22 inflation nightmares, OPEC cracks up

the weekly rundown

we were walking down the street the other night, and all of a sudden - two youths were blocking our path! before we knew it, our phone, laptop, and wallet had been stolen (don’t worry, no one was hurt). we only wish we could’ve told our muggers thank you for wearing facemasks. have something you wish you could tell us? email us today!

big idea: is inflation here to stay?

1. no, you’re not going crazy - that bag of skittles cost more than it did last year, and that box of cereal magically shrunk overnight. everyone is talking about inflation, and we figured we could break that down this week.
2. the big fear is that these price hikes will become an unfortunate cycle. people think that their money will be worth less next quarter, so they choose to spend their money now, increasing demand for goods. that increase in demand results in higher prices, which makes people think their money is worth less. it’s an inflationary cycle which the US was stuck in for the 1970’s (something else we can hate hippies for). we’re already seeing signs of this as grocery stores report higher than normal inventories as they hoard nonperishable items which may go up in price.
3. the question is whether we can compare now to the 70’s, and there are similarities but also differences. yes, there has been an influx of cash into the economy from the stimulus bills and wages are increasing, but part of the reason the 70’s were so bad was because the fed was afraid to raise interest rates and there was a hangover from WWII price controls.
4. for now though, the fed is signaling that they could start pulling back on stimulus measures and low interest rates as early as next year. inflation is a bit of a mind game - if consumers think their dollar will be worth the same tomorrow as it is today, it will be!

story to watch: cracks in OPEC+

1. OPEC+, the cartel which controls the oil sector, had an acrimonious meeting last week, ending with no agreement on future oil production. OPEC+ drastically cut the rate of pumping oil out of the ground last year when COVID hit, and now the question is how fast to undo those cuts. oil has been trading at higher prices, and hit a nearly seven-year record after the cartel meeting broke up.
2. the UAE is challenging saudi’s and russia’s leadership roles in the group, and wants to raise production levels more quickly than planned. the UAE has cut its production by a third for the past year, much more than other cartel members, and isn’t happy with the status quo. they want to pump as much oil as possible while the world is still hooked on fossil fuels. they plan to use those massive profits to diversify their economy - plans put on hold because of the cartel.
3. if talks don’t resume soon, expect oil prices to rise further as supply is artificially constrained. there’s also a non-zero chance this disagreement will split apart OPEC+, with russia choosing to go its own way. it’s hard to figure out which murderous, earth-destroying dictator to root for in this story, huh?

this week’s image: aliens do exist

• (The Atlantic) an alien roller skates down the street in Roswell during the UFO Festival

this week’s number: DOJ prosecutes just 17% of hate crimes

1. the justice department released a report this week finding that between 2005 and 2019, prosecutors charged just 17% of suspects in hate crime cases, mostly due to insufficient evidence. there are signs of change though - that percentage was 48% between just 2015 and 2019, and about 85% of those prosecuted were found guilty.
2. most hate crimes end up getting tried at the state level, where laws vary dramatically. conservatives often argue that hate crime laws criminalize ideological thought, while liberals cry in a corner because they don’t know how to win local elections.

what we’re reading: “Mine!”

1. who knew we would ever call a 336-page book by a couple of lawyers about the minutiae of property law a fun and engaging read? “Mine!” is one of those few treasures which will transform the way you view the world, and who owns what.
2. the authors dive into today’s deep questions like who decides if you can recline your airplane seat, who owns the air above your home, and who truly owns that ebook you just bought on Amazon? it’s a delightful read which we can’t recommend enough.

and, in case you missed it:

• the groundbreaking black journalist Nikole Hannah-Jones will join Howard’s faculty after UNC flip-flopped on giving her tenure
• the FDA revised prescribing instructions for a new Alzhemier’s drug which caused an uproar when it was approved, as we discussed in issue 18
• Mary Simon was appointed Canada’s governor-general, the first indigious person ever to serve as head of state. now they just gotta get rid of their queen to join the 21st century, eh?

the weekly rundown is produced by Yunus, Faisal, and Ahmed. learn more about us and email us your comments and feedback!