Month: July 2023

As we all know, corporations have raised prices substantially over the past couple of years, generating huge windfall profits. Is this "greedflation" the real cause of our recent bout of inflation?

In a nutshell, Eric Levitz says no. All that happened is that the pandemic caused supply shortages while government stimulus payments kept demand high, which caused prices to rise. Corporations then went along for the ride. I think this is broadly correct, but not entirely. After all, the evidence suggests corporations didn't just go along for the ride. They increased prices well beyond the rate of inflation. Was that related to lack of competition?

This raises an obvious problem: Corporate concentration has been transpiring over decades. In 2019, U.S. industries were roughly as concentrated as they were in 2022. Yet in the former year, inflation sat near 2 percent, a low level by historical standards. In the latter year, by contrast, prices rose by 6.5 percent. So why did corporate concentration yield historically low inflation throughout the 2010s, only to suddenly produce exceptionally high inflation following the pandemic?

Indeed. If they could get away with this, why wait for the pandemic?

It is unclear why corporations would feel compelled to wait for an “excuse” before seeking to maximize their profits....Generally speaking, companies do not feel compelled to provide an excuse for pursuing their mercenary interests....U.S. firms have been perfectly happy to offshore jobs to low-wage areas, even in the absence of an economic crisis that would serve to rationalize such profit-maximizing endeavors. Pharmaceutical firms, meanwhile, routinely price-gouged on life-saving medicines, even when inflation was near historic lows.

I think there's a straightforward answer to this question of timing. During periods of low inflation, price increases are conspicuous and consumers react to them. Big, flashy price increases run the risk of consumers abandoning your product and substituting something else.

But when the economy is chaotic and inflation is already high—and consumers are faced with endless news coverage of it—these constraints ease. If inflation is running at 8% and everyone is panicking, it's barely noticeable if a bag of Cheetos goes up 8% or 17%. It just seems like yet another wild price increase, like eggs or beef or used cars experienced for a while. At the same time, there's little risk of your prices being undercut, not because of corporate concentration but because everyone else is suffering supply shortages at the same time.

So my take is simple: Our current round of inflation is fundamentally a result of pandemic shocks, but it's been made a little worse by greedflation. This stands in stark contrast to the usual bogeyman of labor costs, which have been rising at less than the rate of inflation. In other words, it's not that greedflation isn't real—it is—it's just that it's a modest part of the whole story. That's how companies are able to get away with it, after all.

I am three months away from qualifying for Medicare and everything is going smoothly. HHS already sent me a card, and a couple of days ago Kaiser Permanente sent me a signup form that looks like just what I want. But there is a weird little mystery that I can't figure out. Here is the Kaiser description of benefits for two plans, the standard HMO and the Value HMO:

There's not much difference. But the standard HMO is better: It has no inpatient hospitalization copay and the annual out-of-pocket is $1,000 less. Now here are the plan prices:

They are the same: $0. I don't suppose anyone cares much about this. Even I don't care much about it. But it seems awfully peculiar. Why bother having two plans that are close to identical in the first place? And if you do, shouldn't you charge more for the better plan? What's going on here?

This kind of story bugs me:

With the harvesting of wood expected to increase dramatically in coming decades, researchers are warning that policy officials have woefully underestimated logging’s carbon footprint....Between 2010 and 2050, global demand for wood is expected to surge 54%....During that time, greenhouse gas emissions from wood harvests would significantly increase, likely releasing 3.5 billion to 4.2 billion metric tons of carbon dioxide each year.

Estimates vary a bit, but here are the basic stats on greenhouse gas emissions:

The wood researchers are estimating an increase of 0.7 billion metric tons of CO₂ out of a total of 50 billion that the world currently emits. That's barely more than 1%. It's trivial.

There are two, and only two, things we should be seriously concerned about if we want to rein in climate change:

• Fossil fuels
• Carbon capture

We need to focus on fossil fuels because that's the whole mozilla. We need to focus on carbon capture of some kind because we can't reach our climate goals merely by reducing emissions. Everyone agrees that we need a lower concentration of greenhouse gases than we have now.

But is there any harm in pointing out other contributors to climate change? Agriculture in general is certainly #2. The problem is that being peppered by constant news coverage of this kind is a dangerous distraction. People hardly need more excuses to focus on more congenial but basically ineffective solutions to climate change. As hard as it is, we need to be focused like a laser on fossil fuels as the only thing that truly matters.

It's either that or geoengineering. Those are our choices.

This is extraordinary:

Here are the basic stats:

• Among all Americans, 4.5% of deaths are due to opioid overdoses, mostly fentanyl
• Among the youngish middle-aged (20-39), 21% of all deaths are due to opioids.
• Among men in this age group, 30% of all deaths are due to opioids.

Now, part of the reason the percentage is so high among the youngish is that not many people of that age die in the first place. The basic mortality rate is only 0.25%, so that 21% death rate from opioids amounts to only 0.05% of the population.

But that's still 21% of all deaths in that age group and that's still a remarkable number.

Next week there's a NATO summit in Vilnius and naturally Ukraine is on the agenda. Today, a group of 46 foreign policy experts signed a letter recommending membership for Ukraine as soon as possible:

In Vilnius, the alliance should launch a roadmap that will lead clearly to Ukraine’s membership in NATO at the earliest achievable date. As with Finland and Sweden, the process can bypass the Membership Action Plan in light of the close and ongoing interactions between NATO and Ukraine.

Is this really the mainstream view of the US foreign policy community these days? I know it's been on the table for years, and obviously Ukraine itself is eager to join NATO, but that open letter is missing something pretty important.

It goes on and on about the various kinds of military assistance we should offer Ukraine, but there's not so much as a peep about NATO Article 5. You know the one: "An attack on one is an attack on all." This is the part of the treaty that obligates the US to go to war if any other member is attacked.

In other words, joining NATO is not a game. It's not a way to "show strength." It's a guarantee that if, say, Russia attacks Ukraine or Moldova attacks Romania, the US will send troops and planes and ships in defense.

Is that what we want? A tripwire that automatically demands our entrance into a distant war if Ukraine is attacked? To ask the question is to answer it: We could have troops there right now but we've very deliberately chosen not to. Like it or not, we obviously don't consider Ukraine a longtime close ally—neither militarily, culturally, nor diplomatically—that we'd defend without hesitation.

NATO is not just a club of vaguely likeminded states that we feel sympathetic toward. It's a deadly serious mutual defense organization. Everyone should keep that top of mind.

Charlie really looks like he means business here. He's obviously a cat with a mission.

On Wednesday Meta launched Threads, a new social media app designed to compete with Twitter. It's already signed up 30 million users, and you'd think this would be broadly welcomed since Twitter users have been bitching forever that Twitter is a cesspool that's only gotten worse since it was purchased last year and subjected to increasingly ham-handed mutilations by its new owner, Elon Musk.

But Rebecca Jennings is not impressed:

Logging onto Threads is like logging on to the internet roughly a decade ago. I have now seen two strangers share their “hot take” that actually, pineapple on pizza is good, a sentiment copied and pasted from all the world’s most boring Hinge profiles....Threads is Twitter for people who are scared of Twitter.

....Twitter is a platform that attracts a certain type of person....The best Twitter users aren’t people who are looking for sponsorship deals or mugging in front of a camera; by replicating your follower list from Instagram to Threads, you’re not necessarily seeing posts by interesting or funny people. Instead you’re seeing posts from acquaintances, brands, and influencers, and these are not the people who are going to invent the internet’s next best posting format or a new genre of humor. There is nothing revelatory or novel about what’s happening on Threads....For now it’s simply a much less interesting version of Twitter.

Tough crowd! I mean, Threads is two days old. Give it time. A year or two from now I'm sure it will be every bit the cesspool Twitter is today.

Do you think that all the MAGA vaccine denial and mask vitriol is basically harmless? Hell, let 'em do whatever they want to their own bodies and then vent about it on Facebook. There's one group that would disagree:

A new survey of physicians and biomedical scientists in the U.S. found that nearly two-thirds experienced harassment on social media during the COVID-19 pandemic. Pro-vaccine messages were a common target of online vitriol. So were posts that endorsed the use of face masks or promoted public health in general

....The harassment came in many forms. In addition to violent threats, the doctors and scientists said, their medical practices were slammed with bogus patient reviews, their attackers campaigned to get them fired, their personal information was shared online, and their faces were pasted onto photos of porn models.

Nearly two-thirds of all physicians reported being harassed over COVID-19 advice. Here's a brief sample of some of the comments from the survey:

Fucking hell.

Over at New York, John Herrman pulls no punches describing the American news business:

American news is a smoldering wasteland....Cable news is in trouble, the twin threats of streaming and social-media video having sapped it of relevance....Print media is simply disappearing in much of the country, and where it still exists, it is in barely controlled decline.....Digital news is suffering a brutal downturn of its own....Publications savvy or lucky enough to have built subscription businesses — most notable among them the New York Times — have effectively traded broad influence and participation in the public discourse for survival behind ever taller paywalls, where smaller numbers of devoted subscribers consume news that they effectively cannot share. News organizations still vying for pure scale must contend with a Facebook that has thoroughly deprioritized news in its feeds, a chaotic Twitter owned by an ideologue, and a Google that’s threatening to replace its top results with content generated by AI.

I'd like to offer two different perspectives on this. The first is from the perspective of journalists themselves, where Herrman is 100% correct:

This is carnage. Since 2000 jobs in newspapers have plummeted 80%. Total journalism jobs have declined 63%. "Smoldering wasteland" is not too harsh a description.

But there's another perspective: that of the reader of news. Just for lulz, suppose you get your news from the following sources:

• New York Times
• Wall Street Journal
• A network nightly news broadcast
• The Economist
• Reuters/AP websites
• Daily Mail (for the gossip)
• BBC
• Politico

Whatever you think of these news sources individually, they're basically all healthy and reliable. Some are free, some are partially free, and some are behind strict paywalls. But that's still better than pre-internet, when you would have been required to pay for nearly all of them and couldn't easily share any of them since there was no sharing medium available.

You don't have to rely on CNN or BuzzFeed or Facebook or Vice. If you want, you can get your news from much the same places as you did 20 years ago, except more cheaply and more conveniently.

A hundred years ago, my great-grandfather had access to one news source (he ran the only newspaper in town). Twenty or 30 years ago, most of us effectively had access to three or four. Today we have effective—not just theoretical—access to far more than that.

Herrman's broadside against the news biz was motivated by his belief that its current parlous state will have terrible impacts on politics:

It seems not only possible but likely that this will be the first modern election in the United States without a minimum viable media: a placeless race, in which voters and candidates can and will, despite or maybe because of a glut of fragmented content, ignore the news.

I dunno about that. Here's the news that people say they actually consume:

This isn't an entirely pretty picture. Two of the most popular news sources are, at best, semi-reliable, although it's worth noting that social media news feeds mostly point to conventional news sources, not TikTok videos or Twitter disinformation.

There's no question that the news industry has problems. In particular, local news, no matter how you spin it, is all but gone. Small digital outlets, especially those without a niche, struggle constantly. Jobs in journalism have cratered. And yet, through all that, readers have more good options today than ever in history, and the evidence shows that they largely take advantage of that. There's plenty of crap around the edges that demands constant vigilance, but core news continues to putter along smoothly, providing excellent coverage at a reasonable price. It's hard to see how we could ask for much more.

The American economy gained a meager 209,000 jobs last month. We need 90,000 new jobs just to keep up with population growth, which means that net job growth clocked in at an even more meager 119,000 jobs. The headline unemployment rate ticked down slightly to 3.6%.

This is a bad report, but at least there are no gotchas. The increase was solely because more people got jobs, not because workers dropped out of the labor force or anything like that.

As usual, the employment level was weak.

Since the start of the year the employment level has shown a gain of less than 150,000 jobs per month.

On the moderately good news side of things, average weekly wages increased at an annualized rate of 8.1% since last month. That's due to both higher hourly wages and an uptick in the number of hours worked. Adjusted for inflation, it comes to an increase of 6.6%, quite a nice bump even if it is likely to throw the fear of God into the Fed.