Month: November 2021

It's been weeks since the ports of Long Beach and Los Angeles announced they were moving to a 24/7 schedule in order to clear up backlogs, but so far nothing much has happened. There are still upwards of 60 or 70 container ships anchored offshore waiting a turn to offload their cargo.

Over the weekend a reader emailed to ask me what's going on. I don't really know, but I can at least point out that there are various choke points in play:

• Docks: Ships can't unload unless there's berthing available for them.
• Trucks: Berthing space can't open up faster than usual unless there are trucks available 24/7 to move the containers.
• Warehouses: Even if there are enough trucks, they have to have someplace to take the containers. If warehouses are full, trucks have no place to take their loads.

The problem, fundamentally, is that people are spending lots of money and that's caused a big spike in trade with Asia. This is a good thing, but it's also caused a crunch at the LA/LB ports since nearly 100% of their trade is with Asia.

Nobody is willing to build anything permanent to deal with this, since the backlog is obviously temporary. But the bottom line is that somehow, some way, we need more warehousing space so that there's someplace to put all the containers; more trucks running 24/7 to speed up cargo offloading at the docks; and 24/7 operation at the ports.

Any one of these things is useless without the others. The problem is that you can't just whistle up more trucks or more warehouses. It takes a while.

It's time for my sorta-weekly look at the COVID-19 pandemic, but this time I want to focus on something a little different. If you take a look at the case rate, the US has been doing pretty well for the past couple of months, falling from 500 per million to 200 per million. Meanwhile, countries like Germany and the Netherlands are skyrocketing, and others are increasing too, though at more normal rates.

But if you look at fatality rates, the picture is totally different. The US rate has declined to 3.5 deaths per million—which is good news—but that's still three times higher than most other European countries.

To get a better sense of this seeming paradox, we need to look at the case fatality rate, which tells us the percentage of COVID-19 cases that eventually turn into deaths. Here it is:

CFR is an imperfect measure, but the differences are so stark that this hardly matters. Over the past couple of months the CFR has doubled in the US and is now twice as high as in Germany and four times as high as the UK.

The case fatality rate tends to bounce up and down a lot, and the US rate hasn't always been higher than everyone else. Still, it's generally been pretty high, and lately it's spiked to a point pretty near its all-time peak.

Why? Why are so many more people dying of COVID-19 in the US than in other large peer countries?

In the space of ten months, Joe Biden has:

• Passed a $1.9 trillion COVID assistance bill.
• Presided over a massive vaccination campaign that's been successful despite shameless partisan opposition.
• Withdrawn all US troops from Afghanistan with minimal American casualties.
• Passed a $1.2 trillion infrastructure bill.
• Gotten very close to passing a historic $2 trillion safety net bill.

Just sayin'.

Things are pretty good for America's workers these days. Wages are strong, lots of new jobs are being created, and the unemployment rate is a low 4.6%. What's more, families have plenty of savings socked away and debt levels are low.

And yet surveys show that a big majority of people think the economy is in lousy shape. So what's going on? Neil Irwin dives into this puzzler:

The reasons seem to be tied to the psychology of inflation and the ways people assess their economic well-being....“The major issue is rising inflation and falling confidence in economic policies,” said Richard Curtin, who has overseen the University of Michigan survey for decades. “Consumers see rising prices, and they see no policies that would correct it.”

Well, golly, what could account for this? Why would people be spooked by high inflation that's only been around for a few months and isn't really all that bad anyway? Especially when wages have been keeping up with—and sometimes even exceeding—price inflation?

Man, that is a mystery. I just don't understand where such an odd belief comes from.

I was busy driving from the Louisiana swamps to the Houston airport on Friday, which means I missed providing you with my keen insights on the latest jobs numbers. Can't have that! Here they are:¹

It turns out there really are a couple of interesting things to say this month. First, we added 531,000 jobs in October and revised upward the estimates for August and September by 235,000, for a total of 766,000 more jobs than we thought we had a month ago. The headline unemployment rate dropped to 4.6%. That's really good.

In fact, given my belief that we're really only about a million jobs short of where we ought to be, this represents a huge chunk of the "worker shortage" we hear so much about. And it's still a huge chunk even if I'm off by a factor of two or so.

The other interesting thing is wages. For some reason there's been an awful lot of chatter lately about strong wage growth over the past year, but I'm not sure where it comes from. Here is overall wage growth:

It's true that we had strong earnings growth for several years before the pandemic. It's also true that there was a surge in wages right at the start of pandemic, which put us at a permanently higher level.

However, since the middle of 2020 there's been essentially no wage growth after you account for inflation. Keep this very firmly in mind whenever you hear that companies can't attract as many workers as they need. The truth is that they really aren't trying very hard.

¹Note that I've changed the layout of the chart I use by eliminating the months with gigantic ups and down during the pandemic. Those huge swings are old news, and they make it hard to see what's going on in more normal months. With a y-axis range of -400,000 to +800,000, it's much easier to see the changes over the past year or so.

POSTSCRIPT: And since we all love anecdotes, I've got one for you. We've all seen the signs offering jobs at McDonald's for $18 per hour. Wow! But those are mostly in big urban areas where the media hangs out, like New York and Los Angeles. But I just got back from Louisiana, and I saw plenty of help wanted signs there too. They were offering jobs at McDonalds for $10 per hour. Suddenly those $18 jobs sound more like regional outliers than trends for the whole country.

Hoo boy, conservatives are pissed this morning. Not at liberals, for once, but at the 13 traitors in the Republican Party who voted to pass the $1.2 trillion infrastructure bill. Philip Klein is typical:

Disgraceful House Republicans Rescue Biden’s Flailing Agenda

Just before midnight on Friday, we witnessed an utterly disgraceful act by a group of 13 House Republicans....On Friday night, after months of back and forth, it looked like Biden’s agenda could suffer another setback, as not all progressives were sold on the idea of agreeing to pass the infrastructure bill...With only three “no” votes to spare within her own caucus, Pelosi lost six Democrats — enough to sink the bill. Yet 13 Republicans swooped in to rescue Pelosi, provide Biden with the biggest victory of his presidency, and put the rest of his reckless agenda on a glide path to passage in the House.

This is a substantively bad decision that is political malpractice. It represents a betrayal.

....Every Republican who voted for this monstrosity who is not already retiring should be primaried and defeated by candidates who will actually resist the Left-wing agenda. Those who are retiring should be shamed for the rest of their lives. It also is not too soon to be asking whether Representative Kevin McCarthy should be ousted from leadership for his inability to keep his caucus together on such a crucial vote.

It is sort of interesting that 13 Republicans broke ranks on this bill. They usually show more discipline than that. But it's more interesting to parse the reaction from the right. Klein and other critics of the bill generally think we already spend enough on infrastructure—which I think is a defensible position—but their biggest complaint by far isn't substantive at all. They just hate hate hate the idea of giving Joe Biden a win—any win.

Needless to say, this is at the heart of political dysfunction in this country. It's one thing to oppose things that Democrats and Republicans have always fought over, but it's quite another thing to fight against everything across the board that comes from the opposition party. There's just too much stuff that's both necessary and relatively uncontroversial, but might also be considered a win for the bad guys. If you maintain a knee-jerk opposition to all of this, the country can barely survive.

This cat is the mascot of Cajun Encounters. I met her after taking one of their swamp tours.

She was willing to let me scratch her head, but then got a little discommoded by the crowd and wandered off to her hidey hole. Judging by the condition of her left ear, there must have been at least one dark night when she didn't get to her hidey hole quite quickly enough.

For what it's worth, I wouldn't spend too much time worrying about CRT and the "public school" problem that presumably led to Democratic election losses on Tuesday. It's not that this is a trivial issue or anything like that. On the contrary, it's been around in one form or another for decades and it's always been a reliable source of conservative fury whenever it resurfaces.

But it only resurfaced now because Fox News decided it should. They've spent months hammering on it, which successfully moved the needle a few percentage points in Virginia, but there's no guarantee that they'll keep that up for the next year. In fact, it's unlikely. There will be something new by then.

The only thing that's (almost) guaranteed is that next year's outrage will, subtly or otherwise, push racial hot buttons in Fox's audience. That's something that liberals need to figure out how to fight more effectively.

This tweet is making the rounds today:

"A gallon of milk was $1.99. Now it's $2.79. When you buy 12 gallons a week times four weeks, that's a lot of money."@EvanMcS goes grocery shopping with the Stotlers and shows us how badly inflation is hitting the middle class. pic.twitter.com/39hPPRHLja

— Brianna Keilar (@brikeilarcnn) November 4, 2021

Most of the tweets are from people wondering who buys 12 gallons of milk per week, but that's hardly interesting. The answer is that the Stotlers have adopted a bunch of kids and now have nine children living under their roof.

What's more interesting about this news segment is what it tells us about people's perceptions of inflation. Let's review. At one point, Mrs. Stotler says, "I think probably in June it was about a dollar was worth a dollar, so now that dollar is worth about 70 cents."

A little later, she gets specific: milk has gone up from $1.99 to $2.79.

Their total shopping bill for the week comes to $310. A few months ago, "we would have spent probably 150, 200 dollars, something like that."

We also have USDA figures for the price of milk. In Dallas, it's gone up from $2.99 to $3.29 since last June. (That's an average. It might be cheaper at certain stores.)

As it happens, the price of milk bounces quite a bit around depending on the mood of the cows and the whims of the bureaucrats. In the past year, a gallon of milk in Dallas has gone up from $3.03 to $3.29.

Here's how this nets out:

• First Stotler guess: Inflation is running at about a 100% annual rate.
• Second Stotler guess: inflation is running at about a 90% annual rate.
• Third Stotler guess for all groceries: inflation is running at a 70-140% annual rate.
• USDA figures: Extrapolating from the June price, the cost of milk is going up at about a 25% annual rate.
• Also USDA figures: Milk has actually gone up 8% in the past year.
• BLS: The inflation rate for groceries in general is currently 4.4%

Altogether, as we move from personal feelings to actual numbers, our estimate of inflation in the grocery store declines from about 100% to about 4%.

There are some cognitive biases at play here. Obviously one of them is that most of us are bad at mental math and draw wildly incorrect conclusions about relative prices.

But the cognitive bias most at work here is that when we think of prices, our brains go back to eras long past. It seems as if milk only cost $1.99 a few months or a year ago, but it didn't (unless it was on sale or something). It's been years since milk cost so little, but our memories are largely stuck in our early adulthood, when we first started paying attention to things like the price of milk. Mrs. Stotler, by misremembering the price of milk a year ago and then doing some bad mental math, concludes that inflation is running at an insane rate. The truth is that groceries are up 4.4% and milk is up only a little more than that.

I don't blame Mrs. Stotler for any of this. It's just a common human foible. But I do blame CNN for not spiking this story—or, at the very least, providing the full context along with the actual level of inflation in the grocery store. Instead, Evan McMorris-Santoro made every effort to imply that the Stotler's figures were an accurate and alarming reflection of the actual inflation rate today.

Why? Why do television correspondents keep doing this? It's very little short of a bald-faced lie.

We interrupt our ongoing saga of Louisiana's swamps and bayous to bring you some breaking news. On Wednesday morning, shortly after I got on Interstate 10 heading east, I ran into this:

Now that's an accident! The odd thing is that the pickup doesn't look damaged at all. So how did it end up halfway across the median divider? I suppose I'll never know.

In any case, here's what the westbound side of the highway looked like:

Traffic was completely stopped for three miles. And since the highway is passing over a swamp, there's no escape.

I ran into three huge traffic jams on Wednesday, every one of them on the opposite side of the road. It was my lucky day.

Photos of swamps and other normal things will resume next week.