The Biden admin has not yet made moves to undo elements of Trump’s trade war, and some parts of it may not get undone, perhaps especially some directed at China.  But at least one move towards normalization with the rest of the world has just happened as the Biden admin has agreed to let the individual nominated to lead the World Trade Organization (WTO) take office. This is Ngosi Okunjo-Iweala, not only a woman, but a former Finance Minister from Nigeria.  She had previously been blocked by the Trump admin, with Trade rep Robert Lighthizer claiming she had “no experience in trade relatrions at all.” The Trumpers supported a former South Korean trade minister who negotiated a trade agreement with the US in 2018, but others did not do so.  The Trump admin had also blocked appointments of new judges to adjudicate trade disputes at the WTO, a more general move to essentially declare the WTO to be useless and no good in pursuit of an “America First” policy.

Trade is great; trade is good.

Since at least 2000 BCE, since the first inter-tribal (what was to become international) trading of horses, gold, silver, silk, foods, oils, wines, knowledge, technologies, …; trade between peoples has enrichened the lives of humans everywhere. Traditionally, trade was the great cross fertilizer. Without trade, our world would be a lot more like it was 4000 years ago than what it is like today. But first, before there was trade, there had to be enough self-sufficiency (self-sufficiency being relative to a given civilization at a given time) amongst the peoples, the tribes, trading for them to feel that they could afford to part with a goat, a horse, a bit of gold, … in exchange for something different they would more like to have.

Not all trade is great, or good. Certainly not the selling of weapons to warring nations. The exploitation of less developed people by more advanced people clearly wasn’t good for the less developed people. The trans-Atlantic slave trade was itself fueled by trade; trade that was intended to enhance the wealth of the then first world England, Portugal, Spain, Holland, and France. Did so indeed; at horrendous expense to the Africans enslaved and traded, and to the indigenous peoples of the Americas, Africa, and Southeast Asia. The enslaved Africans produced the tobacco, rice, cotton, and sugar that made their enslavers, and these enslavers’ international trading partners, wealthy. It was this pursuit of wealth that fueled the slave trade. Trade from which they, the enslaved, got but hardship and death. The pursuit of land on which to grow these crops for trade fueled the displacement and murder of indigenous people throughout the Americas, Africa, and Southeast Asia. The slave trade was a very unbalanced equation; the abducted were enslaved. This misappropriation of the natives’ land was theft; not trade. What is happening today, in this the 21^st century, on palm oil plantations in Southeast Asia, is little different.

That would be the nuclear football, the one that a President of the United States can use to destroy all human life on the planet with by pushing some buttons.  It turns out there is a second one, a backup, one that is kept near the backup President. That would be the Vice President.

So CNN has put out a report that Tyler Cowen has picked up on and put as one of his daily news stories on Marginal Revolution, although barely commented on and not getting much attention on most media. The story in fact sort of does not quite play up how serious it is.  It focused on how people at DOD did not know how serious the situation was, without in fact playing up how serious it was.

The problem is that while there has been a lot of attention paid to how former President Trump continued to tweet negatively about his own VP, Mike Pence, even after hearing that Pence had been evacuated from the Senate chambers with a mob having entered the Capitol.  Trump’s concern was how Pence had let him down by not engaging in an unconstitutional act to try not to recognize the certified state electoral college vote results. This tweet was read to the crowd outside, and the mob chanted over and over “Hang Mike Pence!”  We have now all seen this.

But probably the most dangerous part of this whole episode, I mean even probably worse than that Trump might have overturned the election and turned the US into a lifetime dictatorship run by him, is that when the mob was within 100 feet of Pence, the backup nuclear football was with him, carried by a Secret Service agent.

Now, if the mob had been a bit faster and caught Pence, certainly that Secret Service agent would have resisted vigorously, probably to the extent of giving up his life. But if the mob had succeeded in obtaining that nuclear football, well, maybe there are limits on the ability of a random person getting that object that keep them from destroying all human life on this planet.  But even short of that, there is no doubt that one of these people could have brought about very serious trouble.  This story needs more reporting, not how mean Trump was not to stand up for his VP who was following the law to certify the electoral college votes that would bring about the end of Trujmp’s presidency.

Barkley Rosser

We Need a Plan for Militias

 A social trend can lie dormant for years, gradually expand and then suddenly explode as if following a hidden exponential growth curve.  Revolutions work this way, and so do religious cults.  Most of the time the curve is nipped in its early phase, but not always.  It isn’t a good idea to assume a fringe movement will always remain fringe.

This brings us to the topic of right-wing militias, people who carry assault rifles, study military tactics, go target-shooting in the woods and live in an end-times epistemological bubble.  They’ve been around for decades, occasionally getting in the news, and gradually getting more numerous and influential.  Read this recent report in the New York Times, which documents the mainstreaming of armed freelancers aligned with the Michigan Republican Party, and ask yourself whether we are approaching an inflection point.

Jobless claims: huge upward revisions for the second week in a row

The story this week is the repeated massive upward revisions to last week’s numbers

This week, on a unadjusted basis, new jobless claims declined by 5,702 to 862,351. Seasonally adjusted claims increased by 13,000 to 861,000 (meaning last week’s original number of 793,000 was revised higher by almost 50,000! – the 2nd week in a row for huge upward revisions). The 4 week moving average declined by 3,500 to 833,250. 

Here is the close up since the end of July (these numbers were in the range of 5 to 7 million at their worst in early April): 

Blockbuster January retail sales presage gains in jobs

(Dan here…late posting)

[NOTE: I’ll report separately on industrial production later this morning. Real retail sales is my bellwether for the health of the consumer. And after 3 months of declines, we got a huge upturn in January. Before adjusting for inflation, retail sales jumped 5.3% – not annually, 5.3% in one month! After adjusting for inflation, sales were up 5.0%, to a new all-time high:

This is simply very good news and adds to the evidence. Once the pandemic is under control, the economy is going to accelerate.

Angrybearblog December 22,2020 “Eyeballing, the first shot looks 80-90% effective.” (Moderna) and “my guess is that the first shot was about 90% effective over this period.” (Pfizer).

Angrybearblog December 24,2020

New England Journal of Medicine February 17 2021

We used documents submitted to the Food and Drug Administration² to derive the vaccine efficacy beginning from 2 weeks after the first dose to before the second dose (Table 1). Even before the second dose, BNT162b2 was highly efficacious, with a vaccine efficacy of 92.6%, a finding similar to the first-dose efficacy of 92.1% reported for the mRNA-1273 vaccine (Moderna).³

With such a highly protective first dose, the benefits derived from a scarce supply of vaccine could be maximized by deferring second doses until all priority group members are offered at least one dose.

You read it here first

Industrial production continues strong growth

If real retail sales (reported on in the prior post) is the best proxy for the health of the consumer, Industrial production, the King of Coincident Indicators, is the same for production. 

And the news there was also very good. Overall production rose 0.9% in December, and the manufacturing component rose 1.0%. As a result, overall production is only -1.9% below its level just before the pandemic hit last February, while manufacturing is only down -0.8% since then:

At the current pace, manufacturing should be *up* YoY in one month, and overall production in two.

Manufacturing, along with housing, has been the best sector of the economy since the bottom of the pandemic recession last April. It continues on a very good trajectory now. As I mentioned earlier with retail sales, this is more evidence of an economy primed to soar once the pandemic is under control.

Something is funky with our comment function. They are showing up at the WP site, just not showing here today. Though, sometimes you might see them, then not. So, leave a comment. We’ll get it happening.

By now, you are aware that the problem Texas is having is because they failed to build their system to withstand cold/winter weather. That is the mechanical reason for their problem. Of course, this leads many to assume that as soon as it warms up, the power will be back on and life is good again.

Unfortunately, that does not account for all the water damage that has happened and will happen as broken plumbing thaws. It won’t just be people’s homes. I’m confident there will be news about failures within the municipal systems and of course, failures with the plumbing in the power plants including those that pump the natural gas and cool the nuclear generators. Rebuilding will take months or more.

However, the issue of failure to build the system for the environment is not the real tragedy here. The true horror is the economic model sold to the citizens. Free Market. Yup, that all powerful, God like, invisible hand. Oh…and FREEDOM! Because when you read ex-governor Perry’s statement about Texans being willing to suck it up for 3 more days, you can only assume this system was built for the great Texas secession. Sacrifice for your FREEDOM! Endure that cold! Any day now, it’s going to happen.

It seems that in truth, the electric system is functioning exactly as it was designed to function. High demand. Low supply. High prices to discourage demand. What’s your problem?

I give you: William W. Hogan. Harvard professor of global energy policy at the Kennedy School. “…the architect of the strategy that was adopted by the state seven years ago.”

“…acknowledged that while many Texans have struggled this week without heat and electricity, the state’s energy market has functioned as it was designed.

That design relies on basic economics: When electricity demand increases, so too does the price for power. The higher prices force consumers to reduce energy use to prevent cascading failures of power plants that could leave the entire state in the dark, while encouraging power plants to generate more electricity.

“It’s not convenient,” Professor Hogan said. “It’s not nice. It’s necessary.”