Month: August 2022

The BLS released productivity numbers for Q2 this morning, and the headline number is bad: a 4.6% decline from the previous quarter (at an annualized rate). This is bad, but in a slightly different way than it seems. Here's a chart that shows the absolute level of productivity, not the change from quarter to quarter:

This is, as usual, my favorite format. First I draw productivity from 2016 through the first quarter of 2020, just before the pandemic. Then I draw a trendline. Then I fill in the numbers from 2020 to the present.

What you see is that productivity went up faster than trend during the pandemic. This is because a huge number of people were laid off. Total output went down, but the number of workers went down even more. By simple arithmetic, this means that output on a per-person basis was higher than before.

As the pandemic eased, the opposite happened. Output went up, but the number of workers went up even more. The same arithmetic tells us that this means output on a per-person better declined.

There's nothing especially wrong with that. We should expect productivity to return to trend level once the economy has recovered. The problem is that this happened in the first quarter. But then, instead of leveling out, productivity declined again, taking us well below the pre-pandemic trend.

It's typical of recent recessions that productivity continues to go up or, at worst, stays flat. Usually, however, productivity keeps going up after the recession is over. This happened again this time, but only for a couple of years before it began to turn down. This is only the second time in 30 years that productivity has decreased two quarters in a row (the other time was in late 2012).

This is yet another indication of how strange the economy is right now: GDP is declining even as employment keeps going up. This is not usually how a recession works. (Nor is it how an expansion works.) So everyone is puzzled.

Here's one explanation that will probably ruffle some feathers: unemployment is too low. Employers have been snapping up anyone with a pulse, and this means they're pulling relatively unproductive workers off the sidelines. Many of them are now now stuck: hiring more people doesn't really improve output because the new workers are of such poor quality. They require more management time and more cleanup time after mistakes than they're worth. Maybe the conventional wisdom was right all along: 4% unemployment really is about the lowest it should ever get in an advanced economy like ours.

The way to return to growing productivity, as usual for the past century, is more machines. But things have changed. When the Industrial Revolution started, the productivity increase from automation was so great that we needed as many workers as before just to handle the huge increase in output. Lately, though, that hasn't been true. Automation has produced modest increases in productivity and the number of workers needed to handle the higher output has gone down. You can see that in the fact that the labor force participation rate has declined from its peak of 67% in 2000 to about 62% today. Here's what that looks like in a slightly modified version of my favorite format:

This time I drew the trendline through 2016, which shows a steady decrease in labor force participation. But then the participation rate flattened and even moved up in 2019. There was a huge downward spike during the pandemic, but the recovery put us right back on trend. Starting in 2021, however, participation grew well above trend.

Perhaps it grew too much. Perhaps employers have been more reluctant this time around to replace workers with automation. But that's not likely to last. For the first time in quite a while I saw a movie on Sunday and there were no ticket sellers at all. The entire process at our local gigantic multiplex was handled by touch screens. Fast food restaurants are moving in the same direction. The eventual result is going to be fewer workers but a return to normal productivity growth.

This is our long-term future and we can't avoid it except for short periods here and there. We're apparently in one of those periods now, but we'll probably return to trend before long. That means some pain in the employment rate, which the Fed seems determined to make even worse, but eventually a return to normal labor participation and productivity rates.

As you know by now, the FBI conducted a search of Mar-a-Lago, Donald Trump's Florida home, on Monday morning. For some reason, everyone assumes that they were looking for boxes of documents that Trump should have turned over to the National Archives but instead took with him when he left office.

That makes no sense. This was something that happened 18 months ago, and anyway, the Archives retrieved those boxes earlier this year. The FBI was obviously looking for something else.

But what? Nobody knows, but the reaction of Democrats and Republicans was nearly unanimously polarized:

Democrats: It takes a lot for a judge to approve a warrant like this. It's got to be something pretty serious.

Republicans: This is obviously a political motivated attack by the Department of Justice. Needless to say, Trump himself led the charge on this interpretation of events.

Now, I don't think this is politically motivated in any way. I'm not a huge fan of the FBI, but they have a long-time reputation for being a pretty conservative organization. What's more, Trump himself appointed the current head of the FBI.

On the other hand, I'm not so sure that judges require all that much convincing to approve an FBI warrant. Nor do I put it above the FBI to cut a few corners. They've certainly done it before.

I wouldn't be too surprised if the FBI's conduct wasn't entirely righteous, but I'd be very surprised if it was politicized in any serious way. As for what it was all about, we'll just have to wait and see.

I'm bored. It's dex night and I can't sleep but I have nothing to do. I'd like to play with my telescope but it's too cloudy even for testing.

So how about if we update our gasoline price chart? It annoys conservatives, so it's worth doing:

The price of gasoline just keeps going down, down, and then down some more. Why? Because the price of oil has dropped about 25% since its June peak and gasoline is following along. It still has a ways to go to catch up, though, so we should continue to see gasoline prices decline for at least another week or two.

This is a long-tailed Pea-blue butterfly captured in our front yard a few days ago. It is a member of the gossamer winged family, and according to Wikipedia it is common in Europe, Africa, South and Southeast Asia, and Australia. Notably missing from this list is our entire hemisphere, let alone Southern California.

So maybe I have this wrong? Perhaps it's a butterfly that bears a striking resemblance to a Pea-blue, but is actually something else? Anyone care to chime in on this?

UPDATE: Rob Modic emails to say that this is almost certainly a Marine Blue, which is very common in Orange County.

One of the ways that the new climate change bill¹ raises money to pay for itself is by hiring more IRS agents to audit rich people. This will make up for the massive drop in audits of the rich that's been engineered by Republicans over the past decade.

This has conservatives in a panic. Over at National Review, Charles Cooke responds to a guy who says, contrary to widespread fears, audits are no big deal if you just tell the truth:

Markowitz says that he has “never understood the fear of an IRS audit.” Given that he is an IRS-enrolled agent — that is, that he makes his living representing taxpayers in front of the IRS — this should perhaps not be too surprising.... “Don’t lie,” he suggests. “How about just don’t cheat on tax returns?” But this, of course, misses the point. I do not “cheat” on my tax return, and I never have. I don’t “lie,” either. But I’m still terrified of the IRS. Why? Because the process of being audited — especially in-person, which this funding will increase — is an absolute nightmare.

OK, sure. No one looks forward to an IRS audit. But the new funding is strictly for audits of the rich. The commissioner of the IRS—a Trump appointee—says the new money will be used only to increase the audit rate of people making more than $400,000 per year. These are the kind of people who have legions of accountants to handle their taxes. There's no fear involved except the fear of possibly having to pay all the taxes they owe.

But this is the bit I found the funniest:

One suspects that, in any other circumstance, this [fear] would be intuitively obvious. Suppose that, tomorrow, the FBI announced that it intended to begin “auditing” millions of people to find out if they had committed any federal crimes....

But this is precisely what the IRS did back in the '90s. As part of a deal over the Child Tax Credit, Newt Gingrich demanded a higher audit rate of EITC recipients, who are almost exclusively part of the working poor. As I recall, Republicans were all for it.

Bottom line: Cooke has nothing to worry about unless National Review pays a lot better than I think. The people who ought to be worried are the rich, but they cheat on their taxes in very abstruse ways and have no reason to be viscerally afraid of audits since most of them never see an IRS agent in the first place. For the rich, audits are just dreary, formal negotiations between opposing lawyers in mid-Manhattan conference rooms. They get occasional reports from their accountants while they relax on their private beaches in the Bahamas, and that's about it.

¹Can we all start calling it this? I'm a Democrat, and even I can't stomach calling it the Inflation Reduction Act.

A recently published research paper has been making the rounds that purports to measure the ideological slant of the Big Three cable news channels. The methodology is to (a) identify all guests who have at least ten hours of screen time over the past decade, (b) add up the amount of time they appear each day, and (c) assign them an ideology score based on how much they contributed to either Democratic or Republican candidates.

I have some issues with this, but let's put that aside. Here are the basic results:

I have helpfully added the dashed red line to indicate the zero level, at which the roster of guests is neutral, and then I've even more helpfully added a red dot for the year 2018 on MSNBC. Other years might have done as well, but 2018 is fine for illustrating my big problem with this paper.

As you can see, the researchers claim that MSNBC had a net conservative guest roster in every single time slot during 2018. That eventually turned around, and by 2021 the roster was enormously liberal.

This doesn't pass the finger test. Does anyone believe that right smack in the middle of Donald Trump's first term, MSNBC was essentially a center-right station? Or that in prime time, with every host blathering nonstop about Mueller and Russia, it was dead center? Help me out here. Does this make any sense at all?

UPDATE: In fairness, I should say that I had a Twitter conversation with one of the authors (Josh McCrain), and he insisted that I gotten the paper wrong. He says the only thing they measure is guest ideology, not the overall slant of the channel or program.

That's true as far as it goes, and they're very clear about exactly what they measured—and I made a few modest changes in the post to make that more explicit. The problem is that the paper mentions "media bias" over and over. For example: "We believe that this measure [i.e., guest ideology] offers a highly scalable method for estimating bias in television outlets and programs."

I don't buy this. It's trivially true that liberal programs tend to have liberal guests and conservative programs tend to have conservative guests, although the authors do almost nothing to demonstrate this empirically. More to the point, though, is whether smallish changes in the lineup of guests indicates whether the overall bias of a program is becoming more liberal or conservative.

This is where things get weird. McCrain apparently agrees that guest ideology is only a small part of overall bias because it doesn't account for the ideology of the host. However, that's not mentioned in the paper itself. Via Twitter, he asserts that overall bias is roughly the sum of host ideology and guest ideology but provides no empirical evidence for this.¹ My guess is that guest ideology is a very small part of overall bias, and therefore modest changes in guest ideology probably have very little effect on overall bias. More likely, it represents what kind of stuff is in the news at any given moment and who's president at the time. It's hard to think of anything internal to a show that would change so synchronously on all three channels. It almost has to be something external.

That's my take, anyway, and it might be wrong. Regardless, this is the question at hand and the paper does almost nothing to address it. It merely measures guest ideology using a dicey (in my opinion) methodology and then tosses up a chart. It tell us nothing empirically about the overall slant of either channels or individual shows.

¹Sorry, no links for this or anything else. Apparently McCrain deleted most of his side of our Twitter conversation. But maybe I'm not looking right.

I was puttering around in my local Target yesterday and I noticed something in the clothing department. In the name of diversity and body positivity, both the mannequins and the pictures of smiling models covered the full gamut of body types: thin, fat, big, tall, short, you name it.

But that was only in the women's clothing section. In the men's section it was still 2010: the body types ranged from 32-inch waists to 34-inch waists and there was nobody with a BMI over 25. Everyone was slim, fit, and muscular.

Comments?

And that's a good thing! My doctor tells me that I've been upgraded from non-urgent to urgent on the waiting list for my eagerly anticipated CAR-T treatment. I still don't have a date, but presumably this means I'm inching my way to the top of the list.

(This change has nothing to do with the severity of my cancer, which has been steady for many months. Though I will say that the latest chemo regimen I'm on sure does pile on the fatigue. I think I sleep about 80 hours a week these days.)

Rick Nevin writes in with the latest data on juvenile arrests. It's pretty spectacular:

I don't know that I agree with Rick's trendlines—I doubt that juvenile crime is going to hit zero anytime soon—but his basic idea is sound. And it's remarkable that even as lead poisoning has flattened out, teen crime rates continue to plummet:

• Since 1990, the property crime rate among Black juveniles has gone down 90% and the violent crime rate has gone down 80%.
• Among all juveniles, the property crime rate has gone down 90% and the violent crime rate has gone down 75%.

The crazy thing about all this is that if you judge by the squawkings of police chiefs and elected officials, you'd think America was still trapped in the middle of a massive crime wave. But it ain't so. The numbers go up and down a bit from year to year and place to place, and the pandemic has obviously had an effect recently, but generally speaking kids just aren't involved in much crime these days. At the same time, 20-somethings are following right along. Their numbers will be similar to that for teens within a few more years.

And don't forget that we're at the start of the decade that will also see a reduction in violence in the Middle East. I'm dead serious about that.

The Washington Post reports today about MoFi Records, a company that creates analog reissues of famous albums on vinyl. But a few weeks ago a customer discovered that the mastering process they used was not, in fact, completely analog:

In a sometimes halting video posted to the YouTube channel of his Phoenix record shop, the ‘In’ Groove, [Mike] Esposito said that “pretty reliable sources” told him that MoFi (Mobile Fidelity), the Sebastopol, Calif., company that has prided itself on using original master tapes for its pricey reissues, had actually been using digital files in its production chain. In the world of audiophiles — where provenance is everything and the quest is to get as close to the sound of an album’s original recording as possible — digital is considered almost unholy. And using digital while claiming not to is the gravest sin a manufacturer can commit.

The story meanders through a couple thousand words, telling the story of analog reissues; the high-end audiophile community; how MoFi fessed up; and how they were caught:

Earlier this year, MoFi announced an upcoming reissue of Jackson’s 1982 smash “Thriller” as a One-Step. The news release said the original master tape would be used for the repressing, which would have a run of 40,000 copies. That’s a substantially bigger number than the usual for a One-Step, which is typically limited to between 3,500 and 7,500 copies.

Michael Ludwigs, a German record enthusiast with a YouTube channel, 45 RPM Audiophile, questioned how this could be possible. Because of the One-Step process, an original master tape would need to be run dozens of times to make that many records. Why would Sony Music Entertainment allow that? “That’s the kind of thing that deteriorates tape,” says Grundman.

“That’s the one where I think everyone started going, ‘Huh?’” says Ryan K. Smith, a mastering engineer at Sterling Sound in Nashville.

Perhaps you will notice that MoFi was initially cast under suspicion due to a technical question. Were they really playing the master tape over and over? That seemed unlikely.

What didn't cast them under suspicion—ever—was the sound of their records. Quite the contrary: everyone agrees that MoFi has some of the best sounding records in the business. It takes until literally the last paragraph of the story to address that elephant in the room:

Randy Braun, a music lover, Hoffman message board member and lawyer in New York, hopes that, in the end, the MoFi revelation will prove what he’s been saying for years, that the anti-digital crowd has been lying to itself: “These people who claim they have golden ears and can hear the difference between analog and digital, well, it turns out you couldn’t.”

Um, right. The whole thing is a ridiculous scam. Modern equipment can digitize an analog sound stream at such high resolution that almost no one can distinguish it from analog itself. Used judiciously, which MoFi did, it improves the sound without leaving so much as a trace of digital impurity.

You could hardly find a better test than this. MoFi had been doing this for years, and high-end audiophiles had been swooning over their reissues the entire time. Nobody had even an inkling that MoFi's records had been corrupted by digital processing

For years. Now can we all knock off this crap?