Month: December 2023

From Reuters:

The main lobbying group for U.S. retailers retracted its claim that "organized retail crime" accounted for nearly half of all inventory losses in 2021 after finding that incorrect data was used for its analysis.

....The NRF's claim that organized retail crime accounted for "nearly half" of inventory losses was repeated in multiple media reports on the issue. The NRF has cited growing rates of crime in calls for Congress to pass new laws, including proposed legislation that would broaden the scope of offenses considered “organized” crime and increase potential penalties.

This was always laughably ridiculous. The NRF's own reports have consistently reported that all shoplifting is responsible for only about a third of inventory shrink. Organized gangs are responsible for a fraction of that. At a guess, they account for 2-3% of inventory shrink, a number that hasn't changed much over the past decade.

America is prone to periodic media-driven panics. Preschool satanic rituals. Frivolous lawsuits. Video games. Social media. CRT. Whenever one of them takes off, there's suddenly an explosion of evidence for it—and it's the same for shoplifting gangs. News networks play the same few video clips over and over. CEOs use it as a handy excuse for weak earnings reports. Experts are trotted out to "explain" what's happening. We're constantly reminded that most shoplifting isn't reported, as if that hasn't always been the case. And lobbying groups like the NRF cite transparently idiotic "facts" about the skyrocketing scope of the problem.

Eventually time passes and we all realize we overreacted. But while the panic is in high gear we're utterly convinced by the manufactured evidence tossed in our faces.

Shoplifting is a problem. Does anyone deny it? But it's been a problem for a long time and isn't much different today than it was a decade ago.

Apologies, but I couldn't really keep focused on the Republican debate tonight. Instead I spent my time shopping Time's Cat of the Year cover—which, honestly, was probably a better use of energy than watching the TV.

Basically, there were two things going on tonight. On one side you had Chris Christie and Vivek Ramaswamy, who know they have no chance of anything and can therefore say whatever they feel like. In Christie's case this mostly meant taking weak shots at Donald Trump. In Ramaswamy's case it meant being a childish asshole.

Then you have Nikki Haley and Ron DeSantis, both of whom have minimal but real chances of winning the Republican nomination. This meant spending lots of time calling each other liars. DeSantis accused Haley of being insufficiently dedicated to the degradation of trans people. Haley said he was lying. Haley said DeSantis was insufficiently dedicated to bathroom exclusions for trans people. DeSantis said she was lying. Very uplifting stuff.

On substance there was precious little daylight between the two. They love Israel. They hate university presidents. They love Taiwan. They hate China. They love parents. They hate trans people. They hate illegal immigrants. They hate the Deep State. They hate the FBI. And they are going to CLEAN HOUSE when they're elected president.

Yawn. It was a nightlong insult fest with little else going for it. My guess is that DeSantis made his points better than Haley, but his affect is so unlikeable that Haley might have won on points.

The one thing that continues to perplex me is Chris Christie's attacks on Donald Trump. Tonight he went after Trump more persistently than he's done in the past, but his actual criticisms of Trump are astonishingly weak. "He's unfit for the job" is fine as a summation, but only after you've reeled off all the reasons he's unfit for the job. Christie never does that. He talked tonight about Trump being all about retribution and revenge, which is fine, but hardly something that's going to change anyone's mind. I wonder why he doesn't go after Trump more thoroughly?

For obvious reasons, I approve of Time's choice for Mammal of the Year.

These are backlit aerial photographs of Los Angeles adorning the entrance to the Metro Center station at the union of the blue, red, purple, and yellow lines. I suppose they're there to remind passengers of what they're avoiding by riding the subway.

Jason Furman reminds me this morning that GDI numbers were released a week ago. Why does it take a month longer to release GDI than GDP? Does anyone know?

Anyway, GDI is Gross Domestic Income, and it's an alternate way of calculating economic output. In theory, GDI and GDP should be identical, but thanks to measurement issues they're usually a little different.¹ Lately, though, they've been way different, and they were way different once again in Q3:

In Q3, GDP came in at 5.2% while GDI was 1.5%. That's a huge difference.

So which one is more accurate? As Furman notes, there are good reasons to think that an average of the two is the most plausible number. In Q3 that was 3.3%, which certainly seems more likely on a gut level. I mean, did summer feel like a season of massive growth? Or a fairly ordinary one? Based on everything else going on (employment, wages, etc.) it seemed fairly ordinary.

¹This is officially known as the "Statistical Discrepancy" because the people who name these things have no imagination.

The stock of news stories asking why Americans are so sour on the economy continues to soar. If we could just figure out a way to give people a nickel for every one of these pieces our problems would be over.

But can I please interrupt all these thousands of words? The answer is simple:

• Republicans are unhappy about the economy, not "Americans."
• Sentiment doesn't turn on a dime. Inflation is our #1 economic concern by a mile, and increases in inflation are way more noticeable than slowdowns. Concerns about inflation will eventually abate, but it will probably take until next summer, after rates have been low for about a year.

That's it. That's all there is. Now can we all shut up about this?

An op-ed in today's New York Times discusses an evergreen topic: prescription drug shortages. But how many drug shortages are there? Emily Tucker cites three sources which provide answers of 160, 49, or 37 for the year 2022. Here's the FDA's number:

If we use this number—which is about the same as that reported in Europe—it represents a little less than 0.3% of the 17,000 pharmaceuticals currently cleared by the FDA. I'm reluctant to downplay the severity of shortages for patients who need these drugs, but I wonder realistically if this number can get an awful lot lower?

One thing Tucker mentions is that large hospital chains often get wind of shortages before others. When that happens, they order huge quantities, which just makes the shortage worse for everyone else. Oddly, she doesn't mention this as something that could be addressed, even though it seems quite likely that the relevant regulatory body could issue rules about hoarding fairly easily.

Instead, she wants legislation to enforce higher quality factories; more adaptable factories that can increase production easily; and buffer stocks of essential medications, presumably held by the federal government. I guess that sounds OK, though I wonder how effective it would really be, especially since (a) the FDA already mandates pretty high quality standards and (b) factories that can increase production more easily is just another way of asking for bigger factories that normally run at, say, half their capacity. As for buffer stocks, that sounds doable, though it depends on just how many drugs we're talking about and how stable they are over time.

All this said, it doesn't appear to be the case that the drug shortage problem is getting worse. Nor is it the case that it's been around for two decades with nothing being done about it. Drug shortages have been cut by about two-thirds since 2010.

Rep. Elise Stefanik had three university presidents on the hook today and decided to goad them by asking if calling for the genocide of Jews violated their university's code of conduct or anti-harassment policies. "Yes or no?" she demanded repeatedly, but all three presidents demurred. Instead they replied with various versions of "it's context dependent"—which outraged Stefanik and a bunch of other people too.

The problem is that Stefanik very deliberately didn't ask the presidents how they personally felt. I think we can all guess that. She asked about their universities' written policies. At Harvard, for example, racial harassment is defined as actions

that demean or abuse another individual or group because of racial or ethnic background. Such actions may include, but are not restricted to, using racial epithets, making racially derogatory remarks, and using racial stereotypes.

The student handbook adds this:

It is important to note here that speech not specifically directed against individuals in a harassing way may be protected by traditional safeguards of free speech, even though the comments may cause considerable discomfort or concern to others in the community.

Calling for genocide certainly falls within the "racially derogatory" bucket, but like it or not, it's factually correct to testify that it's protected as free speech unless it's directed at an individual in a harassing way. In other words, it's context dependent.

The presidents were not waffling, nor being morally bankrupt. They surely all think that calling for Jewish genocide is ugly and antisemitic. But it's also protected speech in some circumstances, so that's what they said. It was the correct answer.

Bad news today:

????NEWS: Over $3 billion in federal funding is headed to California High Speed Rail!

That means:
♻️Reduced transportation emissions
????Less time in traffic
????More good-paying jobs

Proud to have championed @CaHSRA’s application for this Bipartisan Infrastructure Law funding! pic.twitter.com/uwAMUGehOs

— Senator Alex Padilla (@SenAlexPadilla) December 5, 2023

Californians passed a bond measure for HSR between Los Angeles and San Francisco in 2008. It is now 15 years later and we aren't even close to finishing the first little segment. In fact, let's review a few facts and figures from the latest CAHSR business plan:

• The initial "train to nowhere," a 171 mile segment from Merced to Bakersfield, is still seven years away even if the latest schedule is met. It will supposedly be completed by 2030 after more than a decade of work and attract 12 million riders per year. Between Merced and Bakersfield!
• The other 350 miles linking San Francisco to Los Angeles will take only three more years. You betcha.
• By 2035 the authority will be running 120 trains daily between the Bay Area and Greater LA. Assuming an 18-hour day, that's one train every nine minutes. You betcha.
• Ridership will clock in at 32 million per year compared to about 12 million who fly between Greater LA and the Bay Area today. That's 800 passengers per train and 90,000 passengers per day. You betcha.
• The authority continues to claim that the full LA-SF trip will take 2 hours and 40 minutes, even though this would require continuous operation at average speeds higher than any HSR in the world. You betcha.

Oh, and it still lacks about $80 billion in needed financing even after today's $3 billion infusion. Hell, even the train to nowhere is still $10 billion short.

What's remarkable is that all of these assumptions are actually more realistic than they used to be. They've gone from pure fantasy to applied fantasy, but they're still fantasy. And now we're sinking another $3 billion into it. Sigh.