Month: June 2023

LA mayor Karen Bass is using the return of congressional earmarks to get creative with homelessness:

Bass asked every member of the House and Senate who represents Los Angeles to use one of their allotted 15 annual earmark requests on a project relating to the homelessness and housing crisis that her team had identified in their district. The $40 million in requests, according to Bass’ office, amounts to crumbs in the multitrillion-dollar federal budget.

Bass is right that $40 million is a drop in the federal ocean. The problem is that it's a tiny drop in the ocean of homeless funding too.

Across the entire state, California has 115,000 unsheltered homeless and a budget of about $4 billion per year to deal with them. Even at Los Angeles prices, this could rent a nice one-bedroom apartment for every single one of them and still have $1 billion left over for social services, mental health, and drug rehab. It's simply not a question of money.

Rather, it's a question of housing supply. It's a question of regulations, consent decrees, and agency foot dragging. It's a question of too many rules governing anyone who agrees to live in public housing. It's a question of too many homeless who don't want to leave the streets. And above all, it's a question of middle-class residents who are willing—even eager—to pay to "clean up" homeless encampments but will fight tooth and nail against building even a small shelter within a thousand yards of where they live or where their children go to school. Purely mathematically, this leaves almost nowhere the homeless can be sheltered.

So good luck to Bass. $40 million will refurbish some old apartments and move a handful of the homeless into indoor housing. That's a good thing. It really is. But it's just money, and we already have plenty of that. Real solutions for homelessness require much harder work than begging members of Congress for a few more table scraps.

OpenSecrets has released a new report that highlights the growing nationalization of House and Senate races. In the past, nearly all funding for these races came from in-state donors, but over the past two decades candidates have relied more and more on donors from across the country:

Senate races have become steadily more nationalized since 2000 while House races were fairly stable until 2014. Since then the amount of national funding for House races has jumped by more than 10%.

The trend toward nationalization is especially pronounced in certain high-profile races. Amy McGrath, who ran a losing Senate race against Mitch McConnell in 2020, received more than 97% of her funding from followers outside of Kentucky.

Generally speaking, this trend is the same for Democrats and Republicans. In the latest election cycle, Republicans received 39% of their funding nationally while Democrats received 41%.

According to a recent tally by New America, 267 people have been killed by terrorist acts on US soil since 9/11. Virtually all of these attacks were home-grown, not the result of planning or training by foreign terrorist groups:

These numbers include only attacks coded as terrorist, not mass shootings and the like. Nearly half were carried out by far-right wing killers (consisting of anti-government, militia, white supremacist, and anti-abortion violence). Christopher Wray, head of the FBI, said this in testimony before Congress last year:

The top domestic terrorism threat we face continues to be from domestic violent extremists we categorize as racially or ethnically motivated violent extremists, including those who advocate for the superiority of the white race....We have also recently seen an increase in fatal attacks perpetrated by anti-government or anti-authority violent extremists, specifically militia violent extremists and anarchist violent extremists....These anti-government or anti-authority violent extremists have specifically targeted law enforcement and the military as well as institutions or members of the U.S. government.

The number of FBI investigations of suspected domestic violent extremists has more than doubled since the spring of 2020.

The top terrorist threat today comes not from Islamic jihadists, but from far-right white supremacists and anti-government fanatics. And it's growing fast.

Here is something you probably didn't know:

The majority of goat herders in California — of which there are probably fewer than 100 — come on temporary work visas from Peru, usually staying for about three years.

Our goat herders come from Peru! The reason they're in the news is because of a mysterious change in their pay ordered by the Department of Industrial Relations and the Employment Development Department. In the past, goat herders were paid a set monthly amount, currently $3,853, which comes to $46,000 per year. But then they were suddenly reclassified as hourly workers making $15.50 per hour plus overtime. And since apparently goat herding is considered a 24/7 on-call job, that overtime adds up. The herders now make roughly $500 per day in base plus overtime, which comes to about $168,000 per year.

That's a lot of money for goat herding, which is mostly about getting goats to eat up flammable brush that can cause wildfires. Since goats will eat anything, they're particularly good at this as long as they're pointed in the right direction and kept from straying.

As for the goat herders' pay, no one seems to know what will happen. Even labor sympathizers agree that $168,000 per year is overdoing things, but the labor regulators have refused to comment on their reclassification. For now, everything is in limbo.

Here is Joe Biden's job approval compared to his immediate predecessors:

Biden's approval level remains low, but it's not really much lower than Trump's or Obama's at this point in their first term. Within a few weeks it's likely to be almost exactly the same.

Here's an odd thing:

Residential construction plummeted in May 2022 as mortgage rates went above 5%. That's no surprise.

But nonresidential construction started to rise at exactly the same time and has continued rising ever since. Why? Nonresidential construction is largely financed by public or corporate bonds, and high-quality bond rates rose at the same time as 30-year mortgages, crossing 4% in May 2022. That should have slowed down nonresidential construction too.¹

But it didn't.  Why are we in the middle of a nonresidential construction boom?

¹It's worth noting that total construction is not the same as spending on structures. Total construction spending, including roads, utilities, sewage, and so forth, is up 20% over the past year, but investment in actual structures is up only 6%.

UPDATE: David Dayen offers a plausible explanation for the increase in construction since last year:

The manufacturing construction boom is pronounced after IRA and CHIPS. From @soberlook. pic.twitter.com/NZMMmXsYvu

— David Dayen (@ddayen) June 2, 2023

The increase in construction spending started a little before either IRA or the CHIPS Act passed. Based on this timing, I suspect that some of the increase is due to the American Rescue Plan, passed in March 2021 with spending starting a little later. IRA and CHIPS probably kicked in around the time ARP was winding down.

CNN has a remarkable story today about the vast difference in cost between warships built in the US and those built in Japan:

The country’s newest Maya-class destroyers are armed with 96 VLS cells that can fire both anti-ballistic and anti-submarine missiles, while the “quality of its sensors and systems stands at the very top end of the spectrum.”...Those 96 VLS cells put the Mayas on par with the newest of the US Arleigh Burkes, but there’s a crucial difference between them: The Arleigh Burkes cost $2.2 billion; the Mayas cost a billion dollars less.

....And it’s not just the Mayas. Take Japan’s Mogami-class frigates; speedy, stealthy 5,500-ton warships with 16 VLS cells that fire surface-to-air and anti-ship missiles. All done with a crew of 90 and a price tag of about $372 million each. By contrast, the first of the US Navy’s under development Constellation-class frigates are expected to cost three times as much and require twice as many crew.

These Japanese ships, along with others from South Korea, are designed to be very similar to American ships:

All these Japanese and South Korean vessels are designed to incorporate US technology, weapons, spy radars and the Aegis command and control system.

So why the vast difference in cost?

Cost overruns, endemic in US defense contracting, are not common in Japan, Schuster says, because — unlike the US — the country holds manufacturers to their estimates.

“A Japanese shipbuilder’s bid is an absolute. If they finish it below expected cost, they make a larger profit. If they encounter delays and mistakes, the builder has to correct it at their own expense,” Schuster said.

That sounds . . . a little too easy. There has to be more to it than "we won't pay a nickel more than you bid." Requirements change, specs change, and timetables change. It's hardly possible in the real world for a bid to stay frozen in the face of that.

And yet, unless there are some accounting tricks involved, there's the bare fact that the Japanese ships are similar but cost billions less than US versions. How? Are the US ships not actually all that similar? Or is our procurement really so screwed up that we pay twice as much for basically the same ship?

Yesterday I noted that although the number of jobs was up, the number of employed people was down considerably while the number of unemployed people was up. This divergence represents one of the ongoing mysteries of the labor market. Is it strong or is it weak?

Here's another mystery: aggregate hours worked:

Through the end of 2022, workers were putting in more hours, which is consistent with a strong labor market. However, that flattened out this year and aggregate hours even declined 1% in May. This is consistent with a weak labor market.

My take is that nearly all labor signals have been flat or weak since the beginning of the year. Even the basic employment numbers, though still positive, have been trending downward for over a year:

All of this is provisional. The labor market is just a mystery right now, and I don't think anyone knows for sure just how strong it is.

It begins:

When ChatGPT came out last November, Olivia Lipkin, a 25-year-old copywriter in San Francisco, didn’t think too much about it....In April, she was let go without explanation, but when she found managers writing about how using ChatGPT was cheaper than paying a writer, the reason for her layoff seemed clear.

....For some workers, this impact is already here. Those that write marketing and social media content are in the first wave of people being replaced with tools like chatbots, which are seemingly able to produce plausible alternatives to their work.

This is not what people expected when AI first became a topic of conversation years ago. Everyone figured the first victims of job loss would be blue-collar workers doing repetitive tasks: data entry clerks, customer service reps, taxi drivers, retail workers, and so forth. Then in 2017 Google published a paper about how to make Large Language Models work better and within a few years the most common form of AI was suddenly white collar and non-repetitive.

Automation has been taking jobs for years, of course. In that sense there's nothing unique about Lipkin's experience. Most likely she'll get another job, this time at a shop that needs writing skills above the bare minimum that ChatGPT can currently provide.

But there's still a difference. In the past, automation was a two-edged sword. Power looms took away weaving jobs, but there were new, better paying jobs tending and maintaining the machines. The transformation was slow and painful, but eventually everybody was re-employed and making more money than ever before.

Today there's nothing like that on the horizon. When ChatGPT gets a little better it will put copywriters out of work, full stop. Some of them will find entirely different work for a while, but none of them will be writers again. Nor will there be "writing machines" for them to maintain. The machines are just software in the cloud. They will maintain themselves with only sporadic help from a small cadre of programmers who neither need nor want help from former writers.

And so most writers will be out of work with no plausible alternative. At first it will just be entry-level writers, but very quickly the software will improve and journeyman writers will also be replaced. Then it will be the very best writers. Even poets and novelists will eventually be replaced.

And they'll have nowhere to go.

Secretary of State Antony Blinken was in Norway on Thursday to announce the most remote US diplomatic post in the world:

Blinken said the U.S. would open what is known as an “American Presence Post” in Tromso, about 215 miles north of the Arctic Circle. The post will open this year and be staffed by a single U.S. diplomat with the title of “consul.”

Damn. One guy in a post 215 miles north of the Arctic Circle. What's he going to do?

The good news for our new consul is that Tromsø is surprisingly large, with a population of 77,000 and growing. According to the font of all knowledge, "The city centre contains the highest number of old wooden houses in Northern Norway, the oldest dating from 1789. Tromsø is a cultural hub for the region, with several festivals taking place in the summer." So at least there's stuff to do and see.

Also of note: One theory holds that the city's name derives from a nearby mountain known as Tromma, or The Drum. So there's that.