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Jones v USPS September 21, 2020

Steve Hutkins of Save The Post Office updates us on the “Jones vs USPS” suit filed in United States District Court for the Southern District of New York. He has been live-blogging the events from Save The Post Office blog.

September 21, 2020

Big news today: The plaintiffs have won a second suit against the Postal Service. The judge in Jones v USPS, Victor Morrero of the SDNY, has ordered a preliminary injunction preventing the Postal Service from enacting changes that endanger voting by mail. The order is here. It’s the second such order for a preliminary injunction, following the order in Washington v USPS issued on Sept. 17. The Associated Press has the first article about the Jones decision, here, and CNN reports here.

The Jones order directs the Postal Service to “treat all Election Mail as First-Class Mail or Priority Mail Express” and to provide the court a cost estimate for doing so;  to “pre-approve all overtime that has been or will be requested for the time period beginning October 26, 2020 and continuing through November 6, 2020”; and “submit to the Court a list of steps necessary to restore First-Class Mail and Marketing Mail on-time delivery scores to the highest score each respective class of mail has received in 2020.”

The Jones order also directs the Postal Service to submit a proposed memorandum to all USPS managerial staff (the “Guidance Memorandum”) that explains all USPS policy requirements concerning the treatment of Election Mail and that clarifies late and extra trips are not banned, do not require pre-approval, and will not result in disciplinary action.

Judge Morrero has also ordered the Postal Service to provide not only the same weekly updates on service performance that the USPS is providing Congress but also more detailed reports that disaggregate 2-day and 3-5 day service reports and include variance data showing how many days late the mail is.

These are the same detailed reports that, at my request, the Postal Regulatory Commission asked the Postal Service to provide. The Postal Service said that it would take 56 weeks to prepare such reports, and it failed to submit them by the deadline, Sept. 18. It will be interesting to see how the Commission responds to this failure and what the Postal Service does in response to Judge Morrero’s order to produce these reports.

As a side note, we’re happy to report that Mark Jamison, regular contributor to savethepostoffice.com, submitted oral and written testimony in Jones, and his comments are cited several times in Judge Morrero’s order.

In Richardson, the plaintiffs have filed a Reply in Further Support of Plaintiffs’ Motion for a Preliminary Injunction. The Reply frequently cites the order for a preliminary injunction in Washington, and concludes with a request for a “special master”: “The grave constitutional harm that will result from USPS’s failure to implement any changes ordered, along with the extremely short time in which USPS must implement those changes, requires supervision to ensure that it is done. Therefore, Plaintiffs request that the Court exercise its discretion to appoint a master to assist in the implementation of the Court’s orders.”

In Vote Forward, defendants DeJoy and USPS have submitted a Response to Plaintiffs’ Motion for Expedited Discovery, arguing that “expedited discovery would impose an undue burden on USPS as its key personnel are consumed with assessing and coordinating the agency’s compliance with the injunction” in Washington. The defendants also argue that there is already a “wealth of available, relevant evidence” from the other cases so that additional expedited discovery would be duplicative and burdensome.

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2019: the year that the late economic expansion finally bore fruit for nearly all of society

2019: the year that the late economic expansion finally bore fruit for nearly all of society

Yesterday  (Sept. 16) the Census Bureau released its 2019 information concerning median household income and poverty rates. Unfortunately, this data is always released in September of the following year, so is already somewhat stale. Just for example, since the information is collected between February and April of the following year, we may not get complete information about the impact of the coronavirus until two years from now!

Also, since the information is across *all* households, not just wage- or salary-earning households, but includes, for example, retirees as well as the unemployed, it should not be used to infer information about wages.

That being said, in 2019 the economy was doing very well, and both un- and under-employment were reaching repeated new lows, and inflation remained subdued, real median household income rose significantly – up 6.8% over 2018:

As is obvious from the graph, this was a new all-time high.

 

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Real retail sales gains join industrial production in sharp deceleration

Real retail sales gains join industrial production in sharp deceleration

Two days ago we saw that gains in industrial production had decelerated sharply in August. This morning we saw the same thing with real retail sales, one of my favorite indicators.

Nominal retail sales were up +0.6% in August. Meanwhile, July’s reading was revised downward by -0.3%. Since in July and August consumer inflation was up +0.6% and +0.4%, respectively, that means revised *real* retail sales rose +0.3% in July and +0.2% in August. This means that the net result over two months was lower than previously thought for the month of July alone.

Nevertheless real retails sales did establish a new record high, above any reading from before the pandemic:

Historically consumption has led employment (/2) by several months (albeit with lots of noise), and has an even closer relationship with aggregate hours (all shown YoY below):

 

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Industrial production improves in August, but with sharp deceleration

Industrial production improves in August, but with sharp deceleration

If the jobs report is the Queen of Coincident Indicators, industrial production is the King. It, more than any other metric, is found at the turning points where recessions both begin and end.

This morning’s report of industrial production for August shows that the recovery from the bottom of the coronavirus recession has come close to stalling out.

Overall industrial production grew by 0.4%, while July was revised higher by 0.5%. Manufacturing production grew just under 1.0%.  July was likewise revised higher by 0.6%. Here are the overall totals:

The good news is that manufacturing production has gained back almost 70% of its decline from March. Overall production has gained a little over half of its decline.

 

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To Do I, II, & III

The COVID-19 Pandemic, the inadequate response thereto, and the incompetency of the Trump Presidency in general, combined, have exposed our nation’s weaknesses and failings to an extent unknown since at least the Great Depression. This is likely a do or die moment for America. Recovery will be difficult. Improbable unless we are careful in our choice of goals and daring in our efforts to achieve them. The margins for error do not allow for dawdling. Attempting to just return to a time before Trump and The Pandemic would be disastrous. A time like this should also be seen as a time of opportunity.

First, we must rid ourselves of denominational economics such as Capitalism, Socialism, Hayekism, Free Marketism, … These, but ideologies, dogmas, that some would impose on economics, on the rest of us; have done the Nation great harm. They are, at their very best, reasonings of a time past. As likely to be the answer to today’s problems as Adam Smith is to rise from his grave.

As a first step toward becoming again competitive in today’s world; we must stop blindly paying twice as much for inferior healthcare, internet, and cellphone service,… as is being paid in other developed nations; and while we are at it, we need to solve our homeless problem. These are all essential services that should be provided to all. In the grand competition of things; we’re losing. Have been for a while. Were before the pandemic. Ideology is a luxury we can no longer afford.

Let’s pay for these things that need to be done, and help with our wealth distribution problem, too, by taxing the piss out of the too rich and too profitable. Apple, Google, Amazon, Facebook, Microsoft, Sheldon, Warren, …; fun and games are over guys, time for you to pay up.

Let’s pay for these things that need to be done by cutting the ‘Defense’ Budget in half. Halve the number of Generals, the number of Admirals, the number of Aircraft Carriers, the number of Missiles, …; and full-stop attacking other nations. Half of $720+Billion is $360+Billion; $360+Billion is aplenty for Defense, nothing for Attack, and about right for expanding Medicare to Medicare For All. Ike was right about that and Harry was right about health care.

I. Internet Access and Cellular Networks

All those fireman who died because of poor communication on 9/11/2001 should have taught us the need for an ubiquitous cellular network. Mobile radio networks separate cellular networks should have shown us the need for one network. A police car with a half dozen radio antennas on the roof is ridiculous.

So, too, the fact that our cell phone uses a cellular network, our computers use a cable based internet service, and that we need a WIFI router to use our laptops. What’s now the cellular network should be the WIFI router and these routers should be all over our homes, all over every floor in every building, everywhere on our streets, and all across and over rural America. Ubiquitous. Today, thousands and thousands of teachers across America are trying to remotely teach kids, many of whom have very limited internet access, over an internet system that is not reliable. When the fires struck Santa Rosa, the cell towers went down. The internet w/ phones must work at all times during normal times and during times of emergency; needs to be bullet proof. This new inclusive internet is too critical to be trusted to the ‘Market’. Cell phone and Internet should be one and that one should be regulated as a public utility; a service, as a service application, and, as always, the application dictates. Not the ‘Market’.

As a Post Office service, maybe?

In order to fully utilize our Nation’s productivity, better fulfill our personal lives, and assist in times of emergency, the Internet needs be ubiquitous and bulletproof. We should be able to access the internet from our backyards, on a hike, in the mountains, in transit, …; from anywhere we are or can be. It was a big mistake letting cable companies have the internet and the cell phone companies the phone towers. Let the cable companies have Cable TV. Internet and cell phone transmission should be one and the same; should be a Public Utility. It isn’t about ideology, it’s about how it should be; what should be. Half-arsed won’t get it. If we continue to stick with ideology and dogma, China, Japan, and the EU will continue to eat our lunch.

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Au Revoir, Robert J. Samuelson

Au Revoir, Robert J. Samuelson

 For quite a few years not so long ago I was regularly posting here variations on “Today is Monday, so on the WaPo editorial page Robert J. (not related to Paul A.)* Samuelson is calling yet again for Social Security benefits to be cut,” and he did indeed do that very frequently over a long time.  However, today was his final column for the Washington Post, so we shall no longer have RJS to kick around, sob! It was titled, “Goodbye, readers, and good luck – you’ll need it.”  There is also a letter to the editor from former publisher, Donald Graham, praising RJS and reminiscing knowing him as a freshman in 1962 at Harvard.  Graham noted RJS eschewed a nominal non-partisan position and studied and thought hard about his columns, even as Graham himself disagrees with some of RJS’s long-held positions, noting in particular RJS’s longstanding support for privatizing Amtrak.  He also noted, as RJS himself stated in this final column, he is not an economist; he has merely reported on economics for a long time, starting at the Post in 1969 and columnizing on economics since as far back as 1977 in various venues.

I also disagree with RJS on privatizing Amtrak, although this is not a topic he has written much in recent years, although he did mention it in this final column.  I would argue that he has ignored that governments fund highways, which gives vehicles a competitive edge on trains, which governments do not provide or support.  So I certainly see a case for government aid to railroads, with Amtrak certainly one of the more heavily used lines in the nation.

I should note what RJS spent most of his last column writing about. He argues the biggest story of his career has been “the rise and fall of macroeconomics.”  But then he turned to economists. Much of it is on the money.  He says some nice things about us in general: “With some exceptions most are intelligent, informed, engaged and decent.” But then we have been wrong about a lot of things, such as deciding at various points that recessions will never happen again, although RJS admits that he did not recognize the housing bubble or foresee the Great Recession (some of us here or associated with us here did, but RJS largely ignored us). He also accurately notes that many economists take stronger positions than they might otherwise out of a desire for power and position in this or that administration, and also claim to have more influence on the economy than we do.  And then he notes the unwillingness of most to change their minds after a certain point, something he himself exhibited on some of his more strongly held views.

 

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The Bahrain-Israel Mutual Recognition

The Bahrain-Israel Mutual Recognition

 This freshly announced mutual recognition follows the one between the UAE and Israel, which set a new pattern, with Bahrain and possibly others (Oman?) predicted to follow.  I am not surprised it was Bahrain that was next, although it may prove to be the only one.  There are several reasons why it was most likely to be next, and why we might not see Oman join in, although that cannot be ruled out.

I see three reasons why Bahrain was most likely to be next, although there are really two fundamental ones with the third arising from those.  The most fundamental one is that of the 6 members of the Gulf Cooperation Council (GCC), now largely in shatters due to the sanctions on one of them (Qatar) by several others (Saudi Arabia (KSA), UAE, and Bahrain), is the only one where a Sunni minority is ruling over a Shia majority, with the Sunni-Shia conflict a central part of the conflict with Iran that many of them have, with Iran run by Shia, of course, where they are a majority.  The Shia of Bahrain have been restive and rose up against King Hamad during the Arab Spring that began in 2011, only to be violently put down. But, unsurprisingly, the king and those around him are especially worried about the Shia and have strongly supported the anti-Iran coalition, which includes Israel. It is this alliance that is at the heart of the new round of recognitions, with UAE leader, Prince Zayed, arguably the leader of the anti-Iran group in the GCC, along with KSA Crown Prince, MbS, although due to opposition of the Saudi religious leaders who are concerned about the Palestinians, MbS himself is not seen as likely to follow UAE and Bahrain to recognize Israel, although there is clearly a de facto alliance against Iran between them.

 

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Consumer inflation continues to accelerate YoY, but so far no big problem

Consumer inflation continues to accelerate YoY, but so far no big problem

 

The consumer price index for August was reported up +0.4% this morning. This is the third straight big increase. Below I show this plus the more stable consumer prices minus gas (red):

Here’s what the monthly changes look like over the past 10 years:

 

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Improvement in initial and continuing claims stalls out

Improvement in initial and continuing claims stalls out

This morning’s jobless claims report shows that the trend of “less worse” news has at least temporarily ended, at a level of about 150,000 higher than the worst weekly levels of the Great Recession.

On a non-seasonally adjusted basis, new jobless claims rose for the second week in a row, by 20,140 to 857,148. After seasonal adjustment (which is far less important than usual at this time), claims were unchanged at 884,000, tied for their “best” reading since the pandemic began. The 4-week moving average declined by 21,750 to a new pandemic low of 970,750:

Continuing claims, on both an unadjusted and seasonally adjusted basis rose from their pandemic lows of last week, by 54,472 to 13,197,059, and by 93,000 to 13,385,000 respectively:

 

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Tone Deaf

Working-class Black and Latino Americans, more likely to be paid lower wages, less likely to own significant assets; feel that they are being deprived of a fair share; see this as a consequence of white privilege. Meanwhile, white working-class American’s see themselves as less than privileged, barely hanging on; feel that such demands by Blacks and Latinos amount to a threat to their meager share, their livelihood. Neither group is the other group’s problem, the two groups have a common problem; America’s wealth and income distribution problem.

In a prosperous nation with more than 800 billionaires, no one should have to work for low wages, work multiple jobs, in order to survive. Yet, not enough is coming down to the working class for sharing. Robbing Peter to pay Paul is not the answer. It is because of America’s unfair income distribution that the two groups are being pitted against one another in their struggle to eke out a living. More needs to come down to the working class in toto. Less needs to go up to the already wealthy.

While the Democratic Party seeks to attract the vote of working-class Blacks and Latinos, Republicans have made significant progress in attracting votes from the white working-class; thus splitting, thereby negating, the working-class vote. Choosing sides is not the answer. These are the same group with an artificial distinction being made on the basis of race and ethnicity. There is only one side here – that’s the side of the working class; the side of a majority of Americans.

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