mathy inflation hand waving headlines

Breitbart headline: Wholesale Inventories Rose More Than Expected, Pointing to Even More Inflation Ahead

Okay Breitbart, but couldn’t an increase in inventories indicate that supply is starting to catch up with demand, which would put downward pressure on inflation? Or it could indicate a sudden drop in demand, which would also hopefully put downward pressure on inflation, although maybe not right away, which could lead to the dreaded “stagflation”. Either way, this headline is either stupid or intentionally misleading. Either the logical relationship is the opposite of what they are suggesting, or there is no relationship at all.

In the actual article,

Economists had expected many businesses to go into liquidation mode to rid themselves of unwanted inventories in the first quarter of this year. Indeed, declining or decelerating inventories were widely expected to be a drag on GDP as well as a moderating factor on inflation. Instead, inventories have been building faster than expected, which will likely force GDP expectations and inflation to rise.

Wholesalers act as middlemen between producers of goods and retailers. The business requires speculation about future demand. A rising wholesale inventory generally indicates expectations for robust demand from consumers for goods. It can go awry, however, if consumer spending is weaker than expected and wholesalers are left with unwanted stockpiles of goods. For this reason, economists watch the inventory to sales ratio, which remains at a historically low level that indicates wholesalers have not built up big piles of goods in compared to consumer activity.

Breitbart

Let’s try to follow this convoluted logic. I don’t see why declining inventories would put downward pressure on inflation, unless businesses are expecting a big slowdown in demand in the near future so they preemptively stop ordering goods. We hear speculation that inflation and interest rate hikes could trigger a recession, but businesses tend to react to economic fluctuations rather than gamble on what they think might happen. At the moment, both supply and demand are picking up, but demand is picking up faster and causing inflation.

Inventory to sales ratio is at a historic low – this again would suggest demand is picking up and supply is still struggling, triggering inflation. This is logical – and the exact opposite of the headline, which is completely illogical! People who read only the headline or only skim the text (probably most people) are going to get the exact opposite of the right idea. I am going to stamp this as naked propaganda and shame on Breitbart.

“giant leap” for food prices

The “giant leap” headline is from the FAO, which is not usually prone to hyperbole. But their global food price index rose over 12% in March, and the grain portion of the index rose 17% while the vegetable oil portion rose 23%. These are not the annual rates of increase in March, which would be high. They are increases during the month of March, on top of steady increases since about summer 2020. Looking back at the index historically, there were shocks of similar intensity in the 2005-2010 period. This one is already bigger and longer, and those earlier periods resulted in a lot of unrest and mass migration pressure.

A rational response would be to increase food and development aid to countries in the Middle East, Africa, and Latin America. An irrational response would be to do nothing and wait for the rise of racist and nationalist movements that love to capitalize on a mass migration crisis.

March 2022 in Review

The Ukraine war grinds on as I write on April 7, with the Russian military seemingly pulling back from some areas while slaughtering civilians (hostages?) farther east and south. I proffered some limited views on the situation and media coverage of the war during the month, but I won’t go into it below.

Most frightening and/or depressing story: What causes violence? It’s the (prohibition and war on) drugs, stupid. Or at least, partly/mostly, the drugs.

Most hopeful story: There are meaningful things individuals can do to slow climate change, even as governments and industries do too little too late. For example, eat plants, limit driving and flying, and just replace consumer goods as they wear out. I’m mostly on board except that I think we need peace and stability for the long term survival of both our civilization and planetary ecosystem, and we are going to need to travel and get to know one another to give that a chance.

Most interesting story, that was not particularly frightening or hopeful, or perhaps was a mixture of both: Ready.gov has posted helpful information on what to do in case of a nuclear explosion.

Bloodlands

Bloodlands: Europe Between Hitler and Stalin by Timothy Snyder was on my list for awhile, and I suppose I finally decided to read it because of the war in Ukraine. This is a good book and a horrible book, in the sense that it is a well-researched, well-written account of probably the worst series of events in world history. It is first and foremost a book about the Holocaust. It is also a delightful romp through the famine Stalin intentionally imposed on Ukraine in the early 1930s, Stalin’s internal terror unleased on his own citizens in the late 1930s, Nazi mass murder of Soviet prisoners of war, the siege of Leningrad, and the forced relocation of people (including Germans remaining in newly Soviet-occupied areas) at the end of the war that resulted in additional deaths.

I certainly don’t have much to add to scholarly discourse on the Holocaust. I have read more than one account and feel that I have a grasp of the facts, which is a very different thing than wrapping my head around the events, which I am not sure anyone can do. I think everyone needs to have a grasp of the facts, grapple with them, and then not think about them all the time. One thing that surprised me is Snyder’s explanation of how the complete picture really became available only after the end of the Cold War. This is because many of the worst atrocities happened in areas that came under Soviet control at the end of the war, and western (i.e. outside the Communist countries) scholars after the war tended to focus on the evidence and accounts available to them of Jews and others in Western Europe. These people suffered horrible atrocities, but the atrocities further east were of another magnitude in terms of both body count and utter depravity. The Soviets did not exactly deny the Holocaust, but for propaganda reasons they tended to downplay the mass murder of Jews and portray events as atrocities committed by Germans against Soviet civilians, sometimes glossing over the fact that people in these areas came under Soviet control only late in the war, and in some cases were also subjected to Soviet atrocities.

Something I was not aware of was Stalin’s antisemitism in the early 1950s. This fit into his general pattern of paranoia that groups within the Soviet Union, whether Jews, Poles, Ukrainians, Japanese, etc. might be under foreign influence and therefore be a threat to the Soviet state. In his paranoid mind, the ties between West Germany, the United States, and the newly formed Israel were a threat. There is some evidence he was planning a purge of Soviet Jews at this time. Luckily, he was not taken as seriously by underlings at this point as he had been in the 1930s, and he died before he could set any of these events in motion. Echoes of his paranoid rantings linking Nazis and Jews surfaced in Poland as late as the 1960s and 1970s, and I think we hear some echoes of this in the bizarre and seemingly illogical Russian rantings about “denazification” of Ukraine today.

Another theme that struck me was the underlying tension of food insecurity in Europe and the Soviet Union in the pre-war era. This was a motivating factor both in Hitler’s plan to colonize Eastern Europe and exterminate whoever was in the way, clearing the way for German farmers, and in Stalin’s depraved grain quotas imposed on Ukraine in the 1930s, in which peasant farmers were forced to grow grain for export but executed if they were found eating it themselves. Neither of these was a rational response to food insecurity, of course, but I think it holds lessons for us today. In the United States and much of the world, we have taken food security for granted for many decades now. As climate change takes hold, other environmental problems mount (soil erosion? ocean acidification? groundwater mining?), and population continues to grow (though slowly decelerating), the future of global food supply is not secure. On top of the technical and environmental challenges, food insecurity can trigger mass migration, civil unrest, geopolitical instability and even war, which in turn can exacerbate environmental and food supply problems in a vicious feedback loop. These are tough, tough problems, but one thing we can try to do is keep a focus on global peace and stability so we at least have a chance to focus our technological and economic prowess on solving the food security issue.

the 1962 Single Integrated Operational Plan

This is just chilling.

A full nuclear SIOP strike launched on a preemptive basis would have delivered over 3200 nuclear weapons to 1060 targets in the Soviet Union, China, and allied countries in Asia and Europe;

A full nuclear strike by SIOP forces on high alert, launched in retaliation to a Soviet strike, would have delivered 1706 nuclear weapons against a total of 725 targets in the Soviet Union, China, and allied states;

Targets would have included nuclear weapons, government and military control centers, and at least 130 cities in the Soviet Union, China, and allies;

The National Security Archive

That is clearly insane. What secret plans to destroy everything human civilization has achieved in the last 10,000 years are on the books today?

tactical nuclear weapons

Center for Public Integrity has an article explaining how a war involving tactical nuclear weapons could play out. The problem, beyond the obvious horrible human and environmental toll they would take, is that they would likely be the link in escalation from conventional war to civilization-annihilating total thermonuclear war. Please no.

Had such an invasion ever come, the commanders in the field, given authorization to use nuclear weapons to avert defeat, would retreat after deployment. (Soviet plans for war were to specifically attack tactical nuclear sites.) The war would then either end in hours with an exchange of ICBMs, or with a ceasefire negotiated to prevent armageddon.

Defense intellectuals describe the steps between peace and thermonuclear oblivion through an “escalation ladder,” with the leadership of both countries at war taking actions that invite the other country to either escalate, by increasing the stakes and tensions, or de-escalate, by backing away from further conflict. Tactical nuclear weapons are the rung separating conventional battle from a nuclear war.

Soviet leaders developed their nuclear weapons and doctrine as a response to U.S. nuclear war planning, and awareness of U.S. nuclear deployments to Europe. Both the U.S. and USSR assumed that once tactical nuclear weapons were used, it was more likely that thermonuclear exchange, not deescalation, would follow.

Center for Public Integrity

So the strategy was to out-crazy the other side. We rolled the dice on that risky strategy and won, but roll the dice enough times and everyone on both sides will lose.

The best thing that could possibly come out of this horrible Ukraine war, once the dust settles, would be renewed arms control negotiations. I am not too hopeful for that because the world seems to be in a very cynical place right now.

body cams

I just finished up my third Philadelphia jury experience. I’m not going to give any details of names or locations, but one thing that struck me was the role of technology. This trial featured:

  • Instagram
  • Someone (allegedly) impersonating a delivery person
  • Selfies, which ended up in court
  • A (temporarily) purloined cell phone
  • Police body cam videos

Now, about those police body cams. We started hearing about them in the context of police shootings of suspects, but after seeing them in court I realized that they change everything. First, there is a world of difference between hearing the testimony of a police office about what happened on the scene, and seeing and hearing (although the audio was not perfect) it for yourself. For one thing, police are not masters of public speaking. For another, the incident they are describing happened months or even years before, and was just a few short minutes during one busy day. They may have responded to hundreds or thousands of similar calls since then. The body cam footage will even help the police officers themselves remember what happened on the scene before they testify.

EIA Annual Energy Outlook 2022

The U.S. Energy Information Administration (EIA) has a new report out with projections through 2050. The graphs are worth staring at. Here are some takeaways for me.

  • Coal use has crashed from over 20% of energy consumption 10 years ago to around 10% now. The rise in renewable energy mirrors it, from less than 5% to nearly 20%. Natural gas also surged during this period to replace the decline in coal, from around 20 to 30+ percent. Oil just kind of bumps along in the 30-40% range. The projection in 2050 is something like oil 40%, natural gas 35%, renewables 20%, everything else less than 10%.
  • The carbon footprint of electric power generation a decade ago was greater than the transportation sector. It has declined significantly (I assume this reflects the substitution of natural gas and renewables for coal), and is projected to continue to decline. The carbon footprint of transportation and industry is projected to remain relatively flat.
  • The biggest gains in renewable energy are projected to come from solar. Solar is projected to grow regardless of changes in cost, whereas wind and other sources are shown as more sensitive to cost, meaning if cost is high their share stops growing. I assume this has a lot to do with the cost of solar being pretty low already.
  • They show solar energy and battery storage being used extensively to meet peak mid-day demand by 2050.
  • Somewhat disappointing and surprising to me, they show electric vehicles sales only slowly displacing a small portion of gasoline-powered (3%?) vehicle sales over the next 30 years. I hope they are wrong about this one.

I can imagine a past world where safe civilian nuclear technology had been used more widely over the last 50 years or so, and we are not in the climate mess we are in today. Maybe this is even a world where the proliferation of nuclear weapons is less prevalent, but I am not sure about that. This is not the world we live in.

I can imagine a near-future world where homes, businesses, industry, and vehicles are increasingly electrified, and electricity generation is increasingly shifted to renewables. I still think nuclear power might be able to play an important role in this world. But it does not seem like we are headed in the direction of this world, at least not quickly enough to avoid a major train wreck. I hope I am wrong.

Opossums

I like the little guys. They are not “immune” to rabies or Lyme disease, as some have claimed, but they seem to get these diseases fairly rarely. They can carry fleas and ticks because…they’re animals. Although one study suggested they like to eat a lot of ticks, other studies have failed to confirm this unfortunately. This article cites a number of good things about them, and then seems to reach an illogical conclusion that they are nonetheless pests. I don’t quite get it – yes, they have sharp teeth and might use them if they are really cornered, or if a house pet that doesn’t know any better attacks them. That’s about it.

While it’s true that opossums eat ticks, thereby potentially preventing some spread of Lyme disease, their good characteristics may be overhyped by some social media users. Opossum-control mechanisms vary by state, but most pest control experts recommend treating their removal in the same way as one would treat raccoons or skunks. After determining that an opossum has moved in, experts say to make the surroundings less appealing to them by cleaning up overgrown shrubbery and trees that they may use to hide in, clean up fallen fruit, and hide garbage cans, pet food containers, or other food sources. Secure home areas so that they cannot hide out under stairways or other nooks and crannies.

Snopes

This sounds like a pretty good prescription to remove wildlife habitat in general on your property. Anything that is not mown turf grass with maybe the occasional well-mulched tree is “overgrown” in the eyes of some (not mine).

Philadelphia census

The Inquirer has a decent analysis of U.S. census results for Philly. You have to subscribe the Inquirer to read it (which I have done maybe because I was shamed by one of those articles about the decline of local news? also since I don’t really watch TV I am aware of almost no local news unless I pay for it). Anyway, a couple highlights although the graphics are worth a look:

  • They provide the Gini index and change in the Gini index over the last 5 years or so. Income inequality has gotten worse, and Philadelphia proper is the worst in the Philadelphia metro area. They point out that this could be because the rich have gotten richer or the poor have gotten poorer, or both, but then they don’t dig into that any further.
  • The depressing statistic remains that Philadelphia is the poorest major city in the United States at over 20% of residents living in poverty. This is pathetic. They picked 10 “major cities” (not clear if these are counties or metro areas) – Houston, Dallas, and San Antonio are the next poorest after Philly (go Texas!) and Chicago, New York and Los Angeles are 5-7 respectively, with San Diego and San Jose bringing up the rear (i.e., the best of the worst? or the best of the worst of the biggest?). So whatever the impression we might get in the media, the economy in California seems to be doing a bit better than Texas if poverty is the metric. The article points out that social benefits like food stamps are not considered (but maybe tax benefits like the earned income tax credit would be?) but doesn’t dig into it further.
  • About 2 of 3 Philadelphia residents were born in Pennsylvania, indicating people are not that mobile and we are not attracting new residents from elsewhere the way the sun belt cities generally area. They did not do this analysis by metro area, so including people from the New Jersey and Delaware might push this number even higher (and excluding people from, say, the northwestern tip of the state which is a 7 hour drive from here probably would not push it that much lower.)
  • Philadelphia has the second lowest percentage of foreign-born residents of the 10 cities (counties? metro areas?) studied. San Antonio had the lowest, so being near a militarized international border does not seem to correlate to attracting immigrants. Interestingly, Interestingly Philadelphia has the highest percentage of immigrants from Africa at about 11% of immigrants. Houston and Dallas are next, which again I wouldn’t have guessed. But I would keep in mind that in terms of sheer numbers, New York, LA, and Chicago may still have the most people in almost any category.
  • A majority of people over the age of 15 have never been married. This is interesting. Does this mean our city is particularly young (I don’t think so), particular groups are not getting married (I think so), or people are getting married later in life? To answer the last question, it would be interesting to know what age people tend to get married on average. I got married at 30, so if the average age were to be 25 or 30, what percent of people over that age have ever been married? What percent of people who are not married now will eventually get married? That would be an interesting number. 18% of all people over 15 are separated, divorced, or widowed (but if you want to know what % of people who get married eventually get divorced or separated, you would want to separate out the people who are widowed.) 50% of people who get married and don’t get divorced are going to get widowed – there’s a depressing thought. Or I guess it would be slightly less than 50% – I suppose a few couples go down together in car or plane crashes, sinking boats, fires/floods/building collapses, or the very occasional suicide pact. That’s sweet, now I feel better.