Im-Politic: Fake News About a Fake Wall Street China Hawk

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It’s been a long time since I’ve seen an article contain more sheer garbage per word than today’s Bloomberg.com account of a supposed dispute on dealing with China between two kingpins at the same big American hedge fund.

As the article explains, this ostensible disagreement began this past Tuesday when Ray Dalio, founder and Co-Chairman of Bridgewater Associates told a CNBC interviewer that China’s longtime practice of “disappearing” critics of its thug regime amounted to behaving “like a strict parent….That’s their approach.”

Dalio’s comments unleashed a torrent of outrage that was often as cynical as it’s become predictable these days. For with the exception of making isolated protests about especially egregious Chinese human rights violations (e.g., against the Muslim Uyghur minority), or backing piecemeal controls over cooperation with entities directly tied to the Chinese military, many of those who claim to be appalled by Dalio’s excuse-making for Beijing’s brutality wouldn’t dream of urging Bridgewater – or any American finance firm or other kind of business – to even slow its plans to expand its operations in China. 

In other words, they wouldn’t dream of systematically clamping down on practices that for decades have inevitably helped channel massive amounts of resources and knowhow from around the world into the People’s Republic to use as Beijing’s dictators see fit. And in the case of U.S. investment companies, which look to be just getting started in luring capital to China, these operations will just as inevitably improve the efficiency of China’s own financial system, which will just as surely help enrich it economically and strengthen it militarily.

The Dalio rebuke reported by Bloomberg was genuinely unpredictable, but no doubt even more cynical – for it came from Bridgewater’s own CEO, David McCormick. According to reporters Sridhar Natarajan and Katherine Burton, “on a company call,” McCormicktold staff he’s had lots of arguments about China over the years with Dalio and that he disagrees with the billionaire’s views….”

But of course, the “people with knowledge of the matter” who made certain that this alleged dissent would be made public passed along nothing about what McCormick’s problems with his colleagues’ views entailed. And apparently neither Natarajan nor Burton pressed for elaboration.

The authors did make clear that there was no indication that McCormick favored putting the kibosh on Bridgewater’s recent decision to launch a $1.3 billion investment fund in the People’s Republic, which they wrote would bring the Chinese assets under its management to more than $1.6 billion.

But there was no excuse for Natarajan, Burton, or their editors simply to parrot claims from McCormick’s friends and associates that the Bridgewater CEO is a China “hawk” who views the People’s Republic as “an existential threat to our country” – especially since these same persons are encouraging McCormick’s interest in running in Pennsylvania’s upcoming race to replace retiring Republic U.S. Senator Pat Toomey.

And how on earth could the Bloomberg team allow McCormick buddy Jim Schultz (bizarrely, “a former lawyer in the Trump administration”), to get away with pointing to McCormick’s service in former President George W. Bush’s Treasury Department as evidence that the Bridgewater CEO “has dealt with China in the past…knows how to talk to them, and…will be tough on China as a U.S. senator.”

Even loonier: “’The president of China complained about the decisions he was making about technology at the time,’ Schultz said.”

For anyone who knows anything about U.S.-China relations in the last few decades knows that no administration enabled China’s dangerous rise to dangerous superpower status with lenient trade and technology transfer policies more enthusiatically than W’s.

Natarajan and Burton correctly note that “A hawkish stance on China is all but essential in GOP politics if McCormick makes a run” and that since “Bridgewater has been expanding in China…McCormick would undoubtedly have to navigate China-bashing in the Rust Belt state….”

What they left out is that if the press coverage of this possible campaign is as brain-dead as theirs, McCormick’s challenge won’t be terribly difficult.

(What’s Left of) Our Economy: Steady as She Goes for U.S. Manufacturing Employment

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However disappointing America’s November economy-wide job creation was, the official U.S. statistics released this morning show that you shouldn’t blame the nation’s manufacturers. Although total non-farm payrolls (NFP – the domestic employment universe of the U.S. Labor Department, which tracks these trends) advanced sequentially by a modest 210,000 (the worst such figure since last December’s 306,000 monthly loss), U.S.-based industry added a solid 31,000 net new positions. And revisions of the previous few months strong numbers were revised downward only moderately.

Speaking of revisions, it’s especially important today to note that the new NFP statistics are still preliminary – and will be for two more months. It’s especially important because recently – and no doubt largely due to the unprecedentedly weird nature of the CCP Virus-era U.S. economy – revisions have been enormous. For example, August’s initially reported NFP increase was just 235,000. Since then, it’s been upgraded all the way up to 483,000. The first September result – 194,000 – is now judged to be 379,000. So there’s no reason yet to conclude that the national economic sky is falling, or even changing much.

At first glance, based on this preliminary November data, manufacturing’s latest monthly employment performance slightly trailed that of the rest of the economy.

As of last month, including the revisions, industry has regained 1.132 million (or 81.73 percent) of the 1.385 million jobs it lost during the worst of the pandemic-induced recession in spring of 2020. So the manufacturing employment recovery improved by 1.53 percent on month.

The private sector overall as of November has now regained 18.376 million of the 21.353 million jobs it shed during peak CCP Virus. That 86.06 percent figure is 1.76 percent higher than October’s.

And the total non-farm sector has now recovered 18.450 million of the 22.362 million jobs it lost during that pandemic-triggered downturn. The resulting 82.50 percent mark is 1.60 percent better than October’s.

But don’t forget – manufacturing’s jobs decline during that terrible spring of 2020 was smaller proportionately than that of the private or non-farm sectors. So even though it’s had less ground to make up, U.S.-based industry has been creating new employment at nearly the pace of the economy as a whole.

November’s manufacturing jobs improvement was also noteworthy because it took place despite job losses of 10,100 in the automotive sector – which accounted for more than 40 percent of October’s advances. In fact, automotive revisions also accounted for 70 percent of the downgrading of that overall manufacturing October monthly manufacturing jobs improvement (from 60,000 to 48,000).

Other important November manufacturing job losers in the larger categories monitored by the Labor Department were computer and electronics products, which contains semiconductors, and which saw employment drop by 1,300 (its worst monthly decline since the 4,900 recorded in July, 2020); and – at least as troublingly, machinery. That latter industry, whose products are used throughout manufacturing and big non-manufacturing industries like agriculture and construction, shed 6,000 positions. That was its biggest month’s worth of job losses since the 861,000 disaster during the dark days of April, 2020.

These losses leave computer and electronics employment levels just 0.85 percent higher than just before the pandemic began distorting the American economy (in February, 2020) and machinery employment levels 2.63 percent lower.

November’s big manufacturing jobs winners were topped by the miscellaneous durable goods sector – which includes the major CCP Virus-related medical goods. Its payrolls surged by 10,000 – the most since July, 2020, during the first post- pandemic economic bounce, when they soared by 15,000. The fabricated metals products industry generated a 7,900 payroll jump that was its biggest since March’s 10,100. Food products added 7,400 employees for its best gain since August, 2020’s 19,000. Miscellaneous non-durable goods manufacturing was up 3,500. And electrical equipment and appliances’ payrolls grew by 3,300.

As always, the most detailed employment data for pandemic-related industries is one month behind those in the broader categories, and their October job creation was generally solid.

On the disappointing side was the surgical appliances and supplies sector. This industry contains personal protective equipment and similar goods, and the miscellaneous durable goods sector in which it’s been classified saw employment rise by a respectable 2,900 sequentially in October. But only 100 of these new positions came in the surgical appliances and supplies sub-sector. At the same time, September’s initially reported 900 jobs increase was revised up to 1,300, so maybe October will be a statistical blip – assuming of course that it’s not substantially revised, too. And as of October, payrolls in this sector have climbed by 8.27 percent over their immediate pre-CCP Virus February, 2020 levels – compared with the 7.79 percent calculable from the previous jobs report.

The overall pharmaceuticals and medicines industry performed better, with payrolls swelling by 1,500 in October. Still, September’s initially reported jobs rise of 1,500 was revised down to 1,200. Therefore, employment in these sectors now stands 5.49 percent higher than in February, 2020 – better than the 4.62 percent calculable last month.

The medicines subsector containing vaccines expanded employment by 700 in October – down from September’s 1,700, but better than August’s 400. These results mean that this industry’s workforce is now 13.25 percent larger than in February, 2020.

U.S. aerospace giant Boeing’s manufacturing and safety problems have depressed employment in aircraft production along with the pandemic’s restrictions on travel, and payrolls improved by just 300 on month in October following an unrevised drop of 500 in September. But help may be on the way, with China having just decided that its troubled 737 Max model has passed safety inspections and may return to the China market after a two-year ban that greatly reduced the company’s – and overall U.S. – exports.

So although the American aircraft industry’s workforce in October was still 8.12 percent smaller than it was just before the CCP Virus era (down from the 8.24 percent shrinkage calculable last month), look for the sector to start closing the gap meaningfully.

Good news sure could be used by the U.S. aircraft engines and engine parts industry. In October, its employment dipped by 100, and September’s initially reported jobs gain of 600 has been downgraded to 400. This sector’s workforce is now down 13.82 percent since immediate pre-pandemic-y February, 2020 – more than the 13.49 percent calculable last month.

The situation in non-engine aircraft parts and equipment was a good deal better. It grew payrolls by just 100 in October, but September’s initually reported jobs increase of 900 is now pegged at 1,200 – the best such performance since April, 2008. Consequently, whereas employment in this sector as of last month’s data was 15.82 percent less than in February, 2020, the figure is now 15.48 percent.

A significant Boeing comeback would add to the tailwinds identifiable behind the manufacturing jobs scene at this time. Others of course are the expected continued strong growth of the entire economy, a possibly stronger recovery globally, an easing of the supply chain crisis, the prospect of infrastructure bill money starting to be spent, and the seemingly shrinking odds that manufacturers and other U.S.-based businesses will face significant tax increases related to the Biden administration’s Build Back Better legislation.

Not that clouds are gone from the scene completely. Inflation seems to be picking up (although so far, and by the same token, manufacturers in toto have been able to pass on price increases to business and household customers). A defeat or postponement of Build Back Better will reduce the amount of government stimulus supporting consumer spending – and if the Federal Reserve follows through with its decision to start cutting back on some of its own stimulus, contractionary forces will strengthen. And of course there’s the virus wild card that’s just appeared in the form of the Omicron variant.

Still, the tailwinds now seem more impressive than the clouds, so I’m still optimistic about the future of manufacturing’s jobs recovery.

Im-Politic: Can I Oppose Politics in Sports but Favor Boycotting the China Olympics?

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I’ve been struggling lately with two seemingly conflicting ideas that I support: Getting politics out of sports, and boycotting the upcoming winter Olympics in China. Maybe RealityChek readers can help me out.

I’ve laid out my arguments for making sports a politics-free arena in previous posts (see, e.g., here). I’ll amplify one in particular today:  Perhaps now more than ever, Americans need a domain in their cultural and social lives that’s reserved for purely mindless entertainment. Sports seems to be the best candidate, mainly because, unlike any of the arts, it has no substantial political tradition. And the main reason arguably is that music, literature, painting, etc can’t possibly avoid politics consistently if their works seek to make any statements about the human condition.

Of course, lots of art focuses on pleasing our senses and exploring new ways of doing so, and I don’t see how any reasonable person could object. And lots of art that seeks to comment on current issues is completely stupid and/or downright ignorant. But if you oppose the fundamental legitimacy of art that seeks to criticize or praise aspects of the human past, present, and future, or influence our ideas and mores, then you (logically, at least) need to oppose the appearance of much of what’s been the best and most important and most enlightening of human achievements for millennia. And you choke off the possibility of such works and their benefits being created going forward.

Sports, however, lack any such potential. They’re important for keeping us healthy. They can teach important lessons about leadership and cooperation among teammates, the value of hard work, and the like. In their organized forms, they of course should obey the law when it comes to providing equal opportunity. And who could seriously object if those who run professional leagues or sports on the college and university level want to precede society and the law in providing or expanding such equal opportunity to actual and prospective participants either on the playing field or in management, or in nudging society and the law along? And needless to say (I hope!), in their individual capacities, athletes and others in the world of organized sports have the right to express themselves on any issue or matte, political or not, and to engage in politics however actively they wish.

But I’ve also pointed out that today’s athletes or owners or commissioners are hardly lacking for channels and platforms for reaching enormous audiences with their views. As a result, there’s simply no need for them to inject their views into the actual playing or scheduling of athletic contests. Moreover, as I suggested at the start, keeping sporting events politics-free provides Americans with a chance to spend time together having plain old unadultered fun – which surely has major therapeutic effects.

Undoubtedly, some and even many Americans may object to any sphere of their national life being shielded from politics, and especially from the most pressing matters. That’s their right, too – and they can register their objections by staying away from the arenas and stadiums, and turning off their streaming services.

But what about common sports practices like playing the national anthem before contests, or asking politicians to engage in activities like throwing out the first ball or tossing the first coin? Aren’t those political acts? Not the way I see them. Instead, they’re expressions of national unity – which any successful nation or society needs to encourage at least from time to time. In other words, it shouldn’t be seen as too much to ask that spectators and athletes alike spend a few pre-game minutes respecting the flag – or even an elected President or Governor or Mayor of Member of Congress they can’t stand kicking off a contest.

And yet, as also mentioned above, I want the United States to totally boycott the China Olympics slated to start in Beijing on February 4. Partly I support a boycott (or postponing and moving the games) for moral reasons. I’m hardly a world class athlete myself, and so I can’t say that I have any real idea of how much training Olympians have gone through to win the honor of competing in such events. I can say, however, that their dedication to their craft seems especially admirable given how many participate in sports without mass followings, and therefore aren’t expecting to cash in big-time on competing at this level or even on winning. So I haven’t come to my position lightly.

At the same time, do many of these Olympians really relish the prospect of marching in an opening parade past a beaming Xi Jinping, under whose ever ambitious dictatorship China has persecuted and allegedly committed genocide against one of its minority groups, has turned Hong Kong from an outpost of freedom into little more than just another Communist satrap, and is subjecting the entire population of the People’s Republic to a surveillance programs threatening to snuff out what little is left of their private lives? I’d hope many Olympians would be positively ashamed to enhance this thug regime’s global standing.

Partly, I also support a boycott for U.S. foreign policy reasons. As I’ve argued repeatedly, Washington has too often responded to Chinese actions that endanger America’s national security or harm its economy or violate the human rights of the Chinese people with tariffs or sanction or export controls that are episodic and piecemeal in nature. And since the threat China poses is systemic in nature, they’ve by and large failed to protect American interests – much less improve conditions inside the People’s Republic.

It’s true that more sweeping, hard-hitting U.S. retaliation would entail major costs and risks – especially when it comes to countering China’s escalating aggression against Taiwan and elsewhere in its neighborhood. And an Olympic boycott could spur retaliation by Beijing against American businesses operating in China.

But staying away from the games could bring worthwhile gains for U.S. interests, too. Especially if joined by other countries, it would deliver a powerful worldwide propaganda blow to a highly image-conscious regime and its claims of global support and even leadership. As a result, it would also weaken a crucial pillar of its legitimacy with a Chinese public whose culture is also highly face-conscious. Washington Post columnist Sally Jenkins has made a compelling argument that similar international condemnation helped bring down South Africa’s apartheid system decades ago.

China is unquestionably in a much stronger position. But national self-respect isn’t a trivial concern for America’s own security, either, and drawing a line at the Olympics seems particularly important at a time when Beijing is throwing its weight around in even the biggest American business circles more overtly and ostentatiously than ever. (See, e.g., here and here.)

But to return to the original question, a boycott would entail injecting politics into sports – which I’ve been opposing. Can I square the circle by claiming that China’s offenses are worse quantitatively and even qualitatively than any of those that have prompted the kind of on-the-field athletes’ protests that I’m against? Or that China is in a class by itself? Maybe. But what about the Arab and Muslim worlds, where an entire gender suffers systematic and often brutal persecution? So boycott any sporting events held there, too? I strongly suspect that treating human rights policy as the standard would make any truly or nearly universal Olympics impossible, especially if other countries began acting on whatever other foreign abuses they perceive. And maybe canning the games at this point is the way to go. But I’m personally not on board with that stance – yet.

The same problem appears to complicate the case that foreign policy considerations tip the balance in favor of a boycott. There’s certainly no shortage of conflicts between and among countries that could trigger any number of similar Olympics-ending boycotts. Which may just be too bad. Or maybe not. Indeed, if America urgently needs a politics-free zone periodically, doesn’t a tumultuous  world at large as well?

When it comes to a U.S. boycott of the Beijing Olympics, the answer may lie in our democratic system – and maybe it should. In other words, if, like me, the majority of Americans want a boycott badly enough, they’ll make their feelings known to their leaders, and there’s a good chance the politicians will follow suit. If the public doubts that a China Olympics these days is such a big and abhorrent deal, the athletes will go.

But yours truly will still be feeling pretty conflicted on the sports and politics question – and greatly appreciative for any advice on the way out of my conundrum. 

Im-Politic: Signs of Less Corporate Money in American Politics

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Although I’m hesitant for free speech reasons to support sweeping bans on corporate (or any special interest) money in politics, like many Americans, I suspect, I’d like to see a lot less of it. So I’m pleased to report some good news on this front: a study purporting to show that many of America’s largest companies (all members of the Standard & Poor’s 500 stock index), are reducing and even actually halting various types of political spending (including on lobbying).

The study, from the non-profit Center for Political Accountability, claims that 14 members of the S&P 500 have adopted “clear policies that prohibited the use of corporate assets to influence elections and asked third parties not to use company payments for election-related purposes.” Among them are some real surprises (at least to me) – like Wall Street giant Goldman Sachs, big defense contractor Northrup Grumman, energy kingpins Hess and Schlumberger, and IBM from the tech sector. (The full list is on p. 56.)

Just as important, the authors state that since 2015, “there has been a steady rise in the number of S&P 500 companies that have placed prohibitions on election-related spending.” Specifically, the study reports, between 2015 and so far in 2021, the number of these large, publically held companies that has stopped what the Federal Election Commission calls “independent” expenditures (spending for or against specific candidates not made in coordination with any such candidates or their representatives or political parties) has more than doubled – from 83 to 176.

As for companies barring non-independent spending on candidates, parties, and committees, they’ve increased from 84 to 136. Companies no longer contributing to “527 groups” (see here for the definition) are up from 65 to 118. Businesses that have had it with spending for or against various ballot measures have increased from 50 to 75. Those not contributing to organizations responsible for triggering the flow of “dark money” into American politics now number 71, versus 31 in 2015, and the growth in the number not even funding trade associations is from 20 to 47.

The Center attributes these trends mainly to business’ mounting reluctance to expose themselves to backlash from customers and shareholders for taking political stances in the current national environment of “unrest and angry political conflict” and “hyper-partisan politics.” The report adds that one reason companies feel more vulnerable is that many have been making public ever more information about their political and policy spending.

That greater transparency is definitely welcome. But I’m happier about the overall pullback in political spending. Not that all such activities are intrinsically concerning (much less should be outlawed). After all, if Big Businesses are being affected by existing public policies, or are bound to be, why shouldn’t they be able to argue their case to politicians and the public (especially when they make such lobbying, and the funding it requires, public)?

As the study also makes clear, however, although fewer Big Businesses are engaged in political and policy spendings, many more keep opening their coffers. Moreover, the report doesn’t say anything about actual corporate spending levels. In theory, although fewer big companies are contributing resources, those that still are may be spending much more. So it’s not like the corporate sector’s influence is going to be eliminated, or even close, any time soon.

But despite the legality and/or legitimacy of corporate money in politics and policy, there can’t be any reasonable doubt that these enormous resources give companies the kind of power that most individuals – and most other interest groups – can’t hope to match.

Therefore, I can’t help but believe that the less corporate actors putting their thumbs on the scales throughout Washington, D.C. and state and local capitols, the fairer and more representative our politics and government will be – and that the Center for Political Accountability’s findings are an especially terrific Thanksgiving gift.

Im-Politic: What Michigan’s Surge is Really Saying About the CCP Virus

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The Washington Post has just unwittingly delivered some powerful blows to the widespread belief (propagated most notably by President Biden) that America’s latest CCP Virus-related woes are overwhelmingly a “pandemic of the unvaccinated.” And all of them came in a single article focusing tightly on the recent surge of the virus in Michigan.

The first: The article’s stage-setting observation that “At least two dozen states have seen cases rise at least 5 percent in the past two weeks, with Michigan, Minnesota, New Mexico, New Hampshire and North Dakota each recording per capita jumps of more than 60 percent. Some highly vaccinated states, including Vermont and Massachusetts, were also seeing steep rises in cases.”

As I’ve said before, case numbers are about the worst available indicator of the pandemic’s severity, because of huge complications like its heavy dependence on testing, and the related massive numbers of asymptomatic infections, which of course hold down the numbers of test-takers. But they’re constantly touted by the public health establishment and other vaccine zealots, so they’re fair game.

And what’s instructive about that Post sentence is not only its mention of states like Vermont and Massachusetts experiencing “steep rises in case” (despite full vaccination rates of 73 percent and 71 percnt, respectively, according to the paper’s own very convenient CCP Virus tracker), but the fact that Minnesota (62 percent), New Hampshire (65 percent), and New Mexico (63 percent) also boast full vaccination rates notably higher than the national U.S. average of 59 percent.

The second blow against the “pandemic of the unvaccinated” meme: The Post‘s report that in Michigan itself, “The unvaccinated made up about three-quarters of cases, hospitalizations and deaths in the 30 days ending Nov. 5, according to the state health department.”

In other words, fully a quarter of cases, hospitalizations, and deaths (the latter two metrics being far better gauges of CCP Virus severity) have stemmed from vaccinated Michiganders. These figures indicate that breakthrough cases and really bad breakthrough cases are a lot more common than the nation has been told (especially given my previous point that Americans and their government have literally no idea of the share of their unvaccinated compatriots get sick enough from the virus to be hospitalized and die – as opposed to their absolute numbers – because of the testing/asymptomatic spread complications.)

A third blow against the “pandemic of the unvaccinated” narrative comes from the data for the Michigan counties depicted by the Post as being especially hard hit by mounting hospitalizations – which are a good leading indicator of mortality, and which of course threaten the health care system’s ability to provide its vital services against the full range of medical problems Americans suffer.

According to reporters Brittany Shammas and Paulina Firozi, one of the state’s regions where the hospitalization situation is especially dire is Grand Rapids. But Kent County, where the city is located, has one of Michigan’s higher vaccination rates – 57 percent.

Moreover, although the article adds that “A health-care coalition representing 13 counties in West Michigan [including Kent] warned last week that “hospitals and EMS systems were operating at extremely high capacity, describing the situation as being at ‘a tipping point,’ a look at these localities shows that vaccination rates look like pretty unimportant contributors.

Here are the relevant recent hospitalization statistics for these counties as of this past Friday. The left column shows the vaccination rates for their entire populations, the middle column the percentage change in daily new hospital admissions over the previous week, and the right column the seven-day change in absolute numbers of new admissions during that latest week-long period. (The county-specific vaccination rates come from The New York Times vaccine tracker feature and the hospitalization figures come from the U.S. Centers for Disease Control and Prevention’s website.)

Clare:               44 percent           40.00 percent         7

Ionia:                44 percent         -20.83 percent       19

Isabella:            42 percent          42.86 percent       10

Kent:                57 percent          20.15 percent     328

Lake:                55 percent                  n/a                  0

Mason:             57 percent          18.18 percent       13

Mecosta:          39 percent         -12.00 percent       22

Montcalm:       39 percent         -35.09 percent       37

Muskegon:      51 percent           44.19 percent       62

Newaygo:        42 percent           40.00 percent      21

Oceana:           51 percent                   n/a                 2

Osceola:          40 percent         100.00 percent        2

Ottawa:           53 percent             7.69 percent      70

The anomalies should be apparent right away. There’s Kent County’s odd combination of high vaccination rates and strong (but not super strong) hospitalization increases. There are the identical and much lower vaccination rates of Clare and Ionia counties – and hospitalization rates going in the opposite direction, and dramatically so. There’s the equally strange pair of Mecosta and Montcalm counties, with their identical and really low vaccination rates, and their significantly falling hospitalization rates.

Anomalies like this can often be explained by differing demographic characteristics (e.g., more and more densely populated areas are typically worse virus hot spots). That’s one reason why it’s foolish to support a one-size-fits-all vaccination policy – let alone one that imposes major penalties on the unvaccinated. But even population doesn’t explain many of the all-over-the-place results for these mainly rural, thinly populated Michigan counties. (Michigan population-by-county data come from here, and the population density statistics from here.) 

For example, Kent is by far the most populous of the 13 counties, and by far the most population-dense – which surely accounts for much of its hospitalization increase. At the same time, its hospitalization situation proportionately is much worse than the next most populous county (Ottawa – which is also next door). 

Moreover, although Montcalm and Mecosta, as noted above, have identical (and very low) vaccination rates, the former is somewhat more densely populated than the former, but its hospitalization rate is falling more than three times faster.

And as always, very small absolute numbers can skew the percentage changes. Thus Osceola has the second smallest population of the 13, and its population density is one of the lowest – as is its vaccination rate. New hospitalizations have doubled in percentage terms over that last data week. But in absolute terms that means they’ve risen from one to two.

There’s still another way, though, that the Post piece — more wittingly — debunks the cookie-cutter approach to vaccinations, and that’s in the list of states, whatever their vaccination rates, where cases are up the most lately.  Except for New Mexico, they’re all in the upper Midwest and New England, and guess what happens in those regions at this time of year? Yes, it gets cold. And generally colder sooner than in other parts of the country.  Weather also is why, as the article reports, “previous southern state hot spots, like Florida and Texas, saw marked declines in cases.” 

The real message of the article, therefore, is that the CCP Virus, like most respiratory diseases, is a generally seasonal phenomenon, and where and when it’s not seasonal (as in Florida this summer), it comes (and goes) in waves regardless of changes in public policy. As a result, as has been clear once the first wave passed last year, the most public officials can do is concentrate on protecting the most vulnerable, keep the economy and broader society largely open for the rest (in order to minimize the collateral damage from sweeping lockdowns, school closings, stay-at-home orders, and other indiscriminate responses), and count on immunity from whatever source (vaccines as well as natural immunity) to become widespread enough to turn it into something like a bad flu.           

Im-Politic: A Bad Week in Court…for the Race-Mongers

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It’s been a very bad week for those Americans (and others) convinced that their country’s entire society, and especially its criminal justice system, remain so thoroughly infected with racism that nothing less than multiple amputations and lobotomies are required.

As a result, it’s been a very good week for those Americans (and others) trying to grapple rigorously with the racism that has historically stained that criminal justice system and larger society, culture, and economy, and with its lingering effects in all their complexity.

For this time period has seen no fewer than three race-infused trials conclude with verdicts that thoroughly debunk claims of bigotry racism in that justice system so pervasive as to be systemic.

The first and most publicized resulted in murder convictions for three white Georgians who killed an African American man jogging through a neighborhood in the southeastern corner of the state. The trio of whites blamed their attack on Ahmaud Arbery on his resistance to their attempts to carry out a citizen’s arrest prompted by suspicions of his involvement in several local burglaries.

But the nearly all-white jury ultimately agreed with the prosecutor’s observation that the attackers’ actions were utterly illegal vigilantism even by the recklessly indulgent standards of a state law that, like many counterparts, is rooted in a history of genuinely shameful fugitive slave statutes – and that was repealed this past May. For none of the defendants saw Arbery engage even in any dodgy act, and possessed no evidence of his possible guilt.

Arbery’s family and others argued that the killing took much too long to be investigated, and their charges of attempted cover-up by some local officials seems to have been vindicated by the eventual decisions of area prosecutors and judges to recuse themselves from the trial. So there’s a strong case to be made that justice was delayed. But in this instance, it’s clear that it wasn’t denied.

The second trial attracted less attention, but appears no less important. This past Tuesday, more than a dozen white racist and anti-semitic leaders and their organizations, which organized the tumultuous 2017 “Unite the Right” rally in Charlottesville, Virginia, that claimed one life, were found guilty of breaking state law by conspiring to intimidate, harass, or harm counter-protestors and local residents. The verdict by the majority white jury awarded the plaintiffs $26 million in compensatory and punitive damages, and the defendants are almost certain to be tried on the federal charges (of conspiring to commit racially motivated violence) on which the jury failed to reach a decision.

The third trial has received almost no national attention, but is especially interesting given widespread arguments that acquitted Kenosha, Wisconsin shooter Kyle Rittenhouse would have been found guilty of some form of homicide had he been black. (See, e.g., here and here.) This third trial is especially interesting because the verdict actually did acquit on self-defense charges an African American who killed an intruder into his home and attempted to slay another. Special bonus: The two intruders were cops.

The defendant, Andrew Coffee IV, didn’t get off scot free. The Vero Beach, Florida jurors found him guilty of illegally possessing a firearm. (He was found guilty of felony battery and evading arrest in 2013.) But his position that he didn’t realize that the intruders were law enforcement officers, and didn’t hear the SWAT team in question so identify itself, carried the day on the main charge. And here’s a fun fact – Coffee’s acquittal came the same day as Rittenhouse’s.

As noted above, these results don’t mean that African Americans have never gotten horrifically raw deals from the American criminal justice system, or even that no such injustices take place today. (I’ve written about the latter issue, e.g., here.) But these three verdicts – which all came in states belonging to the old Confederacy – cannot possibly have taken place in a country still determined to suppress the rights of blacks (and other minorities). Instead, they took place in a country where, as noted by an African American lawyer quoted here, such outcomes are possible, if not yet often enough, in the first place – and always have been.

(What’s Left of) Our Economy: New U.S. Inflation Numbers Show New U.S. Inflation Momentum

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Claims made by Federal Reserve leaders and the Biden administration (along with Yours Truly) that current lofty levels of U.S. inflation are transitory took another hit this morning with the Commerce Department’s release of the October figures for the Personal Consumption Exepnditures (PCE) price indices.

For some reason, these data don’t get the same attention as the Labor Department’s Consumer Price Index (CPI), but they should, since they’re the Fed’s inflation gauge of choice, and the Fed’s power to control inflation (or not) through monetary so profoundly influences the cost of credit, and therefore how fast or slowly the economy grows.

And the new PCE numbers show that between September and October, monthly and yearly price increases regained momentum that had previously showed signs of waning. Let’s go the statistics lists (an economist’s version of “Let’s go to the videotape”). First, the year’s monthly percentage changes in overalll PCE inflation:

Jan.             0.3

Feb.            0.3

March         0.6

April           0.6

May            0.5

June            0.5

July            0.4

Aug.           0.4

Sept.           0.4

Oct.            0.6

Moreover, not only is the October increase back to the previous peaks in March and April, but the August and September results were each revised up from 0.3 percent.

As you can see from the next list, the same kind of pick up can be seen in overall PCE inflation rates on a year-on-year basis. And these percentage canges are more important than the monthly changes because they measure the trend over a longer period of time, and also smooth out the kind of fluctuations that can pop up for random reasons in the short term. Just FYI, the July result was revised down from 4.2 percent.

Jan.              1.4

Feb.             1.6

March          2.5

April            3.6

May             4.0

June             4.0

July              4.1

Aug.             4.2

Sept.             4.4

Oct.              5.0

The monthly core inflation figures strip out food and energy prices – because they can be volatile for reasons like weather, and foreign oil cartels, that have nothing to do with the economy’s underlying proneness to price increases (or decreases). They’ve been somewhat lower in absolute terms than the overall PCE monthly increases. In October, moreover, though they doubled over the September rate, they’re still lower than the price rises recorded in spring and early summer. But that doubling snapped a five-month streak of stabilization or declines. Here are these percentage changes.

Jan.              0.2

Feb.             0.1

March         0.4

April           0.6

May            0.6

June            0.5

July             0.3

Aug.            0.3

Sept.           0.2

Oct.            0.4

As for the year-on-year core percentage changes, they’ve arguably been worse momentum-wise than their monthly counterparts because they’d shown no signs of decline through September. Now they’ve become worse still with the jump to 4.1 percent in October (the biggest such surge in decades). And September’s rate has been revised up from 3.6 percent.

Jan.             1.5

Feb.            1.5

March        2.0

April          3.1

May           3.5

June           3.5

July            3.6

Aug.          3.6

Sept.          3.7

Oct.           4.1

My gut still tells me that current inflation will be transitory – and in some meaningful sense, not because “nothing lasts forever except death and taxes.” That’s because the CCP Virus-era economy is still so downright weird, and because its disruptions – along with the current severity of the disease – are bound to at least calm down at some point in the foreseeable future.

But the new numbers revealing new inflation momentum are telling the opposite story, and their importance is all the more impressive for basically matching the trends shown by the CPI figures. So the burden of proof on inflation’s future has definitely shifted to the shoulders of the transitory-istas.

Im-Politic: So the Vaccines Work…Except in Europe?

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There’s no doubt about it: Europe is having a terrible time with what looks like a severe new CCP Virus wave. Not made nearly as clear by the coverage – this new wave is rising despite high vaccination rates in most of the countries being hit. As this post will show, two key trends are casting serious doubt on broad claims of vaccine effectiveness claimed by the U.S. public health establishment and others who have viewed it as the only reliable source of “The Science” on the pandemic and fighting it.

The first trend is in reported infection rates. As known by RealityChek regulars, I don’t take this metric especially seriously because it can be impacted by developments having little to do with the actual severity of the pandemic – like testing rates and numbers of asymptomatic infections. (The latter complicates the situation because people carrying the virus who are feeling no effects are relatively unlikely to take a test.)

But the public health establishment takes infection rates very seriously – and evidently in Europe as well as in the United States. So here are the relevant figures for eleven European countries – with their full vaccination rates as of November 22 on the left and the change in the seven-day moving average (7DMA) of daily new infections between November 15 and November 22 on the right. The vaccination rates come (with the exception noted below) from the Washington Post‘s virus tracker feature, and the infection rates from the worldometers.info website. And for comparison’s sake, I’m including the U.S. figures as well.

Netherlands:        73.0 percent*     +48.76 percent 

Germany:             68.0 percent      +30.62 percent

Belgium:              75.4 percent      +45.52 percent

Austria:                65.7 percent      +24.40 percent 

UK:                      69.1 percent        +9.06 percent 

France:                 69.6 percent      +81.76 percent 

Czech Republic:  58.6 percent      +39.58 percent 

Portugal:              86.9 percent      +48.04 percent

Denmark:             78.5 percent      +21.30 percent 

Spain:                   79.8 percent      +58.98 percent 

Italy:                     73.1 percent      +26.59 percent

USA:                    59.0 percent      +11.24 percent

*See here for the Netherlands vaccination rate   

It’s easy to see that there is absolutely no correlation between the two sets of numbers. Just look at the contrast in infection rate increases between the United Kingdom and France – even though their full vaccination rates are nearly identical. Also, how come highly vaccinated Spain and Portugal are seeing case numbers rise so quickly? Why are Italian case numbers rising much more slowly than those on the Iberian peninsula, even though it’s vaccination rate is somewhat lower? And why does the United States, with the second lowest vaccination rate (due to all those supposed kooks who won’t get vaxxed?) come in with the second lowest infection growth rate in this group?

But like I said, in my view, infection rates don’t deserve much relative attention. Death rates aren’t a flawless measure of virus severity, either, but they’re another matter – especially because so many inside and outside the public health establishment say that the main value of the vaccines is less their power to prevent infections than to prevent serious illness and death. That proposition holds more strongly for Europe, but as you’ll see, there are several big exceptions.

Below are the data comparing the same vaccination rates (on the left) and CCP Virus death rates (on the right) for the eleven European countries plus the United States. The death rate number is the change in the 7DMA between November 15 ad November 22 and is also from the worldometers.info site.

Netherlands:        73.0 percent*       +52.17 percent 

Germany:             68.0 percent        +22.35 percent

Belgium:              75.4 percent        +27.59 percent 

Austria:                65.7 percent        +27.27 percent

UK:                      69.1 percent           -5.80 percent

France:                 69.6 percent        +27.03 percent 

Czech Republic:   58.6 percent       +43.75 percent

Portugal:               86.9 percent       +30.00 percent 

Denmark:              78.5 percent       +50.00 percent

Spain:                    79.8 percent        -26.09 percent 

Italy:                      73.1 percent         +5.36 percent

USA:                      59.0 percent        +0.29 percent 

The lessons of this table are more difficult to draw for one main reason – the absolute numbers of deaths involved for most of these countries are extremely low. Meaning single or double digits low. And as known by RealityChek regulars, very low numbers can be highly volatile when it comes to percentage change terms, because only a tiny move in absolute numbers can produce huge relative moves. (For exampile, an increase of one to two in absolute terms equals a 100 percent increase.)

The three exceptions are Germany (where the daily deaths 7DMA have been growing recently by the high-100s), the United Kingdom (where they’re rising by the mid-100s), and the United States (where daily growth still exceeds 1,000). Even taking these disparities into account, it’s interesting that the U.S. daily death rate has been stable lately and in fact has come way down since August; and that in the United Kingdom, with its average vaccination rate, mortality is declining.

And in relative terms, on this front, both countries have been out-performing Germany – whose vaccination rate is a bit lower than the United Kingdom’s but a good deal higher than the United States’. It’s true that death rates are lagging indicators (because CCP Virus victims typically take a while to pass away). But the different directions in this indicator in these three countries don’t seem to have much to do with their vaccination rates.

As for the high vaccination countries, the rates of mortality increase are indeed worrisome, and simply because of their often-soaring infection rates could worsen. But the absolute numbers are still so low that the only reasonable conclusion is “Wait and see.”

That’s why even though tight virus-related restrictions are reappearing all over Europe (see, e.g., here, here, and here), it seems panicky at best to close down entire economies and societies – especially given all the collateral damage that would result. Sweepingly linking employment opportunities to vaccination status, as the Biden administration has sought seems equally unreasonable in light of these mounting signs that the jabs simply aren’t the panacea that was initially advertised.

An announcement yesterday by the President’s coronavirus response coordinator that We can curb the spread of the virus without having to in any way shut down our economy,” indicates that Mr. Biden is learning the first lesson. A more targeted approach toward vaccinations and other responses, focusing on the most vulnerable, would be a welcome sign that he’s learning the second.

(What’s Left of) Our Economy: In Case You Still Think Wages are Driving U.S. Inflation

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Although American workers’ pay has kept falling behind living costs this entire year on net, some serious students of the economy (see, e.g., here and here) seem to believe that they’re already starting to fuel the lofty inflation the nation has experienced recently, or will soon begin to.

So I thought that today I’d add to the evidence I’ve already presented (see, especially, here and here) making clear that nothing of the kind has happened so far during 2021, and no signs of this kind of “wage-price spiral” are yet visible.

The first new set of figures clashing with fears of what’s also called “wage push” inflation is below, in a table comparing the monthly overall inflation rates as measured by the U.S. Labor Department’s Consumer Price Index, and the monthly changes in pre-inflation hourly wages (also tracked by the Labor Department.

                    Monthly inflation rate this year     pre-inflation wages this year

Dec-Jan:                   0.26 percent                                 0.03 percent 

Jan-Feb:                   0.35 percent                                 0.27 percent

Feb-March:              0.62 percent                               -0.10 percent 

March-April:           0.77 percent                                 0.66 percent 

April-May:              0.64 percent                                 0.46 percent

May-June:               0.90 percent                                 0.43 percent 

June-July:                0.47 percent                                  0.36 percent

July-Aug:                0.27 percent                                  0.39 percent 

Aug-Sept:               0.41 percent                                  0.59 percent

Sept.-Oct:               0.94 percent                                  0.36 percent

As the table shows, in only two months so far – August and September – has the increase in the pay received by workers exceeded the increase in total U.S. prices. And in October, the gap between inflation rates and wage increases expanded again to its widest extent of the entire year. Indeed, the October current dollar wage increase matched the smallest secured the entire year.

If a wage-powered inflationary spiral was underway, then exactly the opposite would be taking place. Workers would continue seeking raises that consistently topped inflation rates, and employers would continue raising their prices in bids to keep up. And you certainly wouldn’t see the wage gains losing momentum instead of gaining momentum.

The second set of figures debunking the wage-push inflation claims and fears was inspired by my buddy Widge, who I first met on Twitter, and whose insights on the economy and many other subjects I’m always learning from. (Widge has always been too modest to use his name, but I know he’s a real person because we’ve had dinner together.)

Last week, Widge tweeted a chart illustrating the astronomical spike in prices of new motor vehicles and accompanied it with the question, “Do you think it is wages of 4 million fewer payroll employees that are driving the massive inflation of new Autos in the past year?”

Widge’s tweet prompted me to ask a slightly different question: “How do price increases in the hottest inflation sectors of the economy compare with the wage trends in those industries”? Presumably, if the United States was already experiencing wage-push inflation, worker pay in sectors where prices have jumped over the past year faster than the overall annual inflation rate (5.4 percent for September) would be unusually high, too.

Unfortunately, the industry-by-industry wage and price data tracked by the Labor Department don’t always match up, but the table below presents the results for ten high-inflation sectors from all over the economy, and they won’t make the wage-price spiral crowd happy, either. (I’m using September’s statistics because that’s the latest data month for which the most numbers are available.)

                Sept. 2020-2021 CPI change                         Sept 2020-21 wages change

non-poultry meat:    12.6 percent                                          6.84 percent 

poultry:                      6.1 percent                                        13.01 percent 

restaurants:                5.3 percent                                        12.21 percent

furniture/bedding    12.0 percent                                          6.79 percent 

new vehicles             9.8 percent                                         -0.54 percent 

used vehicles          26.4 percent                                         -6.46 percent 

motor vehicle parts   8.8 percent                                         -4.19 percent 

hotels/motels:         17.5 percent                                         12.76 percent

laundry/dry cleaning 6.9 percent                                        10.60 percent

gasoline*:                49.6 percent                                        10.57 percent**

*motor fuel

**gas stations without convenience stores

After all, in the ten sectors shown, pre-inflation wages have surged faster than prices in only three – poultry processing, restaurants and other eating places, and laundry and dry cleaning services. And in three of the ten industries (new motor vehicles, used motor vehicles, and motor vehicle parts) wages have actually fallen before inflation is taken into account. Again, if wages were the main, or even a prime, inflationary culprit, they’d generally be rising faster than prices overall.

No one in his right mind can rule out the possibility that a wage-price spiral will be ignited. Workers are still returning to the job market at a relatively slow rate. Funds from the CCP Virus relief bill ae still being injected into the economy, more infrastucture and related spending will soon start being released, and still more will be on the way if the Senate passes a version of President Biden’s Build Back Better bill that’s close to the measure the House has approved.

But for now, anyone blaming American workers for recent inflation can be rightly accused of blaming the victim.

Im-Politic: Why College Taught Me Everything Important About the Rittenhouse Trial

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So what kind of a blogger on current affairs-type stuff would I be if I didn’t weigh in on the Kyle Rittenhouse trial? I did hesitate briefly out of concern that I might have to violate one of the main rules I try to follow when deciding what to post: making sure that I add something meaningful to what’s already been said. But then I realized that, of all things, a story from my college days might shed some light on how ludicrous the charges – not all the important but legally extraneous matters that have been brought, but the actual charges given the jury – have been from the start.

I’m presenting the story in condensed form, but it starts in the lobby of Princeton University’s Firestone Library, sometime near week-night closing time for the regular facility (around midnight, as I recall), where and when groups of friends typically gathered to figure out if they’ll do anything after studying – or just to gather briefly. So I’m there with one of my groups and an additional friend (we’ll call him “X”) walks over to join us and proceeds to point to a female student standing across the lobby – no doubt waiting for some of her own friends to show up.

You see that girl?” he asks while pointing. “She’s been following me.”

Whereupon one of us responded, “X, how could she be following you? She got here before you.”

Replied X, without missing a beat, “She’s been following me in reverse.”

Although the rest of our group kept insisting that, at least based on her behavior that night, the female student in question could have been following X only if she arrived in that lobby after him – and that, if anything, the follower would logically have been him – X stuck to his guns.

The tale is relevant to the Rittenhouse trial because the charges deliberated upon by the jury centered on whether Rittenhouse used deadly force unlawfully that night in Kenosha, Wisconsin, or whether the gun shots he fired were legal because they were acts of self-defense. In that state, and apparently in the nation generally, the prosecution needs to present evidence establishing certain kinds of facts about the circumstances of the relevant sequence of events and about defendants’ frames of mind in order to prove criminal or civil liability. And especially whenever life and death or other serious stakes are involved, we should want justice to proceed methodically.

But not all facts are created equal, and to me, the one piece of evidence that cleared Rittenhouse all along – and that in fact justifies doubt about whether charges should have been brought at all – is that he was running away from his eventual victims (along with the complete lack of evidence that any prior violent acts by him caused their pursuit).

After all, someone fleeing others is clearly afraid of them. It’s true that Rittenhouse testified that he knew his first victim and original pursuer, Joseph Rosenbaum, was unarmed. He also, however, said under oath that Rosenbaum “was chasing me, I was alone, he threatened to kill me earlier that night.”

And here’s where I believe my college story adds a new insight to the Rittenhouse verdict debate: Claiming that firing at a pursuer with arguably murderous intent doesn’t qualify as self-defense is akin to X’s claim that the woman who arrived in the library lobby after him was a “reverse follower.” Meaning that convicting Rittenhouse would have amounted to deciding that he was a “reverse aggressor.” And it would have been just as obviously – though not at all humorously – absurd.