Relevant and even prescient commentary on news, politics and the economy.

The producer vs. consumer sectors of the economy: a comparison

by New Deal democrat

The producer vs. consumer sectors of the economy: a comparison

I have a post up at Seeking Alpha, comparing current conditions on the producer side of the economy vs. the consumer side.

As usual, clicking over and reading should bring you up to date on the “nowcast,” and helps put a $ or two in my pocket.

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Why negative transportation indexes don’t support a recession call

Why negative transportation indexes don’t support a recession call

Every month for at least the past half year there is a spate of bearish economic commentary that relies upon one or both of two metrics: AAR rail carloads and/or the Cass Freight Index.

I have a post up at Seeking Alpha showing why the first measure is not a representative slice of transport as a whole, and the second has a history of being very volatile and with a slew of negative readings in the teeth of continuing expansions.

As usual, clicking on the link and reading helps reward me with a $ or two for my efforts.

Addendum: after I put together and posted the article, I came up with the idea of averaging the Cass Freight Index and the Dept. of Transportation’s Freight Index after adjusting for the former’s volatility (shown below). It gives us an even less noisy overview of the transportation sector, although it still does go negative during slowdowns without there being a recession. In any event, none of the current negative readings are sufficiently below zero to accord with recessionary readings over the indexes’ short history:

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Guns and Commas

Guns and Commas

I am glad that the large pro-gun rights rally in Richmond on Martin Luther King, Jr. Day ended without any violence as had been threatened by some people around the US.  That is nice, but it does not end the unpleasant situation legal situation that has arisen here in Virginia.  As of now 93 jurisdictions, mostly counties, have declared themselves “gun sanctuaries” where any gun control legislation passed by the Virginia government will not be enforced.  The bills currently having received majority support in the Assembly and Senate with support from Governor Northam include requiring uinversal background checks for all gun sales (while allowing intra-family gun transfeers without that), a one-gun per month limit on gun purchases, and an especially controversial “red flag” bill allowing for a person deemed to be a danger to themselves or others to have their guns temporarily taken.

I am located in the Shenandoah Valley where this “gun sanctuary” movement got going, with neighboring county to the south of me, Augusta, getting highlighted in an article about this in The Economist recently.  VA is the only state where cities and counties are distinct and separate from each other.  So I live in the City of Harrisonburg, which is surrounded by Rockingham County, which supported Trump with over 70 percent of the vote.  Rockingham County has joined Augusta in becoming one of these on a unanimous vote of its Board of Supervisors, although I know at least one of those not happy about this. But an angry gun-toting crowd showed up at the meeting.  In Harrisonburg such a crowd showed up at the city council, but left angrily after the council refused to go along with this garbage.

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Thoughts and Feelings on cancer

I have begun to keep a daily journal on my thoughts and feelings in the lead-up to my diagnosis and treatment of cancer, a dedifferentiated lymphosarcoma in the groin area.  Sharing these thoughts was not my first or second impulse until Bill encouraged me to keep notes of my progress and publish  them (from the  point of view on our medical system and the more personal journey in considering my own mortality and experience).

I have a second surgery scheduled for Jan. 27; and then about 4-6 weeks later, I start a course of radiation 5 days a week for 33 treatments.  I am greatful to have adequate insurance through medicare and medex blue cross/blue shield of MA. Dana Farber hospital has a bone cancer and sarcoma treatment center that has experience in my rather uncommon cancer and body location.  My surgery will be at the Brigham and Womans Hospital, which is the big building next to Dana Farber, since DF does not provide those services. There is a close coordination between staff.

My Dec. 2 surgery by a urologist at another excellent regional hospital (Newton-Wellesley) was part of an exploratory and diagnostic survey and included the removal of a ‘growth’ that also needed a biopsy, a needle biopsy being inadequate due to the nature of lipomas.  The first surgery turned into a more extensive 4 hour attempt at ‘clean margins’ which failed.  The Mass General Hospital was consulted on the biopsied samples. Newton Wellesly has close ties to MGH as the cancer was not easily recognized and the consult was needed.

My attention to detail is on purpose as it is a demonstration of the benefit of  living near world class hospitals, privelege of choice and access to them, and not worrying so far about the crushing cost if I had to pay out of pocket. This stands in contrast to what many Americans face in rural parts of the country.

I have notified most of the Bears; but, I want readers to know that Bill and Eric will be on top of things.

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A Stock Market Boom is Not the Basis of Shared Prosperity

(Dan here,,,at lunch the other day a friend asked about the great prices for stocks.  This post by Thomas Palley caught my attention as a well written post on the nuances between stocks and finance and the 80% who do not own many stocks and the economy of losers and winners. )


by Thomas Palley  (re-posted)

A Stock Market Boom is Not the Basis of Shared Prosperity

The US is currently enjoying another stock market boom which, if history is any guide, also stands to end in a bust. In the meantime, the boom is having a politically toxic effect by lending support to Donald Trump and obscuring the case for reversing the neoliberal economic paradigm.

For four decades the US economy has been trapped in a “Groundhog Day” cycle in which policy engineered new stock market booms cover the tracks of previous busts. But though each new boom ameliorates, it does not recuperate the prior damage done to income distribution and shared prosperity. Now, that cycle is in full swing again, clouding understanding of the economic problem and giving voters reason not to rock the boat for fear of losing what little they have.

The Groundhog Day boom-bust cycle links with John Kenneth Galbraith’s observations on the phenomenon of financial fraud via embezzlement, which he termed “the bezzle”:

“To the economist embezzlement is the most interesting of crimes. Alone among the various forms of larceny it has a time parameter. Weeks, months, or years may elapse between the commission of the crime and its discovery. (This is a period, incidentally, when the embezzler has his gain and the man who has been embezzled, oddly enough, feels no loss. There is a net increase in psychic wealth.) At any given time there is an inventory of undiscovered embezzlement in – or more precisely not in – the country’s businesses and banks. This inventory – it should perhaps be called the bezzle – amounts at any moment to many millions of dollars. It also varies in size with the business cycle (Galbraith, J.K., The Great Crash 1929, New York: Houghton Mifflin, 1954, p.152-53).”

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Senate Impeachment Trial Day 3, Opening Arguments from Representative Adam Schiff : January 22, 2019


“In this first portion of day 3 of the Senate impeachment trial of President Trump, Representative Adam Schiff (D-CA), the lead House impeachment manager, began opening arguments by explaining the history of why the framers included impeachment in the Constitution. He then laid out the specifics of the charges against President Trump. Throughout his presentation, Representative Schiff used digital slides, graphics, and videos, including footage from House impeachment inquiry hearings as well as clips of remarks by the president and from White House Acting Chief of Staff Mick Mulvaney during a news conference. ”

Let me know what clips you wish to see. C-SPAN

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Covering Up The Coverup

Covering Up The Coverup

I keep thinking that Fox News cannot get worse, but there seems to be no bottom to how low they can go.  New lows are being exhibited in their coverage of the current Senate impeachment trial.  They are fully involved in covering up the Trump administration coverup of what Trump did regarding the articles of impeachment. Anybody getting their news on this trial from Fox will really have no idea what is going on or what the case is that the House managers of the prosecution are arguing.

I am not following the trial fully, and I am only occasionally popping to Fox News to see what they are doing, but I have seen enough.  The main thing they do, and I am seeing Sean Hannity do more of it after seeing Tucker Carlson also do it, is that they barely show the presentations of the House managers. They cover over the presentations with themselves and their allies talking and characterizing what is being said without showing whar is being said except for scattered cherry picked comments.  For Hannity Adam Schiff is a liar and “crazy.”  He  repeats standard talking points he has presented almost every night for months, but never lets the House managers actually their stuff.  Tucker Carlson is no better.

Last night we had the extreme spectacle that I actually saw live, of while Hakeem Jeffries was speaking Tucker Carlson had a large chryon scrolling under him saying “Dems Push Hysterical Talking Points in Trial.”  As  it is, most observers have noted that whatever  one thinks of the bottom line, the House managers have presented careful arguments supported by lots of evidence.  Nothing “hysterical” about any of it.

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Is Progressive Idealism Self-Defeating?

Like many liberals, I am encouraged by the new energy of progressives and the growing political support for progressive causes.  But I also share the common worry that the idealism of progressives is in danger of becoming self-defeating (see, e.g., Judis and Edsall for two recent discussions).  That’s a problem, because the stakes are high and we don’t have much room for error.

As I see it, progressive idealism today has two manifestations, one political, one economic.  Political idealism manifests itself in a reluctance to acknowledge the scale of the political challenges progressives face, the scorched-earth opposition that awaits us, and the need to find potential allies among the not-so-progressive and to design policies and arguments that can win them over.

On the economic side, idealism makes progressives reluctant to take policy design seriously.  For example, there is a big gap between progressives and economists (including progressive economists) on carbon pricing and other aspects of climate policy.  There is also a gap on fiscal and budgetary policy, and on many other issues.  To some extent, this simply reflects the unavoidable fact that non-economists always find economics counter-intuitive – if they didn’t, we wouldn’t need economists.  But the problem today goes beyond this.  There is a strong tendency to rely on moralistic thinking, to assume that every wrong has an easy remedy and that good intentions can solve any problem.  This goes along with a resistance to thinking about tradeoffs, costs, and market-oriented solutions like carbon pricing, and a tendency to favor command-and-control policies and to ignore fiscal constraints.  I suspect that we have right-wing economists and politicians to thank for this state of affairs, but whatever its cause the rejection of careful economic thinking on the left is real.

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Bloomberg’s Plan for Addressing Economic Inequality: not a wealth tax

Bloomberg’s Plan for Addressing Economic Inequality: not a wealth tax

A bit ago (Jan 8, 2020), the New York Times described Michael Bloomberg’s plan1 for addressing the income and wealth inequality in the United States that has been a constant topic of discussion by Democratic candidates.  Briefly, as with the robber barons of Teddy Roosevelt’s age, the wealth of the global commerce titans and particularly the private equity fund buyers and sellers of companies (and layers off of employees) has exploded over the last four decades in the US, beginning in earnest with Ronald Reagan’s presidency.  Most of the benefits of productivity gains have gone to a very few people at the top, and the bottom 50% of the wealth distribution actually owns a smaller share of the nation’s wealth than 40 years ago.  The top 1% have gained enormously, and the top 0.5% have been even more enriched.  We have ultra multibillionaires like Jeff Bezos who can pay $9 billion to his wife in a divorce settlement and still be the wealthiest man in the world with more than $130 billion in net worth.  He earns about $78.5 billion a year (counting value of his Amazon shares) or more than $6.5 billion a month2 and thus exemplifies this new “gilded age” of ultrawealthy tycoons.  This exists at the same time that the Trump administration proposes work requirements that will eliminate food stamp aid for 700,000 of hungry Americans and, with other initiatives, will take  food stamps from 3.7 million beneficiaries who simply cannot get work that pays well enough to fund a sustainable lifestyle for themselves and their families.3  This will “save” the U.S. about $5.5 billion over five years–less than Bezos ‘earns’ in a month.  This disparity–$5.5 billion to feed 3.5 million hungry Americans versus provide a month’s additional wealth for a person already wallowing in wealth like Jeff Bezos–is why it is clear that the US needs to figure out how to respond to the inequality crisis in order to protect American democracy and ensure Americans have a decent standard of living.

Bloomberg’s plan seems to be a moderate stance like Obama and Biden that attempts to focus on factors other than the wealth gap and the accompanying power gap that wealth provides.  As the NY Times reports, he “frames the economic divide primarily in regional terms–and not along … rich-versus-everyone-else class lines.”1  The Times article notes that his plan is not unlike the charge Obama gave to Joe Biden for the Middle Class Task Force.1\

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