Relevant and even prescient commentary on news, politics and the economy.

New host and website: Angry Bear

My announcement about the changes to Angry Bear seems to have disappeared. The controls are different. The changes include:

  1. Upgrade from Word Press 4.8 to 5.5 plus, which involves better security and other functions.
  2. The comments section has different controls and editing functions for users.
  3. The site is mobile friendly now and has greatly improved readability. Try it out.
  4. Improved SEO.
  5. The sidebar will have thirty or more economics links (to be inserted later).

If any difficulties develop please e-mail me, Bill, or Eric so we can work with the tech team. The new set of controls will take some time to get used to for all of us.

If having trouble with comments, clear the cache in your browser.

Kelly Loeffler’s Smears of Raphael Warnock are Met with a Metaphor

I thought this was pretty creative on the part of Reverend Raphael Warnock in responding to Republican and Kelly Loeffler’s campaign attacks on him.

If Democratic Senate candidate Raphael Warnock is worried about the deluge of negative ads coming from Republican incumbent Kelly Loeffler and her allies, he isn’t letting Georgia voters see him sweat.

In a 30-second TV response, the 51-year-old pastor was shown walking his Beagle down a tree-lined suburban street holding a bag of dog feces while telling supporters he knew the “smear ads” were coming.

“Loeffler is trying to scare voters by taking things I’ve said out of context from over 25 years of being a pastor.

But I think Georgians will see her ads for what they are,”

Warnock dropped the bag into the trash and looked at the pup and asked:

“Don’t you?”

Rev. Raphael Warnock’s allies warn of backlash in Georgia Senate runoff race over sermon attacks”, USA Today

Yellen And Akerlof Or Akerlof and Yellen?

Yellen And Akerlof Or Akerlof and Yellen?

 I have already posted about the nomination of Janet Yellen to be Treasury Secretary, a historic first and most duly deserved.  She is great and totally appropriate, and I have already bloviated at length on that.

I am now going to discuss a more obscure and odd matter, the view of her and her Nobel-Prize-winning husband, George Akerlof, in the eyes of the public.  This is triggered by various media stories that have sort of downplayed or dismissed him while praising her and lifting her up, which I am all for and have done myself here and elsewhere on numerous occasions.  I note that I may be in a special position to comment on this as I have known George for 60 years, which might make me concerned about how people view him, although as someone frequently described as “the nicest person in the economics profession” who is also genuinely humble, he does not mind or care about any of this at all.

Mostly I want to reaffirm his important role both in her work and more broadly his importance to the economics profession and more broadly the history and development of economic thought. While she published papers on her own and with others, her most important and influential papers have been coauthored with him, including the one getting mentioned in the news reports about efficiency wages.  They have had a long joint research program studying labor market behavior taking into account such things as social interactions effects such as workers taking seriously whether they are being treated fairly.  They also contributed to the lit on the downward stickiness of nominal wages, which is an important macro fact, with Yellen bringing this into the policy discussion at the Fed when she was first a gov there under Greenspan, with this playing a role in her helping him to move from focusing on a zero inflation target to a positive one.  A major paper by George with Dickens and Perry at Brookings would support this and help pin down what is now the nearly universal 2% target that most central banks use, for better or worse.  They have had an enormous influence on global central banking that is not all that well understood or recognized.

First look at the 2021 economy: housing

by New Deal democrat

First look at the 2021 economy: housing

 

As I’ve pointed out for years, housing is a long leading indicator. It can give us a decent read on the direction of the overall economy 12 to 18 months out.

So the strength in the housing market in the past 6 months has been a powerful positive omen for the economy going into 2021.

Yesterday residential construction spending for October was reported and continued that string of very positive signs. The below graph compares inflation-adjusted residential construction spending with single-family housing permits since the construction series began in 2002:

These are the two least volatile of all of the housing metrics. Since sales have to be made first and permits obtained, before construction starts, typically construction – while the least volatile of all metrics – lags permits somewhat. But right now, both are at 10 year+ highs.

I put together a much more comprehensive overview of the housing market, including mortgage rates, sales, prices, and inventory, and it is posted at Seeking Alpha.

As usual, clicking over and reading puts a penny or two in my pocket to reward me for my efforts, as well as giving you useful economic information about the future.

November data starts out strong with a very positive ISM manufacturing index

November data starts out strong with a very positive ISM manufacturing index

 

The first November data point, the ISM manufacturing index, was reported this morning, and while it declined from last month, it remained very strongly positive.

The overall index declined from 59.3 to 57.5, and the more forward-looking new orders index declined from 67.9 to 65.1:

Since any reading above 50, however, indicates expansion, these were positive readings. The overall index is at levels equivalent to where it was during the strongest parts of the last decade’s expansion, and this month, like 3 of the last 4 months, the new orders component is equal to its strongest levels of the past 16 years.

 

Coronavirus dashboard for November 30

Coronavirus dashboard for November 3

Total US confirmed infections: 13,383,320*

Average US infections last 7 days: 162,365 (vs. latest low of 34,354 on Sept 12)
Total US deaths: 266,873
Average US deaths last 7 days: 1,430 (vs. latest low of 701 on Oct 16)

*I suspect the real number is 18-19,000,000, or between 5 to 6% of the total US population
Source: COVID Tracking Project

Infections are out of control over much, if not most, of the country. North and South Dakota, the 2 worst States, now have had confirmed infections in over 10% and over 9% of their entire populations (and probably much worse than that since many asymptomatic cases go undetected):

While the earliest hard hit States, NY and NJ, still have had the highest death tolls, 8 more States have suffered fatalities in excess of 1 in 1000 of their total populations:

Weekly Indicators for November 23 – 27 at Seeking Alpha

 by New Deal democrat

Weekly Indicators for November 23 – 27 at Seeking Alpha

A little later than usual, my Weekly Indicators post is up at Seeking Alpha.

While there has been no big deterioration, there are further slight signs that the out of control pandemic is taking a toll on the recovery that has been underway for the past 6 months.

As usual, clicking over and reading will bring you up to the virtual moment on the economy, and reward me a little bit for my efforts.

Unprecedented

Unprecedented

 It occurs to me that our current president has engaged in a rather large number of actions that are unprecedented by any other president, as well as some only rarely happening and not for a long time, many of which for nearly all other politicians would make them viewed as simply unacceptable for being a president.  However, with him, there have been so many that people simply ignore most of them as being, “Oh well, there goes Trump again being himself.”

First of all, I do not have a full list of his norm-shattering precedents. In googling I saw an article that proclaimed he had violated 20 “presidential norms.” But it was behind a firewall.  And even though these may have been norms, it may be that other presidents violated at least some of them.  Anyway, here goes a partial list.

The first president to be accused of violating the emoluments clause of the Constitution.  Actually, there are two such clauses, the more famous one involving foreigners buying off a president, and then a domestic one as well.  He has been accused of violating both of them on numerous occasions, although never formally convicted of any, with a couple of law cases in court, mostly involving just the Trump Hotel in Washington.  But the list of likely violations is long and involves many properties and forms, with at least 22 foreign nations reputedly involved.  The funny thing is that just because something is forbidden in the Constitution does not immediately make it specifically against the law.  In any case, it remains that somehow no other president has even been accused of violating either of these clauses, but Trump is pretty clearly massively guilty of actually violating both of them blatantly and numerous times, with only the mildest outcry even from his critics.

He is the first president to have been legally charged with engaging in racial discrimination.  This would have been in 1973 right after he began working for his father’s real estate business.  He was not found officially guilty but had an out of court settlement in which he was ordered to stop doing what he had been doing. As it was, the Justice Dept later accused him of doing exactly that, returning to his previous racially discriminatory practices, after which he seems to have more or less stopped.  Of course there are past presidents with much worse race relations records than his, such as outright owning slaves as did most of the Founding Fathers from the South.  But in those days what they did was legal, if immoral.