Month: July 2024

This is from John Wahl, the chair of the Alabama Republican Party:

The mainstream media wants us to think of ourselves as a democracy because that leads to socialism.... Even our Republican elected officials call us a democracy far too often, and we are not.

This is interesting, but not for the obvious reason. What's interesting is that it really ought to be true. There are way more low-income voters than rich people, so it should be easy and common for them to band together and soak the rich as a way of providing themselves with more bennies.

And to some extent this does happen, more in some countries than others. But what's remarkable is how little it happens. Every adult gets to vote in America, but it's hard to convince low and middle income voters to unite for something as simple and useful as universal health care, let alone free universities or childcare for all. As for really soaking the rich, forget it. Nobody in the world is serious about it. Hyper egalitarian Sweden has more billionaires per capita than the US. The current richest person on earth, with a net worth of $200 billion, hails from social democratic France. In Switzerland, being rich is practically the national religion.

The inability to turn democracy into socialism is a longtime puzzle. When World War I started, socialist leaders were shocked to find that class solidarity vanished instantly to be replaced with patriotic nationalism. It was, in a way, the original version of What's the Matter with Kansas? Why did the proles all join up to fight a war for wealthy interests? Why do so many low-income Americans vote for a party that's so clearly an arm of the rich? In both cases, it was because class interests are surprisingly fragile compared to culture, religion, country, family, and race.

So Wahl doesn't really have anything to worry about. America is a democracy, but all that does is provide a modest counterweight to the interests of the rich. They're the ones who still provide the marching orders.

Tonight's press conference was plainly not the catastrophe the CNN debate was. That said, it's unlikely that Joe Biden quieted fears about his mental capacity. Earlier in the day he introduced President Volodymyr Zelenskyy as President Putin before catching himself. A minute into the press conference he talked about how he wouldn't have selected Vice President Trump as his running mate unless she was qualified. Later on, talking about foreign policy in the Pacific, he referred to "Australia, New Zealand, Japan, Australia—I already mentioned Australia." He had some trouble calling on reporters, clearly not trusting himself to say their full names sometimes. He was halting at times and had trouble pulling words from memory.

But he basically had his facts straight and showed a good understanding of the issues—certainly better than Donald Trump ever does. It was a competent but not barn burning performance, and it probably won't change any minds one way or the other.

Chris Hayes responds to today's good inflation news:

I don't seriously disagree with any of this, but there's an irony here. The single biggest contributor to Biden's good economy was the CARES Act, the $3.5 trillion rescue package passed in April 2020 and signed by.......Donald Trump.

It was the perfect Keynesian stimulus: big, broad, and put in place with lightning speed before the recession could take hold. But Trump has trouble taking credit for it because his base doesn't like the idea of either Keynesian stimulus or social welfare supports. And it did blow up the deficit.

It's deeply unfortunate that we won't learn the right lesson from this stimulus. It was politically possible only because the March 2020 recession was very sudden and plainly caused by the pandemic. This gave Republicans cover to support it.

The same kind of stimulus could also stop a normal recession in its tracks, but Republicans would never permit it. Early on they'd fight over whether we were really in a recession yet. They would insist on tax cuts instead of spending. They would nickel and dime everything for fear of de-incentivizing work. They would scream about the deficit and its impact on inflation.

COVID put all that to the side. It was obvious why people were out of work and it had nothing to do with laziness. It was obvious we needed to act fast: speed was more important than getting every detail right. It was obvious that inflation wasn't an immediate problem. It was obvious that we needed to put money in people's pockets, not promise them a tax cut in a year's time.

It worked, and there were no real downsides. The subsequent inflationary surge was due to supply shortages, not stimulus. People went back to work as soon as the economy recovered. And the recovery proceeded nicely with the same old taxes as before.

We could do this for every recession if we had the political will. We could especially do it if we had the political will to raise taxes and moderate spending during expansions, thus building up a surplus to be used later. Unfortunately, political will is in even shorter supply than usual these days. It takes a massive, once-a-century pandemic to goad us into doing what's right.

POSTSCRIPT: As an aside, I'm not as big a fan of Jerome Powell as Chris is. Powell has been OK, but I continue to think he overreacted on interest rates. It's possible that the economy needed a little reining in, but there was never any need to push rates so high to battle inflation, which came down of its own accord when supply shortages eased.

A couple of years ago it was fashionable among CEOs to blame bad results on supply chain disruptions, even in cases where supply chains clearly had nothing to do with it. Later on, they blamed price hikes on inflation long after the Producer Price Index had settled down to normal. Today, the go-to excuse for poor results is "inflation weary" customers:

For the past few years as prices soared, many consumers kept buying affordable treats like Doritos and Lay’s in lieu of bigger-ticket splurges such as restaurants, concerts or travel. But now, they are limiting their spending in all areas, said Jamie Caulfield, PepsiCo’s chief financial officer.

Sales volume for PepsiCo’s Frito-Lay North America business dropped 4% in the latest quarter, the company said. “There is a cohort of consumers that have become more price conscious,” Caulfield said. “They’re looking for more deals to get more for their money.”

This isn't rocket science. We actually have data on how much consumers are spending, and the Commerce Department releases a new edition every month. Here it is:

I don't know if consumers are weary of inflation—though it would be a little odd if they were, since the CPI has been hovering around 3% for over a year. This might be too high for the Fed but it's more-or-less unnoticeable to ordinary consumers.

But whether they are or not, consumer spending has been increasing at a rock-steady rate ever since the economy bounced back from COVID. It's just flatly untrue that consumers are "limiting their spending in all areas." If PepsiCo's sales of Doritos last quarter were disappointing, they need to find a different excuse for it.

I don't have a fourth picture for astronomy week, but this is close. It shows the sun—an astronomical body—setting behind a Joshua tree that's near the location I ended up at for my telescoping last week. Enjoy.

Headline CPI came in at -0.7% in June:

Now can we please cut interest rates? It sure seems like inflation is well under control. Maybe too much under control?

In conventional year-over-year terms, headline inflation in June clocked in at 3.0% and core inflation was 3.3%.

The Guardian describes Donald Trump's latest rally:

It was a standard Trump stump speech, full of evidence-free claims that his 2020 election defeat was fraudulent; baseless accusations that overseas nations were sending to the US “most of their prisoners”; and a laughable assertion that a gathering of supporters numbering in the hundreds was really a crowd of 45,000.

It also touched on the surreal. Biden, he insisted, had raised the price of bacon four-fold. “We don’t eat bacon any more,” Trump said.

This might be the most trivial Trump falsehood ever, but that's sort of the point. He'll literally make up anything.

The price of bacon is up a mere 14% since Trump left office, and if you adjust for wages it's cheaper than when Trump left office. Meanwhile, total bacon production is 13% higher than it was when Trump left office. For better or worse, the American love affair with bacon is far from over.

Why would anyone make up lies as frivolous as this? Because Trump lives in a fantasy world where everything has to be the worst ever in history unless he was personally involved with it. His brain is so badly beyond repair that I suspect he literally can't help himself, and he's surrounded by sycophants who will never confront him with the truth. This is not a man fit to be president of the United States.

Here's the latest hotness on the economy: Desperate fast food chains are being forced to offer cheap meal deals to lure back customers who have abandoned them due to high inflation. Maybe so. But first take a look at this:

This goes through Q1 and it's for all restaurant spending, not just fast food. But conventional wisdom suggests that when times are tight, cheap places do relatively better than upscale places. So this likely overstates the problems of fast food restaurants.

Even at that, spending dipped only slightly more than 1% in the most recent quarter and is still 15% higher than before the pandemic. This doesn't suggest to me that fast food chains are hemorrhaging business in any serious way.  They advertise specials and deals all the time, and sales go up and down slightly all the time—in good times and bad.

I don't see any serious problems here aside from the possibility that maybe they got a little too greedy about raising prices well above inflation and are now paying a slight price. Them's the breaks, folks.

Astronomy week continues! I finished up my most recent shoot around 4 am and had everything packed up and ready to go by 4:30. Then, just as I was getting into my car, I looked north and saw a string of eight or nine stars in an eerily perfect line.

I'm not much of a constellation guy, but I had never heard of a constellation like this. And sure enough, it was moving. It wasn't a constellation, it was a string of Starlink satellites.

I pulled out my camera and tripod, and by a stroke of good luck I got one good picture. This was a four-second exposure, which is not very long, but even so you can see the streaks made by the moving satellites. The bright star near the center is Capella, and according to Stellarium Starlink satellites go by Capella all the time. I don't know how often there's a long, perfect string of them all moving in the same direction, though.

According to YouGov, here's the latest breakdown of how partisans plan to vote:

Since the CNN debate, Trump has gained four points among Republicans while Biden has lost two points among Democrats.

This is a fairly remarkable performance from Democrats. There are two possibilities here. The first is that most of them are like me: Biden could be stuffed and mounted on a wall and I'd still vote for him if the only other choice was Trump. The second is that lots of Democrats are convinced that the debate, as Biden puts it, was just a "bad night." I hope that's not the case, since it would show a remarkable divorce from reality. That debate wasn't just a bad night. It was a complete catastrophe that showed a man who was lost and often incoherent. I wonder how many people refuse to see that?