Month: February 2023

Jason Furman passes along the news that updated seasonal adjustments have been applied to the inflation rate. "Some of that inflation slowdown that people (including me) were excited about might have just been a seasonal adjustment quirk."

Let's take a look:

Using the previous seasonal adjustments, core CPI in December was at 3.4% on a trendline basis and had been heading downward since last January. Using the new adjustments, core CPI is currently at 4.1% and has been heading downward since last January.

Core PCE is unchanged and is currently at about 3.3% on a trendline basis.

We'll get another data point on Tuesday, when the latest CPI figures are released. In the meantime, it looks to me like things are still headed in the right direction.

Since our current bout of inflation has everyone thinking about the '70s, let's take a look at what happened back then. Here are blue-collar wages and corporate profits compared to the inflation level (blue line):

Following the 1973 recession, wages grew with inflation but corporate profits boomed. After about three years of this, inflation began to take off.

Here's the same chart extended to the present day:

Throughout this entire period, wages have followed inflation pretty closely. Corporate profits, on the other hand, have dipped during each recession but then boomed shortly afterward. All told, corporate profits have grown at nearly 5x the rate of inflation since 1975. Just since 2020—the bottom of the pandemic—wages have grown 12% while corporate profits have grown 60%.

So tell me again: what needs to be reined in when we're going through a bout of inflation? Workers' wages? Or corporate profits? Or both?

In today's picture, Hilbert the mighty hunter shows his fangs in a display of his ruthless apex predator status. Either that or he's yawning. Your call.

I still don't understand how Florida Gov. Ron DeSantis got away with his move last year to eliminate Disney World's special tax district as retaliation for Disney speaking out against one of his bills. It was outrageous and surely illegal, especially since DeSantis explicitly said he was taking action as revenge against Disney's statements.

Somehow this never got much attention, even though—in my eyes, anyway—it's easily the worst thing he's done. By explicitly punishing Disney for its public opinion, he is using official state power to crush free speech.

And DeSantis isn't done:

Florida lawmakers on Friday gave final approval to a proposal to give Gov. Ron DeSantis more control over the future of Disney’s Orlando-area theme parks, the latest escalation in the Republican leader’s feud with the entertainment giant.

The GOP-led state Senate voted 26-9 Friday on a bill to let the state take over the Reedy Creek Improvement District, the government body that has given Disney unique powers in Central Florida for more than half a century. Under the bill, the district’s existing board will be replaced by a five-member board hand-picked by DeSantis.

First DeSantis punishes Disney for disagreeing with him about something. Now, instead of merely eliminating Disney's tax district—which would turn over its taxing power to the county—the legislature is going to keep it around but give DeSantis complete control over it so that Disney will toe the line in the future.

Someone please tell me I'm overreacting. Is there any reason not to think that DeSantis is using state power to conduct his own personal vendetta? Is there some reason he's not in prison over this?¹

POSTSCRIPT: Apparently some conservatives think this move is actually a capitulation by DeSantis: Disney gets to keep its special district with only a change of board members, who will probably stay friendly toward Disney. It's just a way for DeSantis to look tough while in reality he's defusing the feud he started last year.

Maybe? I imagine you'd have to be deeply knowledgeable about Florida politics to know if there's anything to this.

¹No, I'm not joking.

Holy cow. It looks like Germans are really, really rethinking electric vehicles.

Via Albert Pinto, here is a chart of inflation from the Financial Times:

I don't know why anyone would care that these two lines are similar,¹ nor do I know why you'd get ordinary inflation figures from Jesper Rangvid of the Federal Reserve. But the bigger problem is that this chart uses year-over-year inflation, which makes little sense when you're doing a comparison over two time periods. Let's see what it looks like if you use monthly inflation:

Nothing much to see. I added a 9-month moving average to smooth out the noisy monthly data, but when you do that all you get is two lines that are roughly flat and then go up. I daresay every bout of inflation in history fits that pattern.

It's weird how determined people are to compare all inflationary episodes to the 1970s. This is especially egregious for our current round of inflation, which is so obviously completely different. I imagine we're going to have to put up with this nonsense until the entire generation of people who remember the '70s have died off.

¹And they aren't even all that similar, actually. During the first five years the blue line is mostly flat  while the red line is a hump. Over the next two years both lines go up, but only because they've been manually aligned by the author. The only real bit of information you get from this chart is that both periods of inflation lasted about the same length of time.

This is moonset above the Rue de Rivoli in Paris. I returned to this same spot about an hour later hoping to capture an even lower moon, but it had moved behind the buildings by then.

You'll note that the picture was taken from the middle of the street. Gosh, Kevin, didn't you have to dodge a lot of cars just standing out there like that? Yes I did. I'd look around, scurry to the median strip with my tripod, take a picture, and then scurry back. Sometimes I didn't scurry fast enough, but despite what you read about Parisian drivers they actually will try to avoid running you over if it's not too much trouble.

In any case, these are the sacrifices we make for our art.

Everything is wonderful:

Employers added more than half a million jobs in January, the housing market shows signs of stabilizing or even picking back up, and many Wall Street economists have marked down the odds of a downturn this year. After months of asking whether the Fed could pull off a soft landing in which the economy slows but does not plummet into a bruising recession, analysts are raising the possibility that it will not land at all — that growth will simply hold up.

Just remember: when everyone starts to agree, it's time to worry. Also: everything takes longer than you think. Analysts may be bored of waiting for a recession that keeps not happening, but their boredom doesn't mean anything. Toward the middle of this year the Fed's interest rates will start to bite and the economy will turn down.

Unless I'm being too impatient as well. Maybe a good economy will last even longer than I think. We'll see.

Here's an excerpt from last year's Report on International Religious Freedom, published annually by the State Department. The topic is Afghanistan:

According to international sources, Baha’is and Christians continued to live in constant fear of exposure and were reluctant to reveal their religious identities to anyone. Christian groups reported public sentiment, as expressed in social media and elsewhere, remained hostile towards converts and to Christian proselytization. They said individuals who converted to or were studying Christianity reported receiving threats, including death threats, from family members. Christians and Ahmadiyya Muslims reported they continued to worship only privately and in small groups, at home or in nondescript places of worship, to avoid discrimination and persecution.

Christians and other religious minorities were targets of relentless persecution under the Taliban. But there's one religious minority that never even gets mentioned: nonbelievers.

Recognizing this, the State Department began a program in 2021 that funded a couple of small grants¹ to groups that promote religious freedom "inclusive of atheist, humanist, non-practicing and non-affiliated individuals." But National Review reports that even this minuscule recognition that nonbelievers also face problems is too much for the modern Republican Party:

House Foreign Affairs Committee chairman Mike McCaul is reviving a GOP investigation into a 2021 State Department grant to atheist and humanist groups in the Middle East and North Africa, after Foggy Bottom stonewalled existing probes into the matter.

....Representative Jim Banks had previously sent two letters to the State Department requesting further information about the program....In a statement to National Review, Banks thanked McCaul for taking up the investigation “after months of stonewalling from the Biden administration.”

“The House Republican majority will not tolerate the unconstitutional and harmful funding of atheism abroad,” he continued. “Americans believe in free exercise of religion, not state-supported atheism, and taxpayers shouldn’t be on the hook for this anti-American program.”

Republicans presumably think it's OK for the State Department to fund an endless array of programs that, in practice, promote every conceivable version of Christianity in existence. But if they include even the tiniest recognition of atheists—well, that's a step too far. I guess we nonbelievers will just have to remain happy at being the fastest growing religious following in America.

¹Specifically, "1-2 grants" of $500,000 each.

A report from the Brookings Institution says that political podcasts have become steadily more popular over the past five years—and steadily more unhinged. The shows with the most lies false claims are the ones above the dashed line:

Poor Sean Hannity. He only barely makes the cut. Steve Bannon is the Big Lie champion these days, with Charlie Kirk coming in a respectable second. Luckily for all of us, Bannon still doesn't have very many followers.