Archive for the Category Misc.

 
 

The economy is doing fine (as it was 16 months ago)

Lars Christensen is now doing videos at Patreon.  Check it out.

Also check out my new post at Econlog, where I express skepticism about whether Japan is a “safe haven”.

So how’s the economy doing over the past 16 months?  Here’s RGDP growth:

Screen Shot 2018-05-12 at 11.38.06 AMThat’s better a bit better than before.

Here’s employment growth (annual % change):

Screen Shot 2018-05-12 at 11.39.06 AMThat’s a bit worse than before.  Yet the unemployment rate is falling, as it has been for 8 1/2 years.

Here are real wages (deflated by the PCE):

Screen Shot 2018-05-12 at 11.36.30 AMStill rising modestly, as before.

Here is the trade deficit:

Screen Shot 2018-05-12 at 11.40.46 AM

Worse than before, as expected.

Here’s the stock market:

Screen Shot 2018-05-12 at 11.48.27 AM

The bull market continues.

Conclusion.  We are still in the Obama economy, with the possible exception of RGDP growth, which seems a bit stronger.  Otherwise things are about the same.

Prediction:  RGDP growth will stay around 3% for a couple more quarters (reflecting the corporate tax cuts and Fed easing), and then fall back below 2%.

Odds and ends

I have a short piece over at CapX, where I make the case for NGDP targeting.  (You can think of it as complementing my recent longer piece on the subject.)  Here’s how I conclude:

Economists are beginning to understand that NGDP is the variable we should actually be concerned about. Instead of worrying about what might happen to inflation under NGDP targeting, we should consider what happens to NGDP if we insist on targeting inflation.

I leave for Japan tomorrow, so I won’t do much blogging in April.  And most of what I do write will be over at Econlog.  Here are a few interesting pieces I recently came across, starting with an analysis of the new GOP budget:

It fully funds Planned Parenthood. It increases outlays for Pell Grants and Head Start, and boosts funding for the Department of Labor and the Department of Education not only above the requests Trump had made, but above the levels in Obama’s last budget. It fails to deregulate the private health insurance market or to reform federal permitting rules on construction projects. Not a single agency was eliminated, though Trump’s original budget proposal had called for 18 to be scrapped. It makes no changes to entitlement programs, and oh, here’s something interesting, it actually forbids construction of a border wall in the Santa Ana National Wildlife Refuge in the Rio Grande Valley — the very place Trump supposedly wanted to begin construction.

This article suggests that refugees are good for America:

This year’s refugee quota, 45,000, is the lowest in three decades, and is not expected to be met. Mr Trump also excluded a lot of wretched people from it, by temporarily placing additional restrictions on anyone from a secret list of 11 countries, which is said to include South Sudan, as well as Syria and Iraq. A low-cost nativist signal to his supporters, these are the biggest changes Mr Trump has made to America’s immigration regime. They are also counter-productive, as well as cruel, a typical case of nativists mistaking American strengths for weakness.

The argument against refugees, which Republican governors in Texas and Michigan were making even before Mr Trump’s election, is that they are a financial burden and security threat. Both charges are unfounded. For though it is true that refugees represent a bigger upfront cost than other migrants—America spends between $10,000 and $20,000 resettling each one—they repay that in spades. A decade after their arrival, the average income of a refugee family is close to the American average. Mr Makender has paid over $100,000 in taxes. Americans can also relax about their odds of being killed by a refugee. None of the 3m-odd fugitives America has taken since 1980 has been involved in a fatal terrorist attack. That reflects the rigour of America’s vetting, refugees’ hunger for advancement—and America’s ability to feed it.

This article on teenagers in Russia (called “Puteens”) makes me more optimistic:

The internet unites the human race

This heightened sense of the world beyond their borders seems to make the Puteens more receptive towards it. The dynamic of constant confrontation with the West holds less appeal for them. Russia’s youngest adult cohort is more likely to have positive views of America and the European Union, and less likely to believe that Russia has enemies. (Their peers in the West also view Russia more favourably than older generations do.) They trust information from friends and relatives, and increasingly eschew the aggressive state-controlled news on television. Over 70% of 18- to 24-year-olds get their news online, compared with just 9% of those over 55; more than 90% of over-40s still rely on television. “They try to convince us that Americans all hate us; that Americans think Russia is a place full of evil people, bears on the streets and vodka,” says Lera Zinchenko, an aspiring actress from the Moscow suburbs. “I don’t think they hate us. I follow a few people on Instagram who travel all over the world, and there’s one girl who was in America and said people were super nice to her.”

This article suggests that China is becoming more like the West:

Start with administrative litigation, which usually involves private citizens suing government officials. Last year courts agreed to hear 330,000 such cases, more than double the total in 2013—the first full year of Mr Xi’s rule (see chart). Many of these involve disputes over land and housing, the most frequent sources of conflict between ordinary people and the state. Other common cases relate to pension benefits, compensation for workplace injuries and traffic tickets. Benjamin Liebman of Columbia Law School says that suing the government over such matters is becoming routine in China.

There have also been notable improvements in the arena of commercial law. Last year Chinese courts began hearings in 152,000 intellectual-property disputes, up nearly tenfold over the past decade. The explosive growth in IP cases has been fuelled by the growing litigiousness of domestic companies, which have more to protect as they become more innovative. But foreign companies are also benefiting. In August a court ordered three Chinese firms to pay 10m yuan ($1.5m) in damages to New Balance, an American footwear company. It was one of the largest trademark-related awards ever made by a Chinese court.

And don’t be overly depressed by the rise of right-wing authoritarianism.  At the global level, things are still getting much better.  This article discusses the dramatic rise in fish farming in Bangladesh, as well as fast rising chicken production in Nigeria.  The bottom line is that the great mass of humanity is seeing a dramatic increase in living standards:

However much farmers struggle with the consequences of their success, it is a far nicer problem than the one they used to grapple with. Walking down a market street, Mr Haque dips his hand into a sack of maize and a sack of rice. The grains will be bought by farmers, who will grind them into pellets for fish and cattle. “Twenty-five years ago, people were starving for want of this,” he says, marvelling. “Now we feed it to animals.”

If you are depressed about the world, that’s a reflection of you, not the world.

Odds and ends

1.  In a recent post, I asked people why I should be impressed when people tell me that conservative judges are being appointed.  After all, I’d not impressed if someone tells me they know a conservative plumber.  Alex Tabarrok has a couple of recent posts that help to clarify my thoughts on this issue.  Before discussing the posts, let me emphasize that I am not a legal expert.  But that disclaimer cuts both ways.  If I’m not even smart enough to understand the issues that Alex raises, how could I possible be expected to have an intelligent (and positive) opinion of “conservative judges”?

Alex points out that in many states the police are given legal protections that other Americans do not have.  Thus if they are arrested for a crime, they cannot be vigorously interrogated, in the way that an ordinary person is questioned.  On the face of it, that would seem to violate the “equal protection” clause of the 14th amendment.  Why should some Americans be denied legal rights available to others?

So here’s where the conservative judges come in.  How come I never read about conservative judges upholding the Constitution by striking down these violations of the equal protection clause?  I’m not saying that conservative judges never make “liberal” rulings.  In some obvious cases, such as flag-burning, conservatives did uphold the 1st amendment.  (Of course in this period of radical left-wing speech codes, the 1st amendment is being increasingly viewed as a right wing idea, similar to the 2nd amendment.)  But overall, when I read articles about how conservative justices rule, it usually tends to favor policy outcomes that are “conservative”.

2.  I recently did a post showing how pessimism is intellectually fashionable.  Another good example of this problem is Greece’s supposedly “unpayable” public debt.  I’ve always been skeptical of the claim that Greece’s debt was unpayable.  To me, it seemed more a question of the Greek’s not wanting to repay the debt.  Like a number of other European countries, Greece’s government spends over 50% of GDP.  But you can have a perfectly fine Western social welfare state spending far less (say 30% to 40%), as we observe in both rich countries like Australia and Switzerland and poorer countries such as Estonia and Slovakia.  If Greece reduced the non-interest part of its spending down that range, it would be able to divert enough funds to service its debt.

I have not followed events in Greece, but I do notice that yields on Greek debt are now plummeting, to levels suggesting that Greece is not likely to default on its debt.  I did a post last May that pointed out that the debt market’s implied probability of default had fallen to 40%.  Since then, bond yields on Greek public debt have plunged to well below 4%, 200 basis points below the levels of last May.

That does not prove that Greece will not default on its debt, rather that default is certainly not inevitable.  Once again, the pessimists were wrong.  And once again the good news got almost no press attention, while the previous bad news got headlines in the “serious” international media.

If you form an opinion about the world by consuming the media, you will be consistently wrong about things.  Your views will be too pessimistic on issues where the media is already pessimistic, and perhaps a bit too optimistic in areas receiving no media attention, but where a “back swan” could appear suddenly.

3.  In an opinion piece in the NYT, Angus Deaton made the following claim:

This evidence supports on-the-ground observation in the United States. Kathryn Edin and Luke Shaefer have documented the daily horrors of life for the several million people in the United States who actually do live on $2 a day, in both urban and rural America. Matthew Desmond’s ethnography of Milwaukee explores the nightmare of finding urban shelter among the American poor.

It is hard to imagine poverty that is worse than this, anywhere in the world.

A person may have difficulty imagining far worse poverty levels in other countries, but that’s not because they do not exist.  In fact, the bottom 2% of the world community is so much worse off than the bottom 2% of Americans that they might as well be living on different planets.  For people who don’t understand this fact, I’d suggest they read more about what life is really like for the world’s poorest people in places like Congo, North Korea, Somalia, Mali and Yemen.  (I’m actually pretty surprised to read this comment from Deaton, who’s an expert on poverty.)  Or read a book about the Great Leap Forward.

4.  Unlike me, Ross Douthat does not suffer from Trump Derangement Syndrome.  Indeed he writes opinion pieces that are 10 times more thoughtful and 100 times better written than the trash in this blog. I agree with almost everything is this brilliant essay:

And where an abnormal response to Trump has kept things on an even keel, it hasn’t been furious protests; rather, it’s been a collective decision by many different actors, from his own appointees to his congressional opponents to foreign leaders the world over, to simply behave as if he isn’t actually the president, as if the system around him is what matters, and his expressed desires are just a reality TV performance.

So why will some readers be surprised by my claim that Douthat and I agree?  Because it looks like we disagree:

Me:  THE TRUMP PRESIDENCY IS A COMPLETE $&%@&# FARCE!!!!!!!!!!!!

Douthat:  Calm down folks, the Trump presidency is not a tragedy, just a farce.

Like I keep saying, don’t be fooled by framing effects.

There is one silver lining to Trump—he triggers some truly inspired writing.  Kevin Williamson is one of the best.

5.  I recently did a post on the rise of racism in the conservative movement.  Others are seeing the same thing:

That says a lot about the conservative movement. Intolerance always existed within it, but part of its success was how it managed to suppress the appearance of intolerance, to hide it behind terms and ideas that masked the movement’s true motivations. [William] Kristol said that those elements were “less healthy than I thought or hoped.”

Those elements started to come forward in the 1990s, Kristol said, starting with Pat Buchanan and continuing with Trump. “He’s an effective demagogue,” Kristol said of the president. “And then the rationalization of Trump, acceptance of Trump by so many Republicans and some conservatives, including conservatives I worked with and respect, has been disturbing to me.”

Kristol’s lament echoed what conservative commentator Charlie Sykes told Andrew O’Hehir in October 2017. “I knew that it was there, but I did think it was the drunk at the end of the bar, or it was your bigoted uncle at Thanksgiving,” he said. “This was a fundamental moral failing [of the conservative movement] that we did not draw the line on things like that. And as a result, that kind of racism, those conspiracy theories, that paranoid style festered. And it festered to the point that we can no longer control it.”

6.  My 12 recommendations for better living:

1.  Lead by example, don’t tell other people what to do.  (I.e. Tyler’s best advice is his life, not his list.)

2.  Don’t emulate me.

3.  Don’t write a principles of economics textbook.

4.  Don’t be born in North Korea.

I’m still working on the other 2/3rds of my list.

7.  It’s happening.

Another “bad hombre” being deported

From the Detroit Free Press:

His wife, Cindy Garcia, cried out while his daughter, Soleil, 15, sobbed into Garcia’s shoulder as they hugged. Two U.S. immigration agents kept a close watch nearby.

After 30 years of living in the U.S, Garcia, a 39-year-old Lincoln Park landscaper, was deported on the Dr. Martin Luther King Jr. holiday from metro Detroit to Mexico, a move supporters say was another example of immigrants being unfairly targeted under the Trump administration.

Jorge Garcia was brought to the U.S. by an undocumented family member when he was 10 years old. Today he has a wife and two children, all of whom are U.S. citizens.

Remember when Trump said he was going to focus on the “bad hombres”?

His supporters say he has no criminal record — not even a traffic ticket — and pays taxes every year. . . .

Garcia is too old to qualify for DACA, which allows the children of undocumented immigrants to legally work and study in the U.S.

A question for restrictionists.  How about a person who came to America illegally at age 2, and was 93 years old.  Assume no criminal record.  Should she be deported?  If so, why?  If not, why should this guy be deported?

“It’s heartbreaking,” Bonesatti said. “If you’re going to pick someone who’s ideal,” he would be it. . . .

Moreover, Mexico is a foreign place to Garcia.

But at least Trump is reducing regulations on coal companies that want to poison our air and water, so everything’s fine.

PS.  I’m guessing that the truly bad hombres don’t dutifully report to the immigration authorities like this guy did:

She said that when her husband reported to ICE in November as part of a regular check-in, he was informed that he had to leave the U.S. and would be detained immediately.

PPS.  Over at Econlog I have a new post on the war on drugs:

As a candidate, Trump promised to leave the marijuana question up to the states. In his confirmation hearings, Jeff Sessions promised not to make marijuana a priority for federal law enforcement. It turns out that all of those promises were meaningless.

PPPS.  And speaking of Trump, I don’t agree with every single charge on this NYT list, but the cumulative impact is pretty convincing.

Why I’m not impressed by “conservative judges”

When people summarize the first year of the Trump administration, they often focus on the appointment of lots of “conservative judges”.  Oddly, this is often considered a praiseworthy achievement, which is a sad commentary on our society.  I’d prefer a country where presidents were praised for appointing lots of “good judges”.

There are many definitions of conservative judges, but here’s mine.  Consider a closely fought election, such as 2000.  If the courts end up ruling on the outcome, then a conservative judge will support the conservative candidate, regardless of the facts of the case, and a liberal judge will support the liberal candidate, regardless of the facts of the case.  In a well functioning country, the political preferences of the judges would not factor into their decisions.  We’d have good judges, who looked at the specific facts of the case.

Another possible definition of conservative judges is one that views legislation passed by liberals as unconstitutional and legislation passed by conservatives as constitutional.

I have no opinion on whether the actual 2000 presidential election case was correctly decided.  But when people tell me I should support a judge because he is conservative, they are wasting their time.  In my view, the country would have been better off if Al Gore had won the 2000 election.  I certainly don’t want judges who will favor Trump in a court case (nor ones biased against him.)

I’m a libertarian, but I also don’t favor the appointment of libertarian judges.  I favor good judges.

PS.  If you tell me that my views are hopelessly utopian, that impartiality is impossible, that the rule of law is a myth, and that judges will inevitably have biases, then I still won’t favor conservative judges, I’ll favor utilitarian judges.  I.e. someone like Posner.

PPS. Note that because I’m a “rules utilitarian”, I don’t actually favor utilitarian judges.

PPPS.  And now they’ve politicized Christmas.  As our President tries to turn Christmas into a political football by promoting it, China and India wage war on the holiday.  Sad.  In retrospect, it’s now possible to clearly see Trump as just one aspect of the global rise of nationalism that accelerated around 2015.  It’s pointless to try to explain Trump; we should be trying to explain the global surge in right wing nationalism.  If your explanation for Trump doesn’t apply to India, China and Poland, it’s worthless.  That means your explanation should not include phrases such as “West Virginia” or “illegal immigrants”.  If it does, you are missing the big picture.