All I want for Christmas is my 2% inflation

Instead, we've got $499 Christmas trees. [Bloomberg]( This is Bloomberg Opinion Today, a seasonal ritual of Bloomberg Opinion’s opinions. [Sign up here](. Today’s Agenda - What’s driving [the economy](? All that anger. - Who’s [paying]( for [the climate](? Call a banker. - How to win [the 2024 election](? Be an anchor. - How to [keep peace]( in Gaza? Ease the rancor. It’s [Giving]( [Season]( The only [chateau]( we can afford. Credit: @j_hunt09 via Instagram Is it just me, or does it feel like everyone — except government employees in [Wisconsin]( — is trying to get their hands on the viral Home Depot [Christmas tree]( with color-changing LEDs? Overnight, giant-sized [nutcrackers]( replaced the [plastic skeletons]( on our doorsteps. Advent calendars featuring everything from [cheddar cheese]( to [cherry jam]( to [potato chips]( are flying off the shelves. And your inbox is probably filled to the brim with suggestions for [the perfect present](, as evidenced by the 3.7 billion Google results for “gift guide” (note: as of 4:28 p.m.). That’s why John Authers isn't waiting for the end of the year to make [his predictions]( for 2024. “The whole exercise is a tad silly,” he writes, but it’s still “a seasonal ritual that serves a purpose.” Hopefully the ritual will go better than it did last year, when economists predicted that the US was [100% going to enter a recession]( within a year, which absolutely [did not happen](. As it turns out, Betsey Stevenson [says](, the big economic story of 2023 was the [disconnect]( between consumer [sentiment]( and [behavior](. Although millions of Americans are [down about the economy](, they’re still buying $499 Christmas trees and $249 animated nutcrackers. “Economists tend to believe [actions over words](,” she writes. So if you’re someone who’s saying “Bah humbug! The economy is awful!” but you’re shelling out hundreds of dollars to attend [Mickey's Very Merry Christmas Party]( at Walt Disney World, economists are gonna trust your vacation plans over your economic [trash-talking](. A big part of this disconnect boils down to a concept called “[money illusion](,” she explains: “People love to wax nostalgic about the good old days when everything was cheaper. Of course, wages were a lot lower back then, too — but people rarely wax nostalgic about that.” Consider SAG-AFTRA’s recent union victory. The [118-day strike]( resulted in a [$1 billion]( deal which will enable the actors to be paid more for their work. It’s a welcome win for Hollywood, but “customers will be left footing the bill — via those frequent subscription fee increases — without getting more for it,” Paul Hardart [warns](. Normal people (the ones without Bloomberg subscriptions, I mean) tend to see the economy through the lens of their [purchases](. They’re focused on the price increases of their Netflix and Hulu [subscriptions](, not CPI figures or wage gains. Tangible evidence of “shrinkflation,” whether it be the [cookie-to-cream ratio in Oreos]( or the amount of cake mix in a Betty Crocker [box](, only adds to the deep-seated belief that the economy is [rigged](. “This anger — mixed with the real pain of inflation and the frustrations borne out of cognitive bias and partisan politics — has created a toxic stew,” Betsey argues. If that’s the nightmare before Christmas, I can only imagine what horrors are to come after it. CPI Day Livestream: Tomorrow morning, join Jonathan Levin, Claudia Sahm and Gina Martin Adams as they break down [the latest inflation data](. Hell to Pay By the end of the century, do you think humans will still be threatening each other by saying, “There will be hell to pay!” Or will that phrase be too literal? Like, what if hell is already here by then? Wouldn’t everyone be paying for it? Whether it’s [$200 trillion]( or [$275 trillion](, it’s clear that we’ll need to invest a lot of money between now and 2050 in order to limit and adapt to climate change. “Such numbers are so huge they test the brain’s ability to process them,” Mark Gongloff [writes.]( “Eleventy gazillion sounds almost as believable. But they are pennies compared with the damage that will accumulate if we don’t make these investments.” If we fail to pay that money and carry on with business as usual, we’ll be spending $2.3 quadrillion smackeroonies by the year 2100. And that doesn’t even take into account the [damage]( that’s already been done by climate change. Although it may be easy to recognize climate injustice, reparations will be difficult, Mihir Sharma [explains](. “Political battles over who pays and who receives may give rise to even deeper resentments,” he argues. Countries have [agreed]( on a new “loss and damage” fund at the World Bank, but relations between the developed and developing world must improve in order to restore trust and guard against institutional biases. The first order of business should be filling the “US-shaped hole” in every climate solution. Mihir writes. “Everyone outside the US agrees that, as America has contributed the most carbon to the atmosphere, by far, it should pay out the most,” he says, “but no US administration is capable of committing even a single taxpayer dollar to global climate justice.” China, meanwhile, is busy trying to clean up its act. But David Fickling [says]( its [roadmap]( for cutting methane emissions is still too light on the details. “For one thing, there’s no overall target for how much current pollution should be cut, and by what date. We don’t even know what the starting line is,” he writes. China is nowhere near the path to net-zero, which means that the world is also nowhere near the path to net-zero. I would say there will be hell to pay, but it’s increasingly seeming like it’ll be the other way around: We’ll be paying for hell. Telltale Charts Over the weekend I learned that Gen Zers are saying “[luh calm fit](.” It’s used to describe an understated [outfit]( that’s stylish and substantive, but not screaming at you. It got me thinking about the value of tranquility in increasingly [noisy]( times. What if we took the principles behind luh calm fit and applied them to presidential candidates? Neither Biden’s [gimmicks]( nor Trump’s [brashness]( would meet the list of qualifications. But is it so much to ask for a high-quality candidate who isn’t all up in our faces? As it stands, Matthew Yglesias [notes]( that a plurality of voters see Biden and his party as too liberal, and Trump and his as too conservative. What we need is a president that’s “nun too crazy,” as the kids say. With a few tweaks to his campaign — focusing on more moderate policy achievements, for instance — Biden can be that person. The United Nations doesn’t have a fabulous rep when it comes to peacekeeping: Its “list of horror stories, from Bosnia to Rwanda, is long,” Marc Champion [writes](. But there’s one crowning achievement that sometimes gets overlooked: The UN’s 1996-1998 mission to Eastern Croatia. “Vukovar, a town with a mixed prewar population of 44,000, had been Croatia’s Stalingrad — or perhaps soon its Gaza City. After holding out for three months in 1991, it was turned to rubble, strewn with bodies left to rot during the siege. Rebel Serbs ended up in charge, with Croats driven out or killed, for more than four years. But then the balance of forces changed and a transition was needed to restore Croatian control,” Marc explains. The UNTAES mission was straightforward: “Implement an agreed-upon transition of one-to-two-years, during which it would ensure security, the right of safe return and elections.” It’s a model that could prove instructional for Gaza. Further Reading Each year, US [retirement savers]( are getting ripped off by as much as $5 billion. — Bloomberg’s editorial board America’s [elite universities]( love to preach inclusivity, but their reputations depend on being selective. — Tyler Cowen A nation of homeowners? The UK has [a muddled concept]( of property ownership. — Merryn Somerset Webb Link’s [androgynous, silent identity]( in Zelda will be a challenge for Nintendo. — Natalie Schriefer There’s a price to earning [a big return on your cash](: the broader economy. — Paul J. Davies Seventy years ago, the West helped South Korea recover from war. [Ukraine’s reconstruction]( can work similarly. — James Stavridis Now that we know Wegovy is a “game changer,” [obesity drugs]( are bound to become more accessible. — Lisa Jarvis ICYMI Trump’s Hawaii resort is [rebranding to]( become a Hilton. Baby boomers are snatching up [all the houses](. Astronauts accidentally dropped their tool bag in [space](. Kickers [Jacob Elordi]( is the new king. [Greta Gerwig]( is truly unstoppable. [Lauren Sánchez]( got the Annie Leibovitz treatment. Luke Perry’s [compostable mushroom suit]( isn’t working. (h/t Mike Nizza) We’re practically bathing in [cream of mushroom]( soup. [Pet psychics]( are more popular than you think. Nobody wants to live in [Hudson Yards](. Notes: Please send [good soup]( and feedback to Jessica Karl at jkarl9@bloomberg.net. [Sign up here]( and follow us on [Threads](, [TikTok](, [Twitter](, [Instagram]( and [Facebook](. Follow Us Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. 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](. Want to sponsor this newsletter? [Get in touch here](. You received this message because you are subscribed to Bloomberg's Opinion Today newsletter. If a friend forwarded you this message, [sign up here]( to get it in your inbox. [Unsubscribe]( [Bloomberg.com]( [Contact Us]( Bloomberg L.P. 731 Lexington Avenue, New York, NY 10022 [Ads Powered By Liveintent]( [Ad Choices](