Author: Kevin Drum

Pictures of egrets are a dime a dozen. I have hundreds of them.

What I don't have is a good picture of an egret in flight. Egrets are remarkably shy birds that fly away at the slightest movement, and I've never been able to get anything better than a decent picture of one flying.

But perhaps you remember the egret in Monday's picture? Just outside the frame there's a tour boat. This was my chance! I zoomed in, got a good focus, and just waited for the tourists on the boat to eventually scare the egret into flying away. They did, and burst mode did the rest.

This is the best picture I took on the entire trip. It's pin sharp, the lighting is superb, the background is perfect, and the motion is stopped. I finally have a great picture of an egret in flight.

In the New York Times today, Claire Bond Potter blames Ronald Reagan for the unraveling of the American social safety net:

Under Mr. Reagan, conservatives were finally able to begin dismantling the New Deal state and Lyndon B. Johnson’s Great Society. In 1981 and 1982, Mr. Reagan made more than $22 billion in cuts to social welfare programs.... Democrats were complicit. In 1992, although he would try (but fail) to pass national health care, Bill Clinton promised to “end welfare as we know it.”...By 1999, single mothers on “workfare” had sunk deeper into poverty.

Progressive Democrats did only marginally better. In 2012, Republicans accused President Barack Obama of unwinding decades of welfare-to-work provisions, with a new system of waivers, work requirements and block grants that states had to follow. And while his Affordable Care Act passed narrowly, under pressure from both parties, he abandoned universal health care.

Today the poverty rate hovers around 11 percent, about where it was in 1973, and economic insecurity now envelops the working poor and middle class.

This is wildly misleading. There's no question that Ronald Reagan was rhetorically opposed to social welfare programs, just as there's no question that conservatives say they want to pare back the safety net. But they haven't:

As for poverty, the only honest way to measure it is to look at earnings after accounting for social welfare benefits. After all, the whole point of those benefits is to reduce poverty.

Using that measure, in 1973 about 20% of the country lived in poverty. Today, that number is about 9%.

In other words, social welfare spending is up nearly 500% since Reagan took office and poverty has been cut in half. Is that still too little? Does it compare badly to our peer countries in Europe? Is it shameful that we still don't have a national healthcare system?

I'm inclined to answer yes to all those questions. You might differ. But for God's sake, can we at least agree to use real numbers when we talk about this? It's the minimal honesty we should expect from our public intellectuals.

As we all know, Larry Summers has been warning for some time about the risk of high inflation. Given the enormous federal spending of the past 18 months this is a perfectly defensible concern, and yesterday's inflation numbers suggest he may have been right.

But if you're a fan of Summers, you need to pay attention to everything he says:

Summers attributes the persistent inflation to Biden’s COVID relief package, but said he supports the infrastructure and social spending bills. “Together, they are smaller over 10 years than this past year’s stimulus was over a single year, and in addition they are substantially paid for,” Summers said.

The social spending bill, in its current form, amounts to about $200 billion per year and doesn't affect the federal deficit at all. In other words, it will have no effect on inflation. Capiche?

Has crime gotten worse in your neighborhood? That depends on which party you belong to:

Among both parties, fear of crime rose after 9/11. After that, fear of crime among Democrats steadily declined over the next 15 years.

But Republicans showed an entirely different response. When Barack Obama was elected president, fear of crime spiked 13 points. When Donald Trump was elected, fear of crime plummeted 18 points. Finally, when Joe Biden was elected, fear of crime once again spiked, this time by 29 points.

Needless to say, the actual amount of crime doesn't change much over the course of a single year. So why are Republicans convinced that it does?

Do I have to say it? Or is the answer obvious by now? This has nothing to do with actual levels of crime. It has nothing to do with crime policy, which is mostly local anyway. It has nothing to do with protest marches or Ferguson or anything else in far distant cities.

It's because of Fox News, which pushes the crime button whenever a Democrat is president and releases it whenever a Republican is president. That's it. That's all there is to it.

As long as we're on the subject of the economy, it's worth noting that the third-quarter GDP number released a couple of weeks ago shows that the economy is running very close to its potential:

This shows GDP as a percentage of potential GDP. As you can see, the economy never surpasses its potential for long without sliding into recession (gray bars). Sometimes it happens quickly, sometime it takes a while, but it always happens.¹

In February of 2020 we were already running above potential and ready to drop into recession when the pandemic hit. We've now nearly regained that level, running at 99.7% of potential.

This doesn't mean that we're ready to fall into a recession, but it does mean that the economy is running about as hot as it can. There's a little bit of headroom left, but not a lot.

¹The CBO revises its estimate of potential GDP frequently. These figures are based on its near-term estimates.

Treasury yields were up today:

This suggests that today's inflation news has caused inflationary expectations to go up a bit, but not a lot. That's the good news.

The bad news is that I imagine that mainstream news is going to be all inflation all the time. I'm OK with that, I guess, as long as they get their numbers right and put it all into long-term context. Unfortunately, the odds of that are not good.

This is a lovely little water lily in the Honey Island swamp, just a couple of miles from the Mississippi border. I snapped this picture on the first of the two swamp tours I took.

I had a very mistaken idea at first of how to go about photographing the swamps and bayous. The reading I had done suggested (I thought) that I could just drive around on back roads in swamp country and get plenty of good views. That turned out not to be the case. To really see the swamps you have to take the swamp tours, but of course I had made no reservations for any of the tours. Luckily, I managed to squeeze myself in at the last minute a couple of times, and my vacation was saved.

In a geothermal system—not the kind in Iceland, which confusingly has the same name—pipes are buried underground where they stay at a constant temperature. Refrigerant circulates in the pipes, warming air and water in the winter and cooling it in the summer.

This is the greatest thing in the world: essentially free energy. Oh, you still need pumps to keep the refrigerant circulating, but that's not much. And of course it's entirely carbon free.

It's also expensive, though not wildly so. So why isn't it more popular? Why don't states like California require it for all new residential housing? Am I missing something about its greatness?

Since we have new inflation numbers today, we can also calculate real earnings over the past year. Here they are:

For all workers, hourly earnings are down 1.3% compared to a year ago. For blue-collar workers, hourly earnings are down 0.5%.

Needless to say, this is not so good. At the same time, it also gives the lie to claims of a worker shortage. If there were truly a shortage, wages would be going up, not down.

The news this morning was bad for those of us who continue to think that high inflation is temporary and still under control:

Compared to the previous month, the annualized rate of inflation in October was 11.3%. Compared to a year ago, prices were up 6.2%.

Core inflation (which excludes food and energy) was up 7.2% over the previous month and 4.6% compared to a year ago.

Those are big numbers! But are they temporary, caused by shortages of goods and the injection of lots of COVID-19 money earlier in the year? I continue to think so, but only time will tell. One thing to watch for is whether inflationary expectations respond to this later in the day.