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

The Hurricane/Picture of Dorian Gray: A Perfect Moral Storm in Three Texts

The Hurricane/Picture of Dorian Gray: A Perfect Moral Storm in Three Texts

Andreas Malm, Fossil Capital:

The temporal aspect is particularly striking,’ writes philosopher Stephen Gardiner, who has done perhaps more than anyone to foreground it, in A Perfect Moral Storm: The Ethical Tragedy of Climate Change: it catches us in a bind. Given that global warming is ‘seriously backloaded’ (every moment experiencing a higher temperature posted from the past) and ‘substantially deferred’ (the cumulative effects of current emissions arriving in the future), a warped ethical structure arises. The person who harms others by burning fossil fuels cannot even potentially encounter his victims, because they do not yet exist. Living in the here and now, he reaps all the benefits from the combustion but few of the injuries, which will be suffered by people who are not around and cannot voice their opposition. Each generation, reasons Gardiner, thus faces a perverse incentive to ‘pass the buck’ to the next, which also profits from its own fossil fuel combustion while dodging the pain from it, and so on, in a vicious cycle of infliction of harm.

James P. Kossin, “A global slowdown of tropical-cyclone translation speed”:

As the Earth’s atmosphere warms, the atmospheric circulation changes. These changes vary by region and time of year, but there is evidence that anthropogenic warming causes a general weakening of summertime tropical circulation.

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Why is current economic growth called strong?

As of the second quarter the year over year percent change in real GDP is 2.3%.  Virtually everyone refers to this as strong. Why?  By historic standards 2.3% real GDP growth is subpar. It is below the long term growth rate of the economy using virtually any widely accepted estimate of trend or potential growth. Many republicans actually claim that the potential growth rate is now 4%. If so, it would only make Trump’s 2%-3% growth look worse.

In 1967, real GDP growth was 2.7%, significantly stronger than the current rate.  Yet, that was labeled as  a GROWTH RECESSION.  In Obama’s second term, after the recession and economic recovery, his economic expansion averaged 2.4% growth, or essentially the same growth Trump has experienced during what is actually the same economic expansion. But Obama’s record was almost universally labeled as weak growth and Trump’s as strong. Trump recently bragged that the economic expansion just passed ten years, to become the longest in US history.  But  seven and a half years of this was under Obama and only two and a half years have been under Trump. Virtually all the data says that current growth is just a continuation of the trends established under Obama.  To date Trumps policies have had essentially no impact on economic growth. In this expansion  the strongest q/q SAAR was 5.5% in IV 2014 and the strongest  y/y growth was 4.0% in first quarter  2015–both under Obama.

I can understand Trump and the Republican propaganda machine calling 2.4% growth weak and 2.3% growth  “THE STRONGEST ON RECORD” as Trump repeatedly does. 

But why do we let the media and many economist get away with repeating this republican propaganda.  Shouldn’t we be calling them out every time they do this,  for practicing such sloppy economics.

Note, all growth rates are rounded to one decimal point. Economist quote two decimal points just to prove they have a sense of humor.

 

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Labor Day

I was doing my usual reading in the internet world and ran across this comment to another commenter who claimed Labor Day is a made up holiday. A lot of history in this reply:

“‘A made-up holiday that never had a great basis for its existence?’

How about the Ludlow Massacre where 57 miners were killed by Rockefeller guards that set fire to miners tents even though they were on private property? Their union leader was held by two militia members and shot in the back by a third. All they wanted was mine safety, their own doctor instead of a company doctor, an eight-hour day, fair pay and a union. Or how about the five workers shot in the back at McCormick Iron Works as they ran from armed guards. They too were just demonstrating for an eight-hour day and better working conditions generally. How about the women who died in a shirt manufacturing factory in New York? They died because they were deliberately locked in a room with no way out when the building caught on fire. How about the workers hung in Chicago after the Haymarket Riot because the Chicago Tribune just about sealed their fate with a horrific attack on them? The Governor of Illinois pardoned others scheduled to be hung because of what he thought was shaky evidence. What about the five marchers shot by police in a Hunger march in Detroit in the middle of the Depression? Or what about the Battle of the Overpass, where UAW organizers were beaten and bloodied by Ford thugs while the Dearborn police stood by and watched. That is except for one time when they stopped the Ford goons from further beating on a lady unionist. The police thought Fords thugs were going to kill the lady. What about Walter Reuther, who was picked up an thrown down again over three flights of stairs, probably avoided being killed because some reporters saw what was happening, picked Reuther up and threw him in their car, then drove away. Then there was the Homestead strike at Carnegie’s steel mill in Pennsylvania—more unionists killed.

How about the practice of blackballing workers if they gave management any grief? It was common practice for owners to put the word out about a worker to other businesses if that worker was deemed a problem or in favor of a union. A blackball meant that a worker would not be hired by other businesses. Indeed, the leader of the Homestead union, nicknamed Lucky by the way, was blackballed and could not find work in this country. He was last seen working in a mine in Mexico.

Closer to home, the accepted narrative is that Henry Ford was a generous man. He wanted his employees to be able to purchase the cars that they were manufacturing. So he started the five dollar day pay rate. Ford deserves his elevated place in history because he was a pioneer in the standardization of parts necessary for mass production. That being said, the five dollar a day came about, not because Ford cared about his employees, but because the annual employee turnover rate was 309%. Work conditions were so bad in Ford’s factory that nobody would stick around. Ford had to replace his entire workforce three times a year. He had to pay five dollars a day to keep the workforce in his shop. Even then Ford’s Sociology Department could enter your home for inspection. If your lifestyle dissatisfied Ford, you did not get five dollars a day.

Let’s touch briefly on the law and government, starting with the Clayton and Sherman Anti-Trust laws. Inspired by the great trust-buster Teddy Roosevelt, those laws were clearly intended to hinder a monopoly condition by business interests, Unfortunately President Grover Cleveland and his Attorney General, Richard Olney, thought differently. When union members went on strike during Cleveland’s administration, they turned the Clayton and Sherman laws on their respective heads, claiming that unions, as monopoly’s, were in restraint of trade, Clearly, that was not the intent of the legislature that created Clayton and Sherman. That’s just one of a ton of examples.

More recently, the Republican legislature and Governor in Michigan passed an anti-union Right to Work bill. Then they attached a financial appropriation to the bill, in affect disallowing Michigan citizens from putting the issue on the ballot through a referendum procedure,

From the Republican’s point of view, that’s probably a good thing as a recent poll shows 64% of Americans favoring unions.

>>> never a great basis for its existence? Aside from the people of color among us, I doubt that any group in this country has so been so hammered and consistently beaten down as America’s workforce. Let’s not forget that today the top 1% are in possession of 40% of the country’s total wealth while wages have been stagnant for forty years. The CEO of Disney makes 1100 times what the average worker makes. If I have read Adam Smith correctly, there is no economic theory that justifies either being the case. Let’s also not forget that our current President has put a corporate lawyer that has spent a lifetime litigating against unions and employees generally at the head of the federal Department of Labor.

Those among us that have grabbed a cup of coffee and a piece of toast on the way to work as employees have earned a special day and much more respect than Matt is able to give us.

I know. I walked on a picket line with one of the brightest, most imaginative, man this country has ever produced — ‘Walter Reuther.'”

Al Churchill’s Comment

Bridge Magazine, “Labor Day has lost some luster, as partisanship pulls us apart,” Phil Power, August 30, 2019

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My Extreme Opinions.

Here is an especially self indulgent post. I think the useful part is this link to a Data For Progress poll showing current US public opinion is way to the left of the inside the beltway Overton Window. Most US adults support proposals which are seen as fringe left in official Washington. The presentation is verbose. A good write up by Eric Levitz is here

This is interesting and raises the question of how a Congress which totally disagrees with a majority of the electorate got elected. I think the reason is that most voters don’t know the facts — that is don’t know what current policy is.

OK self indulgence after the jump

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Weekly indicators for August 26 – 30 at Seeking Alpha

by New Deal democrat

Weekly indicators for August 26 – 30 at Seeking Alpha

My Weekly Indicators post is up at Seeking Alpha.One of the benefits(?) of the discipline of a mechanical forecasting system is that it can be completely dissonant with what your emotions are telling you.  Right now the discipline of my long/short leading/coincident indicator system is completely at odds with the dominant DOOOM based on the yield curve inversion.

Because, while the yield curve is an important and completely valid long leading indicator, right now it is the *only one* that is negative. All the others are either positive or neutral.

As usual, clicking over and reading should not only be educational for you, but rewards me with a $ or two for my efforts.

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The quick and dirty leading indicator watch has been stagnant for 18+ months

The quick and dirty leading indicator watch has been stagnant for 18+ months

[Note: I’ve been working on my “what leads consumer spending” opus, and as often happens, I don’t want to publish anything until I’m sure I’ve got something good – which means lots more research and saved graphs — and nothing whatsoever published! I owe you something for today, so here’s a little nugget ….]

If you want a “quick and dirty” forecast for the economy over the next 4 to 6 months, the easiest approach is to look at stocks (vis the S&P 500 index) and initial jobless claims.

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Consumer spending leads employment — but what leads consumer spending?

Consumer spending leads employment — but what leads consumer spending?

One relationship I have consistently flogged for the past decade is that consumer spending leads employment.  That’s still true. Here is one of the graphs on that score going back over 50 years, the YoY% change, averaged quarterly, in real aggregate payrolls (blue) vs. real retail sales (red):

1965-90:
1991-2019:

It is absolutely crystal clear that sales have consistently led total payrolls by one to two quarters. (And yet I still see people making this mistake. The other day I read an article on Seeking Alpha that claimed that consumer spending was going to do well because employment was still doing well. NOT TRUE!)

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