My Big Picture
My Big Picture
It’s a Sunday (Dan here…I put this up late), and it’s been a while since I put up some generalized thoughts on where we are, so let’s update. I’ll go in order of my optimism on the economy, COVID, and the political situation.
The economy
I am pretty happy about the place the economy is in right now, and for the near term future. Yes, we have inflation and supply chain issues, but we always have issues. And Q3 GDP will probably come in pretty punk on Thursday, but I’m just not concerned. Average hourly wages for non-managerial personnel are up 5.5% from one year ago. While inflation is going to pass, those wage gains are likely to prove “sticky.” For the first time since the late 1990s, labor is in a position of strength, and able to capture more of a share in the increase in economic activity.
Here’s more: – Even after adjusting for inflation, retail spending – although down from spring’s stimulus-fueled pace – is up 12.3% since just before the pandemic hit, and up 8.1% in the past 12 months. – Real disposable personal income is up 3.4% since just before the pandemic, and slightly higher than 12 months ago. – Personal savings are up 22.9% since just before the pandemic, although down from 12 months ago.
Basically, households spent most but not nearly all of their stimulus payments, and also maintained some of their savings from being cooped up at home due to COVID. And they’re being paid more at work.
Producers are struggling to keep up with all of that new demand – that’s a big part of the supply chain issue – but forward looking data like factory new orders continue to show that production should continue to expand.
And the background financial conditions continue to show low-interest rates, an open spigot for the money supply, and also an open spigot for credit being granted.
Maybe sometime next year, the economy will hit a wall. But even one year out, very few indicators are showing signs of trouble. Color me optimistic.
COVID
Here I am also at bottom optimistic, but much more cautiously. One thing I got wrong this year is that I expected vaccinations to continue at a 2 to 3 million per day pace, once they got available, and reluctant people saw that they really did protect the vaccinated. I did not realize the ferocity and power of the disingenuous political opposition that was originally orchestrated by Trump, but then escaped beyond even his control.
That is going to continue, but it is likely to be overcome by factors on the other side.
For example, even though lots of people over 65 are GOPers, the latest data from the CDC shows that 85% of seniors are fully vaccinated, and over 95% have had at least one shot. In other words, they may be telling pollsters that they’re against vaccines, but they quietly went out and got their shots anyway (because they know how vulnerable they are, and they don’t want to die).
More broadly, almost 70% of all adults are fully vaccinated, and almost 80% have had one shot.
Right now 66% of the *entire* population has had at least one shot, and 57% are fully vaccinated. The percentage of people vaccinated may only be rising by about 0.1% a day, but it has, relentlessly, continued to rise. With the likely approval of vaccines for children ages 5 to 11 (who are about 8.5% of the population), we are going to see a further increase.
Even at 0.1% increase a day, by the end of this year (in two months), it’s likely that about 63% of the US population will be fully vaccinated, and 72% will have had one shot. By March of next year, those numbers will probably be at least 70% and 77%, respectively.
Add to that the fact that, on average, prior infection in the past 1.5 years is the equivalent of a single dose of vaccine, and that it is likely that a little over 2x the number of people have been infected as opposed to cases “confirmed” by tests, currently close to 14%, and probably about 30% of those not vaccinated have some resistance now, and that will probably be over 35% by spring.
In short, by the end of winter, between vaccinations and prior infections, there’s probably only going to be about 15% of the entire population that does not have some resistance. A coronavirus looking to infect its next victim is going to have a 3/4 chance of encountering someone virtually immune, and another 10% chance of encountering someone with some resistance. Not terribly good prospects for wide continuing spread.
Furthermore, I anticipate more and more vaccine mandates from the federal, State, and local governments, as well as by employers. School mandates are going to be enormously helpful where enacted. I think it is only a matter of time before we get interstate public transport mandates. Finally, entire “Blue” regions like the Northeast may finally impose quarantines with teeth on travelers from places like Florida and Texas. Too bad for them; they should get vaccinated.
My base case right now is that we do get a winter wave, but it peaks at only about 1/2 to 2/3’s of the cases and deaths of the summer Delta wave. The next wave after that will be about 1/2 to 2/3’s of that wave, and so on. That’s what COVID turning endemic is likely to look like. By the end of next year, I anticipate it really will be “just like the flu” in terms of both infections and deaths.
The US political system
The President does not decree legislation. It must be passed by the Congress. And Congress has been completely non-functional ever since 2011, except on those things that are allowed to pass with a bare majority of the Senate (tax cuts and judges). This is a blueprint for continued GOP control. Everything they want they can pass with a bare majority, in a chamber weighted towards rural States to begin with. Everything Democrats want requires 60 votes, and they will never get them. A 50/50 Senate means that even 1 dissenter completely destroys any Democratic agenda item.
And here we are. Maybe some scaled down version of Biden’s economic program finally gets enacted. But the scaled down version isn’t going to be nearly enough.
And the situation with regard to voting rights in particular, and democratic integrity in general, is much more dire.
It’s pretty clear that the filibuster in the Senate is not going to be lifted for voting rights legislation, nor for legislation (that is *clearly* within Congress’s power, as to Congressional elections) dealing with gerrymandering. And Merrick Garland (who, presumably, is following Biden’s wishes) appears to be “looking forward, not back,” thus ensuring that there are no consequences even for an attempted violent overthrow of the 2020 Presidential election, and further ensuring that much more organized attempts will follow, probably successfully.
Meanwhile the Supreme Court is revving up to repeal the entire 20th Century, both as to civil rights and economic regulation.
About the only silver lining, I see there is that, whether Roe v. Wade technically survives or not, it is really clear that abortions are going to be permitted to be outlawed by the States (and I don’t even put it past the Court to declare that the fetus is a “person” and that abortions *must* be prohibited). That will be the first time in the entire history of the US that a personal right that people thought they had – for the last 50 years – is taken away.
And one thing we know from behavioral economics specifically, and behavioral psychology generally, is that people react *much* more strongly to things that are taken away from them than things that they didn’t have to begin with. I expect a complete firestorm of rage when this happens, and it may very well lead to 2022 midterm election results that defy the usual trend, with a Blue avalanche giving Biden and the Democrats a much better chance to enact a real agenda, up to and including voting rights and Supreme Court reform.
But in the longer term, the Rule of Law in the US is going to end shortly, I suspect. Some day long after that, a new Constitution not encumbered with creaky 18th Century kludges will finally come into existence, long after I am gone.
We’re Facing a Climate Disaster. Why Is Greta Thunberg Hopeful?
NDD,
Very nicely done. Thanks.
I am less optimistic than you about our political and justice system situation. The judge in the Rittenhouse trial has forbidden the prosecutors from calling the dead and injured people “victims”. And then there are the juries being corrupted by the insanely stupid, ill informed crazy people.
Pretty sure justice is going to take a beating for the foreseeable future.
” When asked why he had described antifa as “troublemakers,” one potential juror said: “All I hear about antifa is what I hear on TV. It seems like they’re always involving themselves in racial riots and causing a lot of problems with their political beliefs,” he said.
Another prospective juror, as Vice’s Tess Owen reported on Twitter, described antifa as domestic terrorists in his questionnaire. “I just seen what I know on television and the internet,” he wrote. He added that he doesn’t consider antisemitism to be a serious issue. “I just don’t believe that today we have this problem… where I live, it doesn’t seem to be a problem.”
While several of these jurors were removed, Judge Moon denied the plaintiffs’ request to strike the juror who described antifa as a “terrorist organization.” He was similarly reluctant to strike jurors who had more neutral views.”
https://www.dailykos.com/st…
The only reason I am glad to be 68 is the chance this nightmare won’t be in full fruition before I am gone. We’re totally screwed. 3 decades of Fox News has ruined this country.
I feel your pain double.
Demented China Joe’s idiotic puppeteers reversed every good thing President Trump accomplished and we ARE screwed.
“T”
Thank you for today’s humor.
First, there is no “We” in this.
The only people who are really screwed (besides yourself) are those who attacked the Capitol as told to do so by führer trump and a gaggle of congressional acolytes who told them there would be a blanket pardon. That little thing is never going to go away for them. Every time a cop pulls them over, it will pop up as it should.
You know, China pulled off one of the greatest economic success stories in a century akin to what Biden is attempting to do the US with the Build Back Better program. So calling him China Joe is not much of an insult. It does reveal a tinge of racism in you Mr. bàn diào zi .
I’m seeing that awkward moment when a zombie [looking for brains to eat] walks right past you.
Mr. Shaw,
Could you please essay the pros and cons on trade tariffs in regard to principal exports of a given economy and how lack of domestic demand slack might potentially hurt producers? What might be a solution to offset any potential negative impacts, aside from subsidizing the producers and have a general welfare via tax dollars supplant the potential loss of trade revenue and potential good will lost with foreign suppliers?
I’d also like to know, if you could please enlighten me, how excess supply of immigrant labor is bad for corporate America? All of my training in economics has told me that excess supply of labor actually helps keep wages artificially low, e.g. Bangladeshi immigrants building Saudi soccer stadiums for the world cup. Are thise fundamentals flawed, and also as a policy position of the republican party to be pro corporation, yet inact legislation that is completely against those fundamentals, if they hood water?
I appreciate your analysis.
T. Shaw,
You are correct about the “we ARE screwed” although that has nothing to do with Ordinary Joe nor much really even to do with Trump, who was more a symptom than a cause despite his enabling of repressed white fascism to escape into open conflict. Our system of government evolved from a hereditary aristocracy into a hereditary plutocracy with delusions of democratic republicanism to whitewash over the influence of wealth on politics and governance. It was just a matter of defending the elite status quo after the aristocracy fell from power. It is not exactly a dollar democracy with one dollar, one vote, but it has always been very close to that even as the ideological positions of the divided republican partisan system changed repeatedly between their role playing costumes of wolves and sheep. Even New Deal populism was supported by the establishment as a defense against Eugene Debs and other socialists that found new political opportunity in the Great Depression. Globalization has similarly provided an opportunity for fascism, but elites will never go where the white supremacists want to go with fascism any more than elites were ready to submit to the socialists during the Great Depression. However, the Club of Rome postulated long ago that offshoring industrial production to low income nations would establish a bulwark against immigration. Climate change and political extremism throughout the world has threatened the plans of elites to keep out the brown people from white shores. Something will happen eventually, but probably not what their adoring sycophants wanted.
I’d like to see a list of those good things.
Space Force
++
:<)
ilsm
ilsm?
Hicks or pseudonym?
Trump Administration Accomplishments – The White House (archives.gov)
(The single greatest accomplishment, really, would have to be The Big Lie, which is not a Trump invention, but he did perfect it – all must agree.)
EMike,
[I am left a little fuzzy reconciling your comment.]
“I am less optimistic than you about our political and justice system situation…”
[With NDD’s closing paragraph.]
“…But in the longer term, the Rule of Law in the US is going to end shortly, I suspect. Some day long after that, a new Constitution not encumbered with creaky 18th Century kludges will finally come into existence, long after I am gone.”
[Maybe it is just me, but “the Rule of Law in the US is going to end shortly” does not strike me as all that optimistic.]
The optimism stems from his belief that the Rule of Law hasn’t already ended.
I did not mean to imply he was optimistic, just that I am less so. This Kenosha shooter is going to get away with murder, the jury will not convict. The Charlottesville rioters will not get convicted, the jury will not convict.
Wat’s surprising to me are these insurrectionists taking plea bargains. Finding a jury to convict them would be all but impossible, perhaps in DC but nowhere else in this country. They can easily pay for their attorneys with a gofundme, which the right seems to pile cash into in a hearbeat. Rittenhouse is out on $2 million cash bail, who knows how much his defense fund has in it.
Our country, as the wicked witch is
“As Coroner, I thoroughly examined her
And she’s not only merely dead,
She’s really most sincerely dead”
EMike,
OK – got it. Read Zardoz first and he nailed it with a laugh.
Richmond VA had a little Unite the Right rally after the Charlottesville incident, but they left quickly with police protection to escape the black protestors. So, the Rule of Law may be secondary to a bunch of well armed black guys when it comes to preserving civil society, which is more than a little ironic given the problem with street gangs in urban areas.
We still have the best law that money can buy alongside all the freedom that we are willing to die for. This growing tolerance of fascism is troubling though.
The problem with hoping for a blue wave due to overturning abortion is that the gerrymandered districts will be in place for 2022. No way turnout can beat gerrymandering of the likes of Texas.
We have not had a democracy since Moscow Mitch said “no” starting with Obama. I’ve noted it before, our democracy comes down to the 2 party leaders in the Senate agreeing to follow the rules. Once 1 says “no” you have no democracy because there is no way to make that adult child engage as their position requires.
Money is about to receive the reward of all their hard work since the Powell memo.
@Daniel,
We haven’t had a representative democracy (= democratic republic) since the senate was designed to have only two representatives from each state and the number of house members was capped.
+1
True, not representative as should be but at least more democratic in function prior to Moscow Mitch’s stance of “No”. “No” is the proverbial wrench thrown into the gears of our democratic machine.
Rittenhouse may well walk and, if so, it won’t be some miscarriage of justice. The news reports at the time including video were quite detailed and his prospective defense of self defense was obvious. The people he shot are shown attacking him physically without any obvious provocation other than his presence with a weapon. Hs carrying the weapon was illegal in Illinois where he lives but not in Wisconsin where the shootings took place. It seems outrageous to many of us that he was there with the gun but it doesn’t seem to have been illegal.
The only quibble I have with that analysis is that it depends on the nu, xi, and omicron being more like gamma than delta. I join NDD in hoping that is correct, but I want to see it validated.
Which is directly linked to sustaining the economy, since the one-time payments and enhanced UI are not coming back, and those are a large part of what sparked the recovery.
If we’re not starting a recession by Q3 2022, I will be pleasantly surprised.
Hey Ken;
Just in time for the election? Hopefully it waits a while longer.
From an economic standpoint yeah I think we are ok. We will see continued inflation pressures as the bottom inputs and energy are getting more expensive. Haliburton is fracking the hell out of things out here so energy is a temporary issue. With increase of input costs, between China and Russia playing games, I don’t see that waning soon. Domestic production will eventually catch up but will take time. Same with semiconductors.
The shark got thrown out to sea in 2020 but will be back for 2024. Meanwhile, his SPAC is about to rob his constituents of potential billions, which I find both bothering and cathartic.
As far as Covid, the doctors (one pediatrician and an epidemiologist) and I had a two hour pow wow yesterday. Kids are vectors and a hesitancy to have them vaccinated has now been pushed hard by conservatives and even talking heads like Joe Rogan. The kids are not the point, yes there is an understanding that only 100 pediatric deaths have occurred and only 8,500 hospitalizations, but this is more about the kids being vectors for transmission as grandmas immunity wanes based on evidence from Israel and Puerto Rico. With kids being vectors in close quarters (schools) and Covid fatigue, the fear is the elderly will forego boosters and a more deadly spike will occur starting roughly around the middle of November and really growing legs two weeks after Thanksgiving.
Honestly I didn’t add much to the conversation being an economics nerd until the end when we started talking through scientifically recommended versus government mandated. I have just recently read the new reprint of Thaler and Sunsteins book, Nudge, and so I had a few strong opinions on it. The recommended takes more time because consensus needs to be had. Mandates are immediate without consensus and measure but are necessary to keep people alive while study is ongoing. The scientific approach is to gather all evidence and then present. The Hippocratic oath leads the physicians to call for mandates to prevent loss of life absent the yet to be heavily researched, yet currently well supported evidence. Me living in Trump country and understanding behavioral economics, you can only mandate a certain percent of the population, the compliant. Not many compliant these days. So the more the government dictates, the more dug in those resistant become. This will create a snow ball of an attempt to discredit and resist known science when we have decades of hard data to go from: polio, MMR, etc. Chicken pox vaccines are pediatrically beneficial but not necessary, shingles suck, but chicken pox is not something that has a mortality rate. Other illnesses do, and so we could start seeing a regression into a very, very serious condition in this country, where herd immunity has kept certain illness a bay for decades and a certain percentage of new found “heroes” pops the cap and allows transmission to begin to stress an already broken system.
I sense that “kids as vectors” is going to be a weak argument for a few years in the vaccination of young children. I presume that unvaccinated parents are going to not go along with this and a pretty good number of vaccinated parents are going to be thinking that a few more years of experience with these would be a really good idea prior to starting to use them. Although the reports of cardiac inflammation center on boys, I think the unease is higher for girls. Many vaccinated moms of girls in our kids school have spoken with my wife and this comes up as ‘good idea to wait on this for a few years, just in case’.
The myocardial issues are 3x worse with covid. The Canadian study was flawed, retracted, but like with most things, the initial shock is what people remember. My pediatrician friend is also a researcher doing the trials in Houston. His kids are both part of a longer term study since they are under 5. So far he has only seen rashes and inflammation of the injection site. A fee broken arms and swallowed items. I asked about the myocardial issues and he said that it’s akin to kids smoking weed when they have schizophrenic futures. The vaccine causes inflammation. The virus causes way worse inflammation.
But again, the messaging is terrible, and talking heads are falling over each other to bring “breaking” news to the general public
Michael:
Political opposition will diminish due to not vaccinating, long term care may increase due to the same, and we could see an increase in the number of years before the exhaustion of the SS Trust Fund. People are casting the dice. Some may win, other may lose and experience death or Long Covid, and the rest of the population may benefit from a smaller population.
The Big Lie might be bigger than we think