Month: July 2022

The Fed minutes for their June 14-15 meeting were released today, and they explained why the Fed took such aggressive action on interest rates:

“The near-term inflation outlook had deteriorated since the time of the May meeting,” the minutes said. “Participants were concerned that the May CPI release indicated that inflation pressures had yet to show signs of abating, and a number of them saw it as solidifying the view that inflation would be more persistent than they had previously anticipated.”

This was all because four days earlier the BLS announced that CPI had clocked in at 8.6% in May. This was splashed across front pages everywhere as "the biggest increase since 1981."

But guess what? The media freakout was based on a CPI figure of 8.58% compared to 8.54% two months earlier. Some record. And that was for headline CPI using the non-seasonally adjusted figures. Using the more normal seasonally-adjusted figure, it wasn't a record at all. (March was.) And using the even more relevant core CPI figures, May represented the second month in a row of declining inflation.

And of course that's CPI, which the Fed claims not to care much about. They care about the core PCE rate. At the time of their meeting, the core year-over-year PCE rate had declined since February from 5.3% to 5.2% to 4.9%. And although they didn't know it, a few days later it would decline again to 4.7%.

And then there's the momentum of the month-over-month rate, which looked like this:

The April figures were the latest the Fed had available at their meeting, but the trend was clear regardless: since its peak a year ago it had been dropping steadily, going from 7.4% to 4.0%. That's a big and sustained downward movement.¹

You can always find something worrisome if you look hard enough. But there's a whole lot of evidence that inflationary pressures are abating. You have to look pretty hard to find something contradictory—like, say, a single month of headline, non-seasonally-adjusted CPI. The stuff that counts—trends, core inflation, PCE—all show declines.

IANAE and I might be all wet on this. But the evidence sure looks awfully clear to me. Just about every relevant measure is showing some welcome softening in inflation. And looking beyond the core, gasoline is now in its third week of declining prices (down yet another ten cents last week). This leaves food as our biggest remaining problem, but that's largely due to bad crops, war in Ukraine, and natural gas prices causing a big spike last year in fertilizer costs (but which have been softening since March). That will all work itself out eventually, and in the meantime there's nothing the Fed can do to speed it along.

¹When the May result was released it came in at 4.2%. But this is a volatile measurement and a small change in a single month doesn't mean much.

Every year I spend a few days taking pictures of hummingbirds in our garden. Here is our 2022 hummingbird posing in front of a Rose of Sharon. Such a beautiful little creature.

Over in England, there's been a long-running case involving an international development researcher who was let go for tweeting about transgender women. In particular, she repeatedly expressed skepticism that trans women are really women and the tribunal ruled that this was largely the reason her employment contract wasn't renewed.

I had never heard of this case before, but thanks to Twitter I heard about it today because the researcher, Maya Forstater, won her case on appeal to Britain's highest employment tribunal. They ruled that all her tweets were reasonable enough to be protected under current law, and therefore she had been sacked unfairly.¹

I don't especially agree with Forstater's views except possibly in a few narrow ways,² but I don't like to see people fired in response to mobs who are upset that someone feels differently than they do. That's regardless of the specific laws in question, which are harsher toward free speech in Britain than they are here.

I would like to see more people calm down about transgender issues, but there are real concerns at stake on both sides and people routinely write and act passionately about their political views. That's OK—even good—as long as it doesn't veer into active harassment. The court ruled that Forstater's tweets didn't do that, so now it's time to figure out what compensation she deserves. Good.

Short version of the ruling: Say what you want but stay away from deliberate harassment. As long as you do that, you shouldn't be the victim of woke mobs demanding you be fired.

¹Forstater has collected a full set of her tweets here. The appellate tribunal responsible for today's decision ruled unanimously that all of her tweets were "fairly mild" with one exception: a tweet about a Credit Suisse executive who identified as a woman for part of the week. Forstater described him as a “part-time cross dresser.” The panel also absolved her on that one, but the vote was 2-1, not unanimous.

²I'd have to study her beliefs in more detail to know.

The New York Times wrote today about a moderate Republican woman who loathed the Dobbs decision removing the constitutional right to abortion:

As Gov. Gretchen Whitmer prepared to kick off a round-table discussion about abortion rights at a brewery recently, Alisha Meneely sat at one corner of the table, feeling politically abandoned.

“This scares me a lot,” said Ms. Meneely, 43, who described herself as a “pro-choice Republican” in an interview shortly before the Supreme Court overturned Roe v. Wade. A few days later, as many Republican officials embraced the far-reaching implications of the decision, she was unequivocal. “This,” Ms. Meneely said, “is not my party.”

Let's think out loud about this. Toss out a few guesses. Run some ideas up the ol' flagpole and see if anyone salutes.

The target for Democrats is obviously center-righties like Meneely. The true believers won't give us the time of day and will never vote for us. So what do we know about these people?

First of all, feelings about abortion are just those: feelings. Science is of no help here. Science can tell us that a human blastocyst is created by a human egg and human sperm. It can tell us when a heart starts beating. It can tell us when brain activity is detected. It can tell us when a fetus is viable outside the womb—although this changes as technology improves. But it can't tell us whether a fetus deserves the same full protection of the law given to a human who's been born. That's an issue for religion, the law, and public opinion.

So why do some people feel that abortion is wrong? We liberals are fond of saying that it's because conservatives are misogynists who want to control women's bodies and punish them for having unapproved sex. And that's probably of true of some of them. But among moderate conservatives, there are really only two things we know for sure:

• A large majority of moderates on both sides have feelings that are basically shaped by shape. That is, they don't think a little ball of cells looks human but they do think that a sonagram taken at 18 weeks does. That's why they mostly approve of Roe v. Wade. They don't care if it makes legal sense, they only care that it jibes with their intuition.
• When Dobbs was finally handed down—that is, when endless talk turned into a real, concrete attack on abortion—support for abortion rights went up. We political junkies all expected Roe to fall after Trump appointed three right-wing justices to the Supreme Court, but ordinary people didn't. They were shocked and surprised when it happened.

These seem like the natural points of attack for liberals who want to persuade conservatives to support broader abortion rights. But how? It's easy to imagine how we can take advantage of scary conservative ideologues. They're scary. But how do we take advantage of the shape thing? After all, it makes a lot of sense for a pattern-matching species like us. If it looks human, it probably is human.

I don't know. The obvious solution is to support abortion until, say, 18 weeks but not after. But that's not what progressives believe.

We could try to convince people that "looks like" isn't "is." But that's a pretty tough row to hoe. I'm not sure how we could go about it.

We could begin a campaign to emphasize how a 20-week fetus isn't like a newborn baby.

We could splash social media with pictures of the 2001 fetus, emphasizing how creepy and alien it is.

Anybody else have some ideas? I know that lots of people have been trying to figure this out for decades, but with Roe gone it gains a certain salience that it didn't have before. What's our best way of handling it?

As usual, the Woodbridge Village Association did its part to increase small particulate matter in the local ecosystem on July 4th. But at least their show was prettier than the one most PM polluters put on.

Every year I try to experiment with something different, and in 2022 I decided to (a) use a long exposure to catch more fireworks in a single image and (b) show other people watching the fireworks. But it turned out that the long exposure time had a benefit I hadn't counted on:

As you can see, the smoke in the background is nicely blurred out and less distracting than usual. However, this is an otherwise undistinguished picture, so here's another one that I like better.

In today's Wall Street Journal we learn why the Fed is so concerned about inflation:

At the root of [the Fed's aggressive interest rate increases] is the fear that households and businesses will come to expect high inflation to persist, which can cause it to do so. That would require the Fed to increase rates more than otherwise to break that mind-set.

....When unemployment is at its natural level, they think inflation is influenced strongly by public expectations, which can be self-fulfilling. If consumers expect prices to be higher in a year, they will buy now.

“If you were a landlord and you knew prices were going to go up, you’d demand higher rent right now. If you’re a worker and you knew prices were going up, you’d ask for a raise,” said John Cochrane, a senior fellow at the Hoover Institution. “What people think is going to happen in the future matters desperately for how they behave today.”

....Current data suggest long-term inflation expectations are still anchored, “but there’s a clock running here,” said Mr. Powell. “It would be bad risk management to just assume that those longer-term expectations will remain anchored indefinitely in the face of persistent high inflation.”

So we have four things here. Three of them are guesses and one of them is a fact. If high inflation expectations set in, then:

• Consumers will buy now.
• Landlords will raise rents.
• Workers will ask for raises.
• Inflation expectations are still well anchored.

I see no evidence, for example, that consumers are "buying now." In fact, big box retailers are literally selling off appliances and other stock directly to discounters without ever putting it on the floor. That's because demand for these things has plummeted.

Landlords are raising rents, but that's largely because they were prohibited from doing so during the pandemic. Now they have three years of normal rent increases to make up in a year or two.

Workers are not asking for raises. Or, if they are, they aren't getting them. Real wages have been declining for over a year.

And yes, inflation expectations are currently pretty well anchored.

The big problem here is that today's core inflation was caused by problems in the past: supply chain headaches, pandemic restrictions, poor order management by big corporations, etc. The Fed can do nothing about any of that now, but they're panicking anyway because it turns out that these things affect inflation a little farther into the future than the FOMC thought they would. (Remember long and variable lags?)

Then, in addition to core inflation, there's fuel and food. But obviously the Fed can do nothing about the weather, nothing about feed shortages, and nothing about overseas wars. They're gunning for a recession that's completely unnecessary. The causes of inflation are either in the past or in areas outside of Fed control.

And keep in mind that the Fed is weighing these guesses against the certainty that a recession will put millions of people out of work. There have been cases where that tradeoff is necessary, but it's time to put both fear and veneration of the '70s away. It's been half a century, folks. Not every bout of inflation requires Volckerian zeal.

In the Atlantic today, Mitt Romney writes about our bipartisan refusal to address national (and global) crises:

Even as we watch the reservoirs and lakes of the West go dry, we keep watering our lawns, soaking our golf courses, and growing water-thirsty crops.

As inflation mounts and the national debt balloons, progressive politicians vote for ever more spending.

....When TV news outlets broadcast video after video of people illegally crossing the nation’s southern border, many of us change the channel.

And when a renowned conservative former federal appellate judge testifies that we are already in a war for our democracy and that January 6, 2021, was a genuine constitutional crisis, MAGA loyalists snicker that he speaks slowly and celebrate that most people weren’t watching.

What accounts for the blithe dismissal of potentially cataclysmic threats? The left thinks the right is at fault for ignoring climate change and the attacks on our political system. The right thinks the left is the problem for ignoring illegal immigration and the national debt. But wishful thinking happens across the political spectrum. More and more, we are a nation in denial.

I'm glad to see Romney write something like this, and I understand that he needs to pick on both sides in order to retain his conservative street cred. That makes me reluctant to nitpick his essay.

But I'm also really tired of people who try to retain a faux balance by desperately looking for bad behavior on both sides. I don't think it would be hard to find genuinely bad behavior by Democrats, but Romney's examples just aren't it. First off, here is recent national debt:

The national debt has gone up twice since 2000. The first spike was due to (a) Republican tax cuts, (b) deficit financed Republican spending for wars, national security, and Medicare, and (c) a housing bubble and bust that was egged on by a Republican Fed chair and made possible by light regulation of the financial sector. It had virtually nothing to do with Democrats.

The second spike was due to a global pandemic that was obviously nonpartisan. Again, Democrats had nothing to do with this aside from a single, smallish rescue component in March 2021.

The overall dynamic since the Reagan era has been for Republicans to cut taxes and raise spending when they're in office, and then for Democrats to pick up the pieces and try to rein things in when they assume power. Nor is this really controversial outside the confines of Fox News. Everyone knows it.

Now here's a look at immigration:

Romney is on firmer ground when he says that Democrats are softer on immigration than Republicans. Nevertheless, the five spikes in border crossings over the past two decades have been evenly split, three from Republican presidents and two from Democratic presidents. What's more, Democrats have twice been willing to sign up for comprehensive reform, but it's been scuttled by the extremist wing of the Republican Party. Democrats are considerably softer on immigration than Republicans today, but we only got here in the first place thanks to Republican intransigence.

And then there's one other thing. I appreciate Romney's vote to impeach Donald Trump. I am entirely sincere about that. But more generally, Romney continues to be a good foot soldier for the modern, Trumpized GOP. That just doesn't jibe with claiming to believe that we're going through a world historical crisis right now.

Politically, Romney is probably doing the right thing in his Atlantic essay. He comes off as cool and bipartisan while I come off as edgy and partisan. Naturally I regret that. But the facts are still on my side.

Some of the most hardcore anti-abortion advocates are hoping to get state laws passed that would not only ban abortion in their own states, but would prohibit women from traveling to another state to get an abortion. A few of them even want to ban the right to speak about reproductive choice options in other states.

It hardly bears saying that this is ridiculous. As an example, consider a few things of varying legality in deep red Texas and deep blue California:

• In Texas it's illegal to purchase or consume recreational marijuana. But it's not illegal to travel to California and do it there.
• In California it's illegal to purchase a high-capacity magazine. But it's fine to travel to Texas and buy one there.
• In Texas it's illegal to engage in assisted suicide. But it's OK to travel to California and do it there.
• In California it's illegal to sell eggs from battery-caged chickens. But you can drive to Texas and eat them there.
• In Texas it's illegal to teach public high school students about the 1619 Project. But you can move to California and get as much 1619 righteousness as you want.
• In California it's illegal for kids to publicly drink alcohol. But it's not illegal to drive to Texas and drink in public if your parents are present.

And of course it's entirely legal in both states to talk about these things in any way you want. It's a massive overreach to try and ban either travel or speech related to abortion.

There are lots of things that are legal in one state but not another. States are the laboratories of democracy, and the Constitution explicitly says that "Full Faith and Credit shall be given in each State to the public Acts, Records, and judicial Proceedings of every other State." Even our current Supreme Court can't pretend otherwise.¹

¹Of course, if that's true it highlights the problem I discussed in the previous post: Republicans talk big, but a lot of people think it doesn't matter because someone always stops them from doing scary, ridiculous stuff. That makes it OK to vote for them.

It's a paradox: we want people to be scared of Republicans, but we don't want Republicans to successfully enact any of the stuff that might actually scare people. What to do?

As an aside in a recent email I mentioned that I thought Dobbs would "get better." What did I mean by that?

Let me make clear that my answer is speculation. And I'll admit up front that it's the kind of speculation liberals and progressives have engaged in for a long time without it coming true. But here it is anyway.

For a long time, Republicans have dreamed of a conservative Supreme Court that would give them everything they want. Now they have it. And they're going to blow it.

For years they've won the support of center-right voters who don't like Republican extremists and don't like Donald Trump but vote for them anyway. Partly this is because they prefer Republicans over Democrats on specific issues (spending, foreign affairs, crime, immigration, etc.) but partly it's because Republican extremists have been huffing and puffing for so long that nobody takes them seriously.

But in three specific areas the Supreme Court has now given them the green light to swing for the fences:

• Abortion (Dobbs)
• Black voting (Shelby County)
• Guns (Heller and New York State Rifle & Pistol)

There are smart Republicans out there who will counsel patience. Let this stuff settle for a while so that it doesn't get scary. Move slowly.

But there are too many conservative Republicans who have no intention of doing this. We're already seeing states try to pass draconian laws forbidding interstate travel to get an abortion or banning speech about reproductive rights.

Likewise, the last few years have already seen a bunch of red states passing obviously race-based gerrymandering bills as well as new election laws designed to give Republican legislatures the ability to turn elections their way based on little but paranoid suspicions.

Finally, we're also likely to see a lot more 2A lunatics carrying guns around everywhere, even in states that don't like this. Eventually one of them will touch off yet another massacre and police will make it clear that they knew there was a guy with an AR-15 hanging around outside the mall/school/courthouse but they were constrained from so much as approaching him. Hanging around a mall with an assault rifle is perfectly legal, after all.

I think this is going to happen because this is what always happens. I don't know how long it will take, but it will happen. And when it does, center-right voters will no longer dismiss conservative extremists as just blowing hot air. It will be obvious that the Republican Party is under the control of right-wing loons and they're scary as hell.

And then the backlash will come. Of course, this is the part that progressives are always predicting but never happens. The Republican Party keeps getting crazier and crazier and we say, "This time people won't put up with it." But they do. Ditto for Donald Trump and his increasingly lunatic pronouncements during the 2016 campaign. (Remember that?)

So why am I dumb enough to believe that this time, for sure, it really is going to happen? Because it's no longer just talk. Republicans now have the power to actually fulfill some of the most extreme fantasies of their MAGA wing. And that, finally, is going to scare people in purplish states into voting for Democrats.

Needless to say, all of this presumes that adults aren't able to rein in the GOP's MAGAnauts and Democrats are able to rein in their extreme progressive wing and present themselves as a temperate, reassuring alternative. That's not a sure thing. But I can hope.

The top picture today is Juno Beach, site of the Canadian landing on D-Day. The bottom picture shows a circle of flags whipping in the stiff breeze that followed us around the entire day.

Why show you Juno Beach on July 4th? Because that's where our particular tour took us.¹ Besides, Friday was Canada Day and we should be generous about acknowledging our comrades in arms. Mind you, not so generous that we skip catblogging, but generous nonetheless. I'm sure our neighbors to the north understand.

¹We actually had a choice of Juno Beach or Omaha Beach. The Juno Beach tour won because (a) we already know the American side of things pretty well, and (b) the Juno Beach tour included a stop at the Bayeux Tapestry, which one of our family members really, really wanted to see. No pictures allowed, though!