Kevin Drum

From the Wall Street Journal:

With Economy Poised for Best Growth Since 1983, Inflation Lurks

That damn inflation! It's always lurking.

But as long as we're on the subject of inflation, something is about to happen that you'll probably hear about many, many times over the next few months. So you might as well hear about it now.

It's this: thanks to unusually low inflation at the start of the pandemic last year, the headline inflation rate for the next few months is going to be unusually high. This is not because inflation is actually high. It's just a mechanical result of the arithmetic. It's as if you were comparing your electricity usage to a year ago when you were on vacation for a week. It would look like your usage was up 25%, but it's not. It's just a mechanical result of the previous year being artificially low.

Here's a chart that will either confuse you or make things clearer. Inflation is actually calculated as an index in which the average price between 1982-84 is set to 100. Here's what the CPI index looks like over the past few years:

The point here is simple: Even if the inflation index in April 2021 is precisely on the trendline of 1.6% growth, it will artificially look higher because the year-over-year comparison is with April 2020, which is in the red dip.

There's not much to do about this except to ignore the inflation numbers for the next few months. One alternative, I suppose, is to compare the current index to the one two years ago, and then divide by two to get an annual rate. That's unofficial, but probably gives a better idea of what the real inflation rate is. I'll try to remember to report that whenever I post about inflation.

One other thing: all the various forecast metrics suggest that inflationary expectations are still restrained. There's bound to be some upward pressure as the economy opens up this year, but nothing substantial.

Remember a few weeks ago when I finally gave up on my original vaccination trendline and drew a new one? It turns out I was too quick to cry uncle. Our weekend vaccination rate has been growing by leaps and bounds and it's now increasing at the rate predicted by the first few weeks of vaccinations.

So, since the trendlines are all kind of sketchy anyway, I put the original one back in. We should hit 5 million in a week or two.

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

Good news! The pandemic may have put millions out of work and shut down businesses across the country, but at least our country's CEOs haven't been asked to make any sacrifices:

According to the Wall Street Journal, this was all part of the plan:

Median pay for the chief executives of more than 300 of the biggest U.S. public companies reached $13.7 million last year, up from $12.8 million for the same companies a year earlier and on track for a record, according to a Wall Street Journal analysis.

Pay kept climbing in 2020 as some companies moved performance targets or modified pay structures in response to the Covid-19 pandemic and accompanying economic pain.

Translation: It looked like it was going to be tough year, so comp packages were deliberately altered to make sure CEOs would make more money anyway. It's good to be king.

Here’s the officially reported coronavirus death toll through April 10. The raw data from Johns Hopkins is here.

Here’s the officially reported coronavirus death toll through April 9. The raw data from Johns Hopkins is here.

The UK has obviously not had the greatest response to COVID-19, with erratic rules and indifferent leadership producing a cumulative mortality rate of nearly 1,900 per million, one of the worst in Europe. But a combination of their latest lockdowns and their very successful vaccination program has turned them into a superstar. Here's how their daily case rate compares to the best of Europe:

The UK's case rate is down to 25 per million (eight times better than ours) and their daily mortality rate is in the low double digits, six times better than ours.

The Nordic countries ex Sweden continue to be the overall stars, even though they don't get an awful lot of attention for it. But Britain is finally catching up. They're showing what can be done with one last month or two of stringent rules along with widespread vaccination. I sure wish we had demonstrated the self discipline to do the same.

Is Hopper asleep? Or just faking it? You make the call.

Why is President Biden's child tax credit universal, rather than going solely to those with low incomes? Jon Chait explains:

The answer is that giving money exclusively to poor families is a design choice that creates problems of its own. One is political: Programs with narrow, politically disempowered constituencies are easy to cut, and Republicans have long focused their welfare state rollbacks on programs targeted to the poor.

The usual way of putting this is "Programs for the poor are poor programs." And yet, as nearly as I can tell, the truth is just the opposite: Republicans might try to cut programs for the poor, but they rarely succeed except at the margins. In fact, it's all but impossible to cut programs for the poor. Here is per-capita means-tested spending over the past half century based on the bottom fifth of the population qualifying as "poor." You can stick in any other definition of "poor" that you want and the results look the same:

This data is taken from reports issued by the Congressional Research Service. The years 1962-2013 are here, and the years 2014-2018 are extrapolated from here. As you can see, means-tested spending never goes down. It only goes up.

Which is great! Here's the result:

What's more, programs for the poor aren't unpopular. In fact, very few people think we spend too much on the poor:¹

Even at the height of the welfare reform era, less than 20% of the public thought we spent too much on the poor. And before you ask, even Republicans agree. In the 2018 round of the GSS survey, only 13% said we spend too much on the poor. To sum up:

• Means tested programs for the poor have grown steadily over the past 60 years.
• They are (obviously) less expensive than universal programs.
• They are very, very difficult to cut. The only serious cut I can think of is the 1996 welfare reform bill, which (a) took years and years of work from conservatives, and (b) barely shows up as a blip in the long-term spending trend anyway.
• Means-tested programs have been very effective at reducing poverty.
• And they are pretty popular, even among Republicans.

All of this evidence is quite clear, and has been for a long time. So why do means-tested programs for the poor still have such a bad reputation among progressives?²

¹If you phrase it as "welfare," the results are much more negative. This says a lot about the way the word has been demonized over the years.

²Granted, there's also a second, technical problem with means-tested programs, which Chait mentions. If a program is means tested, it means that it goes away if you make too much money. This can provide a perverse incentive to keep your income low so you don't lose benefits. There are various ways to ameliorate this, but it's unquestionably an inherent problem with means-tested programs.

UPDATE: I replaced the original spending chart with one that shows spending per person.

What do Black people think about crime and policing? According to a new Vox poll, they think:

• Violent crime has been increasing.
• Most police officers can't be trusted.
• Police are more likely to use force against African Americans.

And yet, there's also this:

Everyone wants more police patrols. It's true that white communities want them most of all, but 65% of Black respondents and 70% of Hispanic respondents want them too. They may think police can't be trusted and are too quick to use force, but by a very large margin they still want them around.

Perhaps I'm misinterpreting this, but I'd say it speaks loudly for trying to reform the way police interact with the Black community rather than defunding them.

(Although it's also the case that large majorities of all races support "reallocating portions of police budgets to create a new agency...to deal with issues related to addiction or mental illness that need to be remedied but do not need police." So there's that.)