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

The Zhou Enlai Paradox

The Zhou Enlai Paradox

A bit over a half century ago when Henry Kissinger was organizing Richard Nixon’s visit to China, he was largely interacting on this matter with Zhou Enlai (Chou-Enlai in Wade-Giles transliteration). He reported that during their negotiations he asked Zhou what he thought of the French Revolution.  Zhou replied that “It is too soon to tell.” This has since been taken as deep insight by Zhou on a deep historical issue, which indeed is still debated, at least in parts of the West. More recent scholarship has decided that probably rather than being Mr. Deep Historical Genius, Zhou was simply commenting on recent current events, most notably the student-worker uprisings in France in 1968, two-three years prior to their discussions. 


According to the Chaguan column in The Economist, 6/5/21, there is now a film out about the life of Zhou Enlai being shown to children from kindergarten on up, with this produced in anticipation of the centennial of the Chinese Communist Party’s official recognition of its founding on July 1. That Zhou rather than many other possible figures is being put forward to children at this time as a role model is most curious and interesting.


I think what is involved here is the regime’s effort to resolve its ongoing conflict between traditional Chinese Confucianism and the Marxist-Leninist-Maoist heritage of the ruling CCP. Zhou came from a scholar-bureaucrat family, which fell into pieces, with Zhou depicted as the deep student of traditional Confucianism that he was as well as finding works in his grandfather’s library about peasants rising against “feudal aristocracy,” with him moving to become a “great proletarian revolutionary.” 

On trial

Commenter and blogger, Professor Joel Eissenberg, Department of Biochemistry and Molecular Biology, Saint Louis University.

Introduction: “A group of clinicians and researchers is petitioning the FDA to delay fully approval of any COVID-19 vaccines before clinical trials have been completed, calling the notion of approval to stimulate vaccination rates ‘backward logic.’

The group, led by Linda Wastila, BSPharm, MSPH, PhD, professor of pharmaceutical health services research at the University of Maryland School of Pharmacy, includes 27 petitioners, including 16 experts outside the U.S., primarily based in Europe.

The message of our petition is ‘slow down and get the science right. There is no legitimate reason to hurry to grant a license to a coronavirus vaccine.’ We believe the existing evidence base, both pre- and post-authorization, is simply not mature enough at this point.”

Taken from a blog post published in The BMJ.

If the FDA listens to us, they won’t give serious consideration to approving a COVID-19 vaccine until 2022.” 

_____________

I enrolled in the Moderna phase III COVID-19 vaccine trial last August. The trial lasts two years. Initially, it was a double-blind trial, although I knew I was in the vaccine arm 12 h after the booster and unblinded myself with the spike antibody test a month later. In January, all subjects were offered unblinding and the placebos were offered the vaccine.

Meanwhile, the Moderna vaccine has emergency use approval for everyone over age 12, so the number of people vaccinated outside the trial dwarfs the number in the trial.

So the issue is whether the FDA should relent and give full approval to this (and the Pfizer, J&J and AstraZenica) vaccine before the phase III trial is done. Trial participants like me are subject to a much higher degree of surveillance than the rest of the vaccinated public (weekly phone log, monthly wellness calls, six month clinical visits and blood samples) for research purposes. I can understand why the FDA would want the trials to be completed, but what if granting full FDA approval would convince more folks to get vaccinated?

A bunch of physicians just weighed in on the side of withholding full approval pending completion of the trial. As a scientist, I get the importance of data-driven decision making, but the horse is already out of the barn and way down the road on COVID-19 spike protein vaccines. Here’s an article. You decide.

Docs, Scientists Call on FDA to Delay Approval of COVID Vaccines, MedPage Today, June 10, 2021

Weekly Indicators for June 7 – 11 at Seeking Alpha

 – by New Deal democrat

Weekly Indicators for June 7 – 11 at Seeking Alpha

My Weekly Indicators post is up at Seeking Alpha

Despite the spike in consumer prices in May, the long term interest rates in mortgages declined, largely taking back the increase occurring earlier this year. Reporting on the overall Economic picture, a resource-constrained Economy. YoY comparisons are slowly becoming more useful. 

As usual, clicking over and reading will bring you up to the moment, and bring me a penny or two for my efforts.

The spike in inflation is not a concern – yet

The spike in inflation is not a concern – yet

By now you’ve probably already read a fair amount of commentary on yesterday’s consumer inflation report for May. I’m going to cut to the chase as to my take right off the bat:


1. The primary driver of this inflationary spike is supply bottlenecks rather than increased demand.2. The inflationary spike has wiped out any “real” wage gains during the past 10 months.3. The inflationary spike is not a concern – yet. If this continues about 3 more months, it becomes a real concern and I would expect the Fed to act at that point.
To the graphs …


1. Here’s a look at retail sales (blue) and personal consumption expenditures (gold) since the beginning of 2020:


Figure 1

Just as with last year’s stimulus, the effect of this year’s stimulus has petered out after a few months. Demand has stabilized.

Pro and Con of a Virtual Currency

What are we talking about here?

Federal Reserve is taking an initial step towards launching its own virtual currency. The move is disturbing to banks as it gives millions of low-income Americans access to the financial system and fortifies the dollar’s status as the world’s reserve currency.

The rise of private cryptocurrencies is motivating the Fed to start considering a digital dollar to be used alongside the traditional paper currency. The biggest driver of causing the concern was a Facebook – led effort in 2019, to build a global payments network using crypto technology. Facebook’s action demonstrated how the private sector could, theatrically create a massive currency system outside of government control.

Globally, central banks around the world are also exploring the idea of issuing their own digital currencies. Fiat versions of cryptocurrency that operate more like physical cash. They would have some of the same technological benefits as other cryptocurrencies. Digital currencies would compete with banks by giving depositors alternative safe places to put their money.

Voicing the Pro – Senator Elizabeth Warren

“Legitimate digital public money could help drive out bogus digital private money, while improving financial inclusion, efficiency, and the safety of our financial system — if that digital public money is well-designed and efficiently executed,”

Fed explores ‘once in a century’ bid to remake the U.S. dollar, Politico, Victoria Guida, June 2021

As said at a hearing on Wednesday, which Senator Warren convened as chair of the Senate Banking Committee’s economic policy subcommittee.

Voicing the Con – American Bankers Association in a statement to lawmakers

JOLTS

I am wondering about Job Openings and Labor Turnover Survey (JOLTS) data. The reason is that I am interested in the extremely record high job vacancy rate of 6%, the moderately high unemployment rate of 5.8% and the moderately high hiring rate of 4.2% of employment in April (last month of data available). There are reports of firms having trouble finding workers, including the results of systematic surveys. Republican governors have decided to send money back to the Federal Government rather than pay the additional $300 per week unemployment benefits, because they think the over-generous benefits are causing the unemployed to turn down jobs they should take.

Others insist that the problem is childcare with unemployed parents staying home, because only about half of schools had restarted in person classes, or fear of Covid 19 keeping people home until they are vaccinated (or my favorite theory: those who are half vaccinated not wanting to combine the joys of a new job and a booster shot).

To me the question is whether there is something unusual a huge vacancy rate and a moderate hiring rate. So I went to FRED and looked at some graphs, which I feel like sharing.

Consumer prices up 5.0%, the largest annual increase since 2008

CPI Rose 0.6% in May on Higher Prices for New and Used Vehicles, Clothing, and Airfares; Now Up 5% Year over Year, MarketWatch666, Commenter RJS

The consumer price index rose 0.6% in May, as higher prices for new and used vehicles, clothing, airfares, car and truck rentals, and utilities were only slightly offset by lower prices for gasoline and for health insurance…the Consumer Price Index Summary from the Bureau of Labor Statistics indicated that seasonally adjusted prices averaged 0.6% higher in May, after rising by 0.8% in April. 0.6% in March, 0.4% in February, 0.3% in January, 0.2% in December, 0.2% in November, 0.1% in October, 0.2% in September, 0.4% in August, by 0.5% in July and by 0.5% in June, but after falling by 0.1% last May….the unadjusted CPI-U index, which was set with prices of the 1982 to 1984 period equal to 100, rose from 267.054 in April to 269.195 in May, which left it statistically 4.9927% higher than the 256.394 index reading of May of last year, which is reported as a 5.0% year over year increase, up from the 4.2% year over year increase reported a month ago, and the largest annual increase since 2008…with lower prices for gasoline holding back the overall index increase, seasonally adjusted core prices, which exclude food and energy, were up by 0.7% for the month, as the unadjusted core price index rose from 273.968 to 275.893, which left the core index 3.7976% ahead of its year ago reading of 265.799, which is reported as a 3.8% year over year increase, up from the 3.0% year over year core price increase that was reported for March, and the largest year over year core price index increase since May 1992 . . .

When The Truth Overtakes Politics . . .

Sharing the truth while speaking to a 100% white and 70% male GOP Pennsylvania legislature body and telling them what is more important. PA Representative Brian Sims takes on the Republican majority in the state House.

PA Rep. Brian Sims: Your boos mean nothing to me as I’ve heard for what you cheer. We are a legislature that has met more times to remove mask mandates, strip executive emergency powers, and overturn free and fair elections than we have to make strategic investments in Pennsylvania’s women, children, and families.

When the truth hurts, you shut down the microphone. Crooks and Liars, Susie Madrak

Coronavirus dashboard for June 9: the high correlation between partisan lean, vaccination rates, and new cases

Coronavirus dashboard for June 9: the high correlation between partisan lean, vaccination rates, and new cases

No big economic news today, so I wanted to follow up on Monday’s post, in which I described the correlation between the number of new COVID cases and States in which there were high vaccination rates vs. ones with low rates. 
The both sad and maddening point is, vaccination rates correlate strongly with partisan lean, and so do the present level of COVID cases.


First, here is a graph of vaccination rates by partisan lean (via the NYT):

Global Polls

Global Polls

OK, so I think the nations surveyed are biased, but I have now seen two polls with roughly similar polls.  

So Pew, with a larger base and solid credibility has that among foreign nations polls in their nations data set showed an improvement in favorability rating for the POTUS have gone from 17% to 75% give or take a few percents. OTOH, the attitude towards the US among whichever nations Pew polled had the attitude towards the US only rising from 34% to 62%.  Most commentary has this as foreigners now fear that either Trump himself or some clone of his might well become POTUs in the not too far distant future.

In the meantime, I wish the best to the current POTUS on his current trip abroad.

Barkley Rosser