I keep seeing this sort of comment:

Federal Reserve Bank of Atlanta President Raphael Bostic said he opposed last week’s interest rate cut because two earlier reductions had provided insurance against global risks and the central bank needed to preserve its ammunition.

It would be interesting to do a search of the Fed minutes and see how many Fed officials are mixed up on this issue.

Dozens of sources provide similar accounts, but this WaPo story is especially vivid:

Senior Trump administration officials considered resigning en masse last year in a “midnight self-massacre” to sound a public alarm about President Trump’s conduct, but rejected the idea because they believed it would further destabilize an already teetering government, according to a new book by an unnamed author. . . .

The author — who first captured attention in 2018 as the unidentified author of a New York Times opinion column — describes Trump careening from one self-inflicted crisis to the next, “like a twelve-year-old in an air traffic control tower, pushing the buttons of government indiscriminately, indifferent to the planes skidding across the runway and the flights frantically diverting away from the airport.” . . .

“It’s like showing up at the nursing home at daybreak to find your elderly uncle running pantsless across the courtyard and cursing loudly about the cafeteria food, as worried attendants tried to catch him,” the author writes. “You’re stunned, amused, and embarrassed all at the same time. Only your uncle probably wouldn’t do it every single day, his words aren’t broadcast to the public, and he doesn’t have to lead the US government once he puts his pants on.”

The book depicts Trump as making misogynistic and racist comments behind the scenes. . . .

The author alleges that Trump attempted a Hispanic accent during an Oval Office meeting to complain about migrants crossing the U.S.-Mexico border.

“We get these women coming in with like seven children,” Trump said, according to the book. “They are saying, ‘Oh, please help! My husband left me!’ They are useless. They don’t do anything for our country. At least if they came in with a husband we could put him in the fields to pick corn or something.”

I said this about Trump from the beginning, back when people told me that a person couldn’t possibly become a billionaire if they were an idiot. People will of course deny this anonymous account, but since Trump seems the same way in public, I’m inclined to accept it.

Look for Trump to be re-elected in 2020 during a period of very low unemployment, even as he loses the popular vote by millions.

Why?  Because of the dysfunctional Democrats.

It’s often said that if you think you understand quantum mechanics, then you don’t actually understand it. That may not be true of Eliezer Yudkowsky, Scott Aaronson and Robin Hanson, but it’s true of most average people. (Thankfully, I don’t even think I understand it.)

Whenever I discuss the lack of mini-recessions, commenters will offer explanations. One argument is that the highly diversified nature of the US economy leads to shocks in one sector being balanced out with growth in other sectors.

That might be in some way relevant to the issue (indeed I suspect it is.) But it’s certainly not an explanation. After all, we do have medium size recessions and large recessions. So this “explanation” actually explains far too much.

Think of it this way. Everyone should agree that some factor causes recessions in the US, on average once about every 5 years. Let’s call this factor X, or factors X, Y and Z, if you think there are three primary causes. If big X shocks cause big recessions, and medium X shocks cause medium recessions, why don’t small X shocks cause small recessions?

Maybe there are no small X shocks. But why not? Everything we know about both the natural world and the human world suggests that small shocks are almost always more common than medium shocks, which are more common than big shocks. This is obviously true of things like earthquakes, but also true of human shocks like murders, traffic accidents and wars. Single murders are more frequent than mass murders, single and two car accidents are more common than 10 car pile-ups. Small wars are more frequent than world wars.

It is true that medium recessions are more frequent than big recessions. So why aren’t small recessions even more frequent? Indeed why don’t we have ANY mini-recessions, defined as unemployment rising by 1.0% to 2.0%, and then falling back.

My hunch is that it has something to do with interest rate targeting, procyclical monetary policy, and policy lags, but I can’t quite figure out exactly how. If the Fed shifts to level targeting and we start having mini-recessions, then that would confirm the role of monetary policy.

PS. The closest we’ve come is the 1959 steel strike, when the unemployment rate rose by 0.8%, and immediately fell back again.  Otherwise, a 0.6% rise is the largest increase short of a recession:

PPS.  Off topic, you really should be reading Slate Star Codex.  Scott Alexander is not an economist, but his posts on economics are often better than 95% of the posts written by economists.

The New York Times has a piece on Long Island City’s acclaimed new library:

In his 2010 renderings for the children’s wing, Steven Holl, the project’s lead architect, had sketched images of children reading on bleacher-like seats that spanned from the lower level of the wing to the upper one, adjoined by an interior staircase.

But library officials, in a walk-through before the building opened, instead saw a potential liability for small children who could jump and fall on them. They have closed off the stairs and the top five bleachers until fixes can be made, said Elisabeth de Bourbon, a spokeswoman for the Queens Library.

Wood panels now block the staircase entrances and protective glass barriers have been added to the tallest bleachers. The bottom three bleachers remain open, however, and a security guard who usually stands there keeps an eye on them.

. . .

“What the lawyers believe is safe or not is a constantly evolving thing in this society,” he said. “Five years ago, they wouldn’t have even thought to block off that area, or even two years ago.”

When you get to be my age the world will seem increasingly crazy.

A business cycle forecasting tool developed by Claudia Sahm has recently attracted some media attention.  This is from a WSJ article:

Sahm suggested that she got the idea from Jason Furman, who heard about the idea from Doug Elmendorf. 

Back in 2011, I had a similar insight in a blog post on mini-recessions (or more specifically the lack of mini-recessions):

I searched the postwar data, which starts at 1948 and covers 11 recessions.  During expansions I found only 12 occasions where the unemployment rate rose by more than 0.6%.  In 11 cases the terminal date was during a recession.  In other words, if you see the unemployment rate rise by more than 0.6%, you can be pretty sure we are entering an recession.  The exception was during 1959, when unemployment rose by 0.8% during the nationwide steel strike, and then fell right back down a few months later.  That’s not called a recession (and shouldn’t be in my view.)  Oddly, unemployment had risen by exactly 0.6% above the Bush expansion low point by December 2007 (when the current recession began) and by 0.7% by March 2008, and yet many economists didn’t predict a recession until mid-2008, or even later.

What’s my point?  That fluctuations in U of up to 0.6% are generally noise, and don’t necessarily indicate any significant movement in the business cycle.  But anything more almost certainly represents a recession.

Now here’s one of the most striking facts about US business cycles.  When the unemployment rate does rise by more than 0.6%, it keeps going up and up and up.  With the exception of the 1959 steel strike, there are no mini-recessions in the US.  The smallest recession occurred in 1980, when the unemployment rate rose 2.2% above the Carter expansion lows.  That’s a huge gap, almost nothing between 0.6% and 2.2%.

Sahm’s formulation is superior to mine because the month-to-month unemployment rate is noisy. By taking a three-month average in measured unemployment she gets a better view of the underlying trend in actual unemployment. In my 2011 post, I hypothesized that any rise in the actual unemployment rate, no matter how small, was an indicator of recession. Because the data is noisy, I suggested that you’d need more than a 0.6% rise in the measured unemployment rate to be certain that the actual unemployment rate had risen at all:

To understand mini-recessions we first need to understand the monthly unemployment data collected by the Bureau of Labor Statistics.  This data is based on large surveys of households.  It seems relatively “smooth,” rising and falling with the business cycle.  Month to month changes, however, often show movements that seem “too large” by 0.1% to 0.3%, relative to the other underlying macro data available (including the more accurate payroll survey.)  So let’s assume that once and a while the reported unemployment rate is about 0.3% below the actual rate.  And once in a great while this is followed soon after by an unemployment rate that is about 0.3% above the actual rate.  Then if the actual rate didn’t change during that period, the reported rate would rise by about 0.6%.

Sahm says that you need more than a 0.4% rise in the 3-month moving average of measured unemployment.

The FT argued that the Sahm indicator doesn’t really “predict” recessions, as it’s a coincident indicator. But even that is highly useful, as we often don’t know that we are in a recession until 6 to 9 months after it began. The most recent recession began in December 2007, but as late as August 2008 the Fed didn’t even know we were in a recession. By that time, the Sahm rule had been indicating a recession for months.

The Sahm Rule has a deep connection to the mini-recession mystery. The rule works in the US precisely because we never have any mini-recessions (for some unknown and deeply mysterious reason.) It doesn’t always work in foreign countries because they do have mini-recessions.