Archive for February 2022


Where would you expect the most Covid deaths?

In the initial wave of the Covid pandemic, deaths in the Northeast (and Washinton state) were far higher than other areas of the country. This is because the virus first entered the US on overseas flights to places like NYC, Boston and Seattle.

After that initial wave, the pandemic spread all across the country. After vaccines were developed, Covid deaths were higher in Republican leaning areas, as GOP voters were far less likely to become vaccinated than Dems.

Given those facts, where would you expect the most deaths from Covid? The answer is obvious—in GOP enclaves in the Northeast. They would have been hit hard by the initial wave, and then again by the delta and omicron waves due to low vaccination rates.

So that’s the theory. But does the theory match reality? Yup:

Ocean County, in central New Jersey, is a mixture of beach towns like Barnegat Light and exurban towns like Toms River and Lakewood. Household income in the county exceeds the U.S. average.

Yet Ocean County is among the least vaccinated places in the Northeast. Only 53 percent of residents have received at least two doses of a Covid-19 vaccine (or one dose of Johnson & Johnson). Only 26 percent have received a booster shot.

The large number of unvaccinated residents in Ocean County has led to a horrific amount of Covid illness and death. Nearly one out of every 200 residents has died from the virus. That is worse than the toll in Mississippi, the U.S. state with the largest amount of Covid death per capita, and worse than in any country except for Peru.

What explains the vaccine skepticism in Ocean County? Politics, above all. The county is heavily Republican. 

PS. This article caught my eye:

Though Paxlovid has only emergency approval, that interim status doesn’t put off many patients who need it, even those who resist vaccines, said Glatt from Mount Sinai. “They beg for it,” he said. “They ask for it.” 

But it’s only an “experimental” drug!

PPS. There is a special circle in hell for people who have been discouraging pregnant women from getting vaccinated.

PPPS. Speaking of pandemics, I’ve always been somewhat skeptical of the claim that 50% of Europeans died during the Black Death. Now I’m extremely skeptical. The reason I was previously skeptical is:

1. Plagues were far more deadly in big cities than in the countryside.

2. Estimated death rates were about 50% in big cities during the Black Death.

3. Over 90% of Europeans lived in rural areas.

Ergo . . .

It’s the NGDP, stupid

It seems like supply chains are stressed almost everywhere in the world. So why is Japan’s price level lower than two years ago. Why haven’t they had any inflation at all?

The answer is simple. In the US, NGDP has risen by more than 10% over the past two years. In Japan, NGDP has fallen by nearly 2%. Monetary policy is far more contractionary in Japan than in the US.

Of course, NGDP is not the only factor explaining inflation; RGDP matters too. But over any extended period of time, NGDP is by far the most important factor.

The Philadelphia Fed’s survey of professional forecasters predicts continued rapid growth in NGDP in 2022. They don’t specifically ask about NGDP, but the rapid expected growth in RGDP and (PCE) prices clearly indicates that forecasters expect fast growth in NGDP. In other words, monetary policy is still too expansionary.

PS. I have a new piece at Discourse.

Update: John Hall points out that they do ask about NGDP.

Let me know when you develop a replacement

Here’s the NYT:

A group of philanthropists and academics say it is time for a new set of ideas to guide the economy. The William and Flora Hewlett Foundation and Omidyar Network announced on Wednesday that they were committing more than $41 million to economic and policy research focused on alternatives.

“Neoliberalism is dead, but we haven’t developed a replacement,” said Larry Kramer, president of the Hewlett Foundation.

I eagerly await the new model. Will I live to see it? (I’m 66)

The difference between Russia and China

China’s policies often annoy the West.
Russia’s policy is to annoy the West.

The real problem is a lack of nominal targeting

This tweet is correct, but tells only a part of the story:

I’ve made the same point many times. This is why I’ve been advocating treating the fed funds target more like a market price. I’ve argued that this rate should be adjusted daily to the nearest basis point at the median vote of the FOMC (voting by email if necessary). Under that system, policy “reversals” would occur frequently, and would be seen as normal, not embarrassing.

Nonetheless, the current debate about where the Fed should set interest rates mostly misses the point. The Fed needs to set a clear nominal target, and then stick to it. Where do they want the PCE price index to be in January 2025? Or better yet, where do they want NGDP to be in three years? That would do far more to stabilize the economy and prevent recession than any tweaking of interest rates. The economy is currently being destabilized by abysmal communication out of the Fed. No one seems to know if they are still committed to FAIT, and if so what that means. So tell us!!

PS. I have a new article at The Hill that provides three reasons why the Fed screwed up in the second half of 2021. Please read the whole thing.