Kevin Drum

For those of you interested in a non-panicked look at inflation, the Cleveland Fed has been forecasting 10-year inflation expectations for the past forty years. Here's their entire time series:

These forecasts have been pretty accurate. Obviously there's a fair amount of noise in the data, and no forecast can account for recessions and pandemics ten years in the future, but generally speaking the Cleveland Fed forecasts are within about one percentage point of how things turn out ten years later. Right now they're forecasting future inflation at about 1.6%.

Other measures of inflation expectations, based on daily movements of Treasury rates, showed almost no movement today after the latest inflation figures were announced. Whatever the pundits are saying, the market doesn't seem to think today's figures meant much of anything at all. The 5/5 forward rate, for example, has been rising all year but dropped slightly today from 2.38% to 2.36%.

Bottom line: as with every other economic indicator, everyone should chill. Daily and monthly movements just don't mean anything, especially during a turbulent period like we're going through now. Over the next few months inflation will stabilize, the economy will grow, people will all get back to work, and everything will be fine.

This is a milkweed leaf beetle, photographed as it was scuttling across a path toward safety in the nearby greenery. It was searching, I assume, for a milkweed leaf to chew on. The blue sheen is very attractive, don't you think?

As expected, the headline inflation rate rose 4.2% in April. My best guess for the real rate of inflation, based on ignoring the artificial drop a year ago, is 266.832 ÷ 259, or about 3%:

For all you inflation worriers out there, 3% is still high too! But hardly unexpected. We've pumped enough money into the economy that everyone expects a temporary bout of elevated inflation. The only real disagreement is over how long this will last. Is it just for a few months, and therefore no big deal? Or is this a harbinger of high inflation for years to come?

My vote is on "temporary bout," but only time will tell.

After a month of stalling at about two deaths per million, our mortality rate dropped to 1.85 per million on Tuesday. This is a rolling 7-day average, so it's not just a single day's anomaly, and it comes right on schedule, about a month after our case rate started dropping. So cross your fingers and try to persuade any holdouts you know to get vaccinated. We might finally be on track to beat this thing.

Here’s the officially reported coronavirus death toll through May 11. The raw data from Johns Hopkins is here.

According to official figures, here is the size of the COVID-19 outbreak in India:

In no way am I trying to downplay the tragedy in India, but if these numbers are correct then India's outbreak is still only a fraction the size of the outbreak we went through just a few months ago—and it appears to be already peaking and starting to turn down.

Is this right? Or are the official figures nowhere close to the truth? Is the devastation in India really due to the size of its outbreak, or is it more about the inadequacy of its medical system?

The Wall Street Journal reports on the malware attack that shut down the Colonial pipeline late last week:

While ransomware has been a challenge for small businesses for years, a confluence of factors have emboldened attackers in the past year, culminating in the shutdown Friday of a critical gasoline pipeline to the U.S. East Coast. The pipeline’s operator, Colonial Pipeline Co., now says service could be offline until week’s end, threatening to raise prices at the pump for millions of Americans.

How soon we forget. The NotPetya malware attack happened four years ago and shut down operations at the Maersk shipping line for more than two weeks. Adam Banks, head of technology at Maersk, describes what happened:

Two years on, Banks is willing to outline the scale of the destruction he encountered as what later become known as the NotPetya malware took hold and the company’s operations ground to a halt. “All end-user devices, including 49,000 laptops and print capability, were destroyed,” he says. “All of our 1,200 applications were inaccessible and approximately 1,000 were destroyed. Data was preserved on back-ups but the applications themselves couldn’t be restored from those as they would immediately have been re-infected. Around 3,500 of our 6,200 servers were destroyed — and again they couldn’t be reinstalled.”

The cyber-attack also hit communications. All fixed line phones were inoperable due to the network damage and, because they'd been synchronized with Outlook, all contacts had been wiped from mobiles — severely hampering any kind of coordinated response.

....Banks is candid about the breadth of the impact: “There was 100% destruction of anything based on Microsoft that was attached to the network.”

Maersk was able to recover only thanks to a wild bit of good luck: an uninfected directory file from their office in Nigeria. Even at that, though, the effect on shipping was a hundred times greater than the Suez Canal blockage earlier this year, and the damage to Maersk clocked in at about $300 million.

The NotPetya attack also hit WPP, Merck, Rosneft, Saint-Gobain, DHL, Cadbury's, JNPT, FedEx, and others. Total damage has been estimated at around $10 billion.

Technically, NotPetya wasn't a ransomware attack because the payload had been altered so that the files it encrypted couldn't be decrypted at all by anyone. But that's a tiny difference. We've known for a long time just how destructive this stuff can be on both small companies and the largest of multinational corporations. Nothing that happened this year taught us anything new.

These are white cosmos blooming against a field of California poppies and purple lupine. The picture was taken at the Farm + Food Lab in the Great Park, an "interactive outdoor classroom for visitors of all ages."

I am generally sympathetic with the CDC's desire to be extremely conservative in its pandemic advice. People might gripe, but that's a whole lot better than being a little too liberal and ending up with a bunch of dead bodies.

Still, enough's enough. Last week the CDC announced that "less than 10%" of COVID-19 transmissions have happened outdoors. That's technically true, but as David Leonhardt points out, badly misleading:

That benchmark “seems to be a huge exaggeration,” as Dr. Muge Cevik, a virologist at the University of St. Andrews, said. In truth, the share of transmission that has occurred outdoors seems to be below 1 percent and may be below 0.1 percent, multiple epidemiologists told me. The rare outdoor transmission that has happened almost all seems to have involved crowded places or close conversation.

Saying that less than 10 percent of Covid transmission occurs outdoors is akin to saying that sharks attack fewer than 20,000 swimmers a year. (The actual worldwide number is around 150.) It’s both true and deceiving.

The difference between 10% and 0.1% is more than just a couple of orders of magnitude. It's the difference between "still a little bit dangerous" and "totally safe to have fun in the sun." The former just isn't true, and the latter could easily be made 100% accurate by adding something simple, like "but still best to avoid big crowds."

So why not do that?

There are two gasoline stations near me. The first is a Mobil station that currently charges $3.89 for a gallon of regular. Across the street is a Chevron station that charges $4.29.

That's a 10% difference, and it's nothing new. The Chevron station is always 30-40 cents more expensive than the Mobil station and has been for years.

How can this be? The Chevron station is smaller, but both seem to be pretty busy most of the time. They're both equally convenient. Both have mini-marts attached to them.

Do people in my upscale neighborhood just not care about price? Maybe, but then why doesn't the Mobil station raise its price?

Does the Chevron station not care about attracting more customers? Why not?

Aside from these two, there isn't another gas station for a mile in any direction. They have a monopoly on the local market.

What's going on?

Tim Skellet reminds me to do a final postmortem on the Swedish pandemic experiment. As you'll recall, they basically went about business as usual on the premise that the coronavirus would do what it was going to do regardless of what measures they took. So how did that work out?

One thing that's universally agreed on is that they did a terrible job with the elderly. Their death rate in nursing homes was quite high, and they plainly could have done more to stop it.

More broadly, though, here's how their death rate compares with every other country in Europe:

Here's a look at COVID-19 deaths over time:

In both cases, Sweden is about in the middle. As usual, though, their performance depends on who you're comparing them to. Compared to the rest of Europe, they're so-so. Compared to other Nordic countries, their mortality rate per million is terrible:

• Sweden: 1,403
• Denmark: 431
• Norway: 141
• Finland: 166

Did any of this pay off in better economic performance compared to the rest of Europe?

Again, it depends on who you're comparing to. Sweden did pretty well compared to other European countries in general, but not as well as the other Nordic countries.

So I'm honestly not sure how to judge Sweden. If you compare them to other Nordic countries, which all took more aggressive countermeasures, their death rate is higher and their economic performance is worse.

But if you compare them to all the other countries of Europe, which also took more aggressive countermeasures, their death rate is lower and their economic performance is better.

It all boils down to whether there's something special about Nordic countries that makes them a proper unit of comparison. I don't have an answer to that, so perhaps this isn't really the final postmortem after all?