Lots of people have been huffing and puffing about whether or not the US economy will go into a recession in the near future, with Menzie Chinn and Jim Hamilton at Econbrowser saying it is now about 50-50 whether or not the US economy will go into recession by the end of 2020.   I do not have a horse in that race, but I am struck that a new odd phenomenon has recently appeared in the US economy, a split between sectors regarding their performance that recently seems to be increasing.

The sectors are manufacturing, which has been declining now for several months and is the harbinger of recession. Meanwhile single family permits are up, and YOY permits overall are up by 8 percent that may well hold off any recession if it continues to accelerate.  It is unclear which will win out.

So the general story of manufacturing looking to decline while housing construction is likely to rise still holds for the fairly near future.

The manufacturing decline has been widely tied to the trade wars, which would appear to be at least partly responsible.  It is also the sector that through trade may be experiencing the pressures of the slowing of global growth.

I don’t think anyone was surprised by this year’s “Nobel” prize in economics, which went to three American-based specialists in the design of on-the-ground experiments in low income countries, Abhijit Banerjee, Esther Duflo and Michael Kremer.  I think the award has merit, but it is important to keep in mind the severe limitations of the work being honored.

The context for this year’s prize is the long, mostly frustrating history of anti-poverty projects in the field of development economics.  Much of the world, for reasons I’ll put to the side for now, is awash in poverty: billions of people lack access to decent sanitation, medical care, education and physical and legal protection, not to mention struggling to put food on the table, a roof over their head and cope with increasing demands for mobility.  A lot of money has been spent by aid organizations over the years to alleviate these conditions, without nearly enough to show for it.  (My specialty, incidentally, has been in child labor, which has been the focus of a large piece of this work.)

There have been various reactions to the lack of progress.  One has been to argue that the effort has been too weak—that we need more money and ambition to turn the corner.  This is Jeffrey Sachs, for instance.  Another is that the whole enterprise is misbegotten, a relic of colonialism that was always destined to fail.  You can get this in either a right wing (William Easterly) or left wing (Arturo Escobar) version.  (I critiqued the “left” stance on child labor here.)  A third is where this Nobel comes in.

The abstract for “Does Medicare Coverage Improve Cancer Detection and Mortality Outcomes?” by Rebecca Mary Myerson, Reginald Tucker-Seeley, Dana Goldman and Darius N. Lakdawalla:

Medicare is the largest government insurance program in the United States, providing coverage for over 60 million people in 2018. This paper analyzes the effects of Medicare insurance on health for a group of people in urgent need of medical care – people with cancer. We used a regression discontinuity design to assess impacts of near-universal Medicare insurance at age 65 on cancer detection and outcomes, using population-based cancer registries and vital statistics data. Our analysis focused on the three tumor sites with recommended screening before and after age 65: breast, colorectal, and lung cancer. At age 65, cancer detection increased by 72 per 100,000 population among women and 33 per 100,000 population among men; cancer mortality also decreased by 9 per 100,000 population for women but did not significantly change for men. In a placebo check, we found no comparable changes at age 65 in Canada. This study provides the first evidence to our knowledge that near-universal access to Medicare at age 65 is associated with improvements in population-level cancer mortality, and provides new evidence on the differences in the impact of health insurance by gender.

I can’t vouch for the results, not having read the article in full, but the study design looks good, provided they avoided the spurious results from higher order nonlinear relationships separated by the discontinuity.

Trump’s stonewalling on impeachment is the top story, snore.  Lower down and more important is Trump allowing Turkey to attack the Kurds in Syria with the support of Russia. Even GOP senators do not like this and ISIS fighters may get out. But, heck, those will go to Europe, and unlike the Btis and Canadians, the Kurds did not help us out in Normandy in WW II.  And, probably most important, Trump has major business interests in Turkey.

However, much less reported (although covered by David Ignatius in WaPo today), but arguably more important than either is Trump’s decision to withdraw from the “Open Skies” agreement with Russia to allow oversight flights by each over the other to test for “doomsday weapons” development, an idea initially proposed by Eisenhower in 1956.  This continues an ongoing collapse of nuclear arms control agreements, with Trump having withdrawn from the Intermediate Nuclear Forces agreement last year, much to the consternation of most of Europe, although arguably Russia had been in violation of it for a long time.  Back in 2002 Bush withdrew from the Anti-Ballistic Missile agreement, which his people thought was a much more important thing to do than fight al-Qaeda.

Trump’s latest excuse for withholding arms for the Ukrainian government to defend itself against Putin’s invitations so he can extract dirt against the Bidens is what again? Oh yea – he wants to root out corruption. REALLY? OK – start with this:

KYIV, Ukraine (AP) — As Rudy Giuliani was pushing Ukrainian officials last spring to investigate one of Donald Trump’s main political rivals, a group of individuals with ties to the president and his personal lawyer were also active in the former Soviet republic. Their aims were profit, not politics. This circle of businessmen and Republican donors touted connections to Giuliani and Trump while trying to install new management at the top of Ukraine’s massive state gas company. Their plan was to then steer lucrative contracts to companies controlled by Trump allies, according to two people with knowledge of their plans.