Texas Was Once a Hotbed of Socialism

In the early 1900s heyday of the Socialist Party, Texas boasted a vibrant state party that attracted oppressed farmers in droves. The Texas Socialists promoted both land reform and labor rights — and forged a powerful farmer-labor bloc that reshaped US politics.

Eugene Debs with Texas and Oklahoma socialists, c. 1910–14. Debs, top row center; E. O. Meitzen, center with gray beard; directly above Meitzen, Theodore Debs; to left of Meitzen, Tom Hickey (with dark beard); to left of Hickey, Oklahoma Socialist Party leaders Patrick Nagle (with mustache) and Fred Holt (partially cut off). (Courtesy Ann Meitzen)

When we think about socialism in the United States, we tend to think of big Northern cities like New York. But in the early 1900s heyday of the Socialist Party of America, many of its most notable figures and strongest bases of support were rooted in the rural Midwest, Far West, and South.

Few states better showcase this agrarian socialism than Texas, where the agricultural worker played a pivotal part in the state Socialist Party, and a German immigrant family by the name of Meitzen — who fled their homeland after the failed 1848 revolution — formed part of the “radical glue,” historian Thomas Alter II writes, “that held the [farmer-labor] coalition together.” Otto Meitzen, his son E. O., and his grandson E. R. — as well as their spouses — forged a multigenerational radicalism in the Lone Star State; E.O.’s political activity stretched from the Greenback and Populist movements of the late 1800s all the way through the height of the Socialist Party in the first two decades of the twentieth century. Along with land reform and labor rights, these Texas Socialists promoted radical positions like women’s suffrage and support for the Mexican Revolution while bumping up against the nascent Jim Crow regime.

Jacobin contributor Yaseen Al-Sheikh sat down with Alter to discuss his recently released book, Toward a Cooperative Commonwealth: The Transplanted Roots of Farmer-Labor Radicalism in Texas, and the forgotten tales of the Texas Socialist Party, which flourished until state-sponsored suppression came down upon them.

Yaseen Al-Sheikh

Toward a Cooperative Commonwealth is the story of an international, multigenerational struggle for a just economic and political order. Tell us about the Meitzens, a “Forty-Eighter” family, starting with the failed revolution of that year in Germany and how it shaped their politics once they moved to the States.

Thomas Alter II

The Meitzens were from the province of Silesia in the then German state of Prussia. While the Silesian economy was primarily agricultural, it was also one of the most industrialized areas of the Germanic states due to the growing textile industry. In many ways, Silesia is the soul of Marxism. It was the 1844 Silesian Weavers Revolt that showed Marx the working class in action and its revolutionary potential.

While in other regions of Europe, the 1848 revolutions were led by middle-class forces that called for a constitutional monarchy, in Silesia it was led in part by organizations based in the working classes that forged an alliance between workers and peasants calling for a socialist republic. When the Meitzens and Forty-Eighter Silesians immigrated to Texas, they brought with them their working-class politics based on an alliance of laborers and working farmers.

Yaseen Al-Sheikh

A central theme of your book is the strength of this farmer-labor bloc in late nineteenth- and early twentieth-century United States. Can you talk about this coalition and how it shaped the country’s politics?

Thomas Alter II

The dominant image of working-class people in the United States during this time is that of an urban industrial factory worker, even though, up to the 1920s, the majority of people lived in rural areas and had jobs connected to agriculture. Even large number of industrial wage workers viewed wage work as hopefully temporary until they could afford to buy their own farm.

As such, agrarian-based demands for land reform came not only from farm areas but urban areas as well. Those working the land also saw how easily they could become wage laborers and in turn advocated labor demands such as union rights and the eight-hour day. Whether one toiled in a Chicago factory or as a tenant farmer in a Texas cotton field, one faced capitalist exploitation.

A family of cotton farmers in Texas, 1913. (Wikimedia Commons)

The sustained farmer-labor bloc began with the Knights of Labor, Greenback Labor Party, and Grange of the 1870s and 1880s. It then progressed through the Farmers’ Alliance, the Populist movement, the Socialist Party, the Nonpartisan League, and attempts to form a labor party during the 1920s.

Working independently of the Democratic and Republican parties, the bloc served as a bulwark against unrestrained capitalism. Though enacted into law in much watered-down versions, many of the historic reforms of the Progressive and New Deal eras originated and were tirelessly championed by organizations within the farmer-labor bloc. Without their efforts, I think it is hard to see either of these eras of reform happening.

Yaseen Al-Sheikh

Founded in 1901, the Socialist Party of America was a heterogenous organization that looked very different from state to state. Trade unionist Eugene Debs, of Indiana, was the party’s perennial presidential candidate, and members included everyone from Jewish garment workers in New York City to tenant farmers in Oklahoma; everyone from the incendiary Big Bill Haywood to the “sewer socialist” Victor Berger. What did the Socialist Party look like in Texas?

Thomas Alter II

The Texas Socialist Party was overwhelmingly based and geared toward working farmers — small landowners, tenants, and sharecroppers. By 1910, 52 percent of all Texas farmers were tenant farmers. Among black farmers, the rate reached as high as 80 percent in some counties. Working farmers squeezed by landlords, bankers, land speculation, Wall Street speculation, middlemen, and high railroad freight rates turned against the capitalist system.

The party campaigned on a program of ending tenancy and sharecropping. It called for a tax on land held for speculation to make speculation unprofitable, the nationalization of railroads, and a proposal that once a tenant paid half the land’s value in rent, they would receive the title to the land. Socialists declared, “Use and occupancy as the only just title to land.”

By 1910, 52 percent of all Texas farmers were tenant farmers. Among black farmers the rate reached as high as 80 percent in some counties.

The party was also the only one in Texas for years advocating women’s suffrage, and it promoted Margaret Sanger’s birth control campaign. The party was not limited to farmers, having locals in urban areas, and one of the largest state locals was among coal miners west of Fort Worth. Texas Socialists actively campaigned for traditional labor and union demands as well.

In many histories of the Socialist Party, farmers are placed on the right wing of the party as “petty bourgeois” landowners. This is inaccurate. As noted, most Socialist farmers did not own the land they worked. And Texas Socialists openly identified with the party’s left-wing led by Big Bill Haywood. The Texas SP ran vigorous electoral campaigns and at the same time saw the importance of direct action as advocated by Haywood. When Haywood was expelled from the party in 1912 for promoting militant strikes, this angered many Texas Socialists and caused a decline in party membership.

Yaseen Al-Sheikh

One of the central organizing tools in rural settings like Texas was the encampment. What were these encampments, and how did they reflect the internal life of the party?

Thomas Alter II

The encampments were usually held during the summer, in between planting and harvest seasons, and lasted two to three days, sometimes an entire week. They featured food, music, dancing, fair rides, and plenty of political talks and meetings. These massive gatherings drew upward of ten thousand people, mostly farmers, especially if popular speakers like Debs, Mother Jones, Kate Richards O’Hare, or Big Bill Haywood were in attendance.

Education was one of the main purposes of the encampments, but even more so, participants would feel empowered being around large numbers of comrades, giving them a true sense of being part of a movement. The mass participation in the encampments reflected the bottom-up, decentralized nature of the Texas Socialist Party, contrasting with the more top-down organization of the party in urban areas like the Wisconsin SP under Victor Berger.

One could argue that people attended the encampments not so much for socialist politics but rather to escape the drudgery of farm life. This, however, is not what Debs found when he attended the 1914 summer encampments in Texas and Oklahoma. Of the encampment attendees, Debs observed:

The most class-conscious industrial workers in the cities are not more keenly alive to the social revolution nor more loyal to its principles or more eager to serve than are these farmers. These are Socialists, real Socialist, and they are ready for action, and if the time comes when men are needed at the front to fight and die for the cause, the farmers of Texas and Oklahoma will be found there and their wives and children will not be far behind them.

Yaseen Al-Sheikh

One major shortcoming of the Texas Socialist Party was black rights, though views varied within the state party. The Meitzens, for instance, were more thoroughgoing racial egalitarians than another party leader, Tom Hickey. So what was the Texas party’s record on black rights? And how might the Texas Socialists have fared had they more aggressively attempted to integrate the black citizenry into the struggle?

Thomas Alter II

The Texas party’s record on black rights was rather poor. It saw how the ruling class used race to divide the working class, yet it offered no specific program to fight racism. Instead, the SP argued that overthrowing capitalism and creating a socialist society would automatically end racism.

Debs called on all workers regardless of race to join the SP on equal terms. However, the Texas SP did not even initially do this. In the first years of its existence, it followed Jim Crow practices with segregated meetings. When the Texas SP created the Renters’ Union in 1911 to organize tenant farmers, it limited membership to “white persons over 16 years of age.”

‘The most class-conscious industrial workers in the cities are not more keenly alive to the social revolution nor more loyal to its principles or more eager to serve than are these farmers.’
Eugene Debs, circa 1910s. (Wikimedia Commons)

However, the racially exclusive membership policy of the Renters’ Union did not last long. In 1912, lumberjacks in western Louisiana organized by the IWW were making modest gains against the lumber barons through interracial organizing and direct-action tactics. Inspired by this, the Renters’ Union, at its 1912 convention, eliminated the word “white” from its membership requirements and called on black tenant farmers to organize separate local unions. Still, from the available evidence, one does not find black farmers forming their own locals of the Renters’ Union, and very few African Americans joined the Texas SP.

It is hard to say how the Texas SP would have fared had it truly attempted to stand up for black liberation. Following World War I, black Texas veterans returned home determined to fight for their rights, and militant chapters of the NAACP were formed across the state. By this time, though, the Texas SP had been repressed due to its opposition to the war. And after a brief flurry of civil rights activism, the NAACP in Texas was rapidly repressed as well by the state government.

An interracial alliance of workers in the Texas SP definitely would have made our class and the party stronger. At the same time, it would have attracted the full force of white supremacist terrorism, most likely crushing the movement. Yet even in defeat, a black-white alliance of workers in the Texas SP would have provided a shining example and laid an earlier foundation to put us in a better position to win racial and economic justice in our present.

Yaseen Al-Sheikh

One admirable episode in the Texas party’s history was its linking with Mexican revolutionaries, whom Hickey and others admired for their bravery and tenacity. How did the Texas Socialists get involved in this fight south of the border for tierra y libertad? And what does it tell us about their view of internationalism?

Thomas Alter II

Many white Texas Socialists held racist views toward Mexicans, viewing them as slavish peons. But the start of the Mexican Revolution in 1910 caused a change in racial attitudes among Texas Socialists; while white Socialists were calling for a revolution on the land, Mexicans were actually doing it. Texas Socialists no longer saw Mexicans as peons but fellow comrades.

The Texas SP held aloft the Mexican Revolution as an example to emulate if the party’s land reform demands were not enacted. The party campaigned against US military intervention in Mexico, supported speaking tours of Mexican revolutionaries, and frequently reprinted articles by Mexican revolutionary Ricardo Flores Magón. The party’s support of the Mexican Revolution, as led by Emiliano Zapata, along with its own land reform program, drew large numbers of ethnic Mexicans into the Texas SP.

The party campaigned against US military intervention in Mexico, supported speaking tours of Mexican revolutionaries, and frequently reprinted articles by Mexican revolutionary Ricardo Flores Magón.

In his 1914 campaign as the SP candidate for governor of Texas, E. R. Meitzen declared that our “only gauge of battle shall be the principles of International Socialism.” Internationalism in principle and action guided Texas Socialists. It led them to support the Mexican Revolution, the cause of Irish republicanism, and oppose US involvement in World War I.

Yaseen Al-Sheikh

The repression of the Socialist Party during and after World War I was a major reason for its precipitous decline across the country. Was that the main cause of the party’s demise in Texas? And what did that repression look like?

Thomas Alter II

The repression of the Texas Socialist Party began before the war, with Texas Rangers and the Bureau of Investigation (the precursor to the FBI) targeting ethnic Mexican party members in a campaign of harassment, censorship, jailings, and deportations. The party came to the defense of members, though the repressive campaign had its desired effect, with many ethnic Mexicans leaving the party.

An edition of The Rebel, the state party’s newspaper, from 1911. (UT San Antonio Libraries)

Once the US entered the war, the Texas SP’s weekly newspaper, the Rebel, was the first periodical barred from the US mail by the federal government. The Rebel had the third-highest circulation of socialist newspapers nationally. Texas Rangers and US Marshals kidnapped party leader Tom Hickey and held him incommunicado for two days before a lawyer obtained his release. Numerous Socialists were arrested across the state, with some serving lengthy prison sentences along with other political prisoners at the federal penitentiary in Leavenworth, Kansas.

This repression effectively crushed the once vibrant Texas Socialist Party.

Yaseen Al-Sheikh

What happened to the Meitzens after the decline of the party? And what is the legacy of the Texas Socialist Party and the Meitzens today?

Thomas Alter II

After the decline of the Texas SP, the Meitzens put much of their organizing efforts into building the Nonpartisan League (NPL), based in North Dakota. The NPL won control of the North Dakota state government after 1915 and began enacting reforms to benefit working farmers, such as a state-run bank and grain elevators.

E. R. Meitzen was a national organizer for the NPL and attempted to build it in Texas through an alliance of farmers and urban workers in the Houston area. The NPL shared the same demise as the SP through government repression.

Meitzen then participated in the numerous farmer-labor conventions of the 1920s that attempted to form a labor party, working closely with communists though not joining the Communist Party himself. Needing to provide for a growing family, Meitzen moved his family to northern Florida, where he ran a local newspaper and joined the successful campaign against the state poll tax in 1941.

By this time, Meitzen and many of his co-thinkers had decided that their best option in fighting for working-class-based reforms was to join the left-wing of the New Deal coalition and attempt to change the Democratic Party from within. Farmer-labor activists had attempted this tactic numerous times since the 1870s with the same failed results. Though rarely achieving electoral success, the farmer-labor bloc, when acting independently of the two-party system, moved the political spectrum to the left and brought about meaningful reforms while raising class consciousness.

Independent working-class political action and internationalism are the lasting legacies of the Meitzens and the Texas Socialist Party.

To Understand the Upcoming Republican Primary, Follow the Dark Money

The operative leading Ron DeSantis’s super PAC is closely associated with conservative activist Leonard Leo, the beneficiary of the largest dark money donation in US history. But Leo’s not putting all his eggs in one basket for the 2024 presidential election.

Conservative activist Leonard Leo’s ties to Florida governor Ron DeSantis are the strongest among the potential 2024 Republican presidential contenders. (Anna Moneymaker / Getty Images)

The Republican operative leading the super PAC backing Florida governor and likely Republican presidential candidate Ron DeSantis was closely involved with a record-breaking dark money donation to conservative legal activist Leonard Leo, the architect of the Supreme Court’s rightward swing, according to records obtained by the Lever.

Chris Jankowski, CEO of the pro-DeSantis group Never Back Down, is listed in the documents as the “settlor” — effectively, the creator — of the Marble Freedom Trust, a massive pool of cash Leo is using to finance conservative advocacy groups.

In 2021, the trust received $1.6 billion from the sale of Chicago businessman Barre Seid’s surge-protector empire, constituting the largest known dark money donation in history and leaving Leo in control of an unprecedented political advocacy fund.

The role Jankowski played in developing the Marble Freedom Trust has not previously been reported, though he has for years served as a consultant for Leo’s dark money network, which played a central role in flipping control of the Supreme Court and building its 6–3 conservative supermajority.

“Mr. Leo has known Chris Jankowski for many years and considers him one of the most effective political strategists in the country,” said a spokesperson at Leo’s consulting firm, CRC Advisors. “Governor DeSantis’s Never Back Down PAC is fortunate to have him there.”

Never Back Down and Jankowski did not respond to the Lever’s requests for comment.

Jankowski’s current role with the DeSantis super PAC is just one place where Leo’s influence will be felt throughout the 2024 Republican presidential primary. Leo, who helped select and install three Supreme Court nominees as President Donald Trump’s top judicial adviser, has used his dark money network to distribute major donations to nonprofits affiliated with several other potential primary contenders, including Mike Pence and Nikki Haley.

Leo’s ties to DeSantis are perhaps the most extensive among the potential 2024 Republican presidential contenders. The Florida Republican’s crusade against “woke capital” and his recent decision to sign a six-week abortion ban seem to be perfectly calibrated to appeal to Leo, a hard-line social conservative who has financed a broader messaging war against “woke capitalism.”

“Lead Consultant to the Judicial Crisis Network”

Jankowski, a longtime conservative operative, is best known for spearheading the Republican State Leadership Committee’s highly successful 2010 Project Redmap campaign — an effort to tip state house elections across the country and then use the redistricting process to help the GOP lock in a long-lasting advantage in congressional and state legislative elections.

Since 2014, Jankowski has been periodically identified as a consultant with the Judicial Crisis Network, a key dark money cog in Leo’s campaign to remake both the federal and state courts.

“In 2016 to 2018, Chris served as a lead consultant to the Judicial Crisis Network’s successful Supreme Court confirmation campaigns,” read Jankowski’s bio on one conservative nonprofit’s website. “These efforts blocked the nomination of Merrick Garland and pushed for confirmation of Justice Gorsuch and Justice Kavanaugh to the Supreme Court. These unprecedented efforts, with almost $30 million spent, helped create a new conservative majority on the court.”

Records obtained by the Lever show that Jankowski helped Leo establish the Marble Freedom Trust, his $1.6 billion landmark dark money fund. Jankowski was the trust’s settlor — which generally means a trust’s creator or donor.

The donation for the trust came from Seid, who, as part of his “attack philanthropy” strategy, gifted the entirety of his electronics business to the trust, which then sold it.

Now Jankowski is helming Never Back Down, a super PAC that’s preparing to help perform core campaign operations to boost DeSantis, despite the fact that such outside groups cannot directly coordinate with candidates.

On Wednesday, the Washington Post reported that officials at Never Back Down have “been telling donors they intend to push the bounds of what an independent effort can do in presidential years” and are planning “a major push into the sort of organizing in early states that has historically been undertaken by candidates themselves.”

The Post added that “Never Back Down could receive a transfer of the more than $85 million that DeSantis has in a state fundraising account if he becomes a candidate.”

DeSantis’s Leo-World Ties

In recent years, Jankowski was listed on the board of advisers at N2 America, a dark money group designed to boost the GOP’s image in the suburbs. The organization campaigned for schools to resume in-person learning amid the COVID-19 pandemic and boosted the confirmation of Trump’s 2020 Supreme Court nominee, Amy Coney Barrett.

Tax records show N2 America was primarily funded by Leo’s Concord Fund, which donated at least $1 million to N2 America between 2020 and 2021. The organization reported raising $1.5 million during that time.

DeSantis’s nascent campaign operation includes several other N2 America alumni.

Generra Peck, the organization’s vice president, is reportedly expected to serve as DeSantis’s 2024 campaign manager if he runs, and is currently working as a consultant for his Florida-level political committee.

Phil Cox, who served on N2 America’s board of advisers, is serving as a senior adviser to Never Back Down, the DeSantis super PAC led by Jankowski.

Peck and Cox helped lead DeSantis’s 2022 gubernatorial reelection campaign. Peck previously worked at Cox’s consulting firms.

The DeSantis super PAC’s leadership team also includes Ken Cuccinelli, a former Virginia attorney general and Trump administration official.

Since 2021, Cuccinelli has been the national chairman of the Election Transparency Initiative — an effort designed to protect Republican voter suppression laws around the country — which is part of the Susan B. Anthony List, an antiabortion advocacy group.

Leo’s network donated $2.3 million to the Susan B. Anthony List between July 2020 and June 2021.

Hedging His Bets

DeSantis isn’t the only potential GOP presidential contender with significant ties to Leo.

Leo’s Concord Fund contributed $1 million in 2020–21 to Advancing American Freedom, a nonprofit chaired by former vice president Mike Pence that is serving as a “campaign-in-waiting,” according to Politico.

Since 2018, the Leo network has donated $1.5 million to Stand for America, a dark money group founded by Nikki Haley, the former South Carolina governor and Trump United Nations ambassador.

“I’m running for president to renew an America that’s proud and strong, not weak and woke,” Haley said in a speech last month to conservative activists. “Wokeness is a virus more dangerous than any pandemic, hands down.”

You can subscribe to David Sirota’s investigative journalism project, the Lever, here.

The Sources of Inflation Have Shifted. The Fed Needs to Take Note.

Over the past year, the sources of inflation have shifted dramatically: rather than rapid income growth, the main driver now is a lull in productivity growth — a problem the Fed’s interest rate hikes can’t do anything to solve and that is probably temporary anyway.

Jerome Powell, chairman of the US Federal Reserve, at the spring meetings of the International Monetary Fund (IMF) and World Bank in Washington, DC, US, on April 14, 2023. (Samuel Corum / Bloomberg via Getty Images)

There’s a simple but underemphasized point about inflation — inflation in general and the post-COVID inflation we’ve been experiencing in particular — that’s worth noting as we head toward the Federal Reserve’s next meeting in early May.

By definition, inflation is the difference between two numbers: the growth rate of real output per hour worked, and growth rate of nominal output per hour worked, and each of these tells us something different about the state of the economy.

Real output per hour is none other than the familiar concept of labor productivity, whose growth rate at any given moment tends to fluctuate around an underlying pace determined largely by the trend of technology. Nominal output per hour is the average amount of money businesses charge for the output of one hour’s labor. Its level is determined by the level of wages and profit markups.

In a classic demand-driven inflation, price rises are caused by the growth of this latter, nominal metric: high levels of demand create a seller’s market in which workers, as sellers of labor, have greater bargaining power vis-à-vis employers, and firms, as sellers of goods and services, have greater pricing power with respect to their customers. We might call this type of inflation excess-income inflation, because it’s caused by nominal incomes earned in the course of production rising faster than productivity.

An inflation-fighting strategy based on compressing aggregate demand — through higher interest rates or government spending cuts — thus makes the most sense when excess-income inflation dominates.

The Other Kind of Inflation

But what’s less often appreciated is the second kind of inflation, which can occur even without any acceleration in unit wages or profits. If the number of hours required to produce a given amount of output rises for some reason, or if its rate of decline falls — that is, if labor productivity growth falters — price inflation will rise even if wage and profit growth remain steady. We can call this type of inflation productivity-shortfall inflation.

For example, if the economy is experiencing annual productivity growth of 1.5 percent and nominal output per hour is rising by 3.5 percent per year, the inflation rate will be 2 percent. If something then causes productivity growth to fall to 0.5 percent, then — even without any change in the growth rate of wages or profits — inflation will rise from 2 percent to 3 percent.

The idea here is that the prices of goods can rise not just because the inputs that go into them (e.g., labor) have gotten more expensive, but also because the actual quantity of inputs required to physically produce the goods has increased.

Why does this matter? The answer has to do with the very different prognoses implied by these two separate inflation types. Perhaps the most important difference relates to the nightmare scenario that central bankers are always most acutely on guard against, in which inflation doesn’t just experience a onetime jump but keeps rising and rising indefinitely. This “accelerationist” scenario can only occur due to excess-income inflation: a self-propelling upward spiral of wages and prices is, in theory, a danger, but a self-propelling downward spiral of labor productivity is not.

So it’s worth looking separately at the contributions to inflation coming from these two different sources, which I attempt to do in the charts below.

First, I calculate benchmarks: what the growth rates of labor productivity and nominal hourly output would be if the inflation rate were at the Federal Reserve’s 2 percent target and productivity growth were at its trend rate as estimated by the Congressional Budget Office (CBO).

Then I calculate how much extra inflation is caused by nominal hourly output rising faster than its benchmark rate (this is the contribution of excess-income inflation) and how much is caused by real labor productivity rising more slowly than its benchmark (this is the contribution of productivity-shortfall inflation). The sum of these two measures is by definition equal to the actual amount of “excess” (above–2 percent) inflation. (All inflation data are shown as four-quarter growth rates.)

What these charts show is that up through the end of 2021, above–2 percent inflation was mostly driven by excess income growth. But since then, excess-income inflation has dramatically declined. From its peak in the fourth quarter of 2021 to the fourth quarter of 2022 (the most recent for which we have data), the contribution of excess income growth to the excess-inflation rate fell from five percentage points to one percentage point.

Thus, the bulk of excess inflation is now caused not by too much demand growth but by productivity growth lagging behind its trend rate — a problem that higher interest rates simply cannot solve.

Avoiding the Worst

Now, it’s possible, in theory, that the recent shortfall of productivity growth relative to its trend rate will turn out to be permanent: in other words, trend productivity growth might have actually declined, but the CBO hasn’t picked up on it yet. If that’s the case, the rate of nominal hourly-income growth compatible with 2 percent inflation will be less than what I’ve assumed in making the above charts, and this could conceivably justify a long-run policy aiming for a lower rate of nominal hourly-income growth.

But so far, economists who study productivity dynamics have generally concluded — however tentatively, given the capricious nature of productivity — that the recent slowdown is probably temporary and that the most likely scenario for productivity is a gradual return to pre-COVID trends.

Labor productivity is hard to measure accurately in real time, so it’s understandable that the Fed would be hesitant to rely too much on any analysis that depends heavily on those numbers. But the fact remains that any Fed policy aiming to push inflation down to 2 percent in the face of productivity growth rates that are significantly — but temporarily — below their trend will require a compression of nominal income growth that will not only be severe and painful. It will be entirely unnecessary.

Note that the statistics used in these charts pertain to the output of the nonfarm business sector, which means that the measure of inflation I’m using here is not the familiar Consumer Price Index or the Fed’s preferred “core PCE” (Personal Consumption Expenditures excluding food and energy) price index, but rather the price index for nonfarm business output. That index is very tightly correlated with core PCE: the r-squared at a four-quarter horizon is 0.90. However, nonfarm output inflation tends to run lower than core PCE: when core PCE inflation is at the Fed’s 2 percent target, nonfarm output inflation tends to be about 1.3 percent. I have taken this into account in constructing the charts.

Pfizer MATISSE Trial Targets Pregnant Women for Bivalent RSV Vaccine

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US to Double Its ‘Defense’ Budget

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U.S.-NATO Involvement in the 2014 Ukraine Coup and Maidan Massacre: The Soft Power Ecosystem and Beyond

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Poland’s New Border Fence at Kalingrad and “Himars Academy” Escalates Tensions with Russia

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U.S. Out of Africa: Voices from the Struggle

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