A new NBER working paper concludes that when private equity firms buy nursing homes, they charge about 11% more and have 10% higher mortality rates—which clocks in at about 1,700 extra deaths per year. But that's just an average of all patients. The actual change in mortality depends a lot on who you are and why you're there:
The worst off are low-risk patients regardless of age, whose mortality rates increase by nearly a quarter. Surprisingly, nonwhite patients improve their mortality risk in PE-owned nursing homes. Also surprisingly, low-income patients have only a small increased risk compared to high-income patients.
I confess that these oddities, along with the fairly complex instrumenting used by the authors, makes me skittish about these results. Nevertheless, the overall result seems sound. After all, the only reason for private equity firms to be interested in nursing homes is if they think they can be run more profitably than before. This means charging more and reducing staffing levels—both of which they do—and this in turn is almost certain to produce higher mortality rates and lower patient well-being.
The only question left is: If I need to stay in a nursing home, how do I find out if it's owned by a private equity firm?
I don't quite remember what piqued my interest in this, but I got curious about the trend in hate crimes against Black people. According to the FBI, here are the numbers, represented as the rate per million of the Black population:
A number of people, including me, have posited that the Obama era produced a white backlash that eventually elected Donald Trump president. There's some evidence to support this, but it sure doesn't show up in the hate crime statistics. Hate crimes against Black people plummeted by nearly half during Obama's term and have pretty much stayed there ever since.¹ This is despite the fact that presumably the Obama administration put a greater focus on hate crimes than either George Bush or Donald Trump.
Violent assaults on Black people have gone down by nearly half since 2005, far more than violent assaults in general. In this case, however, the decline has been fairly steady over the entire period.
The FBI is not the only authority on hate crimes and the NCVS is not the only authority on victimization. Still, they're generally well respected and use the same methodology from year to year. This probably represents reality pretty well.
I have been accused—rightfully—of constantly telling you that things are better than you think. The reason is simple: Whenever I look into something, it very often turns out to be better than the media focus would have us believe. It wasn't my intention to find yet another example when I dug up these numbers, but I'm not really surprised any longer when that's the way it turns out.
POSTSCRIPT: Standard caveat that there are some things that really are as bad as we think—life expectancy, opioid addiction, income inequality, etc.—and that just because something is declining doesn't mean we don't still have a lot of work left to get it even lower.
¹However, despite the decline it's still the case that the rate of anti-Black hate crime is considerably higher than the rate against any other ethnicity.
It's traditional for new presidents to lose one of their nominees for cabinet-level posts. The opposition party needs a scalp to maintain their sense of self esteem, and they're usually able to dredge up a micro-scandal of some kind that gives them an excuse to demand one.
But this year is different. Republicans are after two scalps, and neither is associated with any kind of scandal. One is Neera Tanden, head of the Center for American Progress, who has an unfortunate habit of getting into Twitter feuds with people. The other is Xavier Becerra, California's attorney general, who loves to mix it up with Republicans.
Neera Tanden (left); Xavier Becerra
And that's it. The GOP is threatening to vote unanimously against both of these nominees because . . . they're not always nice. This might not matter if Democrats were united behind the nominees, but Democrat Joe Manchin has already announced that he'll vote against Tanden because her "overtly partisan statements will have a toxic and detrimental impact" on her relationship with Congress.
This is absurd. Tanden deserves to get dragged a bit, but she's done nothing even remotely worth denying her confirmation. Ditto for Becerra. If Democrats let themselves get suckered into believing that Republicans are delicate little flowers who can't abide partisan nastiness (Jeff Sessions! Mike Pompeo! Bill Barr! Mick Mulvaney!) then I guess they deserve whatever they get. But make no mistake: this is just fakery and no one should take it seriously.
This is a panoramic shot of Mono Lake, the source of all the water that Los Angeles steals from northern California. For some reason it's peculiarly washed out, which is very cool. I can't explain it, but I know that I like it.
I've been experimenting a lot with panoramic shots, and mostly I like the results. The big problem is that on the blog I'm limited to a width of 700 pixels, which means they look pretty tiny. This one isn't too bad, but I've got a few others that are real problems. They'd look great blown up big and hung on a wall, but not so great on a tiny computer monitor.
(Of course, you can always do a right-click and choose "View Image" if you want to see it larger. I assume something similar works on Macs.)
UPDATE: In the interests of precision, Los Angeles has never gotten water directly from Mono Lake, which is extremely salty. It got water from the streams that feed Mono Lake, thus lowering its water level by dangerous amounts.
“We have an unemployment rate that, if properly measured in some sense, is really close to 10 percent,” Ms. Yellen said on CNBC Thursday. A week earlier, Mr. Powell cited the same figure in a speech about lingering labor market damage.
Come on. We have U1, U2, U3, U4, U5, and U6. We have the labor force participation rate. We have the employment to population ratio. We have both those things for prime age workers only. That's nearly a dozen different ways of measuring "unemployment," and now we have yet another. Here is Fed chair Jerome Powell explaining the unemployment measure that Yellen was talking about:
All told, nearly 5 million people say the pandemic prevented them from looking for work in January. In addition, the Bureau of Labor Statistics reports that many unemployed individuals have been misclassified as employed. Correcting this misclassification and counting those who have left the labor force since last February as unemployed would boost the unemployment rate to close to 10 percent in January.
Well, sure it would. And I could invent a new measure that would boost it even further. But neither Powell's metric nor mine would represent "properly measured" any more than the others. It all depends on what you want to know.
In any case, a raw number shorn of context doesn't really tell us anything. What we really want to know is how much higher (or lower) it is than normal levels in the past. This is fairly easy to see for measures like U3 (the normal headline rate) and U6 (unemployed plus marginally attached):
As you can see, these two track each other pretty well, with U6 a fairly steady 4-5 points above the headline rate. This tells us that if we improve the labor market, both measures will probably reach their previous lows at about the same time. They're both telling us roughly the same thing.
But Powell cheats. He only shows his new metric from the beginning of the pandemic:
Sure, his made-up measure is at 10% now. But what is its natural low level over the past 20 years or so? How much lower should we expect it to drop? You can't simply take a metric that's artificially designed to match the headline rate during a single month and then declare this the "right" way to measure things.
That's especially true for this metric. The "misclassification error" has dropped to almost nothing, and the labor force participation rate always drops during a recession. It dropped a fraction of a point in 1990-91; a little more than a point in 2001-04; more than 3 points in 2008-15; and two points during our current recession. It dropped faster and more dramatically this time around, just like every other economic indicator, but it's still not outside the range of normal for a recession of this size.
As usual, maybe there's something I'm missing here. But my take is that any of the normal measures of unemployment are perfectly suitable right now. What's more, we know exactly what we have to do to push the unemployment rate down: get everyone vaccinated and open up the economy completely. Then we can see where we're really at.
Will it turn out that some of the new unemployment is permanent? I wouldn't be surprised if it is. Ever since 2000 it's been normal for the participation rate to fall during a recession and then never make up all of its lost ground. This may be due to an uptake in automation or it might be something else. But whatever it is, it's not something brand new.
POSTSCRIPT: It may seem like I devoted a lot of words to something not all that important. Probably. I just find this kind of thing annoying, regardless of whether it comes from the Secretary of the Treasury or some nutball on the Fox Business Channel.
There are disquieting findings in the poll for Fox News, which has prospered as the dominant news source for conservatives. In a USA TODAY/Suffolk Poll in October 2016, 58% of Trump voters said Fox was their most trusted source of news. In the new poll, that drops to 34%.
Trust has risen in two relatively new outlets that have made their reputations by championing Trump. Newsmax is the most trusted among 17% of Trump voters, followed by 9% for One American News Network, or OANN.
Fox News spent all of November and December doing everything it could to convince its viewers that the election had been stolen. They promoted every dumb conspiracy theory, every hopeless lawsuit, and every utterance from the mouth of Rudy Giuliani. They made themselves the target of libel suits from voting machine companies. Tucker and Sean and Laura and the rest of the gang spent every evening explaining how Democrats were fraudulently stealing votes in every state Trump lost.
And what's their reward for all this? They've lost the trust of the true believers because the events of January 6 went a little too far even for Fox to swallow. But it turns out that the audience conditioned by Fox News to always believe the worst of Democrats wants to keep hearing that even if Fox News itself is suggesting otherwise. So now 26% of Trump voters have dumped the Murdoch empire for the sin of being ever so slightly attached to the real world.
I think we all knew what this weekend would bring, and the numbers confirm it. COVID-19 vaccinations were not only below the old trendline, they were down in absolute terms. This is due partly to supply issues and partly to delivery problems caused by the unholy weather that hit two-thirds of the country last week.
Factories are humming and consumers are spending again, signs that the United States could emerge from the current health crisis with its strongest growth in decades. Goldman Sachs expects the economy to expand this year at an annual rate of 7 percent, the fastest pace since President Ronald Reagan proclaimed “morning again in America” in 1984.
....Not for 75 years, since American G.I.s were battling two totalitarian empires, has the economy been boosted simultaneously by so much deficit spending and so much easy money. The economy will enjoy additional support this year from consumers, who have more than $1.6 trillion in excess savings, thanks in part to last year’s stimulus checks, according to Bank of America.
Some people are worried about all this stimulus producing inflation, and maybe it will. But one of the best indicators of inflation expectations is the 5-Year/5-Year Forward rate, and it seems to be pretty untroubled right now:
Inflation expectations recovered from their pandemic lows in early 2020, but are still at about 2%—well below the rate of the entire period from 2003-2014.
For years, many of us who lived through the '70s have been urging our boomer colleagues to stop being traumatized by the inflation of those years. The inflation of the '70s truly was damaging, but a big reason is that the financial system of the era was designed on the assumption of low inflation rates. When inflation rose, we had to apply all sorts of Rube Goldberg hacks to keep people from literally making negative returns on their money. But those days are long gone. Deregulation of the financial system produced inflation indexing almost everywhere, which means that even if inflation rises it doesn't produce the kind of trauma that it did 40 years ago.
In the meantime, the aging of the US population, along with increasing globalization, puts steady downward pressure on inflation. The lesson here is simple: If inflation becomes unanchored for a significant period of time, then we should start pulling back. But there's no need to pull back every time expectations rise a few tenths of a point. Let's give the economy room to run and see what happens. The best outcome is that GDP booms, wages rise, and even the long-term unemployed start getting back into the workforce.
And the worst case? Inflation starts to grow too fast and the Fed has to raise interest rates. That's not good, but it's hardly the worst thing in the world. It's not a fear that we should let rule our lives.
