The Hippie Dog Whistle Work Ethic Silent-Majority Counter-Offensive

Following up on my last post, I was searching for coverage of Ronald Reagan’s infamous “strapping young buck” comment from 1976 and found this wonderful commentary by Ian Haney López on Bill Moyers’s show.

In his book, Dog Whistle Politics, López mentions the “work ethic” angle several times.

The narratives promoted alike by the ethnic turn and racial-demagogues—a lack of work ethic, a preference for welfare, a propensity toward crime, or their opposites— reinvigorated racial stereotypes, giving them renewed life in explaining why minorities lagged behind whites…. they became the staples of political discourse, repeated ad nauseam by politicians, think tanks, and media.

 …

In accord with the stories spun by dog whistle politicians, many whites have come to believe that they prosper because they possess the values, orientations, and work ethic needed by the self-making individual in a capitalist society. In contrast, they have come to suppose that nonwhites, lacking these attributes, slip to the bottom, handicapped by their inferior cultures and pushed down by the market’s invisible hand, where they remain, beyond the responsibility, or even ability, of government to help. 

…

Many older whites nostalgically pine for the days when a solid work ethic meant a good job, a decent home, a new car every few years, an affordable college education for the kids, and a nice vacation by the lake or seashore every August.

Dog whistle politics (as opposed to overt racist rhetoric) got its start with George Wallace’s 1968 presidential campaign. Wallace addressed his speeches to the proverbial hard-working, tax-paying, church-going, law-abiding, gun-toting patriotic citizen:

How To Estimate “Rational” Market Expectations Of Future Inflation

 I am not a fan of rational expectations, hence the quotation marks around “rational” in the subject head here.  Nevertheless I have become aware thanks to some posts at Econbrowser by the intrepid Menzie Chinn that the usual way this has been measured and reported by most people needs to be modified, with the understanding of this only developing quite recently.  This came from a paper in 2018 by some Fed Board of Governors economists: S. D’Amico, D.H. Kim, and M. Wei, (although Menzie refers to it as the “DKKW model”), “Tips from TIPS: The Informational Content of Treasury Inflation-Protected Inflation Securities,” Journal of Financial and Quantitative Analysis, 2018, 53(1), 395-436. 

For a given time-horizon, it has been conventional for those estimating such a “rational” market forecast of expected inflation to take the appropriate Treasury security nominal yield of that time horizon (say 5 years) and simply subtract from it the yield on the same time horizon TIPS, which covers security holders for inflation.  So it has long looked like this difference is a pretty good estimate of this market expectation of inflation, given that TIPS covers for it while the same time horizon Treasury security does not.

Coronavirus dashboard for April 5: the problematic cases of Chile . . . and Michigan

As you probably already know, the news on the vaccination front continues to be good, as the US is now administering on average over 3 million doses a day – and still climbing. At this rate of improvement, every adult in the US could be vaccinated by Memorial Day at the end of next month.

One bit of not so good news is that the percentage of seniors who have received at least one dose has almost stalled out at roughly 75%. For example, yesterday that percentage improved by exactly 0.1%. If 1/4 of even the most vulnerable population simply refuses to be vaccinated, we are not going to achieve herd immunity.

Further, while in the past few weeks I have been highlighting the success stories in vaccination, particularly in Israel and the UK, there are a number of counter-examples that I want to examine today.

First of all, Chile. Chile has administered even more doses per capita than the US, equivalent to about 55% of its population vs. 50% for the US. And yet both cases, and with about a 4-week delay, deaths, have both risen about 50% from the date that vaccinations started to be administered:

I bookmarked a prediction about the coronavirus by supply-sider Scott Grannis one year ago …

 As I mention from time to time, I read a number of economic observers with whose opinions I usually strongly disagree, partly because it is good to consider other points of view, and partly because some compile excellent and interesting data, even if I disagree with their conclusions about what the data means.

The “Calafia Beach Pundit,” Scott Grannis, is one of those writers. His chart work is frequently compelling and often challenging. But, when it comes to the ideologically inspired response to COVID-19, he has been out of his mind.

So almost exactly one year ago, on March 27, 2020, I bookmarked one of his observations and forecasts, because I expected that the truth would be very different than he thought: 

American plutocracy in two simple graphs; plus, when will wage growth bottom?

The JOLTS report for February comes out later this morning; I may post on it later or tomorrow.

In the meantime, here are updates on several graphs I used to run during the last expansion in order to examine how shared out (or not) economic growth was.

First, here is a graph comparing corporate profits adjusted for inflation, and total nonsupervisory wages, also adjusted for inflation. Both are also adjusted for population growth, so that we can see how much each has grown (or not) per person:

Blockbuster March jobs report, but still a long way to go

 –HEADLINES:

• +916,000 million jobs added. The alternate, and more volatile measure in the household report indicated a gain of 609,000 jobs, which factors into the unemployment and underemployment rates below.
• U3 unemployment rate declined 0.2% to 6.0%, compared with the January 2020 low of 3.5%, and the April 2020 high of 14.8%.
• U6 underemployment rate declined 0.4 to 10.7%, compared with the January 2020 low of 6.9%, and the April 2020 high of 22.9%
• Those on temporary layoff decreased -203,000 to 2,026,000.
• Permanent job losers decreased -65,000 to 3,432,000.
• January was revised upward by 67,000, and February was also revised upward by 89,000, for a net gain of 156,000 jobs compared with previous reports.

 by New Deal democrat

Weekly Indicators for March 29 – April 2 at Seeking Alpha

My Weekly Indicators post is up at Seeking Alpha.

One fairly unique service I think I provide is not just forecasting the next few months, but into the next year as well. So in the second half of last year I was writing about how all of the indicators were lining up for strong growth in 2021 if the pandemic could be brought under control.

Now I am beginning to look at 2022, and what I see are increasing signs of jumps in the prices of important middle class commodities and assets, mainly houses and gasoline. Which means, we could see the old-fashioned type of end of an economic boom.

As usual, clicking over and reading will not just bring you right up to the moment in the nowcast and the forecasts, but also reward me a little for bringing that information to you.

Commenter RJS at MarketWatch 666

Construction Spending Fell 0.8% in February after January & December Figures Were Revised Higher

The Census Bureau’s report on February construction spending (pdf) reported that “Construction spending during February 2021 was estimated at a seasonally adjusted annual rate of $1,516.9 billion, 0.8 percent (±0.7 percent) below the revised January estimate of $1,529.0 billion. The February figure is 5.3 percent (±1.0 percent) above the February 2020 estimate of $1,441.1 billion. During the first two months of this year, construction spending amounted to $213.2 billion, 4.9 percent (±1.0 percent) above the $203.2 billion for the same period in 2020. “…the January annualized spending estimate was revised 0.5% higher, from the $1,521.5 billion reported a month ago to $1,529.0 billion, while December’s construction spending was revised from $1,496.5 billion to $1,510.4 billion annually, which together meant that the January construction spending increase was revised down from +1.7% to +1.2% . . . the $13.9 billion upward revision to December’s annualized spending would mean we’ll see a upward revision of about 12 basis points to 4th quarter GDP when the annual revisions are released later this summer . . .

A further breakdown of the different subsets of construction spending are provided in a Census summary, which precedes the detailed spreadsheets below:

by New Deal democrat

Housing and the economy, now and in 2022 – recession caution?

My long-form review and forecast of the housing market and its potential effect on the 2022 economy is up at Seeking Alpha.

If the market stays like 2014 when interest rates went up, no biggie. But if it’s more like the 1950s, we have a problem.

As usual, clicking over and reading should be informative for you, and it rewards me a little bit for my efforts.

New jobless claims rise slightly, expect a big payrolls gain tomorrow

New jobless claims are likely to the most important weekly economic data for the next 3 to 6 months. They are going to tell us whether, as the number of those vaccinated continues to increase, there will be a veritable surge in renewed commercial and social activities and attendant consumer spending, leading in turn to a strong rebound in monthly employment gains.Three weeks ago I set a few objective targets: I am looking for new claims to be under 500,000 by Memorial Day, and below 400,000 by Labor Day. 
This week initial jobless claims increased from last week’s pandemic lows. On a unadjusted basis, new jobless claims rose by 63,282 to 714,433. Seasonally adjusted claims rose by 61,000 from last week’s downwardly revised 658,000 to 719,000. The 4 week average of claims declined by 10,500 to 719,000, a new pandemic low.