Cats, charts, and politics
This is what December and January have looked like here in Southern California: either stormy and threatening to rain, or else just raining. This picture was taken halfway up Mt. Baldy Road looking south toward Upland. It wasn't raining when I took it, but about half an hour later it started coming down.
The Washington Post reports today that Florida's K-12 teachers have been removing books from their classrooms while they await guidance from the state about what's allowed and what's not:
House Bill 1467, which took effect as law in July, mandates that schools’ books be age-appropriate, free from pornography and “suited to student needs.” Books must be approved by a qualified school media specialist, who must undergo a state retraining on book collection. The Education Department did not publish that training until January, leaving school librarians across Florida unable to order books for more than a year.
Those requirements don't sound unreasonable—but it all depends on how the "guidance" interprets them, and that guidance was only published (in draft form) a couple of weeks ago. Here's the most directly relevant guidance about porn:
This is just cut and pasted from the Supreme Court's definition of porn. To qualify, a book has to fail all three of those bullet points, not just any one of them. Unless you have a book version of Debbie Does Dallas in your classroom it's all but impossible to fail this test.
Here's the guidance for suitability and appropriateness:
This doesn't really seem objectionable either, although the guidance in the fourth bullet could use some additional guidance of its own. Who exactly decides if a portrayal is "accurate"?
Later on, the guidance says that books should be selected that "Support the broad racial, ethnic, socioeconomic and cultural diversity of the students of this state." This sounds fine.
On the less positive side, we also have this: "Check any books that have been removed or restricted due to a challenge in other districts. Those books should be carefully considered before purchasing." And this: "Avoid[] unsolicited theories that may lead to student indoctrination." Needless to say, this leads us to the dreaded Critical Race Theory:
This applies to all instructional material. I personally doubt that there's much of anything related to CRT in any instructional media anywhere in Florida, but there's almost certainly none in library or classroom books. So this probably has little practical impact on schoolbooks.
For the most part, I suspect that this whole legislative effort in Florida has generated far more heat than light. It makes it look like Gov. Ron DeSantis is doing something to support wholesome values for Florida kids, but the law actually changes very little unless there really are social studies teachers who have been stocking Story of O on their bookshelves and teaching their kids that white people should all be sent to reeducation camps.
Of course, it all depends on how people react to this in real life. Will everyone simmer down now that they have their law? Or will MAGA parents start mounting endless challenges in the hope of proving that Judy Blume writes porn? I guess we'll find out soon.
JOLTS¹ data for December was released today. Here it is for the full year 2022:
Hires have been declining, but recovered a bit in December, rising 2.2% compared to November. Ditto for job openings (up 5.5% in December). That's the good news.
Then there's the bad news. Layoffs have been on an upward trend all year and increased 3.5% in December. Quits have been declining all year and declined another 0.4% in December. This suggests that workers are staying in their jobs because they're nervous about the economy.
So it's a bit of a mixed report, which is typical of an economy that's doing well but not going gangbusters. Which is exactly what we have right now.
¹Job Openings and Labor Turnover Survey
Two people in two days have told me that NextDoor is aflame with outrage about the price of natural gas. And that's hardly surprising: here in California gas bills for December ranged from double to triple the normal rate. People who normally have gas bills of $100 or so are reporting bills of $200-$500 depending on how much they use. Here's the chart I put up a few weeks ago:
This is an astonishing spike, and I spent some time today trying to figure out what caused it. The basic answer turns out to be simple: gas companies were predicting a warm, dry winter and instead got just the opposite. This has been one of our coldest winters of the past decade, and that drives up consumption and therefore prices.
But that's not all. Here's a chart comparing temperature to gas prices in California:
The red line is the November temperature from 2009-22 (I used an average of Los Angeles and Sacramento). Lower temperatures mean higher prices, so I inverted the cost of gas and then scaled it to fit on the same chart. As you can see, price roughly follows temperature until 2021, when it suddenly diverged. Then in 2022 it diverged even more. What's going on?
Here's the way things work. Local utilities pay what's called an "index price for natural gas supplies:
There are dozens of liquidly traded, regional index points which represent the cost of gas delivered into different market areas....Weather conditions and available pipeline capacity often determine the volatility of an Index point. The monthly Index price is published the second business day of the month, after the decision of how much gas to flow has been determined.
Based on November temperatures, the index price for California started to soar. It was up 60% in December and then tripled in January. [But see the update at the bottom of the post.]
But why? We've had cold winters before, and the price of gas has increased only modestly. The answer is related to a seeming mystery: December prices were also well above average in 2021 even though winter was fairly warm that year. That doesn't make sense.
The problem was a pipeline from Texas that exploded in Coolidge, Arizona, earlier in the year and killed a person. The pipeline is operated by Kinder Morgan, and another one of their pipelines had exploded in Tucson in 2003. For this reason, the town of Coolidge was none too eager for the pipeline to reopen, and the NTSB was cautious too because they couldn't figure out what caused the explosion. This cut off one of California's sources of natural gas, which made it difficult to get enough supply during winter months.
In 2021 this caused a smallish upward blip in the index price. But in 2022, the pipeline outage combined with a cold winter to send prices skyrocketing. Kinder Morgan just recently applied for permission to reopen the pipeline, but the Pipeline and Hazardous Materials Safety Administration hasn't yet signed off on it. If all goes well, the pipeline will be back in service within a few months and this year's price spike won't happen again.
We hope.
POSTSCRIPT: But wait. Isn't it also true that we're exporting a lot of our natural gas to Europe this year? Isn't that contributing to lower supplies and higher prices here in the US?
Nope. Outside of the Pacific Coast natural gas prices are completely normal. In fact, an explosion at an LNG terminal in Quintana, Texas, cut off shipments of natural gas from Freeport and produced an enormous glut of natural gas. The glut is so big that prices of natural gas are negative down there: suppliers are willing to pay people to take gas off their hands because they don't have any place to store it anymore.
So we have a glut in Texas producing super low prices there, but no way to get that excess supply to California, where we need it. Welcome to modern life.
UPDATE: Good news! The LA Times reports that the index price for February has been published and the crisis is over:
That's still higher than normal, but it's not 3x higher than normal.
Paul Krugman asks today:
Hang on a second, pardner. There's also a third option: a plain, old-fashioned recession that lasts a year or so. This is my best guess right now because the Fed's interest rate hikes will start to affect things in a few months and drive a normalish economy down into recession.
I might be wrong about this, of course, and it's hard to stick to your guns when you're relying on an invisible force to explain things. Maybe this time will be different! For now, though, I can't think of any good reason why it should be. Invisible or not, interest rate hikes cool off an economy, and we're already about where we'd like to be. When last year's hikes take effect, the economy will respond in the usual way: by dropping below where we'd like to be.
Generally speaking, I think I'm more confident about sticking to fundamentals than most people. I hope I'm wrong about an upcoming recession, but ordinary old fundamentals tell me it's coming. We'll see.
According to my bird buddy, this is a lazuli bunting female Mountain Bluebird. I found her hopping around the trail markers at Quail Hill park, one of the open-space preserves in this neck of Orange County.
The top photo is a good overall picture of our little bluebird. The middle picture shows that it's not only the early bird who gets the worm. And the bottom picture shows her displaying her plumage.
(I'm not sure why her feathers are teal in the first two photos and blue in the bottom one. It's not my doing. Maybe the light changed? The teal coloring shows up in every frame taken after 3:32 pm.)
UPDATE: Steve_OH says it's a female Mountain Bluebird. So a Mountain Bluebird it is. Also, there are several theories about the teal/blue color change being bandied about in comments.
Here are all of the standard economic indicators that affect people in their daily lives. They look pretty solid!
Growth rates are all annualized.
NOTE: Will everything stay this sunny? I'm a recession hawk myself, so I doubt it. We'll know in about six months.
Are wages skyrocketing so strongly that the Fed needs to continue crushing the economy until workers understand who's the real boss? Let's look at today's latest data:
The Employment Cost Index measures the total cost of employing someone: wages, taxes, office space, health care, etc. In the last quarter it went up at an annualized rate of 4.0%. Adjusting for inflation, it went up 0.8%.
Both of those seem pretty reasonable. Nominal growth has been sliding downward ever since the beginning of 2022, and real growth remains low despite a couple of recent increases.
From the Fed's point of view, the ideal rate is around 3% nominal growth, with 2% inflation producing 1% real growth. We're getting pretty close to that.
I was piddling around with something related to the Tyre Nichols killing—I don't quite remember what—and decided to look at police killings by both race and age. We all know that Black people are killed at much higher rates relative to population than white people, but it turns out that the difference depends a lot on age:
It's not surprising that the rate of fatal police shootings is highest for young age groups, since ages 18-29 are the prime years for criminal activity. But look at the chart. Shooting rates do go down strongly with age for Black people, but only slightly for white people. This strongly affects the difference in shooting rates.
At ages 18-29, police shoot Black suspects at more than three times the rate of white suspects.
At ages 30-44, the difference is "only" a little more than double.
And at ages 45-65 the difference is down to 50%.
Why is this? A couple of possibilities have popped into my head, but neither made sense when I thought a little longer. So I have two questions:
For some reason—maybe real, maybe not—police are way more afraid of young Black suspects than young white suspects. Conversely, by middle age apparently people of both races are equally scary.
Thoughts?
Here's what the latest NBC poll has to say about what Congress should be doing this year:
Normally polls like this are kind of worthless because the crosstabs invariably tell us that 100% of Democrats think one thing and 100% of Republicans think the opposite. Not exactly news.
But when you get to the edges, you find a few topics that are so widely liked or disliked that they mathematically have to be fairly bipartisan. In this one, the United States is pretty united that Congress should pass a moderate immigration bill and shouldn't screw around with abortion.
This is good to know, but I wish someone would ask about support for mandatory E-Verify. As you know, this is my hobby horse on immigration policy, and I'm a little surprised that it never gets much attention. Immigration arguments are almost exclusively about the wall, DACA, and a pathway to citizenship. But why stop there? We should also talk about E-Verify, which might actually reduce illegal immigration, and massive reform of the asylum process. Unfortunately, the former is opposed by the business community and the latter would cost a bunch of money, so even if you had significant Democratic support you'd never get any Republican support. "Might actually work" is just not anyone's top priority.