Month: November 2024

I've been wondering where the preposterous Kash Patel would land, and now we know: He's going to be director of the FBI.

Aside from being a fanatic Trump loyalist, Patel naturally has precisely no qualifications for the job. He's worked as a trial attorney, and then as Devin Nunes' attack dog, and that's it. He's 44 years old and has never had the remotest connection to law enforcement. On the other hand, he's written a book explaining that he passionately hates the FBI. And he said this last year:

We will go out and find the conspirators not just in government, but in the media.

We're going to come after you whether it's criminally or civilly. We'll figure that out.

What could possibly go wrong?

Here is Joey Politano's latest update of real GDP growth among the G7 group of rich countries:

The US is on top, followed by Canada and Italy. Germany and Japan bring up the rear. But the best measure of economic growth is real GDP per capita. Let's take a look at that:

The US is still in the lead, but now followed by Italy and Japan. Germany still looks grim, but Canada has done the worst of all. This is because Italy and Japan have kept GDP up or flat even though their populations have fallen. Canada drops to last place because their GDP growth has been powered solely by a rising population.

The United States is the only rich country that's had strong population growth and strong economic growth.

Congratulations, France, on Charles Kushner, your new ambassador from the United States. And don't think for a moment that this is nothing more than a bit of unusually rancid nepotism to benefit the father of Ivanka Trump's husband. He earned this.

As for all those "other crimes" Kushner committed, Trump pardoned him for that stuff in 2020. It doesn't count anymore.

The Washington Post says homebuilders are super excited about Donald Trump's election:

“The energy right now is just unbelievable,” said Greg Hardwick, president and owner of Hardwick General Contracting, a custom home builder in central Florida. “Among builders, among clients — anybody that is taking a risk in the housing market right now feels really good.”

....Interviews with builders across the South, Midwest and West Coast highlighted two regulations the industry hopes Trump could pare back as he tries to cut red tape. One prohibits building homes near water, or roadside drainage ditches that connect to creeks and streams, without first obtaining a federal wetlands permit. Another has to do with energy efficiency requirements for certain government-backed properties that were made stricter under the Biden administration. Generally, builders say both rules add costs and delays.

Well, you never know. But the water rule is part of federal law—the 1972 Clean Water Act—which explicitly requires a permit from the Army Corps of Engineers if you want build something that impacts recognized wetlands. And many states have complementary laws of their own. This would be no easy thing to repeal.

The energy efficiency standards are newer, but still outside the 60-day "lookback" period that would allow the incoming Congress to overturn them. They could only be repealed by going through the full rulemaking process all over again.

As for builders feeling great, the Post notes that "builder sentiment improved for the third straight month in November," which is true. But it's still not exactly sky high:

As for home sales themselves, they've been stuck in the doldrums ever since mortgage rates went up. Maybe they have nowhere to go but up, but that depends on the Fed way more than it does on Trump.

Oregon legalized assisted suicide in 1998. The number has grown ever since, reaching 367 last year, about 0.8% of all deaths. In the past decade the growth rate has been 18% per year.

Why the steady increase? The median age of assisted suicide was 75, and my guess is that it's an inevitable result of both rising life expectancies and, ironically, the ability of modern end-of-life care to keep people barely alive for longer and longer.

Yesterday I mentioned that the national debt as a percent of GDP had declined under Joe Biden. And yet, interest payments on the national debt have skyrocketed from $500 million in 2020 to over a trillion dollars a year today. What's going on?

The national debt is held in treasury bills, treasury notes, and treasury bonds. Some are short term and some are long term. Here's the average:

On average, the national debt is held in securities with a six-year maturity. So when the Federal Reserve raised interest rates by five points, interest on the debt didn't instantly go up five points. It went up gradually as old notes were redeemed and replaced with new ones at a higher rate.

Overall, the Treasury Department says that average interest on the debt has gone up about 1.5 percentage points since 2020—from 1.77% to 3.32%. That's a lot less than five points, but it's still nearly double. So we have this:

In nominal terms—which is what gets most of the attention—the national debt has increased about a third and the interest rate paid on the debt has doubled. That means total interest on the debt has gone up roughly 130%. So even if you look at interest as a percent of GDP, it's still gone way up:

Bottom line: This is all about the Fed raising interest rates. If that hadn't happened, interest on the debt would have gone up about the same as GDP and would currently be somewhere around 2.5% of GDP, just like it has been for the past couple of decades. When interest rates go down, interest on the debt will go down too.

A recent paper investigated veterans of Iraq and Afghanistan to find out how much they were claiming in VA disability benefits. The answer is: a lot.

The study primarily looks at male soldiers who joined up between 2001 and 2011 and were assigned to a brigade combat team. What the chart above shows is that general disability payments didn't go up. This includes SSI, SSDI, and workers compensation. However, VA disability payments skyrocketed.

Why? Excellent question, and one that the authors ended up unable to answer. They controlled for a vast number of variables (age, race, IQ, number of years deployed, etc. etc.) and it turned out that these predicted exactly nothing:

Outcomes were measured eight years after enlistment, so 2009 through 2019. None of the things they thought might predict disability payments did so after the first few years. By the 2011 cohort, they explained literally zero.

So again, why have VA disability payments skyrocketed? The authors first suggest it's because we've passed a bunch of laws that make it easier to claim benefits. They back this up with a long list of changes to the law. But still, why would later cohorts take advantage of these laws more than earlier cohorts? I'm not sure this explains much either.

In fact, it turns out the whole thing is even more mysterious than it seems:

The results show that deployments have become less dangerous over time and simultaneously generated larger increases in VADC receipt.... The causal effect of a 10-month deployment on VADC compensation more than doubled during this period.... SSI/SSDI, by contrast, shows a very different pattern. The effect of a 10 month deployment on total payments from these programs decreased from $490 to $145 over the same period, consistent with the declining combat risk.

Disability payments from general programs decreased, as you'd expect from soldiers who were less exposed to combat later in the wars. But VA benefits surged.

Why why why? The final attempt to explain this is something else entirely: declining standards for new recruits.

Changes in deployment and exposure to violence across cohorts effectively explain none of the changes.... Observable selection, however, is a far better predictor of changes in noncombat deaths.... As more soldiers with lower AFQT scores and more moral waivers enlisted in the mid-2000s, noncombat deaths increased.

Hmmm. Noncombat deaths rise for a few years partly as a result of lower recruiting standards (and other things), but by 2010 it's showing zero effect. Did recruiting standards really change that much in two years? And even if this is real, the effect is smallish and only for noncombat deaths. It doesn't seem to account for anything else.

In the end, the authors suggest that greater generosity in awarding disability benefits, along with changes in the quality of the soldiers, can explain some of the huge increase in VA disability benefits. But even by their own account, not very much of it. The whole thing remains a mystery.

POSTSCRIPT: If I had to guess, I'd say disability benefits have risen largely because later cohorts were far more aware of the benefits available to them, and far less squeamish about claiming them. But the study didn't look at that, so it's only a guess.

This is Charlie guarding the upstairs water bowl. Anybody else who needs to hydrate himself is going to have to wait his turn.

The ruble is collapsing:

It recovered slightly yesterday when the Russian central bank intervened, but it's still down 30% since the war started and 20% over just the past couple of months. Western sanctions continue to tighten, driving the ruble ever downward.

Big news from our friends at FRED:

FRED has added 3 data series for the Fujita, Moscarini, and Postel-Vinay (FMP) Employer-to-Employer (E2E) Transition Probability. The E2E Transition Probability is a monthly measure of the rate at which U.S. workers transition from one employer to another in a given month.

This sounds a little dry, doesn't it? But it turns out that the recent history of the FMP series is actually kind of interesting:

FMP measures how likely it is to change jobs. Generally speaking, this goes down during recessions as people burrow in and just hope not to be laid off, and then goes up when times are good and people are feeling optimistic. Recently, it went up early in Biden's term, started to decline as inflation bit, but then has been going steadily up since March.

This is not the biggest deal in the world, but it suggests, once again, that if you measure what people actually do, as opposed to what they tell pollsters, they were feeling increasingly good about the economy for almost the entire election season. The economic explanation for Donald Trump's win just doesn't seem to hold water.