Subject: Re: A far better DG analysis
It's an odd article. It makes a very compelling narrative, but I just can't find a way to agree with all that much of it.

A lot of it is built on the macroeconomic situation rather than the company's specific situation.
That's not a problem as such, but consider his "nut paragraph":
"Fundamentally, the US is not struggling with low consumer demand due to cyclical changes in the credit cycle, as did during all "Great Moderation period" recessions. Instead, the US (and its Western peers) face weakened consumer demand due to prices rising faster than wages."
The problem with this is that it's not correct. Median real US wages are up 0.8% in the last year, and 0.9%/year in the last three.
(FRED database "Employed full time: Median usual weekly real earnings: Wage and salary workers: 16 years and over")
Median earnings are down from the transient pandemic spike, but ignoring that, it's right on track to continue the uptrend since about 2014.
That continuing trend is actually quite an improvement, after having been net flat roughly 2002-2014.

He also goes down the "inflation is being understated" conspiracy rat hole, claiming inflation is really around 8%. But...no.
I have concluded that the UIG is a much better measure of monetary inflation (what the general purpose purchasing power of a dollar is doing) than either CPI or tinfoil-hat numbers.
The NY Fed does a big calculation based on the notion that the change in the price of any one thing is a mix of a single global rate of change, plus a factor purely specific to that one product or service.
After crunching through the data, they can tease out the one global factor from all the item-specific idiosyncratic factors, which they call the Underlying Inflation Gauge or UIG.
Using this method, the best fit trailing year "common" inflation rate is either 2.27% or 2.98%, depending on whether or not they include monetary factors other than straight-up prices.
Now, it's not in doubt that a lot of people are hurting financially--gasoline might be only one price, but it's an important one But I see the income shortfall primarily as the early onset symptoms of a recession, not built on out-of-control inflation.
Rather, the headline CPI inflation numbers are jumping around because some individual components are seeing large item-specific price swings. Though those one-item price swings are real and affect people, they tend not to be lasting. Mostly.
The main downside of the UIG from my point of view is that unfortunately it is only (and can be only) a year-on-year rate. There is no absolute-level index that could be used to adjust prices through history as with CPI, where the "I" stands for "index".

Jim