China’s hot new export could be stagflation

Follow Us Get the newsletter Today's Agenda Out: Chinese deflation. In: Chinese inflation. Munis have a spare $350 billion to spend. Today's GOP is anti-democratic. We just can't quit Zoom. China's Hot New Export: Inflation For decades, China made it easy to mock inflation Cassandras by pumping deflation into the world. It was like Arrakis with spice, except instead of space-folding and prescience you got stagnant wages and low interest rates.  The inflation Cassandras may finally be having their revenge. Like everybody else in the world dealing with shortages of chickens, lumber and chlorine, China has its own supply problems and rising prices, writes Dan Moss. Just like everyone else, it hopes these are temporary. But its economy has developed enough in recent decades, and its wages have risen enough, that its days of keeping global growth high and prices low are over. In fact, China could soon be exporting stagflation to the world, warns John Authers. If Beijing tries to solve its little inflation problem by letting its currency jump, then that could lower the buying power of other currencies, including those in your bank account. And given its anxiety about the social upheaval inflation would bring, Beijing could be determined to fight it, no matter the cost. The spice won't flow forever. States Have Money. Teachers Need Money. You Do the Math. Or Ask a Teacher to Help. So many of America's longstanding problems are the result of state and local governments not having enough money. Failing schools. Falling bridges. A geriatric donkey pulling trains through a leaking Hudson River tunnel. All are problems money could solve. Now, thanks to a Covid-relief windfall that turned out not to be 100% necessary, state and local governments have a $350 billion pot of money they can spend almost at will, writes Brian Chappatta. This is the American dream: just stumbling into a pile of cash to turn that basement into a man cave or buy more AMC stock for the free popcorn, to eat in the man cave and fill the void inside. Where was I? Oh, yeah, states: Now they can hire workers, fix schools, get a new Hudson River donkey. The sky's the limit. They just can't cut taxes or throw any of the money into their deep pension holes. They might want to set some billions aside for the fall, just in case they find they're running low on teachers, Conor Sen warns. We're short on chickens and chlorine, so why not teachers? In fact, it's pretty easy to see why people might not want to teach our germ-ridden little darlings these days. As Conor notes, in some places you can make more money working at McDonald's. Spending some of the Covid windfall on boosting teacher salaries could help. It's Official: The GOP Is a Threat to Democracy It has long been consensus on the left that the Republican Party is a threat to American democracy. One contested election and violent transfer of power, several alarming state laws and a softball league's worth of coup-curious congresspeople later, this view of the GOP is now mainstream consensus, writes Jonathan Bernstein. He agrees. It's hard not to, given recent evidence. We could just hope the party's fever breaks on its own, like that whole Crocs with socks thing. Donald Trump couldn't maintain a blog for a month, much less a successful coup. Then again, people said similar things about his insistence he'd won the 2020 election. He's still telling people he'll be back in the White House by August. Better to overprotect democracy than to regret doing nothing. Telltale Charts Zoom was such a big pandemic winner that it even starred in a horror movie. Despite the fading pandemic and ever-present risk of demonic possession, people still use Zoom a lot, writes Tae Kim. Its stock price and user growth hasn't been as bananas lately, but that's probably a good thing at this more mature stage. Further Reading Lab regulations are too loose around the world, making it easier for deadly pathogens to escape. — Bloomberg's editorial board We don't know yet if Pfizer's Covid vaccine causes heart inflammation in young men, but the risk is negligible. — Max Nisen The Texas anti-vaccination suit doesn't have a legal or even moral leg to stand on. — Noah Feldman  The U.K. government still has much to explain about how Greensill got so much access and influence. — Elisa Martinuzzi and Therese Raphael Goldman Sachs is looking to get back into business with China's ICBC, but a lot has changed since its first successful venture. — Anjani Trivedi The Tulsa massacre is part of a long history of White violence to prevent Black economic and political equality. — Trevon Logan ICYMI Exxon's activist won a third board seat. Israel's opposition formed an unlikely coalition. Tesla restaurant? Tesla restaurant. Kickers Accurate clocks may make the universe more chaotic. (h/t Ellen Kominers) Mainland Australia has its first baby Tasmanian devils in 3,000 years. Australian whales are breeding like rabbits. Philosophers think different. Notes: Please send accurate clocks and complaints to Mark Gongloff at mgongloff1@bloomberg.net. Sign up here and follow us on Twitter and Facebook.   Like Bloomberg Opinion Today? Subscribe to Bloomberg All Access and get much, much more. You'll receive our unmatched global news coverage and two in-depth daily newsletters, The Bloomberg Open and The Bloomberg Close. Before it's here, it's on the Bloomberg Terminal. Find out more about how the Terminal delivers information and analysis that financial professionals can't find anywhere else. Learn more.   You received this message because you are subscribed to Bloomberg's Bloomberg Opinion Today newsletter. Unsubscribe | Bloomberg.com | Contact Us Bloomberg L.P. 731 Lexington, New York, NY, 10022