Biden’s Economy is Booming

The Daily Escape:

Sunrise with moon, Utah Lake, UT – December 2021 photo by Karen Lund Larsen

Bloomberg reported on Monday that the US economy is outperforming the world by the biggest margin in the 21st century. Surprisingly, they say that there’s a good reason:

“America’s economy improved more in Joe Biden’s first 12 months than any president during the past 50 years…”

They say that the objective economic data are pretty convincing about the Biden Boom of 2021, notwithstanding the contrary media narrative that seems to be driving poor public opinion. Biden is either in first place compared to recent American presidents, or at number 2 on all the big economic indicators, says Bloomberg’s Matt Winkler:

“Exceptional returns…especially the S&P 500 Index in both absolute terms and relative to its global counterparts, can be attributed to record-low debt ratios enabling companies to reap the biggest profit margins since 1950. Corporate America is booming because the Biden administration’s Covid-19 vaccination programs and $1.9 trillion American Rescue Plan reduced the jobless rate to 4.2% in November from 6.2% in February, continuing an unprecedented rate of decline during the Covid-19 pandemic.”

Also, inflation-adjusted GDP surged at an average annual rate of 5.03% in each of the first three quarters of 2021 and is poised to hit 5.6% for the year based on the preliminary estimates of more than 80 economists surveyed by Bloomberg. If that forecast holds up, it would be more than 2.8 times the average performance between 2000 and 2019. And double the average since 1976.

More from Bloomberg:

“All of which makes Biden’s first year in the White House the standout among the seven previous presidents, based on ten market and economic indicators given equal weight. According to data compiled by Bloomberg, no one comes close to matching Biden’s combination of No. 1 and No. 2 rankings for each of the measures:

Gross domestic product (1)

Profit growth (1)

S&P 500 performance (2)

Consumer credit (1)

Non-farm payrolls (2)

Manufacturing jobs (2)

Business productivity (2)

Dollar appreciation (2)

S&P 500 relative performance (2)

Per capita disposable income, which rose 1.08% this year, is the only comparable weakness for Biden, trailing Donald Trump’s 2.17%, George W. Bush’s 2.01%, Jimmy Carter’s 1.80% and Ronald Reagan’s 1.42%.”

GDP growth in year one of each new administration during the past four decades had never exceeded 2.74% until 2021. Bloomberg goes on to say that Biden might surpass Carter (5.01%) as the GDP growth champion of presidents since 1976.

Much of the credit goes to The American Rescue Plan, which poured $66 billion into 36 million households. The child tax credit reduced the child poverty rate by 50%, helping the US recover faster from the pandemic than most other nations.

That’s the same child tax credit that just expired, and that Sen. Joe Manchin is vociferously against.

The downside to those record corporate profits is that they are not being shared with workers. We know that in 2021 economic inequality got considerably worse, even with Biden’s recovery act putting $ billions in the pockets of American families.

Like Jimmy Carter, Biden now faces the political fallout of accelerating inflation. The NYT’s Neil Irwin wrote about how high inflation and  the never-ending pandemic are depressing Americans’ attitudes about the economy. He adds that it’s easy to recall Carter’s inability to deal with inflation in the 1970s, until the Fed’s Paul Volcker threw the economy into a deep recession. Back then, Carter took the political fall for the Volcker policy. Reagan got full credit for the recovery.

Once again, fear of inflation is everywhere in the press, but as Wrongo wrote:

“Back in 1980, when then-Chair of the Federal Reserve Paul Volcker raised interest rates high enough to throw the US into a recession and end inflation, inflation had averaged 6.9% for the previous 11 years.”

And while inflation’s averaging 6.81% for this year, it isn’t comparable, because of the amazing growth in US GDP and corporate profits, along with the chronic product shortages due to supply chain issues.

But contrast today to December 1981, when Reagan had been president for 11 months, just as Biden is now. Conditions were substantially worse: The unemployment rate was 8.5% and would keep rising throughout 1982. Inflation was 8.9%, and consumer sentiment was in the tank.

People believe what they’re told by the press and pundits. That in part explains Biden’s low approval ratings, along with the GOP’s master class of blaming Biden for a disastrous economy that was really caused by Trump’s inaction on Covid.

Keep all this in mind. Overall, Biden’s doing a very good job with the economy.

Time for another Christmas season tune. Here’s a group of UK theater performers called Welsh of the West End performing the Mariah Carey classic, “All I Want for Christmas is You” on a zoom call. Perfectly appropriate for Christmas with Omicron:

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Facing The Music

The Daily Escape:

First snow, New Hampshire creek – December 2021 photo by Betsy Zimmerli

“It’s always been about the music. And when it’s not, it’s about facing the music” – Wrongo

Today is the Winter Solstice, the shortest day of the year. It is also Wrongo’s favorite day because he prefers daylight to darkness. This is an optimistic day since every succeeding day for the next six months will bring more daylight to the land.

But Wrongo struggles to see any political daylight at the end of this extremely dark year. Here is a summation of the three events most important to Wrongo in this dark, dark year:

The January 6 aborted coup. Nothing that happened this year can overshadow the effort to subvert our democracy. While it may be doubtful right now that the outcome of the Jan. 6 committee will bring justice for the coup plotters, let’s compare it to the Watergate scandal. Those plotters were held accountable. And Watergate occurred at a time when we didn’t have mobile phone, email, and text message electronic tracing to reveal what had happened. In this Jan. 6 case, proving accountability should be easier. We don’t need to know everything, we just need to know enough to prosecute people. With all the digital information that’s available, that should be an easier job than it was during Watergate.

The recent revelations by the House Select Committee are an encouraging sign because they moved quickly on passing a contempt resolution for a former Congressman, Mark Meadows. The Committee got to tell their story three times in 24 hours. They embellished it with juicy new details (texts from Trump’s family members, Fox News personalities, reporters, members of Congress) every time they told it. If they can keep that up through the early part of next year, maybe we’ll start getting somewhere with this.

Ending the Forever War. Biden was crushed by the media and the public for walking away from Afghanistan and the subsequent chaos around the pull-out, but it was the right thing to do. Nearly 2500 US service members were killed, 20,698 were wounded, and more than $2.2 trillion in American taxpayer funds were spent on warfighting, reconstructing programs, building the Afghan National Security Forces, and promoting good governance.

In the end, we have nothing to show for our time there except for more national debt and soldiers who will need care for the rest of their lives. We deserve a full and complete accounting of our 20 years in Afghanistan. After all, it’s another military defeat that requires a fundamental examination to ensure that we never again jump into a country when we fail to understand their social and cultural dynamics.

Losing the Covid war. We’ve failed as a country to work together to beat the virus variants, despite having a vaccine that offered protection. The politicization of Covid treatment is the second worse outcome in 2021, to the politicization of the January 6 attempted coup.

Anti-vaxxers believe that their strong natural immune system will beat the virus, and that “healthy lifestyles” will give you a healthy immune system. They think using a vaccine to enhance the natural protection offered by their beautiful immune system is a bad idea because [insert the excuse of the day]. Perhaps they don’t realize that you can’t have natural immunity to a virus that your body has never encountered. An unvaccinated but fit person can get Covid because their body has no idea how to fight it.

There’s also the argument that Covid only kills older people. While the facts don’t support that idea either, maybe the anti-Vaxx community views it as an experiment to see if “having living parents or grandparents” is an evolutionary advantage for the kids who didn’t lose their relatives.

These issues show America must face the music. Wrongo’s sure we’ll face more 2021 music, but this is his top-of-mind thinking.

We’re going to have Christmas or seasonal music in each post this week. Today let’s listen to U2 – “Christmas (Baby, Please Come Home)” filmed in November 1987 at the Assembly Center in Baton Rouge, Louisiana. These guys were children back then. Maybe this tune has a special relevance in a world where Covid has taken so many lives:

Be kind. Not just during this season, but all the time.

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Monday Wake Up Call – December 20, 2021

The Daily Escape:

Early snowstorm, Yosemite NP, CA – December 2021 photo by Don Smith Photography

Everyone’s speeding. Drive any highway in the US and cars are going really, really fast. It’s also true on local roads. For the past 20 years, speeding has been involved in approximately one-third of all motor vehicle fatalities.

In 2020, an estimated 38,680 people died in traffic crashes, the highest since 2007, according to the federal National Highway Safety Administration. That represented a 7% increase in nationwide fatalities at a time when Covid reduced driving activity by 13%. Henry Grabar, a staff writer at Slate, wrote last week about how Americans became obsessed with driving fast, no matter the cost. He quotes a Connecticut state trooper:

“Covid was midnight on the day shift.”

We all experienced how empty the roads were at the height of Covid. Despite the empty roads, in the first six months of 2021, traffic fatalities in the US rose by 18%, the largest increase since the US Department of Transportation started counting, and double the rate of the previous year. And the National Traffic Safety Administration (NTSA) reports that drivers were hitting higher speeds on empty roads. They reported that as trips taken decreased by 50%, speeding increased by 45%. They also reported an approximate one-third increase in speeding above pre-pandemic levels from November 2020 through March 2021.

It’s a paradox: We have laws about driving speeds that no one obeys. We have police who enforce speeding laws without trying to catch everyone. More from Grabar: (emphasis by Wrongo)

“Speeding is a national health problem and a big reason why this country is increasingly an outlier on traffic safety in the developed world. More than 1 in 4 fatal crashes in the US involve at least one speeding driver, making speeding a factor in nearly 10,000 deaths each year….Thousands of car crash victims are on foot….The odds of a pedestrian being killed in a collision rise from 10% at 23 mph to 75% at 50 mph.”

This isn’t going away. Americans love driving fast and apparently, have confidence in their own abilities. Grabar reports that about half of drivers admit to going more than 15 mph over the speed limit in the past month. But those same drivers regard other drivers’ speeding as a threat to their own safety.

Distracted driving, particularly involving mobile phones, is a huge problem as well. Cambridge Mobile Telematics reported data from more than 300 million trips, measured between January 2019 and July 2021. They showed that phone distraction jumped by more than 17% in the first month of the pandemic. On weekday evening commutes, it was higher by more than 31%.

Separately, Zendrive presented an analysis showing increases in cell phone use among drivers after the mid-March 2020 start of the public health emergency. Their analyses showed that in more than 16% of the crashes, a cell phone was manipulated less than five seconds before impact.

America has once again landed in the worst of both worlds: Drivers believe in their own skill, but not that of other drivers. We have thousands of speed-related deaths and a system of enforcement that isn’t designed to change behavior all that much.

Let’s leave the last words to Grabar:

“The nation’s most disobeyed law is dysfunctional from top to bottom. The speed limit is alternately too low on interstate highways, giving police discretion to make stops at will, and too high on local roads, creating carnage on neighborhood streets….the lack of political will to do something about it tracks with George Carlin’s famous observation that everybody going faster than you is a maniac and everybody going slower than you is an idiot. The consensus is: Enforce the speed limit. But not on me, please. Because while it would be nice to save 10,000 lives a year, it sure is fun to drive fast.”

Time to wake up America! Maybe you like driving fast while scrolling the internet on your phone, but it may make your life (or the life of a family member, or someone you’ve never met) end badly.

To help you wake up, listen to Queen do their song “Thank God It’s Christmas” originally released in November 1984. It was re-released last week by Brian May and Roger Taylor. They have it right, it’s been a long hard year:

Sample Lyrics:

Oh my love we’ve had our share of tears
Oh my friend we’ve had our hopes and fears
Oh my friends it’s been a long hard year
But now it’s Christmas
Yes it’s Christmas
Thank God it’s Christmas

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Saturday Soother – December 4, 2021

The Daily Escape:

Mexican Hat Rock, Mexican Hat UT – 2021 photo by Jacky and Rick

The media keeps talking about inflation, saying that it’s bound to hurt the economy any time now. They mean that inflation will make workers ask for higher wages. That will force companies to pay workers more, and thus, lower corporate profits.

Sounds like a problem, but as Bloomberg reports, the fattest corporate profits since 1950 are debunking inflation stories spun by CEOs. US corporations enjoyed the widest profit margins in more than 70 years during the second and third quarters of 2021. US corporate profits before adjustments rose to a record high of $3.14 trillion in the third quarter of 2021. From Bloomberg:

“On earnings calls, plenty of executives complained about the squeeze from rising costs of labor as well as materials. But overall, profits were up 37% from a year earlier, according to data out last week from the Commerce Department.”

Nearly two thirds of publicly traded US corporations have reported higher profit margins this year compared to 2020. One hundred of the largest have booked profit margins at least 50% higher than last year’s levels.

Bloomberg reports that businesses have been paying more to their employees too, with total compensation up 12% in the last quarter vs. a year earlier. It’s not that every worker got a raise. A significant part of the increase was due to millions of Americans simply returning to work. But many got raises too. To date, hourly earnings broadly kept up with the fast-rising cost of living. And in some low-pay industries like leisure and hospitality they’ve outpaced it, although not by enough for those firms to get fully staffed.

The new data on corporate earnings suggest businesses are comfortably passing on their higher costs. In recent months, a number of US companies including Coca-Cola, Procter & Gamble, Chipotle, and Dollar Tree have announced price hikes, claiming that the increases were necessary because of higher wages and material costs.

But the Bloomberg data say that these corporate kings are using price hikes to pass their sky-high CEO pay and marginal increases in material and labor costs to consumers, in order to keep padding their already historically strong profit margins.

Still, politicians are calling for Fed Chair Jerome Powell’s head. Sen. Tom Cotton (R-AK) wrote in the WSJ that Powell doesn’t deserve another term because he caused inflation. Powell’s policies have contributed to US inflation, but there’s zero evidence that US inflation is a problem today.

For months, corporate executives and right-wing politicians have been parroting the claim that inflation in the US is due to Biden’s social spending policies. But the new data show that inflation is going up largely because corporations are driving it.

Remember, corporate profits are up by 37% while inflation amounted to about 6.2% in the same period. In other words, as the economy reopened and prices for goods went up, and corporations used the situation to raise prices a lot.

In fact, the FTC just announced it voted 4-0 to investigate the relationship between competition and supply chain problems. The FTC sent letters to nine dominant firms in supply, retail, and wholesale, mandating they respond within 45 days to a host of questions, as well as give internal documents on various topics.

This matters. Inflation and shortages aren’t neutral forces. The twin problems seem to be *helping* big business improve their profit margins. It’s important to ask why they are happening and who has an incentive to keep them going.

Even Morgan Stanley is now asking corporations to hit the brakes on accumulating profits. Their research division released a report highlighting the gap between corporate profits and worker wages. From the report:

“Real wages…still have to grow by 7.3% in excess of productivity growth to make up the gap….If this catch-up takes place over the next 5 years, unit profits will fall 33% from current levels
This would move the corporate profit share back to its 1990s average on a pre-tax basis and leave it just marginally above on a post-tax basis.”

Imagine. An investment bank telling corporations that they really should be making less profit. Things must be really going to get much worse than we think.

Let’s launch into our weekend, starting with a Saturday Soother. Try to forget about whether a government shutdown will hurt you or Biden, or whether the Supreme Court is now filled with ideological hacks.

Instead, grab a seat by a window and listen to “The Girl with the Flaxen Hair” by Claude Debussy. The Art Nouveau period was obsessed with women’s hair. Debussy was immersed in that world. It’s played here by the LA-based, Sakura cello quintet. Wrongo is a sucker for cello, and there are five of them! This was originally written for piano, and is transposed here for cello:

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Young Americans Are Suffering

The Daily Escape:

View from Franconia Notch, NH – November 29, 2021 photo by Mel Elam. Looks cold.

There’s plenty of Covid news. We’re concerned about the new Omicron variant while we’re also seeing another surge of the Delta variant around the country. It’s important to remember that half of what you’re reading about Omicron now, and for the next several weeks, is going to be wrong or mistaken.

The problem is that we can’t be sure which half is wrong.

It’s troubling how prevalent Long Covid has become. The NIH reported on an Italian study that found 87% of people recovered and discharged from hospitals showed at least one symptom even 60 days after release. The commonly reported problems were fatigue (53.1%), worsened quality of life (44.1%), shortness of breath (43.4%), joint pain, (27.3%) and chest pain (21.7%).

One symptom of Long Covid that wasn’t reported is emotional distress. This is particularly evident in younger Americans. The just-released Fall 2021 Harvard Youth Poll, surveyed 2,109 Americans aged 18-29, between October 26 and November 8. In addition to their usual questions about politics, they also asked these young Americans about their mental health and Covid. They found that half of them say they’re a different person because of Covid. Here are the results:

Overall, 51% of 18-29-year-olds say that Covid has changed them. What’s particularly striking is that 61% of young women say they’re different now than they were before Covid. Contrast that with men in the survey, just 40% of whom said that they have changed.

While the survey can’t tell us exactly how they’ve changed, there’s some insight because 51% also say that Covid had a negative impact on their life. And there wasn’t a partisan divide: 51% of Democrats, 51% of Republicans, and 52% of independents said that Covid impacted them negatively.

There’s something worse going on though. These kids are a mess mentally. More than half (51%) report  that several times in the last two weeks they felt down, depressed, and hopeless, while 25% have had thoughts of self-harm.

In addition to the majority of youth who express depressive symptoms, and the 25% who express thoughts of self-harm, the study also found that a significant number show traits associated with generalized anxiety disorder:

  • 38% of young Americans report feeling nervous, anxious, or on edge in the last two weeks
  • 36% have been worrying too much about different things
  • 32% have been easily annoyed or irritable
  • 30% have had trouble relaxing
  • 22% report feeling afraid, as if something awful might happen
  • 20% have not been able to stop or control worrying
  • 16% have been so restless that it is hard to sit still

The causes of these emotional problems are diverse. The respondents listed the following as their top five reasons for worry: School or work (34%), personal relationships (29%), self-image (27%), economic concerns (25%), and Covid (24%).

But Covid can easily be seen as the primary driver behind all of these issues. The pandemic brought fear of losing one’s own life or that of an older loved one. The lockdowns impacted school and work, with people having to use technology as a work around for face to face interaction. People were cut off from friends and family. Dating died. Retail businesses that primarily hire the young closed, or sharply reduced their staffing, causing historic job losses and reduced paychecks.

The CDC reported in 2020, that from 2007 to 2018, the suicide rate among persons aged 10–24 had increased 57.4%. Let’s hope that isn’t what will happen to this cohort going forward.

Wrongo and Ms. Right have 12 grandchildren. Ten are between 18-29. A few graduated from high school, college, and grad school during the pandemic. And some of those graduates seem stuck in bad grooves, unable to land the jobs they wanted, or in some cases, a job at all.

They seem to swing between two poles, either feeling unqualified for the job they want, or being unwilling to settle for the jobs they are offered. A few grandchildren with college degrees say they are unqualified for even entry-level positions in their field of study.

These kids broadly represent what the kids in the Harvard study say about changes in their lives during Covid. Young Americans must really hate what we’ve done to them.

Their sense of despair is a common theme in other polling of American adults. But the deep unhappiness and pessimism displayed in the Harvard poll was a startling turn in an age group that might be expected to have more optimism, given that they are at such an early stage of their adult lives.

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Monday Wake Up Call – November 29, 2021

The Daily Escape:

Dusk, San Miguel Peaks, Uncompahgre National Forest, CO – November 2021 photo by Tad Bowman

And we’re back from our gratitude-giving, dessert-eating weekend at the Mansion of Wrong. Did I miss anything? Oh yeah, Omicron. It’s the 15th letter of the Greek alphabet, but it has a darker meaning for people who fear Covid. Omicron is also known as B.1.1.529 Coronavirus variant. It was first detected in Botswana and South Africa earlier this month.

It’s moving fast. Cases have been found in Australia, Hong Kong, the UK, Germany, France, Italy, Belgium, Israel, and the Netherlands, in addition to several African countries. But we know very little about it so far.

Three questions have to be answered: How rapidly does the variant spread? Is it capable of causing more serious disease than the known variants? Can it circumvent the immune protection of the Covid vaccines?

Once again, we’re facing an unknown. Dr. Fauci said Omicron looks more transmissible than others, and thinks that it’s inevitable that the US will see cases of the new variant. No need to panic, but the US has shut down flights from several African countries. There are questions facing us:

  • Will we be better prepared for this variant than we were for the past several variants that have killed nearly 800,000 Americans?
  • If a new variant becomes widespread, will it help make a nation that is already skeptical about its institutions and leaders better able to take direction from the federal government?
  • Will a substantial minority again toss aside experts and incumbents in a pursuit of self-management of their disease in the name of toxic freedom?

What will the political and economic ramifications of a new surge of disease be as we enter an election year? The battle lines are drawn. We know that the country is very evenly divided, and trying to govern causes one side to demand nearly the opposite of whatever is proposed. People on both sides of the political divide ask: Who can we really trust? Who do we really believe can solve the problem? Who’s really for us?

We used to take it on faith that our country works, that the dollar is a valuable currency, that there will always be a peaceful transition of power. But those things are slipping away. Many think that we are teetering on the edge of something very dark, that we must be pulled back, if we are to preserve America.

What are we actually trying to preserve? Our lack of shared values? The sham of our voting laws? McDonald’s, apple pie and baseball? Think long and hard about these questions. Regardless of what conclusion you reach, you’ll find that it simply won’t resonate with a significant minority of Americans.

Time to wake up America! Our social cohesion is dying. The Fund for Peace ranked the political cohesion of countries between 2008 and 2018. They found that the US had the largest drop in cohesion of any country studied, including Libya, Mali, and Bahrain. Martin Longman likens an asteroid headed straight for Earth to where we are as a society. We complain about the asteroid rather than the destruction it will cause.

To help you wake up, listen to U2 play their global hit “One” live at Commonwealth Stadium, Edmonton, Canada in 1997. The song is about finding unity:

Sample Lyric:

Well, it’s too late tonight to drag the past out into the light.
We’re one, but we’re not the same.
We get to carry each other, carry each other… one
Have you come here for forgiveness,
Have you come to raise the dead
Have you come here to play Jesus to the lepers in your head
Did I ask too much, more than a lot
You gave me nothing, now it’s all I got.

“One” is a song about disunity written against a backdrop of reunification. U2 decided to work at Hansa Studios in Berlin. The studio used to be called “Hansa by the Wall” but when U2 got there, the Berlin wall was gone. Bono told the BBC:

“The irony of One’s title is the band wasn’t very close at the time….We were building our own wall right down the middle of Hansa studios.”

More from Bono about One:

“The concept of oneness is of course an impossible ask….Maybe the song works because it doesn’t call for unity. It presents us as being bound to others whether we like it or not. ‘We get to carry each other’ – not ‘We’ve got to carry each other’.“

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Monday Wake Up Call – November 22, 2021

The Daily Escape:

Ash Meadows National Wildlife Refuge, NV – November 2021 photo by Marcia Steen

Today is the 58th anniversary of the assassination of President John Kennedy. While it wasn’t the first time Americans dove deep into conspiracy theories, who killed JFK has always been a controversial topic surrounded by conspiracy theories since that November day.

Over the weekend, we passed a sad milestone. The number of US Covid deaths in 2021 surpassed the deaths in 2020 and we still have a month to go. So far, there have been 385,457 deaths this year vs. 385,343 in 2020 according to the WSJ.

Wrongo has a few observations about what our continuing saga with Covid says about America. Almost 200 million of us are fully vaccinated. In addition, we have had 47 million confirmed cases to date. That means 74.8% of us have some level of antibodies to the several variants of Covid that have traveled through our population in the past two years.

But because: 1) Vaccines haven’t made it beyond the rich world (only 6% of the population in Africa is vaccinated) and 2) Americans seem to value the freedom to control their bodies over public health, new variants that may not be controllable by current vaccines could infiltrate the US.

There’s one very concerning new variant, B.1.640. It appears to be from Africa and has only been seen in small numbers. Apparently it’s bad. The Jerusalem Post mentioned it in” New COVID variant found in France: Reason for panic or not quite yet?” after it spread to Europe:

“A new COVID variant identified in a handful of European countries is raising concerns among some health professionals because there are changes to the coronavirus spike protein that have never been seen before.”

The B.1.640 variant has nothing to do with Delta. Researchers have had a really hard time placing it on the known Covid family tree, because it’s so far removed from anything else, that it just sits on a very long branch of its own. They think that it may elude our current vaccines.

If true, this would be another example of viral evolution completely blindsiding us. And if it isn’t this one, we’ll probably see some other variant.

The sad truth is that America is no longer willing to fight Covid. We think its too hard, and we don’t like doing difficult things. Too many of us don’t want to choose between public health and our economy.

Our unofficial policy is to expect that Covid will become a gradually declining annual infection. But that’s based on the assumption that we have a successful vaccine, that the current variant is all we’ll see, and that the virus will lose its potency over time.

Nobody dares say it out loud, but Covid has revealed the US to be a prime risk for a bioweapon attack.

If a terror group, or an adversary country decided to launch a biological attack, there is clearly nothing that we would do to stop it. How do we know that? Because Covid could have been a biological attack, and it was allowed to spread broadly instead of being properly dealt with. Because it was “too hard” to try to stop it.

We’ve spent countless $ trillions over the last 20 years for “national security”, and this is where we’ve gotten to? Wrongo is starting to think that Churchill’s comment that “the US will do the right thing, after we’ve tried everything else” was overly optimistic.

Time to wake up America! We’ve got to toughen up, or face defeat, not only on the battlefield but in ICUs across America. To help you wake up, here’s a throwback song from another era. Listen to “I’d Love to Change the World” by the late Alvin Lee & his group, Ten Years After from their 1971 Album: “A Space In Time.”

The video doesn’t feature the band, just the song from the album. The video is a film student project that Wrongo likes. Overall, the song  looks at what were considered the biggest problems in the world in 1971: Overpopulation, economic inequality, pollution, and war. Unsurprisingly, the issues remain the same:

Sample Lyric:

Everywhere is freaks and hairies
Dykes and fairies, tell me where is sanity
Tax the rich, feed the poor
Till there are no rich no more

I’d love to change the world
But I don’t know what to do
So I’ll leave it up to you

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Increased Demand is Causing Price Inflation

The Daily Escape:

Pueblo Bonito, Chaco Canyon, NM – November 2021 photo by James C. Wilson. It’s difficult to hire stone masons this good today.

 “If Americans are feeling glum, they sure are engaging in some retail therapy.”— WSJ’s “Heard on the Street” columnist Justin Lahart

We’re in a period of unclear signals. Every poll says that Americans believe inflation is high and the economy is bad. But unemployment is low, GDP growth is high, and people are buying things like crazy:

“The Commerce Department…reported that sales at stores, restaurants and online rose 1.7% in October from a month earlier, better than the 1.5% economists expected. Additionally, estimates of August and September retail sales were revised upwards. Sales were broadly higher across most categories, with gains at department stores, electronics and appliance stores and online retailers in particular…”

This led economists to revise their fourth-quarter GDP estimates higher. JPMorgan Chase now forecasts GDP will grow at a 5% annual rate in the fourth quarter, versus its previous 4% estimate. The news wasn’t all terrific, as restaurant and bar sales were flat in October versus a month earlier. That might be an indication of cooler weather keeping diners at home as outdoor seating arrangements became less comfortable.

Overall, this dynamic growth in retail sales stands in contrast to the University of Michigan’s consumer sentiment survey that fell in early November to its lowest level in a decade.

How to explain what’s going on? People have some savings. Some people have higher wages, and both seem to be having a greater influence on how much people are willing to spend than price increases are having on how they feel about Biden’s job performance.

Claudia Sahm argues that some of the savings are due to government checks, and it was worth it:

“2021 began with economists arguing about $1,400 stimulus checks. Americans got them, but they got higher inflation too. Even so, the checks were very good policy.”

She compares the government’s reaction in the Covid crisis to their reaction during the Great Recession. This time, Congress went big:

“In 2008, Congress enacted one round of stimulus checks, totaling about $110 billion. During the first year of Covid, it sent out three rounds at close to $1 trillion dollars. A family of four got $11,400, which is about 20% of median family income.”

Here’s a chart showing the difference between the two policy approaches. Sahm plotted the value of the payments against the trend of personal income during both recessions:

The three rounds of stimulus checks provided relief to the families whose lives Covid disrupted and it helped bolster the economic recovery by creating jobs. The Covid relief paid the bills. Stimulus helped bring back paychecks.

Most people spend most of the money they make. With smaller take-home money during the crisis, many Americans made a dramatic cut in their spending. And big cutbacks in spending in an economy driven by consumers, led to big layoffs. So, the policy decision to put money in people’s bank accounts was key to keeping the Covid recession as short-lived as possible.

Clearly, the fast recovery came with a cost. Inflation is higher today than it has been in 31 years. But don’t let the inflation doom-sayers fool you: consumer spending, even after taking inflation into account, has been increasing even as millions are out of work.

New Deal Democrat shows us that total activity through the big Southern California ports is breaking records, and yet as we know, they still can’t keep up with the increased import demand:

Despite increased container handling capacity, this explains a great part of the current supply chain bottleneck since the global supply chain is incapable of handling a sudden jump in consumer demand. It partially explains why goods shortages and price pressures have mounted. That, in turn, is pushing up prices. The NYT quoted Aneta Markowska, chief financial economist for Jefferies, an investment bank:

“It’s the demand in the first place that’s causing prices to move higher…There is a supply shortage, but it’s not because of bottlenecks. It’s because we’ve had this big shock to aggregate demand and supply can’t respond quickly enough.”

There are still plenty of logistics bottlenecks. Yes, we’re buying much more stuff, and paying more for it. But households were sitting on a collective $2.5 trillion in savings built up during the pandemic. And millions of jobs have come back, so spend they will.

The Covid recession was a sharp and steep one, the deepest since the Great Depression. But the speed of recovery has been very fast, due in large part to the policy decision to put checks in people’s pockets.

This time, government worked for us.

Let’s have a Thursday tune. Everyone has heard 1981’s “Under Pressure” a masterpiece by Queen and David Bowie. It was covered by Fall Out Boy as part of ABC’s Queen Family Singalong on Nov 4. Lead vocalist Patrick Stump tries to sound like both Freddie Mercury and Bowie. Read the words and you’ll understand why Wrongo offers it today:

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Dems Must Persuade the Persuadable

The Daily Escape:

Sunrise, Jensen Beach, FL – November 2021 photo by Patrice Ostradick

More about the Dem’s messaging problem. The latest jobs report showed that we added more than 530,000 new jobs in October. And the DOL also revised its estimates for September and August, confirming an additional 235,000 positions were created.

That’s 766,000 jobs we didn’t know about until last Friday.

The news sent the Dow Jones upward (again). It ended at another all-time high, 36,327. Since Biden was elected last year, the market is up 40%. That’s $14 trillion in new wealth that has landed in quite a few pockets. But the media still covered a Biden administration in disarray. From Eric Boehlert:

“…on Friday, news consumers visiting WashingtonPost.com had to scroll down past 75 different stories and links before they found the first mention of the blockbuster jobs report…..at the top of the Post site Friday afternoon was a column about how the White House is having trouble spreading good news about the economy.”

Again, the media going all “gotcha” on Biden. And it’s having an impact on his poll numbers, which took another dive in a USA Today poll over the weekend that shows Republicans holding a lead on the 2022 Congressional ballot. It found that Biden lost support among the Independent voters who delivered his margin of victory over Trump one year ago:

  • 46% said Biden has done a worse job as president than they expected, including 16% of those who voted for him. Independents, by 7-1 (44%-6%), say he’s done worse, not better, than they expected.
  • 64% said they didn’t want Biden to run for a second term in 2024. That includes 28% of Democrats.

Democrats need to understand their peril. The NYT’s front-page story, “Americans Are Flush With Cash and Jobs. They Also Think the Economy Is Awful” shows their dilemma. The economy is by all accounts on fire, but consumers and voters think it’s floundering. You might question just who is flush with cash, but the negative views of the economy seem to be tied to the effects that rising prices and shortages have on families. Regardless of the exact causes, after decades where the lack of jobs drove economic sentiment, inflation now appears to be a force driving opinion about the economy.

Prices for many consumer goods are rising, and as we said yesterday, it’s impossible to win elections by telling voters that their concerns are imaginary. From Bloomberg (paywalled):

“It’s not all negativity: A record-high 74% of respondents told Gallup in October that this is a good time to find a quality job, and 65% told AP-NORC pollsters that their personal financial situation was good. The Conference Board’s Consumer Confidence Index rose in October and, while lower than before the pandemic, is higher than at any time between 2001 and 2017.”

The reality is that consumer prices have risen faster over the past six months than at any time since the early 1980s. And there’s increasing evidence of a partisan bias in consumer sentiment, with most people judging the economy more favorably when the person they voted for is president.

Remember that the USA Today poll says 64% think Biden shouldn’t run in 2024. Maybe some of today’s economic pessimism has to do with people downgrading their view of Biden’s competence after the surge in the Delta variant that killed so many, while our messy withdrawal from Afghanistan was seen by many as humiliating.

The Democrats’ conundrum is how to respond both to the economic concerns and the cultural attacks. They can’t win by simply pointing to their actual policies on specific issues. They must respond to the attacks on “wrong way for the country” by honing a message that works for the persuadable Independents. We live in a 40-40-20 country in which 40% percent are hard-wired for either Party, and 20% are swing voters, who are primarily located in the suburbs. They largely control the outcome of elections.

Democrats need to study the art of persuasion. The Right is driven by nostalgia: they want to go back to a “simpler time”. The Left is motivated by change, to ensure rights for all, whether that’s healthcare or fair wages. if Democrats want to win against the highly organized right-wing media ecosystem, they must find a series of messages to persuade Independents.

We need a tune for Tuesday. Here’s Willy Nile with something brand new, “The Justice Bell” a tribute to John Lewis, from his August 2021 album, “The Day The Earth Stood Still”:

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Climate Change Summit, Part II

The Daily Escape:

Mt. Princeton, Buena Vista, CO – October 2021 photo by Haji Mahmood

Biden sees the Glasgow Climate Summit as a legacy event that will bring about substantive change. But nobody believes that. Change doesn’t occur easily, and in the case of climate change, the forces arrayed against it are overwhelming.

Corporations will not give up profits easily. Individuals will not willingly pay more for goods once companies jack up their prices to maintain margins. Countries will try desperately to avoid being the first to bend the CO2 curve, knowing that their economic growth will slow precipitously.

Sometimes a change in culture has to occur before political change can begin. Think about the civil rights movement in the 1950s and 1960s, or the anti-war movement in the early 1970s. Those great political changes were built on a foundation of cultural change. One came from Black churches, and the other from college students.

We’re in the middle of a 2-year Covid debacle on top of a 13-year economic debacle. Before the Great Recession, if people weren’t making it, they (and everyone else) thought the problem wasn’t America’s politics or our economic system, but it was mostly about their laziness or lack of skills. Back then, we believed that anyone could make it. Few thought the system was rigged, and there wasn’t a widespread push for serious change.

Now, young people are tumbling to the fact the problem isn’t them – it’s the system. Think of it as a game of musical chairs, where the people sitting down never stand up when the music plays. From Ian Welsh: (Brackets by Wrongo)

“They [the young] think, ‘it’s you, not me’ where ‘you’ = society and politics. They may have…student loans, but they know boomers paid….[only] a nominal amount for university. They know they can’t afford a home or apartment, not because they don’t earn enough, but because wages have effectively gone down, and real home prices have gone up….They know medical care is too expensive and that drugs didn’t used to cost nearly this much.”

Young people are beginning to understand that without political change, their lives aren’t going to get better. In fact, they will probably get worse. This is true for the climate as well as for the basic inequalities in our society.

We need a political revolution to change these things, but America’s political system doesn’t like big changes. It does enable smaller cultural and political changes all the time. Our politicians give us intermittent reinforcement: They are amenable and sometimes eager to serve up limited forms of change, but not what most people want, or what the planet needs.

And the longer we rely on today’s politicians to save us, the farther we will be from the changes we need. Our political system is very resistant to change, as the prolonged debate over Biden’s social spending bill shows.

And there’s no political will at any level to change the system.

Still, it has to change, or it will self-destruct. When you are at Wrongo’s advanced age, the temptation is to say, “the future is hopeless.” But America’s youth will soon replace the elders in both political parties. They will not be staying quiet.

What must happen is a cultural change that a significant portion of the population will buy into. It doesn’t have to be everyone, but it has to be compelling to at least a 10%-20% minority which can then influence the other 80%-90%.

We live in a culture that values greed, power, and control over other people’s lives. So, the new culture must be built on a different set of values. Insisting on a different set of values is something we can all do both individually and collectively.

The Trumpists have attempted this with middle-aged White Americans. Steve Bannon knew that change must first happen culturally, that the culture has to want it, or at least allow it. But so far, the Trumpist appeal seems limited to 30% of the population.

The other 70% are on the sidelines, waiting for a reason to believe in something else.

If you doubt that young people can have an outsized impact, watch “The Children Will Rise Up!” an climate change anthem written by Nandi Bushell, who gained social media fame as a drummer, and Roman Morello, son of Rage Against the Machine’s Tom Morello. Here these two 10 year-olds perform with cameos by Jack Black and Greta Thunberg:

Sample Lyric:

They let the earth bleed to feed their greed.
Stop polluting politicians poisoning for profit.
While they are killing all the trees, now we all can’t breathe
As the temperature’s a rising, nothing is surviving.

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