Month: September 2024

CPI inflation rose 2.3% in August:

This is up a bit from July but still well controlled. It should cause no problems for the Fed.

On a conventional year-over-year basis, headline inflation was up 2.5% and core inflation was up 3.2%.

The inflation rate for groceries has been under 1% since the beginning of the year. Grocery prices have risen a grand total of 1.2% since January 2023 and 0.9% over the past year:

The Taylor Swift endorsement is finally here. Will it matter? Stay tuned.

Who won the debate? I think it was Kamala Harris, but I would say that, wouldn't I?

But I really think she did. I was impressed by her fluent command of facts, many of them a bit obscure. Her delivery was excellent. She chose not to respond to much of Trump's blizzard of lies, which had me yelling at the TV but then immediately wondering if maybe it was the right thing to do. Perhaps constantly calling out Trump's lies as lies doesn't work well with the average viewer.

Trump, I thought, was angrier than usual, which is saying a lot. He was in a rage practically the entire time and his lies were relentless. Kamala will ban all your guns. Kamala wants to kill babies after birth. Kamala negotiated with Putin. Kamala let millions of criminals into the country and they're eating pets in Springfield. Kamala will ban fracking. Kamala hates Israel (and Arabs!). Kamala has sent America into decline.

David Muir, one of the moderators, pushed back on some of these things, which surprised me. It didn't slow down Trump, but it was still more real-time fact checking than I can ever recall in a debate.

Trump was a little more coherent than he was in the last debate. He flitted from subject to subject as usual, but most of the time his segues were at least decodable.

Harris relied on a strategy of relentlessly staying positive and selling her "opportunity economy" story. I wish she had pushed back more on Trump's falsehoods, but she did that only occasionally—partly because of the moderators. Whenever Harris attacked Trump, he insisted on an immediate response. But it seemed to me that they often didn't give Harris the same opportunity.

Harris spent a lot of time trying to convince viewers that Trump was an extremist nutcase—but without directly calling him a nutcase. I can't tell if that worked. I understood all her references, but I'm not sure if the average viewer did.

In the end, Harris projected vibes of confidence and energy. Trump's vibes were angry and defensive. That's probably the single most important takeaway.

Here's a headline in the New York Times today:

This highlights a problem either with journalists or with economists. I can safely say that economists aren't "skeptical" of Trump's tariff blather. They think it's straight up bullshit.

So is the problem that economists are too polite to say so when a Times reporter calls? Or that the Times reporter feels an obligation to tone down what they say in order not to seem anti-Trump?

The truth is pretty simple:

• Tariffs don't "tend" to be borne by US businesses and households. They just are. They're collected by the customs service from American importers.
• Tariffs would not "likely" generate less than the trillions of dollars Trump promises. They wouldn't, period. On net, they might even generate negative revenue.
• Retaliatory tariffs wouldn't "probably" do little to affect the dollar's role as a reserve currency. They would almost certainly make the dollar less attractive. The whole idea of using harsh tariffs to protect the dollar is "a bit nuts," says Brad Setser.
• "Most economists" don't say that Trump's tariffs would increase inflation. They all do.

I understand the obligations reporters are under to appear evenhanded. Language has to be restrained. Everything has to be sourced. You can't just state things on your own authority.

And yet, an ordinary person who managed to plow through the entire Times piece would probably come out of it thinking that tariffs are kind of complicated and it's not really clear if Trump is right or not. This is simply not correct.

We still haven't figured out how to cover someone who lies and blusters the way Trump does. When he says that tariffs on China are paid by China, he's either lying or he's a moron. That's it. Those are the choices. But you can't say that in the New York Times.

Here's the Vienna Opera House at night just as a performance is starting to let out. I believe this was the setting for a big part of one of the Mission Impossible movies.

The FBI reported yesterday that cryptocurrency fraud in the US amounted to $5.6 billion in 2023. This is a 45% increase since 2022.¹ Nearly 40% of the fraud was perpetrated on people age 60 and over.

This all makes the United States the crypto fraud capital of the world by a very wide margin. Here are the country stats for the top losers:

Even after taking population into account, the US reported fraud losses more than 7x higher than the next biggest loser. When you figure that the positive value of crypto is approximately zero, this means the US sustains a net consumer welfare of -$5.6 billion just for allowing crypto to exist. Despite this, crypto stans continue to push for even looser regulation of what is, essentially, just a criminal enterprise.

Welcome to the free market.

¹By my calculations it's a 36% increase. But what's nine percentage points between friends?

The government's fiscal year ends on September 30, which means FY25 begins on October 1. That's three weeks away.

Naturally we need a federal budget in place by then, but that's a laughable impossibility with Republicans in charge of the House. The best we can hope for is a continuing resolution to keep the lights on for six months while we wrangle over an actual budget.

Of course—did I mention that Republicans control the House?—there's a catch: Speaker Mike Johnson insists he won't pass even a CR unless Democrats agree to pass the SAVE Act along with it. This is a "statement" piece of legislation that would require proof of citizenship before you can register to vote.

The SAVE Act probably wouldn't actually affect voter registration much, but what a pain in the ass. I, of course, would just show my passport and be on my way. But lots of people don't have passports. Nor do they have an official, stamped birth certificate, so they'll have to track one down. And for what?

The argument is simple. Democrats say there's virtually no noncitizen registration, so why bother fixing a problem that doesn't exist? Republicans say: maybe so, but what's the harm of requiring proof of citizenship?

Meanwhile, I'd like to remind both sides that if they're actually serious there's an easy solution: free national ID cards. You'd have to show your ID to register, so Republicans get what they want. However, acquiring ID is free and easy, so Democrats get what they want.

Outside of the UK and its former colonies, virtually every country in the world offers free identity cards to its residents. Some are compulsory and some aren't, but everybody gets one regardless because they're really convenient. The US already has such a card (the passport card), so that part is done. All that's left is to make it free and urge everybody to get one. What's not to like?

In addition to new poverty figures, the Census Bureau also released new annual income numbers today. Real household income was up 4.0% in 2023:

Household income was up for all races and all income groups. It increased the most for the poorest 10% of workers.

Note that this is "money income" as defined by the Census Bureau. It doesn't include either taxes or government benefits.

We got new poverty figures today from the Census Bureau, and the news was mixed:

Using the old, official measure, the poverty rate was down 0.4 percentage points, dropping from 11.5% to 11.1%.

However, using the shiny new SPM, the poverty rate was up 0.5 percentage points, rising from 12.4% to 12.9%.

The SPM is generally considered a more accurate gauge because it accounts for both welfare benefits and taxes. Because of that, it fell sharply during the pandemic thanks to generous benefits in the various rescue packages. As those benefits disappeared, poverty went back up to its old, pre-pandemic rate. Unsurprisingly, this mainly hit non-white workers:

Overall, the main takeaway from today's report is that poverty didn't change very much in 2023 for white people but went up significantly for everyone else.

TIL that members of Congress are allowed to use their franking privilege to buy TV ads:

This is nothing new: Congress extended the franking privilege from mail to TV in 1972.¹ It's become a little more common lately because no one sends out mail anymore; they just blast out newsletters via email. This means they have more money available, and some members use it on TV spots.

Unlike mail, however, TV ads have to be paid for, and the money comes out of each member's office budget. This means there will never be very much of it and it will never be a big deal. Still, I had no idea this was a thing. Now I do.

¹I think? It's remarkably hard to pin down when Congress first allowed the frank to be used for broadcast communications.