wrongologist – Page 44 – The Wrongologist

Companies Are Making Inflation Worse

The Daily Escape:

Grand Park, Mt. Rainier, WA – August 2022 photo by Edwin Buske Photography

As discussed yesterday, polls are showing that voters are still concerned about inflation. The good news over the past two days is that producer prices (prices at the wholesale level) and consumer prices both fell from June to July.

But these inflation concerns won’t be going away, and the Republicans hope to make the November midterms a “gas and groceries” election, saying Biden is the cause of rising prices. In July’s Consumer Price Index, the price of groceries was a particular pain point, rising 1.3% for the month. Wolfstreet reports that the year-over-year rise in the “food at home” part of the CPI (food bought in stores and at markets) is now at 13.1%, the worst spike since 1979.

Food is a category where inflation hits consumers right in the face on a daily basis. And it hits people on the lower end of the income spectrum much harder because they spend a relatively larger portion of their income on food.

But the fall in gasoline prices over the last couple of months is also meaningful. After peaking in June at $5.03 per gallon, the average national price of gas fell below $4 this week, according to GasBuddy.

The Hill reports that Biden will go on offense against the Republicans’ drumbeat about inflation by traveling the country to tout job creation and the Inflation Reduction Act, once it is passed by the House on Friday. Biden plans to make the point that Congressional Republicans sided with the special interests every step of the way on delivering lower costs for working people.

That won’t hurt Dems chances in November, but will it be enough to offset what’s happening with retail prices? Here’s another striking set of facts from Bloomberg:

“The first sign that this wasn’t going to be a typical corporate earnings season came early on the morning of July 12, when PepsiCo Inc. unveiled an odd set of results. Growth in unit sales, it said, was essentially zero in North America. Revenue rose though, driven by the double-digit price increases Pepsi slapped on its snacks.”

They weren’t the only consumer product company to raise prices as sales fell: The purple dots show how unit sales fell (as much as 10% for Clorox) while prices (green dots) rose in most cases, more than 10%. And revenue (yellow dots) rose for all firms:

This is bad for the economy on many levels: Price-driven sales growth isn’t healthy; and it isn’t good for consumers who have lost purchasing power (and are angry about it). It isn’t good for our overall economy, or for the Federal Reserve that’s trying to bring down inflation.

Many CEOs are willing to raise prices because it’s no longer the taboo it has been for the past two decades, when annual inflation averaged a little more than 2%. Their thinking is that if volumes slip a little as a result of the price hikes, their share prices won’t take a beating. So no worries, just raise prices.

The bet that these consumer products CEOs are making is that once things settle down in the economy, people will come back. Bloomberg quotes Neil Saunders, an analyst at GlobalData Plc, a consulting company:

“If they keep losing share next year, they’ll take more notice. It’s very hard at the moment to tell what’s temporary and what’s permanent.”

Starbucks, Coca-Cola, Kimberly-Clark, and Church & Dwight, the maker of Arm & Hammer baking soda and OxiClean, all reported quarterly numbers that fall into the weak-volumes-and-big-price-hikes category. More from Bloomberg: (emphasis by Wrongo)

“One of the best examples is Conagra Brands Inc., the…Chicago-based food conglomerate, which reported results on July 14. A core measure of its revenue jumped 6.8%, in the three months that ended on May 29, thanks to an increase of 13% in the average price it charged….The amount of goods it sold, though, fell 6.4%.”

We know that inflation is very high, among the highest rates in the past 40 years. It now seems clear that consumer products companies are a prime contributor to these price increases.

We know that unemployment is as low as it’s been in 50 years. The labor market is strong. We know that the growth rate of GDP was really high in 2021, and that it’s slowing in 2022.

What we don’t know is how voters are going to act in November.

Partisanship is Dragging Down Consumer Sentiment

The Daily Escape:

Sunrise, Smugglers Beach, Yarmouth, MA – July 2022 photo by Sue Frageau

We all hear the negative news, and fewer of us hear what’s positive. Bloomberg’s Matt Winkler says that the measures that track confidence in the economy are being skewed downward by politically disgruntled Americans, mostly people on the Right. Here’s a chart:

There’s plenty of evidence that the Democrats are terrible at political messaging. But, even though inflation is at 40-year highs, we need to ask why consumer sentiment seems so low when the economy is doing pretty well.

Winkler’s point is this level of negativity makes little sense economically but as the chart above shows, it’s consistent with partisanship. And he makes a compelling case that the current sentiment levels are disconnected from the overall state of the economy relative to historic levels. More from Winkler:

“Never mind that the deaths related to Covid-19 plunged 78% from the first to the second quarters, that 10 million new jobs have been created, that unemployment at 3.5% represents a 53-year-low, that corporate earnings rose to a record and that the confidence of chief executive officers remains above its long-term average. Not to mention that total household net worth soared by $18.1 trillion in 2021, the most under any president…”

Here’s a different chart from Barry Ritholtz showing the University of Michigan Sentiment Index going back to 1978, annotated to show previous economic turndowns:

The chart shows that the current sentiment readings are worse than:

1980-82 Double Dip Recession
1987 Crash
1990 Recession
9/11 Terrorist Attacks
2000-2003 Dotcom implosion
2007-09 Great Financial Crisis
2020 Pandemic Panic

Does it make any sense that today’s consumer sentiment would be worse than it was for all of those previous economic crises? It does not.

It seems that Republicans are indifferent to the positive developments. The University of Michigan’s national Consumer Sentiment Index has plummeted 50% under Biden to an all-time low, primarily due to Republicans’ disapproval of an economy led by a Democratic President.

Bloomberg found that Democrats also aren’t as approving when their Party isn’t occupying the White House. But in contrast to Republicans, Democrats’ confidence correlates closely with rising and falling gross domestic product and unemployment trends.

To be sure, the highest inflation level in 40 years, as measured by the Consumer Price Index at 9.1%, for June (although July measured a lower 8.5%) is punitive to the least affluent voters, the traditional base of Democrats.

Republican are amplified by FOX News in their views that the economy is in terrible shape. When the Commerce Department said on July 28 that the economy contracted for a second consecutive quarter, the Fox Business channel declared, “We are officially in recession.” But, as Wrongo and many others have said, there is no “official” recession until the nonpartisan economists of the National Bureau of Economic Research declare it.

It’s a perplexing time for economists. Overall activity as measured by GDP has contracted, but it doesn’t feel like a recession. The economy has added 2.74 million jobs this year through June. This earnings season has shown that members of the S&P 500 Index are on track to post record profits for the second quarter.

But none of this is apparent in the Michigan Sentiment Index, perhaps because Republicans running for office across the country in 2022 are saying the economy is terrible. They are the same people who are still denying the results of the 2020 election.

Paul Krugman asks why Biden isn’t getting any credit for the 10 million new jobs created in his first two years in office:

“Some polling suggests that the public may not be aware that we’ve been creating jobs at all, let alone at a record pace. And we’re in a partisan environment where politicians…can make obviously false assertions and have their supporters believe them. The other day Trump told a crowd that gas in California costs $8.25 a gallon, and nobody laughed. (It was actually $5.43 at the time.)”

Meanwhile, Biden is doing exactly what he promised when he got elected. And he’s succeeding against the odds with only occasional bipartisan support. His success shows that what’s hurting the consumer sentiment polling is partisanship and disinformation.

The FBI Search

The Daily Escape:

Wildflowers above 11,000’ at Paradise Divide, Carbondale, CO – July 2022 photo by Mountain West Photography

What to make of the FBI executing a search warrant at Trump’s Mar-a-Lago (MAL)? Despite what most of the immediately outraged Republican Party is saying, the bar for getting a search warrant on a former President is understandably and correctly, set high.

Trump claimed that the search was “prosecutorial misconduct” and reflected “the weaponization of the Justice System.” But prosecutors can’t conduct searches of people’s homes on their own. The Fourth Amendment requires that “no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.”

For the FBI to conduct this search, it needed a warrant, which means everyone from frontline prosecutors and FBI lawyers to Attorney General Merrick Garland had to sign off on the warrant application, and then a federal judge had to examine the affidavit setting forth their evidence and concur. This is the system working as the Constitution intended.

Garland and the federal judge who authorized the warrant knew that it would set off a shitstorm of reaction by Right-wing politicians and by Trump loyalists, but they went ahead anyway. Oh, to see that affidavit!

It was predictable that the MAGAverse would erupt in fury, but the reaction by the so-called Republican “establishment” is both ridiculous and frightening. Elected Republicans, who always remind us that they are the party of law and order, could have: Either adopted a posture of strategic silence, or given the FBI the benefit of the doubt while they conduct a court-sanctioned investigation.

Instead, except for Mitch McConnell who has stayed silent, they mostly went crazy, including House Minority Leader McCarthy’s threats of retaliation against Garland if Republicans take the House in the fall. Sen. Marco Rubio (R-FL) tweeted:

Although Lil’ Marco said this in 2016:

This is the worst kind of lie by a member of the US Senate. Rubio knows that this was the lawful execution of a search warrant that was presented with probable cause, and issued by a Federal judge. These aren’t done lightly or carelessly.

Trump has spent years sowing distrust of federal law enforcement and the “deep state.” And the response by senior Republicans shows how deeply his campaign of subversion has penetrated their hive mind.

Republicans are claiming that the FBI’s search of MAL is abusive. But law enforcement leaves a copy of the search warrant, which itemizes what they are looking for, and what laws may have been violated. If Trump and the MAGA Republicans really think this search is abusive, Trump would have made the warrant public. Trump needs to show it or shut up about it.

We really need to stand back and appreciate the clarity with which the GOP is expressing that the role of law enforcement is only to police the powerless. Here’s the #3 GOP Representative in the House:

This is sick. Law enforcement does exactly this to average citizens all the time, all over America. So, expect that this fall, the Party of “LOCK HER UP” will become the Party of “How Dare the FBI Investigate Republican Politicians.”

People are getting a lesson in civics: If society has a rule, it must be enforced for everyone in the same situation. Trump is saying that the DOJ has been weaponized. But consider this list from Marshall Cohen:

Despite all the hope by Democrats and the fury of Republicans, no one has a handle on how this will progress, or whether it has an impact on Trump’s attempt to run again for president. Wrongo listened to a Republican political strategist on the BBC say that the fact of the search itself will hand the presidency to Trump in 2024.

That seems like GOP hopium to Wrongo.

The next few weeks will be filled with speculation and most likely, conflicting information as details emerge about the MAL search and what was behind it. One thing that’s sure is that the immediate and escalating talk of violence among Trump’s supporters is troubling. Some have been calling for “war” or “civil war,” referring to FBI “tyranny.”

In the not too distant past, we’d dismiss this kind of talk as braggadocio. But that disappeared on Jan. 6, when we realized these militants are more than willing to act on their warped beliefs.

So take a step back and place this story in a broader context: As a Constitutional matter, DOJ’s action is a message to future presidents that even though recently, other guardrails of presidential accountability have failed us, the criminal justice system still works, so long as someone of integrity—like Garland—is at the helm.

Does America need further convincing that this fall, aside from running on their accomplishments, Democrats up and down the ballot, need to amplify the opposing party’s lack of regard for the rule of law or, for truth itself?

How do we insure that they don’t use the powers of their office(s) to morph this country towards authoritarianism?

By voting them out of power.

Should Legislative Wins Have Dems Feeling Optimistic?

The Daily Escape:

Sunset, Colorado, NM, near Grand Junction, CO – July 2022 photo by David Shield

Robert Hubbell made a list of landmark legislation passed thus far during the Biden presidency so that we’d have it handy over the next few months leading to the mid-terms in November:

03/11/2021 American Rescue Plan Act of 2021, a $1.9 trillion relief bill to address the continued impact of COVID-19 on the economy, public health, state and local governments, individuals, and businesses.
11/15/2021 Infrastructure Investment and Jobs Act, a $1.2 trillion investment in “hard infrastructure” including roads and bridges.
03/29/2022, Emmett Till Anti Lynching Act, 120 years after an anti-lynching bill was first introduced and which failed on nearly 200 prior occasions, Congress passed a bill designating lynching as a hate crime. Only three representatives—one each from Texas, Kentucky, and Georgia—voted against the bill.
06/25/22 Bipartisan Safer Communities Act, extended background checks for gun purchasers under 21, funding for state red flag laws and other crisis intervention programs, and partial closure of the “boyfriend” loophole.
07/29/2022 CHIPS and Science Act, the most significant research bill passed in a generation, including a $56 billion investment in American semiconductor production to incentivize companies to move chip production back into the US.
08/02/2022, Honoring our PACT Act of 2022, expanded healthcare and other services for veterans who were exposed to toxic substances during military service.
08/07/2022, Inflation Reduction Act of 2022, the largest climate investment in US history, also lowers prescription drug prices by giving Medicare the power to negotiate the prices of certain prescription drugs and extends expiring Obamacare health care subsidies for three years.

The scope of the issues addressed is significant: the pandemic and its economic fallout, highways, bridges, broadband, rail, manufacturing, science, semiconductors, prescription drug prices, health insurance, veterans’ health, climate change, deficit reduction and tax equity.

And they were passed within the constraints of a 50/50 Senate. Five of these laws, and all but the two biggies: the American Rescue Plan, and the IRA received Republican support. It’s pretty amazing that the Dems got this much.

So, whenever someone asserts that “Biden or the Democrats haven’t achieved anything” or that “Biden’s presidency has been a failure,” ask them to name as many significant pieces of legislation passed by Trump. Or, by Obama, Bush II, Clinton, Bush I, Reagan, Carter, Ford, or Nixon.

Only LBJ stacks up to the progress Biden has made so far.

But, it’s unclear how much this will help the Democrats in November. The Dems went into the 2010 midterms having passed Obamacare, a landmark piece of legislation, but they lost 60 seats and the leadership of the House. That was the biggest swing since 1948. Republicans also reduced the Democrats’ Senate majority.

So, as Wrongo stated yesterday, the political challenge for Democrats turns in large part to messaging —and targeting their message to the cohorts that make up the Democratic Party. Ruy Teixeira, a Democratic strategist affiliated with the American Enterprise Institute, wrote in the WSJ that Hispanics are no longer a sure cohort for the Democrats:

“It seems clear that Democrats seriously erred in 2020 by lumping Hispanics in with other “people of color,” assuming that they sympathized with the racial activism that dominated so much of the political scene that year. In reality, Hispanic voters are not a liberal voting bloc, especially on social issues.”

“In a Pew postelection survey, just 20% described themselves as liberal, while 45% were moderate and 35% conservative. Surveys show that Hispanics are overwhelmingly an upwardly mobile and patriotic population whose main concerns are jobs, the economy, healthcare, effective schools, and public safety.”

Teixeira cites the polling firm Civiqs’ survey in late July that showed that just 12% of Hispanic working-class voters said their family’s financial situation had gotten better in the last year, while 50% said it had gotten worse.

In general, Hispanic voters cite inflation and the economy as by far their top issues for 2022. They could be a tough get for Dems who want to focus voter attention on abortion rights, their legislative achievements, and the Jan. 6 hearings.

How should Democrats message Hispanic voters?

We’re at an inflection point. All of the above happened because there were 50 Democratic Senators. It wouldn’t have happened with 49. It might have been bigger with 52 or more. Lose control of the House in November, and see Biden impeached.

These are things all Democrats should be reckoning with. Let’s leave the last words to Hubbell: (brackets by Wrongo)

“We have the policies, the positions, the values, and the candidates necessary to win. We need to….engage without fear or hesitation…..Let’s capitalize on the string of mistakes and “pulling back the curtain” moments that have revealed…[Republican] depravity as never before. We have every reason to be confident but no reason to be complacent!”

Monday Wake Up Call, Inflation Reduction Act Edition – August 8, 2022

The Daily Escape:

Summer storm passes, Grand Teton NP, WY – August 2022 photo by Hilary Bralove

The Senate came into session at 12 pm Saturday, and after a full 24 hours, it paused the vote-a-rama on Sunday for a new prayer. Those are the Senate rules. Then the Senate promptly resumed its vote-a-rama, which ended about 3:15 pm on Sunday. From the WaPo:

“The Senate on Sunday approved a sweeping package to combat climate change, lower health-care costs, raise taxes on some billion-dollar corporations and reduce the federal deficit, as Democrats overcame months of political infighting to deliver the centerpiece to President Biden’s long-stalled economic agenda.”

While most of the Democrat’s reconciliation process proceeded according to plan, Senate Republicans successfully stripped a provision capping the price of insulin in the private marketplace from the Inflation Reduction Act (IRA) by a 57-43 vote, with seven Republicans (Cassidy, Collins, Hawley, Hyde Smith, Kennedy, Murkowski and Sullivan) voting to keep it in. But the seven GOP votes, plus all Democrats, weren’t enough to reach the 60-vote threshold necessary to pass.

The cap on insulin prices for only those on Medicare remained in the bill since it complied with the rules on reconciliation. Apparently, the Republicans think that if we give people handouts for having diabetes America’s just incentivizing people to get diabetes. Who wants that?

Democrats included a new tax on large companies that currently pay nothing to the US government and added about $80 billion for the Internal Revenue Service to pursue tax cheats. They also approved a 1% tax on companies that buy back their own stock, a practice that many see as detrimental to the economy, that benefits only wealthy shareholders and executives.

After the bill passed, Republicans were predictably outraged. The appropriately-named Sen. Mike Crapo (R-ID) said:

“It does nothing to bring the economy out of stagnation and recession. But rather, the Inflation Reduction Act of 2022 gives us higher taxes, more spending, higher prices — and an army of IRS agents…”

And it’s important to note that while Democrats don’t think that Sens. Manchin and Sinema are all that great, don’t forget that this watered down bill was opposed by EVERY SINGLE REPUBLICAN.

There is plenty to crow about in the IRA. Does it contain everything on the progressive wish list? No, but Dems should take the win and stop pissing and moaning about what couldn’t get by Manchin, Sinema and/or the Senate Parliamentarian, and sell the bill hard to the American people.

If Democrats want to deliver even more, they’ll need to improve their margin in the Senate, and hold the House in the November mid-terms.

It’s not enough for Democrats to wait for Republicans to shoot themselves in the foot this fall, even though some candidates can be counted upon to try hard to do just that. Democrats need to be shouting about their successes. Just yesterday, Trump said at CPAC: “You have not good job numbers now”, even though the just-published job numbers were awesome! That has to be countered at every opportunity.

This means a wall-to-wall, multi-pronged messaging campaign, reminding Americans every minute that Republicans can’t be trusted on the economy. And despite where inflation is today, we need to be saying that gas prices are down nearly $1.00/gallon in the last seven weeks.

Maybe John Stewart should become the Dem’s Minister of Information?

We need to say that most GOP candidates support the Big Lie and the impeached coup plotter, Trump. That they’re willing to eliminate the right to an abortion in America. On Friday, Indiana’s Republicans passed and Republican Governor Eric Holcomb immediately signed, a bill that prohibits nearly all abortions from the moment of gestation. Several Republican-controlled states will shortly pass similar laws.

People must, as Tom Sullivan says, “campaign like crazy“, while reminding all Americans that the Party of Lincoln no longer will deliver anything that ordinary people want.

Time to wake up America! We’re at war politically and ideologically with Republicans. The only way to win is to keep defeating them at local, state, and federal levels until they stop trying to force their radical ways on the rest of us. To help you wake up, watch, and listen to the interesting but short-lived group, 4 Non Blondes play their big hit from 1992, “What’s Up”:

Sample Lyric:

25 years and my life is still
Tryin’ to get up that great big hill of hope
For a destination

I realized quickly when I knew I should
That the world was made up of this brotherhood of man
For whatever that means

And so I cry sometimes when I’m lying in bed
Just to get it all out what’s in my head
And I, I am feeling a little peculiar

Sunday Cartoon Blogging – August 7, 2022

The Labor Department on Friday reported that the economy added a seasonally adjusted 528,000 jobs in July, far more than the 258,000 economists expected to see. And the headline rate of unemployment fell to 3.5%, back to the multi-decade low we experienced just before the start of the pandemic.

With the upward revisions to the last two months, there are now 22,000 more jobs than there were just before the pandemic. Further, the mix of these new jobs skews away from the lower paying sectors toward higher paying ones. The WSJ reports that in July, there were about a million more jobs combined in the so-called goods-producing sectors—manufacturing, construction, mining and logging—plus the retail trade and warehousing and transportation sectors, than in February 2020. And there were about a million fewer jobs in the remaining service-sector industries.

Leisure and hospitality jobs, which were the most hard-hit during the pandemic, rose by 96,000, but are still -7.1% below their pre-pandemic peak. And within the leisure and hospitality sector, food and drink establishments added 74,100 jobs, but are still about 635,000, or -5.1% below their pre-pandemic peak.

But it wasn’t all good news. The number of people employed as a share of the working-age population was 60% last month, below February 2020’s 61.2%. If it could return to that percentage, there would be millions more Americans working. An interesting fact in the employment report was that there were 656,000 more people out sick last month than in July 2019. On to cartoons.

The Kansas vote dropped on the wicked witch:

What Kansas taught us this week:

Pelosi sparks a flame:

Alex Jones finally grabbed by his appendage:

The US kills another al-Qaeda leader, but nothing changes in Afghanistan:

RIP Bill Russell:

Saturday Soother, Taiwan Edition – August 6, 2022

The Daily Escape:

El Morro National Monument, NM – monsoon rains have turned the brown landscape green – July 2022 photo by Kirk Shoemaker

We need to talk about Taiwan. China said that they wouldn’t tolerate a visit to Taiwan by House Speaker Nancy Pelosi (D-CA), and that there would be severe consequences if she failed to heed China’s warning. But she ignored China, and went anyway.

China then launched a comprehensive set of war games, showing clearly how they might invade and take over Taiwan militarily at some point in the future. China then announced it sanctioned Pelosi and her family. Now, according to the BBC, China has said all dialogue between US and Chinese defense officials would be cancelled, while co-operation on returning illegal immigrants, climate change, and on investigating international crime would be suspended.

You know the broad outline of the issues: China viewed Pelosi’s visit as a challenge to its claims of sovereignty over Taiwan, even though Taiwan is self-ruled, and sees itself as distinct from the mainland.

As China has become a global leader, their abilities and ambitions have shifted. A 1997 trip to Taiwan by then US House Speaker Newt Gingrich, was met with little opposition, while the Speaker Pelosi visit has been met with missiles. This is a complicated issue. China doesn’t control Taiwan; it doesn’t issue travel visas for it, either. In April, a group of US Senators visited Taiwan. At the time, China’s Foreign Ministry condemned the visit in a series of tweets and press statements, but nothing more.

The US has wanted to keep Taiwan in its orbit at least since the 1950’s when General Douglas MacArthur, then the Supreme Commander of allied powers in Japan, sent a top secret “Memorandum on Formosa” to President Truman (Back then, Formosa was the name of Taiwan). To contain communism, MacArthur insisted that Truman consider the strategically located Formosa (Taiwan) as a counterbalance to the Soviet and Chinese regional expansion:

“Formosa in the hands of the Communists can be compared to an unsinkable aircraft carrier….”

He argued that Taiwan should instead be an unsinkable US aircraft carrier, projecting American power in the Pacific. As China grew in power and importance, the US adopted a policy of strategic ambiguity with respect to the two countries, wanting good relations with both and wanting to finesse the question of political control of Taiwan.

But lately, the US has been slowly walking away from the doctrine of strategic ambiguity, increasingly signaling to China that it considers Taiwan a core US interest in North Asia. That’s why the Chinese reacted so strongly to a high level politician like Pelosi visiting Taiwan.

It’s also true that the South China Sea and the Taiwan Straits are among the world’s busiest seaways, and that’s where China’s military exercises are now taking place:

Source: Bloomberg. The dots are vessels, the polygons are China’s military drill areas

The NYT’s Tom Friedman connected Pelosi’s trip to the Biden administration’s previous efforts to keep China from getting involved in Ukraine on Russia’s side:

“There are moments in international relations when you need to keep your eyes on the prize. Today that prize is crystal clear: We must ensure that Ukraine is able, at a minimum, to blunt — and, at a maximum, reverse — Vladimir Putin’s unprovoked invasion…”

Biden had held a series of tough meetings with Xi, trying to keep Beijing out of the Ukraine conflict. Friedman says that Biden told President Xi that if China entered the war in Ukraine on Russia’s side, Beijing would be risking access to its two most important export markets — the US and the EU. More from Friedman:

“By all indications…China has responded by not providing military aid to Putin — at a time when the US and NATO have been giving Ukraine intelligence support and a significant number of advanced weapons that have done serious damage to the military of Russia, China’s ostensible ally.”

So why mess with Biden’s Ukraine power play, Nancy? That’s Friedman’s question. OTOH, everyone knows that the minute we bend a knee to China is when we lose our ability to defend Taiwan and hold on to the unsinkable aircraft carrier.

China hasn’t proven itself capable of dealing with Taiwan except through threats since Chiang Kai-Shek left the mainland and took over in Taiwan in 1950. If China wants to control Taiwan without a fight, it has to stop threatening to rape her if she doesn’t want to date. Every Chinese threat increases Taiwan’s separate national identity, and decreases the chance of a peaceful Chinese takeover.

Time to leave geopolitics behind, it’s time for our Saturday Soother, where we focus on clearing our minds for the week to come. Here on the fields of Wrong, we have a crew rebuilding a stone wall by the road that was hit by a large truck a few years ago.

Let’s start by finding that one last can of nitro cold brew in the back of the refrigerator and grab a seat by a large window. Now put on your wireless headphones and listen to “Danse Bacchanale” by Camille Saint-Saëns from his opera “Samson et Dalila”, played here by the Orquesta Sinfónica Juvenil de Caracas, Venezuela in 2010:

This is played at a very quick tempo, and with passion!

Run On Roe And Reform

The Daily Escape:

Perkins Cove, Ogunquit, ME – July 2022 photo by Adam Silverman Photography

From the Kansas City Star:

“The right to an abortion will remain in the Kansas Constitution. In the first ballot test of abortion rights in a post-Roe America, Kansas voters turned out in historic numbers to overwhelmingly reject a constitutional amendment that would have opened the door for state lawmakers to further restrict or ban abortions across the state.”

Kansas voters showed that the Supreme Court’s decision in Dobbs doesn’t sit well, even in one of the country’s most conservative states. Democrats should adjust their 2022 Midterms messaging and strategy accordingly, to make it clear that Roe and Reform are what they’re running on.

Across party lines, abortion rights remain popular while the Supreme Court’s ruling is not. The most recent CNN poll found that 63% of Americans disapproved (51% “strongly”) of the court’s decision.

The NYT reported about Kansas:

“From the bluest counties to the reddest ones, abortion rights performed better than Mr. Biden, and opposition to abortion performed worse than Mr. Trump,”

The NYT had several observations:

Abortion opponents under performed even in conservative areas. In Hamilton County, which voted 81% Trump in 2020, less than 56% chose the anti-abortion position. In Greeley County, which voted more than 85% for Trump, only about 60% chose the anti-abortion position.
Kansas’s swing areas swung left. Wyandotte County, (where Kansas City is located), voted 65% for Biden in 2020, but 74% for abortion rights. Neighboring Johnson County, the state’s most populous, voted 53% for Biden but more than 68% for abortion rights.
Turnout was high. Before the election, the Kansas secretary of state’s office predicted turnout of about 36%. But anecdotal evidence indicated turnout might hit 50%, an extraordinary increase over what was expected.

Here’s TPM’s Josh Marshall’s Twitter thread on what Kansas means to the Democrats’ Mid-term road map: (emphasis by Wrongo)

2/ When a result is this lopsided & this unexpected for most political observers it’s not only a political earthquake but a sign many political professionals have seriously mistaken the political terrain. When there’s a political backlash as strong as the one against Dobbs …

3/ and one party is as firmly tied to it as Republicans are here, clearly the opposing party needs to grab on to it with both hands. Abortion rights will be central to numerous races this fall. But Democrats need to make the connection as explicit and tangible as possible.

4/ The way to do that is to make a firm pledge that if Democrats hold the House and add two Senate seats they will make Roe into federal law in January 2023. They are at present kinda sorta suggesting something like that, maybe. But clarity is everything. Give us this …

5/ specific result and this is specifically what we will do. Kansans didn’t turn out in these lopsided numbers to make a statement about Dobbs or Roe. They did so because they knew that the outcome of this one vote would immediately and dramatically affect the right …

6/ to a safe and legal abortion in the state. Democrats need to approximate the same clarity at the federal level, both to undo Dobbs and also to secure their hold on Congress. The way to do that is to get all 48 (non-Sinema/Manchin) senators to make a firm pledge that …

7/ if the House is held and two Democratic senators added they will vote for a Roe law in January 2023 AND suspend the filibuster rules to guarantee that bill gets an old fashioned up or down majority vote. So far 31 Senate Democrats have said they’ll do that (though not …

8/ yet on the specific date). All but two of the 17 are basically there but still refuse to say it clearly. There are two potential hold outs. Angus King of Maine and Mark Warner of Virginia. They will all certainly fall in line quickly if constituents apply pressure now.

The Kansas vote shows that the anti-abortion Republicans have misjudged how deeply this issue resonates for voters. When a Constitutional right simply disappears, apparently, the voters will turn out.

The polls have consistently shown that the majority of this country is pro-choice. The rejection of the Kansas amendment shows that if the election were to be a referendum on pro-choice, Democrats will win.

The Republicans should be afraid that they have gone too far. Let’s hope this is a bellwether for the midterms.

(Hat tip to long-time blog reader and Kansas resident Monty B. for keeping Wrongo apprised of the Kansas fight to turn back this amendment).

Monday Wake Up Call, Recession Edition – August 1, 2022

The Daily Escape:

Monopoly, Revere Beach, MA – From the 2022 Revere Beach International Sand Sculpting Festival. July 24, 2022 photo by Jack Daryl Photography.

From Paul Krugman:

“The US economy is not currently in a recession. No, two quarters of negative growth aren’t, whatever you may have heard, the “official” or “technical” definition of a recession; that determination is made by a committee that has always relied on several indicators, especially job growth.”

Nonetheless, Wrongo predicts that over the next few months, the Big Brain News Pundits will spend mucho time arguing among themselves while we watch, about the meaning of the word “recession“. They will ensure that the word “recession” is said at least once every 30 seconds.

Wrongo brought this up a few weeks ago. Recessions are determined not by pundits but by a committee of economists at the National Bureau of Economics (NBER). The two measures that have had the most weight are real personal income and non-farm payroll employment. So, despite what you’re hearing, it boils down to income and employment. If income and employment turn south, there’s a good chance economic output will be lower. From Robert J. Shapiro:

“Start with employment, which normally contracts in the first two quarters of recessions. Over the first six months of the 1990–91 recession, employment fell by 690,000, or 0.6%. Similarly, over the first two quarters of the recessions of 2001 and 2007–09, employment fell respectively by 761,000 and 426,000 positions, or 0.6% and 0.3%.”

But in the first two quarters of 2022, employment actually grew, increasing by 2,740,000, or 1.8%.

The main factor behind the lower GDP in the second quarter was business inventories. Businesses generally finance increases in their inventories. So as interest rates rose in the second quarter, inventory purchases fell sharply, subtracting 2% from GDP. GDP growth in the second quarter was -0.9%, so inventories accounted for all of the loss of GDP.

Inventories grew. but at a slower pace, bringing about the negative GDP performance. But this change in the rate of growth in inventories is not tied to either employment or to income, so we’re not in a recession, even though GDP fell.

But our bigger economic problem is inflation. Back to Krugman:

“Obviously gasoline prices are down — almost 80 cents a gallon from their mid-June peak. (Remember those scare stories about $6 a gallon by August?)”

We all know that the Big Brain Pundits only really care about how much it costs to fill their gas tanks compared to what it may have cost when some other guy was president. Expect that they will ignore our record low unemployment, and the growth in median wages.

Despite growing slower than inflation, wages are growing at about 5.4% annually. That’s good, although it could be better. Yet, the Big Brains want us all to be worried about the possibility of recession and inflation occurring at the same time. They’re worrying about that old 1970’s bugaboo, stagflation, which is highly unlikely to occur, despite how much Republicans are rooting for it to happen.

If America really wants to stop inflation in its tracks, we know how to nudge prices in the right direction: Implement a windfall profits tax on oil and food companies, whose profits are off the charts, along with their prices. Also, we could pass the corporate minimum income tax that is a part of the proposed Inflation Reduction Act.

How well the Federal Reserve addresses inflation will decide how soon the current economic expansion ends, and a recession begins. Although the economy’s fundamentals are sound, there’s a danger that the Fed’s interest rate hikes may dampen demand and employment too much. That’s a 50/50 call right now.

Time to wake up America! We’re not in a recession, although we may see one in 2023. We don’t have inflation under control yet, although that’s likely to happen within the next year.

To help you wake up, watch and listen to Sir Elton John from his “Farewell Yellow Brick Road” tour. Wrongo and Ms. Right got to see him in Foxborough, MA last Wednesday, courtesy of daughter Kelly and her partner Bob.

It was Wrongo’s second time seeing Sir Elton, the first was at the Budokan in Tokyo in 1974.

Last Wednesday was a great night with an adoring audience for what seems to be near the end of his touring career. Here’s his final encore from last week’s performance, “Goodbye Yellow Brick Road” performed on the night we were there:

Sunday Cartoon Blogging – July 31, 2022

Q: Why do people take an instant dislike to Justice Samuel A. Alito? A: It saves time.

Alito spoke in Rome dismissing criticism from foreign officials who he said “lambasted” his opinion that overturned Roe v. Wade. Alito spoke at a conference promoting religious liberty, saying:

“I had the honor this term of writing I think the only Supreme Court decision in the history of that institution that has been lambasted by a whole string of foreign leaders who felt perfectly fine commenting on American law…”

Alito called out Prince Harry as making a particularly hurtful comment. What Harry said at the UN:

“This has been a painful year in a painful decade….Climate change wreaking havoc on our planet, with the most vulnerable suffering most of all. The few weaponizing lies and disinformation at the expense of the many. And from a horrific war in Ukraine, to the rolling back of constitutional rights here in the United States, we are witnessing a global assault on democracy and freedom, the cause of Mandela’s life.”

Alito said in response:

“But what really wounded me…was when the Duke of Sussex addressed the United Nations and seemed to compare the decision…with the Russian attack on Ukraine…”

To quote Charlie Pierce: