Month: January 2024

Here's the address on democracy that Joe Biden delivered today. It's about half an hour long. Go ahead and watch the whole thing and then tell me if Biden seems cognitively limited. There are a few minor stutters here and there, but cognitively he's fine.

Skip ahead to 5:30 if you want to get directly to his attacks on Donald Trump for trying to overturn the 2020 election. For example, there was this about all the court cases: "The legal path just took Trump back to the truth: I won the election and he was a loser." Or, on Trump's laughter about the assault on Paul Pelosi: "What a sick—" with the f-word only barely left unsaid. Or: "When he visited a cemetery, he called dead soldiers suckers and losers."

Let's check in on what Republicans are saying these days:

Donald Trump, about 40 times over the course of a single hour: "Except for a Fraudulent Case against me, I had no idea who E. Jean Carroll was. She called her African American Husband an ‘ape,’ and named her Cat ‘Vagina.’ Look at her Tweets, Stories, and the CNN Interview about her. The Judge on the Case is another Highly Partisan Clinton-Appointed Friend. He should have recused himself long ago!"

Trump lawyer Alina Habba on Trump's insurrection case before the Supreme Court: "You know, people like Kavanaugh, who the president fought for, who the president went through hell to get into place, he’ll step up. Those people will step up."

Rep. Troy Nehls (R–Texas), who supports increased border security: "Let me tell you, I’m not willing to do too damn much right now to help a Democrat and to help Joe Biden’s approval rating."

Fox News prime time wit Greg Gutfeld: "It's almost three years to the day since January 6 and Biden is still flapping his toothless gums about it. Probably since it's also the date of his last solid bowel movement."

Charlie is still restricted to the house, but Hilbert gets let out occasionally just to confirm that he's the senior cat around here. He looks like a cat on a mission in this picture, and his mission was: find Marian and tell her to stop gardening and instead pay attention to Hilbert.

The Justice Department is nearing the end of its long pondering about whether to sue Apple over antitrust issues:

Specifically, investigators have examined how the Apple Watch works better with the iPhone than with other brands, as well as how Apple locks competitors out of its iMessage service. They have also scrutinized Apple’s payments system for the iPhone, which blocks other financial firms from offering similar services.

....The Apple suit would likely be even more expansive than previous challenges to the company, attacking its powerful business model that draws together the iPhone with devices like the Apple Watch and services like Apple Pay to attract and keep consumers loyal to its products. Rivals have said that they have been denied access to key Apple features, like the Siri virtual assistant, prompting them to argue the practices are anticompetitive.

These kinds of actions aren't illegal per se but they are illegal if you have a monopoly in the market, so the key to all this is whether Apple is a monopoly. Here is Apple's market share of the smartphone market:

Apple has controlled more than half of the smartphone market for the past decade and currently has about 57% market share. Is that enough to brand them as a monopoly? It's lower than IBM's share of the mainframe market while it was being sued for similar bundling practices, but not a lot less—so I'd say yes. But obviously Apple will argue otherwise.

It's finally time to check in on the prediction of weak holiday hiring by the National Retail Federation. With December numbers finally in, how did we do?

In one sense, the NRF was wrong. They projected 345-445,000 retail workers would be hired, a 40% decrease from 2021. In reality, hiring was nowhere near that bad. It came in at 564,000, down only 11%.

On the other hand, hiring was clearly weaker than the non-recession average of the past couple of decades. In fact, aside from the recession years of 2008-09, it was the second weakest holiday hiring season since 2000.

Overall, I'd say the NRF was too pessimistic, but nonetheless pessimism was the right call. Holiday hiring wasn't disastrous, but it was still fairly bad.

A few miscellaneous thoughts on former Harvard president Claudine Gay:

• An awful lot of conservatives have attacked Gay as unqualified for the Harvard presidency because she isn't an academic star. This is crazy. Presidents of R1 universities aren't hired for their academics. They're hired to raise money and run the place. Big university presidents aren't commonly academic stars.
• On the other side, a lot of liberals are agog that Christopher Rufo publicly explained his strategy to target universities generally and to get Gay fired specifically, but everyone fell for it anyway. But politicos on both the left and right do this all the time and then crow when they succeed. It's not as if it's a big mystery anyway. Everyone knows which side supports what stuff.
• There's nothing new to this attack on universities. Conservatives have been gunning for academia for the past 60 years, ever since academia broadly turned from being conservative to liberal. Remember William F. Buckley's famous comment, “I would rather be governed by the first 2,000 people in the telephone directory than by the Harvard University faculty"? That was in 1961.
• There's a narrative on the left that Gay was attacked not primarily for plagiarism but because she's a Black woman. Gay herself nods in this direction. This is supposed to be part of a broad attack on women and minorities in positions of power, and that might be true. But I'd sure like to see some evidence.
• It doesn't matter if Gay's plagiarism was uncovered by conservatives with ulterior motives. That happens all the time with whistleblowers. What matters is whether they uncovered something true. In this case they did, though I continue to have doubts about whether sentence-level copying should be such a big deal.
• Computers make it fairly easy to search documents for potential plagiarism. I would like to see this done for all the dissertations and publications of every president of an R1 university—or maybe even more broadly than that. I'm curious whether Gay's plagiarism really is an outlier.

Today's jobs report also included wage data for blue-collar workers. Adjusted for inflation, weekly wages were up 0.9% from last year and down -0.5% from last month (at an annualized rate):

As usual, this can be interpreted as good news. If wages are under control it should reassure the Fed that inflation is moderate and interest rates can be eased. Maybe.

The American economy gained 216,000 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 a moderate 116,000 jobs. The headline unemployment rate was unchanged at 3.7%.

This is a perfectly reasonable report, but the bad news is that December saw a huge exodus from the labor force. The number of employed people dropped by 683,000 and a total of 845,000 people left the labor force. These are seasonally adjusted numbers, so they aren't due to any kind of holiday hiring artifact.

As a result of this, the labor force participation rate went down from 62.8% to 62.5%. This is not a huge decrease by itself, but it's not a good trend.

National Review's Luther Ray Abel reports on Ron DeSantis's latest pitch:

Florida governor Ron DeSantis (R.) called for the abolishment of the IRS during a CNN town hall in Iowa as he makes his final few pitches to the voters of the Hawkeye State. DeSantis said, “I want to eliminate the IRS, and I would like a flat — one single-rate flat tax.”

....While DeSantis’s call to level the IRS and its loopholes may strike the casual viewer as either a move of desperation for a flagging campaign or....

Nope, we can stop right there. It's a move of desperation, full stop. This is just about the oldest con in the Republican book, a cheap applause line with nothing to back it up.

For what it's worth, a flat tax would cut taxes on millionaires and raise taxes on the middle class. It would also blow up the deficit since no plausible flat tax would raise anywhere near the revenue we currently raise.

But you all know that. Everyone knows that—including Ron DeSantis.

Yesterday I wrote about the federal budget for this year and how much it was going to get cut in various scenarios. As you'll recall, I was puzzled about what was really going on.

But complaining gets results around here! Today the CBO published a definitive letter on precisely this subject. Note that "this subject" is nondefense discretionary spending; defense spending is relatively untouched by all this. Here's the short version:

• Under the continuing resolution we're currently using (because House Republicans can't agree on a budget), we are spending at a rate of $777 billion.
• If the CR is still in place by May 1, spending has to be cut to its 2023 level ($744 billion) minus 1%. This comes to $736 billion.
• If we pass a budget, we have to abide by caps agreed to in the debt ceiling agreement. This comes to $704 billion.

You can stop reading now if you don't want to tear your hair out. But if your follicles are strong, read on.

First: By definition, a continuing resolution keeps spending at old levels. So if CBO says 2023 spending was $744 billion, why are we currently spending at a rate of $777 billion? This is largely because there are a few items that were prefunded at higher levels than last year. Those higher levels are in effect now but didn't exist in 2023, so they don't count as part of the 2023 budget.

Second: If we spend at a rate of $777 billion from October through April, that's $453 billion. In order to get to $736 billion for the full year, we can only spend $283 billion in the final five months from May through September. That's a run rate of $679 billion, a decrease of about 13% from current levels.

Third: If we run into this situation, then on May 1 the president has to sequester spending to the new level. This is not done by picking and choosing what to cut. It demands a 13% cut across the board. That would be devastating.

Fourth: If we do pass a budget, we're even worse off. That would require spending be reduced to $704 billion. If the budget were passed on May 1, we'd have to cut spending for the second half of the year to a rate of $602 billion. That's a 22% cut. The good news is that since it's a budget, it can cut specific programs instead of just slashing across the board. Alternatively, of course, Congress could also ignore the $704 billion cap since it's not bound by its own legislation.

Fifth: None of this is set in stone. Congress can do whatever it wants regardless of what limits it placed on itself in the past. CRs always have exceptions (the current one has exceptions for WIC and the Columbia submarine, for example), and Congress could pass a full-year CR with exceptions for the prefunded stuff if it wants to. It could also choose to fund everything at a higher level. It can do anything it wants.

So, did you get all that? Huh? Did you?

Of course you did. It all makes perfect sense, doesn't it?