Too Little Too Late?

I got on the scale. Yep, I weighed too much. So I got on the scale again in a few weeks and yikes -- I weighed even more. I swore then that I would change. I would only eat green beans and asparagus spears for a month, maybe longer. Well, I didn't really do that and soon my pants were so tight that I could hardly dance. Now it is even more painful. It's even harder to go on a diet when you are psychologically and physically hurting. What a mess!

That's my analogy for the Fed. The leader of the Fed, Mr Powell, and several of his directors have been quite public lately about their intention to reduce inflation. When inflation was building and possibly manageable, they said little. Like the common cold, they said that price increases were temporary. No need to worry our pretty little heads about a rising inflation rate. Let's keep interest rates near zero. 

Well, that was then and now we are reading just the opposite. Inflation is heading towards 7%. Inflation did not go away. It got much worse. Now workers want higher wages. Financial firms want higher interest rates. Business costs are rising and all that spells even higher inflation as firms pass along higher costs into higher prices. 

"Don't fire until you see the whites of their eyes!" That was bad advice then and is bad advice now. Waiting until the enemy is on top of you may save a little ammunition but it clearly makes the fight harder. In the 1970s we learned about the pernicious effects of something we called inflation expectations. Who cares what started the inflation rate rising -- as people expect higher inflation they act in ways that create even higher inflation. It becomes perpetually self-sustaining.

At this point we have two problems. First are the effects of the actual inflation. Second is that once inflation expectations are increasing -- how does the Fed reverse that psychology? If a person fails at life, that's a problem. If that causes the person to go into a depression, then that's a second and perhaps even more difficult problem. 

The Fed had plenty of chances to nip inflation in the bud. Now that they have waited so long to do something, they have to deal with inflation expectations. History suggests this can be a bloody process. How does the Fed wipe out a psychological expectation after they and their friends in Congress have created historically high government deficits and monetary increases? How? They can't. Period. 

Looking back at the 1970s when I was just a kid and Tuna was swimming in Tuna Pampers, they let inflation get going. It steadily increased for a whole decade in the 1960s before they decided to do something. Nixon got the brilliant idea to have wage and price controls -- government edicts over wages and prices. That didn't work. And damned if it didn't lead to smaller Hershey Bars. By the end of the 1960s with inflation soaring, the Fed finally cut back. Interest rates soared and the economy went into a recession. We ended up having two recessions by 1975 before all was said and done. 

Why don't these fools in Washington know about all that? Why do they insist on not learning from history? Why do they do nothing but talk? Still today they talk and do nothing. Sure they will finally do something but as in the 1970s it will be too little too late....and then they will find themselves in a no-win situation. Then they might get more aggressive as inflation soars. We called that no win situation back then "stagflation". It meant inflation kept rising during the recession. Ugh.

Here we go again. 

The Big Lie

End of Democracy?

A bunch of political hacks and thugs broke windows and doors and created a new page in the history books. It was horrible and scary and wrong. But did it really signal an end to democracy? Why can't politicians just say the truth? The end of democracy? A significant threat to democracy? I don't think so. 

Does anyone really think that even in the chaos that resided in our Congress, that the folks involved in the invasion were significant? Were organized? Had a plan to take over the government? We are now more than a year from that event and yet the same talking heads repeat louder and louder that democracy was in jeopardy. Even our President repeats this outright lie.

Why do I use the word lie? Because he and his buddies know that democracy was not in jeopardy. And I use the word here only because that's the word that they use. They say the big lie is the claim that the election was fraudulent. I agree. That was a whopper. But to retort and say that democracy was in jeopardy is a pretty big stretch of the imagination. 

Only a bunch of ideologues could have come to that conclusion. Or maybe what they really mean is that democracy only exists when Democrats have their way? 

Yes, people broke windows and scared the crap out of a bunch of elected officials. Did it look like they were going to stay and impose a new government? Did they plant a new flag in Pelosi's chair? Did they read aloud their new constitution? Did the government of the people disappear?

Nope none of that. What happened is that a bunch of angry and violent and lawless people tried to make a statement. The statement, I think, is that that there might have been voting irregularities. Voting irregularities do threaten democracy. Voting irregularities have happened before. It's possible. 

As I said above, I don't think there were significant irregularities. But what you saw vividly is that if the wrong party brings that point  up -- then those people are spreading the big lie. They screamed that democracy is threatened if someone talks about voting irregularities. I don't think so. What I think is that regardless of party, if someone believes there are voting problems -- then those people are standing up for democracy. They should stand up. They should accuse.

If they are wrong, then lets do what we used to do at Ponce de Leon Junior High School -- when they stand up then lets pull their pants off in front of everyone. A joking way to say it, but if someone alleges voting irregularities and they are wrong, then they should be punished severely. People should know in advance that we don't put up with those kinds of lies. We shouldn't be vigilantes. We should have laws and legal processes that can be enforced against this kind of despicable behavior. Give them an award if they are right. A jail term if wrong. 

What is democracy anyway? Is it really so fragile? Democracy means we have free elections. Democracy means we elect people who represent us. Those people enact laws to improve and safeguard our homeland. Democracy means all our votes are counted. It also means we have laws that govern who can vote and who cannot vote. Government should make sure we don't violate that trust and vote twice or somehow disturb the rights of others to freely vote once. 

We have a tradition of democracy. Nearly 250 years of democracy. I don't think it is too fragile. This is not Latvia or Cuba. Democracy was not threatened by a bunch of thugs in the streets. It was a lie to say that elections were rigged by Democrats. It was a lie to say that democracy was threatened by Republicans. 

Let's get together. Let's kiss and hug and be proud of the fact that we live in an incredibly terrific free nation. If you don't agree, then why not spend a little time in Ukraine or Cuba. Bon voyage. See how much you like those places. 

Covid and Employment -- Still off by 7 million workers

There have been many ways to measure the impacts of Covid on the US economy. We talk a lot about spending, supply chains, and inflation. But little has been said about employment. Employment is the basis of our economy and our feelings of wellbeing.  So I decided to take a look at employment at the national level. 

The Bureau of Labor Statistics publishes a lot of information on employment, I chose something they call total nonfarm employment. No offense to agricultural workers, but this measure seems to be the one most often cited. It comes out each month and tells you the number of people who are employed. The information comes from the business firms. 

I downloaded data from January of 2011 to November of 2021. In January of 2011 there were 131 million people employed in the US. By November of this year the number reached about 149 million. That's an increase of 18 million workers -- or about 14%. That amounts to increase of almost 2 million workers per year. Not bad. 

If you measure change from December to December of each year, it was typical for employment to grow by about 1.6%. In 2019 the growth was 1.3%. The highest growth rate before 2021 was 2.2%. Not a very exciting variable. We can count on employment to grow. Even the monthly growth rates are not very interesting. In the 8 years from 2011 to 2018 the lowest growth rate in one month was 0.3% -- this happened twice. The highest rate was 3.1%. That also happened twice. 

Snooze.

But then we hit 2020. In March, employment fell by 1.7 million jobs and then in April the decline was almost 20 million jobs. In one month there were 20 million less people employed.  Employment was at 130 million jobs on March of 2020. That's close to the employment level of 9 years before! Now that's news. 

By the end of 2020, employment crept back to 143 million and by the end of 2021 it was closing in on 149 million. That sounds pretty good. But at 149 million it was still 3 million below the peak rate of 152 million in December of 2019. 3 million is a lot of jobs lost. 

Clearly 2020 was a bad year for work. But notice that 2021 showed a lot of vigor. The increase in employment in the first half of 2020 was about 6% per month. The second half of 2021 has been good too but not as spectacular as the first six months. 

This numbers make me dizzy. But there is a story here. If we want to focus on employment, we see the very temporary effects that Covid has had on jobs. We are not yet back to previous peaks. But we aren't far off.  

That sounds pretty hopeful, but it doesn't hurt to think about where we might have been without Covid's interruptions. If employment had grown in 2020 and 2021 at previous rates -- say about 2 million jobs per year -- then the employment level at the end of 2021 might have been around 156 million. Todays' 149 million workers means we are off that mark by 7 million workers. 7 million workers as a percent of 156 million is about 5%. 

That sounds hopeful to me. But a lot depends on Delta, Omicron, and whatever comes next. 

The Glass is Mostly Empty, New York Times

I just read the daily poop (DP) from the New York Times. Each day the NYT writes a short news, but mostly opinion piece*. As a person who is pretty much politically neutral, I read it for fun and to support my belief that the NYT is one of several publications that profit from making us all a little less happy each day. In my case their goal is thwarted because it makes me happy to know that they are so transparent. Of course, they probably are pretty successful at stirring up a lot of pessimism. I guess pessimism sells papers. 

I read their DP on Friday, December 10th. Afterward I felt like stabbing myself in the eye with a bowl of oatmeal. I can't believe they get away with this stuff. 

The piece was motivated by a poll they quoted that found that only 35% of the population thinks the economy is good. Meanwhile 65% think their own finances are just corker dandy. Apparently most people think they are doing a lot better than their neighbors. Somehow, the NYT thinks that is horrible, so they wrote a whole piece about that. Seems to me that they should be happy. Would they rather take a poll and find out that most people think they are doing worse than their neighbors? 

The article is about Covid. I wonder how many negative articles they have written about Covid? The number infinity seems to be close to the reality. Remember the good old days when they used to write about murder and mayhem? 

In their attempt to make everything look horrible, they explain that Covid's impact on the economy is very broad and varied. In their own words, "

    Sure, some major statistics look good, and they reflect true economic strengths, including the state of families’ finances. But the economy is more than a household balance sheet; it is the combined experience of working, shopping and interacting in society.

With that bold statement, the NYT goes on and on about anything and everything they can think of that is bad or worse these days. And the implicit opinion is that while some macro statistics and personal finances are good, it is all that other stuff that matters the most. Gloom. The world is horrible. 

Whatever happened to Mary Poppins? What happened to the glass half-full? Nope. The NYT thinks the glass is pretty much empty. 

Of course, the NYT article never quotes a number to support their angst, except for the poll numbers described above. 

And worse than not quoting a number, they don't distinguish between trends of 2020 and those of 2021. They mention that social distancing makes us socially distant and makes us cry ourselves to sleep at night. While things were pretty uncomfortable in 2020, there have been some improvements in our discomforts and challenges. From this article you would never even guess that anything had improved since 2020. 

What is missing as well is some balanced view of human resilience. It doesn't help that the NYT constantly reminds us that things are always getting more horrible. But the truth is that we have been through horrible many times. The state of nature is that the lion is out there and it is going to eat us if we are not careful. And yes, Covid sucks dirty pond water. But World War II was pretty crappy too. 

As with Covid, we had different opinions about entering WWII (or WWI or Vietnam or Korea) and the effects it would have on us. But with WWII many supported the war effort and many communicated a positive and optimistic psychology. Let's win that war!

But we don't need to go to WWII to make this point. Take any given non-war day in the last 100 years and there is always a mixture of good and bad happening. Leave it to the NYT and you'd never know it because they will prefer to write about the bad stuff. 

Covid is terrible and we have made many sacrifices in our lives to try to win that war. I venture that the NYT is not helping in that regard. They would rather make money by stirring the pot than helping people adjust to an important and difficult challenge. They are a major part of the problem. If you tell people enough times that they are doing poorly -- pretty soon they will start to believe it and feel poorly. 

Poo on them and their DP. 

* nytdirect@nytimes.com