We begin this week with a simple pop quiz. Is inflation good or bad? Answer quickly. I’m sorry – your answer is wrong. Or rather, we can’t know if your answer is right or wrong because we are not sure what is meant by the question. We may think we know – and we may be right – but we can’t be sure, because the word inflation has different meanings for different people in different places and different times. In fact, even the same people in the same place and time can’t agree on a precise definition.
This is in part because most of us still think of economics as a science akin to physics or mathematics. Inflation is one way economists attempt to measure things. But unlike the distances between stars or atoms, or the certainty implicit in even very abstract mathematical models, our measurement of inflation is limited by and entirely dependent upon the tools we choose. In fact, the methodology we use has as much ability to determine the outcome as the actual data does. This week we begin a series on economic data with a look at inflation, but we’ll preface the series with a discussion of how economics may be more akin to philosophy or theology than the hard sciences. If you are an academic economist, you may want to move on to the next letter, unless you are capable of not taking yourself too seriously.
First, a little housekeeping. You are getting this letter this week on Friday night or Saturday morning, depending on what part of the globe you inhabit. When Thoughts from the Frontline first started (in August of 2000), I wrote on Friday during the day and hit the send button in the afternoon. The list was smallish and delivery was quick. Over the years, it has taken me longer to research and write. My business life is now focused around thinking about and writing this letter, which suits me just fine.
But now “writing day” often stretches late into the night and beyond, into the following morning. Friday nights became Saturday mornings and I ended up sleeping too late on Saturday to really enjoy the day. I should note that since I quit drinking about 19 months, 26 days, and 4 hours ago (but who’s counting?) it is taking me about twice as long to write the letter. Seriously. I suspect that, like many writers far more productive and interesting than I am, I was self-medicating my ADD with a little wine and scotch on writing nights. Not a lot, mind you; just enough. Whatever enough is, which is another data point that can be, well, fluid.So I decided to try writing Sunday night, and then moved to Tuesday night due to the publishing schedule of other Mauldin Economics publications. However, readers told me they prefer to read me on the weekend. It finally dawned on me (skilled analyst that I am) that there is little difference between Tuesday and Thursday nights. So the new schedule will be that I will write on Thursday night, reflect and edit on Friday, and make sure the letter gets to you overnight for your weekend reading pleasure. Thanks for your patience as I wandered through the week in order to get back to sending the letter on the weekend when you always wanted it anyway.
Long-time readers may know that for sins committed in my past lives I matriculated to Southwestern Baptist Theological Seminary in Fort Worth after graduating from Rice in 1972 (just as slide rules were starting to slip from the pantheon of must-wear gear for the respectable nerd). I decided not to pursue the religious endeavor beyond that point, which was a positive choice both for me and for the…