Month: November 2024

According to the Washington Post, "live commerce" allows users to buy products in real time, "typically advertised by hosts during live video events on platforms such as TikTok Shop and Instagram Live." And it's booming!

Global sales on these platforms hit $918.9 million last year, according to a Verified Market Research study, and are projected to more than triple by 2031, to about $3.1 billion. And TikTok Shop is among those quickly gaining ground....

Hmmm. Global retail sales amount to about $30 trillion, with a t. So $918 million, with an m, is 0.003% of the total unless I've dropped a digit somewhere. By 2031, that will be up to 0.007%. Approximately. Mostly in China.

Let me put this a different way. Live commerce sales are so small I had trouble finding another product category for comparison. It turns out it's about the size of the rutabaga market. It's one quarter the size of the nail clipper market. But it's bigger than either the frankincense market or the myrrh market.

In other words, you might want to hold off on being too impressed by the hype.

Since I'm beating dead horses this week, let's continue. When Congress passed the various COVID rescue bills, it resulted in massive deficits in 2020-21, which drove up the money supply. How much? This much:

The red shaded area is the excess above the normal growth of M2 money supply, and provides a good proxy for the way COVID stimulus worked its way through the economy. It's easy to add up the total excess and put it in a chart. Here is that chart:

Apologies that it's so busy. The dark blue dashed line is inflation. The other two blue lines show the M2 excess and the stress on supply chains as calculated by the New York Fed. Notice that they both follow the inflation line pretty closely.

The light orange line shows interest rates set by the Fed. Notice that it doesn't follow inflation even slightly. By the time it peaks inflation is already gone.

Inflation was caused by supply chain shortages and COVID stimulus. When they ended, so did inflation. I would like this chart to be tattooed on Jerome Powell's forehead.

Fine. I give up. I thought Pete Hegseth for SecDef was about as unqualified an appointment as you could get. Obviously I was wrong:

"Provocative" indeed. But wait! That's not even the craziest pick today:

Gabbard, as far as I know, has exactly zero background in intelligence. Matt Gaetz may be under investigation for sexual misconduct and might be one of the most hated people in the House (by Republicans!) but at least he has a law degree. I suppose that counts for something. Gabbard's only qualification is that she suddenly decided a few years ago that Democrats were the antichrist:

On October 11, 2022, Gabbard announced on Twitter that she was leaving the Democratic Party, accusing its leadership of "cowardly wokeness, anti-white racism, (being) hostile to people of faith and spirituality, and dragging us closer to nuclear war". Shortly thereafter, Gabbard endorsed and campaigned for several Donald Trump-endorsed Republican candidates.

She now dabbles in Russian-backed conspiracy theories and calls her old home the "Democrat Party," just like every good Republican.

However, like Pete Hegseth and Matt Gaetz, she's good looking and does boffo box office on Fox News. Being good on TV is emerging as a key quality for Trump nominees. The folks who aren't especially photogenic, like Tom Homan and Stephen Miller, have been chosen instead for White House jobs where they can remain safely anonymous. The cabinet picks, by contrast, all have plenty of experience as pit bulls on Fox. When Trump watches TV in his second term, by God, he wants to see his people singing his praises.

I pass this sign every time I return from an astrophotography session in the desert. There are two of them, both misspelled, and I keep wondering if they're ever going to be replaced. The odd thing is that the signs on the eastbound side of the freeway are spelled correctly. Go figure.

From an anonymous defense lobbyist on Donald Trump's choice of Fox News talker Pete Hegseth to be Secretary of Defense:

“Who the fuck is this guy?”

I guess this lobbyist doesn't watch Fox & Friends on weekends?

More to the point, I wonder if Sen. Roger Wicker watches Fox & Friends on weekends? He's in line to be chairman of the Senate Armed Services Committee, so he'll be in charge of Hegseth's confirmation hearings. Apparently the answer is yes:

“No, I don't have concerns. I'm delighted at the prospect of working with.”

Yeesh. I thought the Senate might bring a tiny bit of adult supervision to Trump's more bizarre appointments, but I guess not.

Donald Trump's administration hasn't even started and he's already suffered his first loss:

Senate Republicans chose Sen. John Thune of South Dakota to be their new leader, rejecting an outside pressure campaign from Donald Trump’s allies to break with the establishment in the secret-ballot election, according to two people familiar with the vote.

Thune, a close ally of retiring leader Mitch McConnell (Kentucky), has been critical of Trump in the past but has worked to repair that relationship in recent months. He reassured senators in a closed-door meeting that he would work hand in glove with the new administration and would not butt heads with Trump even on issues such as continuing U.S. aid for Ukraine, which Trump opposes, senators said.

Thune was always the favorite, so this is no surprise—and Trump himself wisely kept his mouth shut about it. Thune will, of course, be a normal staunch Republican partisan, but he's probably the best we could hope for. He's not a firebrand conservative and he'll likely show at least a little spine in standing up to Trump.

Ramesh Ponnuru says Elizabeth Warren might be responsible for high inflation:

In 2021, Senator Elizabeth Warren (D., Mass.) led the fight to keep President Biden from reappointing Jerome Powell as chairman of the Federal Reserve.... Former Fed official Randal Quarles has said that uncertainty about the Fed’s leadership delayed the central bank’s response to rising inflation.

A more halting Fed response likely led to inflation rising more, and subsiding more slowly, than it otherwise would have.

I assume Ponnuru isn't being especially serious about Warren, but he is serious about the Fed fighting inflation. I sure wish we could put an end to this. I mean, the facts are the facts:

I'm using core PCE inflation because this is allegedly the Fed's favored measure of inflation. It peaked in December 2021 and then started declining. But the Fed didn't start raising interest rates until three months later. Inflation was already coming down on its own as supply shortages eased and pandemic stimulus ended.

Did the Fed's interest rate hikes at least help things along? Maybe, but I doubt even that for three reasons. First, interest rates rose above 3% in October 2022. Inflation was basically conquered by July 2023. Nine months just isn't enough time for an impact that large. Second, interest rates peaked in mid-2023 and stayed high for more than a year. But during this time inflation didn't budge even a hair. Third, there was never a recession or even a slowdown. How does monetary policy affect inflation without first affecting the economy?

I'll admit that if I had been in charge of things I would have raised interest rates too—but slowly and steadily. It can't hurt to make sure, right? And in fairness, things weren't as clear two years ago as they are now.

But they are clear now: The Fed raised interest rates, causing economic pain to millions, for nothing. There was never any need for it.

Average weekly earnings beat inflation for the sixth month in a row in October:

Adjusted for inflation, wages rose at an annualized rate of 1.5% in October.

CPI inflation ticked up in October and core CPI ticked down:

Used car prices surged in October after cooling off over the past year. Food inflation remained around 1% and clothing prices dropped.

On a conventional year-over-year basis, headline CPI clocked in at 2.6% and core CPI at 3.3%.

Annie Lowrey comments on the economic problems of the working class:

The COVID-era boosts to SNAP, UI, CTC, and child care went away. Medicaid unwound. Food costs spiraled. Interest rates doubled. Measures of material hardship worsened. And Democrats pointed to headline figures showing a boom.

I know I'm beating a dead horse, but I continue to have problems with this narrative. SNAP benefits went way up and were permanent. Expanded UI went away, but that's because everyone went back to work. Food costs went up, but not by more than wages and not at all for the past year. That leaves interest rates, which did indeed rise, and CTC and Medicaid benefits, which did indeed unwind.

That said, if any of these things were serious they really would show up as worsening measures of material hardship. But which ones? Lowrey is right that headline averages can be deceiving, so let's look solely at measures of the poor and working class. Here are expenditures:

This is not the BEA measure of spending, which includes stuff like imputed rent and healthcare paid by insurance. It's the one from the Consumer Expenditure Survey, which measures money out the door. As you can see, every income level did about the same, with the working class doing a hair better than anyone else. But is this because they were depleting their savings? Nope:

During the pandemic itself workers got help from stimulus checks, which they spent down. But over the past five years working class incomes have gone up more than working class spending ($1,700 vs. $700), so even after the stimulus benefits were used up saving has held at its normal historical level. Now here's working class unemployment:

Working class folks all had jobs and weren't losing them. Here's poverty:

The poverty rate never rose above its 2019 level, not during the pandemic or after it.

Here's another check on things. If money were tight, the first thing you'd cut back on is entertainment. Did that happen?

There's a small dip in 2022, probably just noise. In any case, it only lasted a year. By 2023 everything was back to normal.

Now, I understand that maybe I'm just stuck here in my upper middle class bubble, refusing to acknowledge all the pain out there. And yes, there are some government benefits that inevitably unwound over the past couple of years.

It's also true that some people did worse than others, and it doesn't take many of them to move the vote a few percentage points toward Trump. That's a possibility.

But it's grasping at straws. There are individual things that have been problems (auto insurance, for example), but no matter how hard I look I can't find any evidence of serious overall hardship among the working class. It really seems like we have to look elsewhere if we want an explanation of what happened.