Kevin Drum

Here is the Wall Street Journal today:

Worker Pay and Benefits Grow at Record Pace, Pressuring Inflation

Compensation for American workers grew rapidly in the first quarter, as a tight labor market put more money in workers’ pockets while also keeping pressure on inflation.

Business and government employers spent 4.5% more on worker costs in the first quarter compared with the same period a year earlier, without adjusting for seasonality, the Labor Department said Friday. That marked the fastest increase in records dating to 2001, and the gain eclipsed 4.0% annual growth in the fourth quarter.

Compensation for workers also accelerated on a quarterly basis, rising a seasonally adjusted 1.4% in the first quarter compared with a 1.0% increase in the fourth quarter. The growth reflected strengthening wages, salaries and benefits.

I assume I'm not keeping you in too much suspense about the real story here? Hold onto your hats, here it is:

Yes, in one of the great surprises of economic reporting this century, the Journal has presented nominal numbers instead of taking a minute or two to adjust them for inflation. When you do that, you can see that ECI is down about 4% since mid-2020 and down 3-4% over the past 12 months.¹

All of this is front and center in the BLS press release, so it's not hard to figure out. Right now, the real cost of employing someone—wages, benefits, Social Security, office space, etc.—is at about the same level it was at in 2016. In what way this is "keeping pressure on inflation" is a mystery to me.

¹The exact amount depends on which measure of inflation you favor, and I'm embarrassed to admit that I can't figure out which one BLS uses. I get -3.3% using ordinary old CPI; they get -3.7% using something else.

OK, I have to ask one more time. Suppose President Biden cancels all student debt. What happens next?

It just starts piling up again for new students? State universities are forced to cut tuition and fees dramatically? The federal government starts massively subsidizing all university education?

Or do we just hold a student debt jubilee every decade or so? What's the story here?

This is a patch of primroses in Borrego Park, a small overlook in Lake Forest.

By now you're all aware that GDP declined in the first quarter. Here's why:

Consumer spending, government spending, and private investment—the key components of GDP—were up 1.8% on an annualized basis last quarter. That's no great shakes, but it's not too bad either.

However, imports and exports are also a part of GDP. Normally they aren't big compared to domestic production, but last quarter was peak panic over supply chain problems. In the end, businesses imported so much stuff to fill out their inventories that it wiped out the domestic gains. On net, real GDP was down 1.4% on an annualized basis.

The good news is twofold. First, warehouses are starting to fill up. Second, consumer income and consumer savings were down, but only a bit. It's enough to cool the economy and rein in inflation a bit, but not big enough to suggest a recession is on the way. Cross your fingers.

Monday was the start of Milky Way season. It was the first time in 2022 that the core of the Milky Way rose at a decent hour (around 1 am) and there was no moon. Since it was a dex night for me, I went out to take some pictures.

But I couldn't find it. It was too cloudy. Boo. So instead I just shot a few pictures of the night sky, including this one on Ortega Highway. It's nothing special, but still kind of pretty.

How's the economy doing? Inflation is up, but other than that GDP is growing; unemployment is down; consumption is high; investment is strong; corporate earnings are good; and businesses are growing. Here are the latest numbers for that:

About 80% of job gains come from expanding businesses. Ditto for job losses. The other 20% come from new startups and closing businesses.

I continue to jitter about the possible collapse of supply chains from China if COVID-19 gets out of control there, but hopefully that's just my little worry. Aside from that, the American economy continues to look pretty strong over both the medium and long term.

A couple of days ago Vox published a trend piece about how young Gen Z folks "have created an abundance of memes and pithy commentary about their generational disillusionment toward work. The jokes, which correspond with the rise of anti-work ideology online, range from shallow and shameless (“Rich housewife is the goal”) to candid and pessimistic."

This piece is based mostly on a bunch of anecdata, and over at National Review Kyle Smith has been suckered by it. "Gen Z Types Do Not Want to Work for a Living," says his headline, but let's check that out with real data. Here is the labor force participation rate for 20-24 year-olds compared with the participation rate for prime age workers:

The leading edge of Gen X turned 20 in 1985. During the period in which Gen Xers turned 20 years old, they drove down their participation rate compared to prime age workers by about 4 points. Anti work!

For Millennials, it was about 3.5 points. Anti work!

For Gen Z it's been zero points. Pro work!

Gen Z inherited a low participation rate from Gen X and Millennials, but they kept things steady when it was their turn to enter the workforce. By this metric, young Gen Zers are more dedicated to work than the youngsters of both the preceding generations.

Remember: always trust real data. Anecdata is fun, but it's rarely very useful.

LA County Sheriff Alex Villanueva, who got elected by appealing to the Hispanic community and promising to represent them, has turned out to be an unbelievable piece of shit. His latest stunt is to open a criminal investigation of an LA Times reporter who obtained surveillance video that Villanueva didn't want her to have:

Los Angeles County Sheriff Alex Villanueva announced Tuesday his department is targeting a Times journalist in a criminal leak investigation for her reporting on the department’s cover-up of an incident in which a deputy kneeled on the head of a handcuffed inmate for three minutes.

....The Times published a report last month that described how Sheriff’s Department officials worked to cover up the March 2021 incident because they feared it would paint the department in a “negative light.” The Times report was accompanied by surveillance video from a lock-up area of the San Fernando Courthouse that captured the deputy kneeling on the inmate’s head after handcuffing him.

Earlier this week, the newspaper and other outlets reported on a legal claim in which a department commander alleged that Villanueva participated in the cover-up, telling underlings, “We do not need bad media at this time.”

....In the wake of the reports on the commander’s claims, Villanueva summoned the media to the Hall of Justice downtown and revealed the criminal probe into how The Times obtained the video of the detention.

Reporting on official bad behavior is precisely what the press is supposed to do, and making use of leaked material is part of the job. But as near as I can tell, Villanueva's goals in life are to defend any and all bad behavior by his department and take revenge on anyone who points it out.

I don't even live in Los Angeles but I hope he gets crushed in the next election. He's a horrible human being with, as near as I can tell, no redeeming qualities.

The Wall Street Journal editorial page is obsessed with Elon Musk and Twitter:

Two-thirds of their featured opinion pieces are about Musk and Twitter. Why are conservatives so preoccupied with Twitter? For that matter, why is everyone so preoccupied with the fate of America's 15th biggest social media company?

This is the interior of a subway car on the LA Metro. If I were, say, Cindy Sherman, the MOMA label next to this photo would explain how COVID masks were used to immediately mark the era as late capitalism; the Foot Locker bags connect the metro to modern consumerism; and the height of the camera angle makes the human subjects subservient to the technology that transports them.

Since I'm not Cindy Sherman, I will just get a bunch of guff about whether I got signed release forms from everyone in the metro car¹ and whether I was afraid that some of them looked like they were about to smack me.²

¹No.

²No. The lead era is over.