Author: Kevin Drum

The crypto community brags that there are thousands of cryptocurrencies these days. But doesn't that, almost by definition, demolish the idea that cryptocurrencies have real value?

When Bitcoin was unique, that was one thing. But over the past few years it's became clear that nearly any random person can create a cryptocurrency. All it take is some technical knowhow, a little bit of marketing skill, and a highly artificial mechanism for guaranteeing scarcity. Every cryptocurrency is nearly identical to every other one.

Put aside the complicated arguments and long conversations about why crypto is for real. Just answer one question. It makes no sense that just about anyone can create a cryptocurrency. So why can they?

Marissa Evans writes about her 70-year-old father's death in January from COVID-19:

Since my father’s death, I have stared at the January 2022 calendar page attempting to trace his COVID-19 exposure and when he started coughing. I’ve tried reconstructing timelines and symptoms with dates, texts and calls to understand why my father died. But I know it will not make sense. The way we lose Black men in America never makes sense.

Loving a Black man in America often means your time with them will always seem short-lived....Black people are 2.5 times more likely to be hospitalized and 1.7 times more likely to die from COVID-19 than white people, according to the Centers for Disease Control and Prevention.

I don't want to reduce Evans's grief to statistics, but COVID death rates actually illuminate—or perhaps add to—her confusion:

There are two obvious things to say here. The first is that although it was once true that the Black community had a higher risk than the white community of dying from COVID, that risk started to plummet in October and has mostly matched the white death rate since then.

But the second thing is that mostly is not always: There was a huge spike in the Black death rate in January—exactly the month that Evans's father died. This was true of all age groups, not just the elderly, and it was outsized compared to both the white and Hispanic death rates. This really doesn't make sense.

When I read pieces like this, which discuss the way Black patients are treated by the medical system, I almost always come away with conflicting responses. On the one hand, I get annoyed at the errors and hyperbole. Generally speaking, Black people aren't dying from COVID at higher rates than white people these days. That's outdated. The PNAS study Evans mentions later doesn't show that lots of white medical students hold outrageous racial beliefs. It shows that when they start school, white students average about 15% incorrect beliefs and this declines to 5% by the end of medical school. Finally, the litany of complaints about various unhappy interactions with doctors rarely strike me as unusual. Doctors periodically treat everyone badly, and most of the complaints feel very familiar to me.

On the other hand, both anecdotes and data really do support the notion that white doctors systemically treat Black patients worse than white patients. Some of this may be class bias more than racial bias, and some of the outcomes are due mostly to problems outside the health care system. (For example, Evans talks about life expectancy, but if you account for income something like 70-80% of the racial difference in life expectancy goes away.) Still, even with all that acknowledged, a racial component always remains. There's just no doubt that, one way or another, the mere fact of being Black leads to worse medical care on average.

Based on some skeptical feedback to my post about how our global supply chains actually worked pretty well through the pandemic, I began wondering if the real issue here revolves around our definitions of "global supply chain" and "failed." For example:

• My view of "global supply chain" is that it specifically refers to the complex web of logistics for turning a given set of inputs into finished products and then getting them to customers. It doesn't refer simply to shortages of those inputs, since it's trivially obvious that almost any manufacturing system will produce fewer finished products if its supply of inputs declines.
• A different take might emphasize that we have chosen to rely heavily on more and more inputs (oil, semiconductors, grain, etc.) in individual products, which makes them vulnerable to shortages of more things. In the past, for example, cars didn't use semiconductors. Now they do, so a shortage of semiconductors affects the supply of cars. This reliance on so many different inputs makes the supply of finished goods more fragile.
• Yet another take might argue with my narrow definition of supply chains, expanding it to include forecasting, financial speculation, OPEC policies, and so forth.
• Finally, there's the definition of "failed." A huge and sudden pandemic that shuts down production all over the world will obviously affect the supply of finished goods. But how do we measure this? By shortages of consumer goods? Total global trade? Increased prices? And even if we agree on metrics, how do we decide if our current system performed better or worse than some other system?

The simplest metric of "global supply chains" is the global level of trade. A good system keeps trade humming, while a bad system is fragile and vulnerable to unexpected external shocks like a pandemic. Here are the biggest negative trade spikes in recent history:

The drop due to the pandemic isn't a big one. It ranks #9 among the biggest spikes due to economic downturns.

But here's another interesting thing. A related measure of how well our global trade system is working is its ability to rebound. For each year, here's a ranking of how well the next year fared compared to two years previously:

The pandemic year of 2020 is pretty good. Trade may have been down compared to 2019 (top chart), but it rebounded and by 2021 trade was up about 14% compared to 2019 (bottom chart). Our supply chains recovered in very short order, which suggests a considerable resilience, not fragility.

This is not a slam dunk analysis. It would be nice to have some measure of shortages, but it's hard to imagine how you could calculate that in any kind of rigorous way. Nonetheless, basic trade data suggests that our global supply chains worked pretty well in the face of an enormous challenge.

POSTSCRIPT: There is one other thing to consider. US demand for goods spiked upward last year, and the result has been clogged ports, a shortage of transportation, and jammed warehouses. This speaks well for global supply chains, which are producing goods in huge quantities. However, it also shows that American supply chains aren't able to cope with even a 5-10% increase in goods. That's a problem, but don't conflate it with a global trade crisis.

With cases of Omicron and now BA.2 rising in Europe, it occurred to me that this might be a good time check in again on Sweden. Here it is:

Back in the middle of last year, Sweden was officially a disaster area. Their light touch on COVID regulation had backfired, producing higher case counts than any other big country in Western Europe.

But the fat lady hadn't sung and the COVID pandemic wasn't over. Today, the cumulative Swedish case rate is among the lowest, below both Denmark and Norway. At the same time, its cumulative death rate is right in the middle (though above both Denmark and Norway).

There are caveats to this, including questions about how accurate case counts are these days and whether Sweden significantly changed its approach later in 2021. Still, over the long run it's no longer clear that the Swedish model is a huge failure. It's possible—only possible, mind you—that the lesson from all this is that for a virus like COVID the best response is to flood the zone with countermeasures for the elderly but keep countermeasures fairly light for everyone else.

Of course, the pandemic still isn't over. A year from now it's possible that things will look different once again. Don't take any of this as the final word.

Here's another picture of Hilbert and Charlie taken in the wee hours using the Night Sight feature of my Pixel 6 Pro. This one really shows off the huge amount of image processing that the phone must be doing: the edges are so sharply defined that the cats almost look like they're floating a bit.

The hump over on the far left is Marian, curled up into a tiny ball so that the cats have plenty of room to stretch out. Or maybe she's lying diagonally. Either way, the key is that the cats always have first priority.

The latest from Ukraine:

Not long after Mr. Biden arrived in Poland, the Russian military signaled that it might be reducing its war aims. After a month of a grinding war in which Russian forces have been met by unexpectedly fierce Ukrainian resistance and have failed to capture major cities across the country, Maj. Gen. Sergei Rudskoi said Russia would now be focused on defeating Ukrainian forces in the eastern Donbas region, where Russian-backed separatists have been fighting a war since 2014.

Hell, if they'd done that from the start this whole thing would have been another Crimea: a quick, easy sprint that would have left the world with a fait accompli it could do little about. And it would have solidified Putin's reputation for military genius instead of turning into a long, grinding war that's done nothing but expose the Russian military as far less capable than anyone imagined.

What an idiot.

This is a seagull on the Seal Beach pier. I can't think of anything else to say about it.

Here we go again with yet another fretful look at our delicate global supply chain:

"Far more vulnerable than many imagined." Indeed. Why, all it took was a deadly and unprecedented global pandemic and suddenly our supply chains developed a few minor hiccups and then were unable to fully keep up with a sharp and unexpected rise in demand for goods. Who came up with this hot mess, anyway?

Seriously, folks: By any reasonable measure, our global supply chains came through the pandemic with flying colors. The truth is that most of us have suffered only in very small ways from supply chain shortages.

And keep in mind that not all shortages are even "supply chain" issues in the first place. Take cars, for example. The problem here is not primarily that the supply chain failed. The problem is that American car companies apparently decided the pandemic would last forever and canceled their orders for crucial chips. When demand for cars recovered, they had no chips because they had been allocated to other companies that planned better. That's a forecasting failure, not a supply chain failure.

Other shortages are similar. Gasoline prices are up thanks to high demand and OPEC+ limits. This has nothing to do with global supply chains. The price of beef is up because—well, I'm not sure, exactly. But some of it is because of worker shortages due to the pandemic. Again, that's not a "supply chain" issue.

I sometimes wonder what people think would have worked better than our current trade system. If we in the US sourced all our goods domestically¹ would everything have been great? Of course not. People still would have gotten sick; companies still would have been short-staffed or closed down entirely; managers still would have made lots of bad forecasts; and many items would be in short supply because there were few alternate suppliers. Other countries would be even less able to cope. It's almost a dead certainty that having a huge global supply chain with lots of different suppliers cushioned the effect of the pandemic rather than making it worse.

In many cases I feel like people say "supply chain problems" when they really mean "modern products are complex and have lots of different parts." This is certainly true, and those parts come from a lot of different places. The same is true of raw materials. If lithium is mostly mined in South America, then that's where you have to go for it. If rare earths come from China, ditto. One way or another, modern products depend on both raw materials and parts from a lot of different places, and there's nothing much we can do about that. A global supply chain isn't a choice, it's a necessity.

Long story short, I remain convinced that our global supply chains worked magnificently under enormously strenuous conditions. The fact that our ports and our trucks and our warehouse are bulging at the seams is evidence of this. I'm still waiting for someone to write the long version of this story.

¹This isn't possible, but consider it as a thought experiment.

A new Fed paper tries to estimate the difference in unemployment benefits between Black and white workers. Here's the raw data:

Fewer Black workers are eligible for UI benefits compared to white workers. However, even among those eligible for UI, Black workers receive UI benefits at a much lower rate than white workers (42% vs. 55%) and receive much lower benefits ($1,799 vs. $3,098).

The difference in benefit amount is largely due to lower Black earnings. However, the difference in being authorized to receive benefits in the first place is not. The authors performed a decomposition and concluded that lower earnings and living in the South (which is generally stingier about UI benefits) accounted for about half the difference in UI receipt among eligible workers, while other demographic factors accounted for nearly nothing. This suggests that about 50% of the difference in receipt of UI is likely due to racial factors:

Racial gaps in UI receipt are sizable. Among individuals that are eligible for UI, raising the Black take-up rate to the white level would lead to a 14 percentage point increase in the share of individuals that receive UI and a $1,299 increase in mean UI benefits. To put the size of this gap in perspective, Black individuals that are eligible for UI earn an average of $28,055 per year, $12,657 less than white individuals on average. Thus the UI gap is equal to 5% of Black individuals’ yearly earnings and 10% of the Black-white earnings gap.

This should be considered tentative data until it's confirmed by other studies. However, it's very likely real, and for people (like me!) who are always asking for current examples of systemic racism, this is one of them. For reasons that appear to be related to race and nothing more, Black workers who are eligible for UI simply aren't approved to receive it as frequently as white workers.

A friend sent me a link to a Catalist analysis of what happened in the Virginia governor's election last year. There are lots of takeaways, but here's one of them:

Between the presidential election of 2020 and the gubernatorial election of 2021, youth turnout dropped 34 percentage points. Among boomer adults it dropped only 17 points. Among the elderly, it barely dropped at all.

This is totally normal. Progressives always swear that this time they can keep young people engaged in off-year elections, and every time they're wrong. Whatever our problems, depending on the young in non-presidential elections is a fool's venture.