); “The Trillion Dollar Meltdown” (2008); “The Surgeons: Life and Death in a Top Heart Center (2007),” which dissects the cost of care to the public and to practitioners; “American Catholic: The Saints and Sinners Who Built America’s Most Powerful Church” (1997); and “The Tycoons: How Andrew Carnegie, John D. Rockefeller, Jay Gould, and J.P. Morgan Invented the American Supereconomy” (2005).

Assessing “The Tycoons” in The Times Book Review, Todd G. Buchholz, a former economics adviser to President George H.W. Bush, wrote of Mr. Morris, “I admired his drive to delve into competing theories of the Great Depression, sleeves rolled up, digging evenhandedly into the muck of academic research and the tumbleweed of the Dust Bowl.”

Rarely allowing himself to be typecast, Mr. Morris would debunk what he called the conservative conventional wisdom that raising the minimum wage costs jobs. He complained in the Jesuit magazine America that the nation’s existing health care system benefits the wealthiest Americans. In an interview on the business blog bobmorris.biz in 2012, he criticized graduate schools of business.

“Business schools tend to focus on topics that are suitable to blackboards, so they overemphasize organization and finance,” Mr. Morris said. “Until very recently, they virtually ignored manufacturing. I think a lot of the troubles of the 1970s and 1980s, and now more recently the 2000s, can be traced pretty directly to the biases of the business schools.”

In “The Trillion Dollar Meltdown: Easy Money, High Rollers and the Great Credit Crash” (2008), which won the Gerald Loeb Award for business reporting, Mr. Morris precisely predicted the collapse of the investment bank Bear Stearns and the ensuing global recession.

He wrote the book in 2007, when most experts were still expressing optimism about the economy. He also appeared in the Oscar-winning documentary “Inside Job” (2010) about the 2008 financial crisis.

“I think we’re heading for the mother of all crashes,” Mr. Morris wrote his publisher, Peter Osnos, the founder of Public Affairs books, early in 2007, adding, “It will happen in summer of 2008, I think.”

Mr. Osnos recalled that after the book was published, “George Soros and Paul Volcker called me and asked, ‘Who is this Morris, and how did he get this so right, so early?’”

Article source: https://www.nytimes.com/2021/12/13/business/economy/charles-r-morris-dead.html