Month: October 2022

The Washington Post is worried that we're all getting lazy:

In the first half of 2022, productivity — the measure of how much output in goods and services an employee can produce in an hour — plunged by the sharpest rate on record going back to 1947, according to data from the Bureau of Labor Statistics.

The productivity plunge is perplexing, because productivity took off to levels not seen in decades when the coronavirus forced an overnight switch to remote work, leading some economists to suggest that the pandemic might spark longer-term growth. It also raises new questions about the shift to hybrid schedules and remote work, as employees have made the case that flexibility helped them work more efficiently.

Did "some economists" really suggest that the pandemic might spark long-term productivity increases? Color me skeptical.

(UPDATE: A reliable source tells me that, yes, there really were economists making this argument back in 2020. OK then.)

Nor have I ever really believed that remote work increased worker efficiency. In fact, I'm not sure the kind of stuff the typical remote worker does even affects the productivity stats much.

But most of all, there's this:

The pandemic was a singular event for the national economy, which makes it difficult to evaluate by normal historical standards. This is why I believe that a necessary first step for nearly any analysis of recent economic data is to look at the pre-pandemic trendline and see how we're now doing in comparison. In this case you see something typical: a big increase in 2020/21 and then a reversion to trend later on. In other words, the increase in productivity was a bit of chimera, probably because lots of people were furloughed and that caused an artificial productivity increase that went away when worker levels returned to normal.

For now, this is just a guess on my part. But unless productivity keeps on dropping, I'm not sure there's really anything worrisome going on here.

I didn't get around to this last night, and by now most of you are probably already aware of the reaction by all too many Republicans to the attack on Paul Pelosi. In a word, it's been vile.

If Republicans were just trying to claim that the attacker didn't have any kind of partisan motivation, that would be par for the course. Wrong, but hardly surprising—especially this close to an election.

But they're going way beyond that. Charlie Kirk asked his listeners to post bail for the attacker since the whole thing is just fake liberal news. Virginia Gov. Glenn Youngkin admitted the attack happened, but then joked about it. Donald Trump remained silent over the weekend, but spoke up today to blame everything on lax Democratic crime policies. This is also the line Fox News has been pushing all weekend. Donald Trump Jr. retweeted a joke about Pelosi being in his underwear. And there's more:

A forum devoted to former White House adviser Stephen K. Bannon’s right-wing radio show alerted its 78,000 subscribers to “very strange new details on Paul Pelosi attack.”

Roger Stone, a longtime political consigliere to former president Donald Trump, took to the fast-growing messaging app Telegram to call the assault on House Speaker Nancy Pelosi’s husband an “alleged attack,” telling his followers that a “stench” surrounded mainstream reporting.

....Dinesh D’Souza, whose recent film “2000 Mules” burnished his right-wing bona fides by pushing Trump’s debunked claims of widespread voter fraud, aired falsehoods and innuendo in a viral Twitter thread suggesting the attack on Paul Pelosi was a form of intentional misrepresentation sometimes referred to as a “false flag.”

....The story shared in the Telegram channel for Bannon’s “War Room” show . . . ominously pronounced, “It appears we are not getting the real story.”

....[Elon] Musk . . . [retweeted] a story in the Santa Monica Observer claiming without evidence that Paul Pelosi was drunk at the time of the assault and “in a dispute with a male prostitute.” Musk, who later deleted the tweet, did not respond to an email seeking comment.

....Scores of tweets included claims that the attack was a false flag, including some responding directly to messages from the House speaker. “@SpeakerPelosi Accountability is coming,” one user warned. “Tired of your Lies and False flags. Your Treasonous.” Another wrote, “I don’t know why the Paul Pelosi story falling apart is such a surprise. False flag attacks are a common tool of the left.”

....Wendy Rogers, a Republican state senator in Arizona who has set fundraising records in her state while aligning herself with right-wing extremists, shared a spurious Amazon listing for a “Paul Pelosi Fake Attack Novelty Item Headpiece.”

Garrett Ziegler, a former Trump White House aide, directed his more than 125,000 followers on Telegram to a meme sexualizing the assault.

Larry Elder, a conservative radio host who mounted a failed bid for governor of California in the recall election last year, reacted to the assault by ridiculing Pelosi for a charge earlier this year of driving under the influence. “First, he’s busted for DUI, and then gets attacked in his home,” the commentator wrote on Twitter. “Hammered twice in six months.”

Even after all the events of the past few years it's hard to believe that this is how things go today. So despicable.

Happy Halloween! Can you figure out what this is? The first person to correctly identify it will win the eternal admiration of both their peers and other assorted readers of this blog.

Today the Supreme Court is hearing arguments in a pair of cases that could spell the end to affirmative action in university admissions. Conversation around the case has been almost entirely about elite universities, which enroll only a small fraction of all college kids, but there's good reason for that.

I'm going to use California as an example because in 1996 we banned affirmative action via Proposition 209. That makes California an excellent test bed for how well affirmative action works and how easily it can be replaced by something else. Here is enrollment at the non-elite California State University system:

As you can see, diversity is not a huge issue in the CSU system. White students are slightly underrepresented while Asian students are slightly overrepresented compared to their population. Black and Latino students are represented in numbers very close to their population. And Latinos in particular have improved their position considerably since Prop 209 passed: In 1998 they were enrolled at a rate about ten points below their population, while in 2018 they've almost completely closed the gap.

In other words, CSU might be twice the size of UC but that doesn't mean it deserves twice the attention. Quite the contrary: its very size and non-eliteness means there's little point in studying it since it doesn't pose a big diversity problem in the first place.

So now let's take a look at the elite University of California system. Enrollment numbers are surprisingly (?) hard to come by, but here's an estimate from an ETS paper by William Kidder and Patricia Gándara:

In 1998, Hispanic students were enrolled at UC campuses at a rate 19 points below their share of the population. In 2014, it was still 19 points.

Among Black students, enrollment was about four points below their share of the population in 1998. By 2014 they had closed the gap to two points.

Here are the numbers for Asian students:

Asian students are overrepresented by about 27 points. There are two big takeaways here:

• The elimination of affirmative action seems to have had little effect. Black and Hispanic students were underrepresented in 1998 and they're still underrepresented today. More to the point, they're underrepresented by the same amount as they were back when UC campuses actively used affirmative action.
• These numbers are never going to change much because Asian students are massively overrepresented. If Asian students are overrepresented by 27 points, then by definition every other racial group is going to be underrepresented by an aggregate of 27 points. There's no way to change this arithmetic.

This is California, not the nation as a whole, and both Latinos and Asians play a bigger role here than in most states. Still, California presents an unusual natural experiment, and that experiment suggests that affirmative action is not all that effective.

Personally, I've always been a fan of replacing race-based affirmative action with class-based affirmative action. This is not because it's just as good at redressing racial disparities. As near as I can tell from the evidence, it isn't. However, the evidence also suggests that it's almost as good. And it has the benefit of being far less controversial; helping a greater number of people; and appealing to most people as fairer. In other words, it eliminates a lot of problems at a very small cost.

For this reason I'm not too panicked about today's Supreme Court arguments. I would prefer that the court allow race-based affirmative action to continue because I think universities should have the flexibility to use it if they want to. At the same time, if it's banned I suspect the impact will be small. As in California, elite universities will have to find other ways of increasing diversity on campus, and they probably will.

We have some genuine good news tonight—though it was a close call:

Voters in Brazil on Sunday ousted President Jair Bolsonaro after just one term and elected the leftist former President Luiz Inácio Lula da Silva to replace him, election officials said, a rebuke to Mr. Bolsonaro’s far-right movement and his divisive four years in office.

....He won 50.90 percent of the votes, versus Mr. Bolsonaro’s 49.10 percent with 99.98 percent of the vote counted Sunday night.

Lula seemingly had a bigger early lead than this, but apparently it withered away as the election neared. That's not very heartening, but at least he still won.

So let's see. Brexit was 52-48. Trump 2016 was a 46-48 squeaker. Lula 2022 clocked in at 51-49. I remember the year 2000 when the United States officially became a 50-50 nation, and we've stayed that way ever since. I guess now we're a 50-50 world.

Except in China, of course. I hear that Xi Jinping won his third term by a resounding margin. Popular guy!

ProPublica and Vanity Fair published a blockbuster story yesterday suggesting that COVID-19 originated with a lab leak in Wuhan, not from natural causes. I've read it, and I feel like I must be missing something.

The story is 10,000 words long, but almost all of that is a rehash of past arguments. The only thing new is a review of some documents by Toy Reid, an expert in Chinese bureaucratese who spent nine months working with the Republican staff in the Senate on a report about the origins of COVID. Reid says that if you interpret the pishi correctly, it turns out there was some kind of big emergency at the Wuhan lab toward the end of 2019—and the ProPublica/Vanity Fair team says it confirmed this with other China experts.

And that's about that. It's a new wrinkle, but there's not very much there. It's a bit of a Jenga tower of supposition based on marginalia, and even if it's all true there's no evidence the emergency had anything to do with a leak, or with COVID, or with bats, or with anything else specific. At the end, we're left at about the same place we started.

(UPDATE: Apparently even "Jenga tower of supposition" was too charitable. It appears that several of the passages in the article were just flatly mistranslated. See here and here. After accounting for this, there's really nothing left—and honestly, how likely was it that a public news release would confess to releasing dangerous pathogens in the first place?)

The strongest reason to believe the lab leak theory has always been simple and entirely speculative: It's a hell of a coincidence that COVID-19 originated precisely at the site of a major biolab facility that was widely known to be a little loosely managed. Aside from that, there's long been knowledge of a sick researcher, Chinese unwillingness to cooperate in an investigation, and a few other things that are suspicious if you have a suspicious mind.

Conversely, the case for a normal zoonotic origin of COVID has always been based on solid evidence that's only gotten stronger as more research is done. It remains the overwhelming consensus of virology experts who have looked into it.

There's not much more to say about this. Virologists are virtually unanimous in thinking that COVID-19 originated naturally. Non-virologists span the gamut, including a subset of conservatives who are seemingly desperate to find evidence of Chinese deceit lurking behind the scenes. There's a chance they're right, but their evidence remains thin, cherry picked, and always vaguely conspiratorial. Draw your own conclusions.

Here is Hilbert deep in thought. As usual, he is being subtly photobombed without ever knowing it.

Let's take stock of the past two years. First a mob attacked the Capitol on January 6, 2021, hoping to hang Mike Pence so that he couldn't announce that Donald Trump had lost the 2020 election.

Then six men tried to kidnap Governor Gretchen Whitmer of Michigan.

A couple of months ago a guy assaulted an FBI office with an AR-15 rifle because he was mad about the FBI's search of Mar-a-Lago.

Today a man broke into Nancy Pelosi's house, but couldn't find her so instead attacked her husband with a hammer.

Election workers have been quitting in droves thanks to threats on their lives from MAGA fans convinced they're stealing votes.

Ditto for MAGA threats against school board officials, librarians, and even the grand marshal of a July 4th parade.

An executive at Dominion Voting Systems was forced into hiding after furious Trump supporters put a million-dollar bounty on his head for allegedly switching votes from Trump to Joe Biden.

All of this is against the background of Trump's infamous campaign chant "Lock her up"; his continuing insistence that the 2020 election was stolen and Democrats need to be punished for it; and the increase of serious threats on right-wing social media.

Am I missing anything?

On the other side, one deluded guy wandered by Brett Kavanaugh's house this summer with vague thoughts of killing him. But he never did anything and shortly afterward called 911 on himself.

Again, am I missing anything?

One more thing for chart day. I mentioned yesterday that 30-year fixed mortgage rates had broken the 7% barrier, so this is a good time to update my chart showing the average monthly mortgage payment on a newly purchased house in the United States. Buckle your seat belt:

These are annual figures through 2021. For 2022 they're the latest figures available. Here's the nut: even with home prices starting to drop, the average monthly mortgage for a new purchase has increased 71% since last year—and that's during a period when real income is down.

How long can the housing market bear this until it crashes? I know what Keynes said about markets, but I can hardly believe it will take much longer. In real terms, mortgages are now more expensive than they were even during their infamous (former) peak of 1981.

As long as we're collecting up all the spending and income statistics this morning, here is the newly released Employment Cost Index from the BLS:

This is an important number because it tells us how much employers spend on workers. Obviously wages and salaries are the main component, but it also includes other expenses like bonuses, the employer share of Medicare and Social Security taxes, health care, office space, company cars, time off, retirement contributions, uniforms, and any other expenses a company might have that's related to worker compensation.

For some reason ECI is reported as an index rather than an average dollar amount, but it represents dollars and can be adjusted for inflation just like any other dollar outlay. That's what I've done here, and as you can see the results continue to be startling. Despite all the whining and moaning, total average comp for workers is less today than it was five years ago.

As with so many other compensation numbers, what this tells us is that although employers might complain about a shortage of workers, they're obviously not doing much of anything to attract them even though they could:

Real ECI is down 1.5% since 2017 while real corporate profits are up 18% during the same period. Just to hammer this home, here are corporate profits compared to ECI:

This is not a percentage or anything like that, but it is a ratio of profits to compensation. I call it the Greed Index, and it's gotten worse and worse: up from 14 to 16.5 over the past five years. That's a fairly astonishing 19% increase. But perhaps not a surprising one.

POSTSCRIPT: There are exceptions to this since ECI and profits vary from industry to industry. For example, in the always whining restaurant and accommodations industry, real ECI is up 10% over the past five years. That's better than going down! Of course, after-tax industry profits are up a remarkable 55%, so that 10% raise isn't all that impressive. That's an increase in the Greed Index of 42%. Booyah!