A More Hawkish Federal Reserve — and Federal Trade Commission

Link: https://www.nationalreview.com/2021/06/a-more-hawkish-federal-reserve-and-federal-trade-commission/

Excerpt:

For the first time since the start of the COVID-19 pandemic, the Federal Reserve has bucked investor expectations and taken a more hawkish policy stance. After months of projecting near-zero interest rates through 2023, yesterday the Federal Open Market Committee forecast two rate hikes by the end of 2023. With consumer prices and spending rising in tandem of late, the revised projections are a tacit admission that recent inflation may not be as transitory as the Fed has maintained.

“Is there a risk that inflation will be higher than we think? Yes,” said chair Jay Powell. The ten-year Treasury yield increased roughly 80 basis points to 1.57 percent after the press conference.

But the Fed’s revised policy outlook was not matched by an increased medium-term inflation forecast. The central bank continues to expect an average inflation rate of 2.1 percent over the next three years. Goldman Sachs’s macro researchers interpret that to mean that “the FOMC sees the 2021 inflation overshoot, which will bring the average inflation rate since the recession began above 2 percent, as largely sufficient to accomplish its averaging goal.”

Ever since the Fed adopted an average inflation target last summer, markets have been left guessing as to the time horizon over which the Fed would target 2 percent. Yesterday’s projections suggest it will be two to three years.

Author(s):DANIEL TENREIRO

Publication Date: 17 June

Publication Site: National Review

Rebekah Jones’s Lies about Florida COVID Data Keep Piling Up

Link: https://www.nationalreview.com/2021/06/rebekah-joness-lies-about-florida-covid-data-keep-piling-up/

Excerpt:

One of the most persistent falsehoods of the COVID pandemic has been the claim that Florida has been “hiding” data. This idea has been advanced primarily by Rebekah Jones, a former Florida Department of Health employee, who, having at first expressed only some modest political disagreements with the way in which Florida responded to COVID, has over time become a fountain of misinformation.

…..

To understand what is happening here, one needs to go back to the beginning. Over the past 15 months, Florida has published a truly remarkable amount of COVID-related data. At the heart of this trove has been a well-maintained list of literally every documented case of COVID — listed by county, age, and gender, and replete with information about whether the patient had recently traveled, had visited the ER, had been hospitalized, and had had any known contact with other Floridians. To my knowledge, Florida has been the only state in the union that has published this kind of data.

…..

To this day, you can download Florida’s case-line data and see 21 cases of COVID that, despite having been identified between March 2020 and December 2020, feature a December 2019 “Event Date.” To anyone who understands data, these results are clearly the product of the system having assigned a non-null default value when no data has been entered. To the Miami Herald, however, these results hinted at scandal. Even now, when its reporters know beyond any doubt that their initial instincts were wrong, the Herald continues to tell its readers that these entries serve as “evidence of community spread potentially months earlier than previously reported.” This is not true.

Author(s): Matt Shapiro

Publication Date: 8 June 2021

Publication Site: National Review

Rebekah Jones, the COVID Whistleblower Who Wasn’t

Link: https://www.nationalreview.com/2021/05/rebekah-jones-the-covid-whistleblower-who-wasnt/

Excerpt:

There is an extremely good reason that nobody in the Florida Department of Health has sided with Jones. It’s the same reason that there has been no devastating New York Times exposé about Florida’s “real” numbers. That reason? There is simply no story here. By all accounts, Rebekah Jones is a talented developer of GIS dashboards. But that’s all she is. She’s not a data scientist. She’s not an epidemiologist. She’s not a doctor. She didn’t “build” the “data system,” as she now claims, nor is she a “data manager.” Her role at the FDOH was to serve as one of the people who export other people’s work—from sets over which she had no control—and to present it nicely on the state’s dashboard. To understand just how far removed Jones really is from the actual data, consider that even now—even as she rakes in cash from the gullible to support her own independent dashboard—she is using precisely the same FDOH data used by everyone else in the world. Yes, you read that right: Jones’s “rebel” dashboard is hooked up directly to the same FDOH that she pretends daily is engaged in a conspiracy. As Jones herself confirmed on Twitter: “I use DOH’s data. If you access the data from both sources, you’ll see that it is identical.” She just displays them differently.

Or, to put it more bluntly, she displays them badly. When you get past all of the nonsense, what Jones is ultimately saying is that the State of Florida—and, by extension, the Centers for Disease Control and Prevention—has not processed its data in the same way that she would if she were in charge. But, frankly, why would it? Again, Jones isn’t an epidemiologist, and her objections, while compelling to the sort of low-information political obsessive she is so good at attracting, betray a considerable ignorance of the material issues. In order to increase the numbers in Florida’s case count, Jones counts positive antibody tests as cases. But that’s unsound, given that (a) those positives include people who have already had COVID-19 or who have had the vaccine, and (b) Jones is unable to avoid double-counting people who have taken both an antibody test and a COVID test that came back positive, because the state correctly refuses to publish the names of the people who have taken those tests. Likewise, Jones claims that Florida is hiding deaths because it does not in­clude nonresidents in its headline numbers. But Florida does report nonresident deaths; it just reports them separately, as every state does, and as the CDC’s guidelines demand. Jones’s most recent claim is that Florida’s “excess death” number is suspicious. But that, too, has been rigorously debunked by pretty much everyone who understands what “excess deaths” means in an epidemiological context—including by the CDC; by Daniel Weinberger, an epidemiologist at the Yale School of Public Health; by Lauren Rossen, a statistician at the CDC’s National Center for Health Statistics; and, most notably, by Jason Salemi, an epidemiologist at the University of South Florida, who, having gone to the trouble of making a video explaining calmly why the talking point was false, was then bullied off Twitter by Jones and her followers.

Author(s): Charles C. W. Cooke

Publication Date: 13 May 2021

Publication Site: National Review

U.S. Lifts Pause, Will Restart J&J Vaccinations with Warning

Link: https://www.nationalreview.com/news/u-s-should-restart-jj-vaccinations-with-warning-cdc-advisory-group-says/

Excerpt:

The United States will resume Johnson & Johnson COVID-19 vaccinations after health officials lifted an 11-day pause on the shots at the recommendation of a Centers for Disease Control and Prevention advisory panel on Friday.

The pause in inoculations was triggered by concerns over six cases of a rare blood clot that occurred out of more than 7 million people who had received the vaccine in the U.S.

The panel voted 10 to 4 to recommend restarting the vaccinations, saying the benefits of the shot outweigh the rare risk of blood clots. However, the group suggested that the vaccine include a warning about the increased risk of the very rare but severe blood clots.

Author(s): Brittany Bernstein

Publication Date: 23 April 2021

Publication Site: National Review

The SALT Subsidy

Link: https://www.nationalreview.com/corner/the-salt-subsidy/

Excerpt:

“Taxed twice on the same income”: This is an argument sometimes brought out in favor of the state and local tax deduction, or SALT. But it doesn’t really hold water.

It’s not problematic for different taxes, funding different services, to use the same denominator. County and municipal governments often tax the same property, for instance, and local and state governments often impose sales taxes on the same transactions. In these cases, requiring one tax to be deducted before the other was calculated would just be silly, because legislators would simply increase the second tax’s rate enough to offset the loss, leaving everything back where it started.

With SALT, though, there’s no simple solution like that — federal tax rates apply across the entire nation, while state and local taxes vary from place to place. A federal deduction subsidizes places with high taxes by collecting less federal revenue from those places, while any overall rate increase will hit the whole country. Blue-state lawmakers like Nadler like SALT, and want to get rid of the cap on it, because they want that subsidy, not because it’s fair tax policy.

Author(s): Robert Verbruggen

Publication Date: 15 April 2021

Publication Site: National Review

Don’t Mistake Accounting for Economics

Link: https://www.nationalreview.com/2021/04/dont-mistake-accounting-for-economics/

Excerpt:

There’s one mistake that’s particularly common and damaging. Too many observers try to derive economic principles from accounting principles. This is flat-out wrong. The reason is simple: Economics is not accounting. Economists try to understand the causal relationships in commerce and government. Accountants document stocks and flows in an orderly fashion. Economics obviously makes use of accounting, and accounting can be improved through knowledge of economics, but they’re not the same thing.

The most egregious abuses of economics that we see today start with an accounting identity — a true statement or equation — but end with an absurd economic claim. Importantly, an identity is true by construction. Based on the definitions of the variables, the formulation must be so. But it doesn’t say anything about the real world. It certainly doesn’t capture the causal relationships among those variables.

Author(s): Alexander William Salter

Publication Date: 9 April 2021

Publication Site: National Review

Why Investors Can’t Quit U.S. Debt

Link: https://www.nationalreview.com/2021/03/why-investors-cant-quit-u-s-debt/

Graphic:

Excerpt:

Second, there is another $12 trillion in dollar-denominated assets issued by entities outside the United States, according to the Bank for International Settlements. Combine this with the dollar assets exported from the United States, and there exists roughly $32 trillion in relatively liquid and safe dollar assets abroad, as seen in the figure below.

There is no other currency system that comes close to providing so many safe and liquid assets to the world. On one hand, this outcome is not surprising, given the dollar’s dominant role in the global economy. On the other hand, the implication of this fact is astonishing: There is no alternative source of safe and liquid assets available on such a large scale. This means that if investors wanted to break up with the global dollar system, there would be nowhere else to go to meet all their relationship needs.

Author(s): David Beckworth

Publication Date: 31 March 2021

Publication Site: National Review

Leave the Cap on the SALT

Link: https://www.nationalreview.com/2021/04/leave-cap-salt/?utm_source=Sailthru&utm_medium=email&utm_campaign=TUE_20210406&utm_term=Tuesday-Smart

Excerpt:

Since the Republican tax reform of 2017, the federal government has allowed taxpayers to deduct $10,000 of their state and local tax payments from their federal taxes. What the Democrats now seek is a restoration of the unlimited tax deduction that had previously been in place. Only the highest earners hit that cap, so getting rid of it would directly benefit only them. The Tax Foundation estimates that lifting the cap would raise the after-tax incomes of the bottom-earning 40 percent of households by nothing. People in the middle of the income distribution would see an average increase of 0.01 percent. People in the top 1 percent, on the other hand, would receive a 2.8 percent increase. Another analysis, from the Tax Policy Center, found that the top 20 percent of taxpayers would receive 96 percent of the benefit of repealing the cap.

Publication Date: 6 April 2021

Publication Site: National Review

Yahoo Story on Florida COVID Study Misrepresented Key Finding, Study’s Author Says

Link: https://www.nationalreview.com/news/yahoo-story-on-florida-covid-study-misrepresented-key-finding-studys-author-says/

Excerpt:

But Moosa Tatar, the lead author of the study featured by Yahoo, said the story’s framing of his analysis was incorrect, and he does not yet know how many of the excess deaths are attributable to COVID.

“The impact of COVID-19 on mortality is significantly greater than the official COVID-19 data suggest. But we need further research to determine specific reasons for this,” he told National Review. “These deaths may have been directly or indirectly associated with COVID-19.”

Nazaryan went on to imply that Governor Ron DeSantis could be pressuring the state’s medical examiners, who have “some discretion,” to deliberately undercount COVID deaths. “In Florida, the state’s 25 district medical examiners are directly appointed by the governor,” he noted.

Author(s): Tobias Hoonhout

Publication Date: 30 March 2021

Publication Site: National Review

The EU Vaccine Debacle

Link: https://www.nationalreview.com/2021/03/the-eu-vaccine-debacle/

Excerpt:

Supported by Angela Merkel, the German chancellor, the EU Commission (its administrative arm) took over the negotiations with vaccine manufacturers on behalf of all EU member-states last June. This was designed both as a declaration of EU “solidarity” and because of the belief that bargaining on behalf of the whole bloc could secure the vaccine at a cheaper price, a calculation that appeared to take little account of the economic costs of any delays, and delay was what — for a variety of reasons — Brussels delivered.

The U.K. came to its deal with AstraZeneca (the manufacturer of the Oxford vaccine) three months earlier than the EU, and its contract came with sharper teethThe EU also took four months longer than the U.K. and U.S. to sign up with Pfizer.

Making matters worse, the EU’s FDA, the European Medicines Agency (EMA), a body by definition particularly receptive to the precautionary principle that plays such a dominant role in EU policy-making (except when it comes to setting up a new currency), took its time to approve the first vaccines. Its first approval came some weeks after the U.K. and ten days or so after the U.S.

Author(s): Editorial Board

Publication Date: 25 March 2021

Publication Site: National Review

Does the Fed’s Monetary Policy Threaten Inflation? (Contains Spoilers)

Link: https://www.nationalreview.com/2021/03/does-the-feds-monetary-policy-threaten-inflation-contains-spoilers/

Excerpt:

Indeed, Brainard writes, “If, in the future, inflation rises immoderately or persistently above target, and there is evidence that longer-term inflation expectations are moving above our longer-run goal, I would not hesitate to act and believe we have the tools to carefully guide inflation down to target.” It matters that people believe this, even if the actions cause immense short-term pain. Do people still believe the Fed has that will? Do people believe that the Treasury Department and Congress have the parallel will to take fiscal steps to contain inflation if it should come?

Does the Fed really have the tools to do it? I am doubtful. For ten years, interest rates were zero. (Interest rates were either too high or too low, depending on your view of things, but stuck at zero in any case.) For ten years, the Fed ran massive quantitative easing after quantitative easing. Inflation just sailed along slightly below 2 percent. This episode suggests the Fed has a lot less power than it thinks. But that is also a cheery view, as if the Fed’s interest-rate and bond-purchase tools are relatively powerless, then not much of what the Fed is doing will cause inflation either. In the current economy, fiscal policy and fiscal anchoring seem the greater danger to inflation than even the monetary mistakes of the 1970s.

Author(s): John H. Cochrane

Publication Date: 9 March 2021

Publication Site: National Review

The Politics of Pensions

Link: https://www.nationalreview.com/the-tuesday/the-politics-of-pensions/

Excerpt:

One of the difficulties faced by some of these pensions is that most of the large employers that were expected to pay into them no longer do so, many of them having ceased to exist. As Elliot Blair Smith put it in a 2016 MarketWatch write-up of the sorry history of the Central States pension fund: “Only three of the plan’s 50 largest employers from 1980 still pay into the plan. And for each active employee, it has 5.2 retired or inactive participants.”

If corporations did nothing but grow and stack up profits, then this would be a pretty good system. But that isn’t how things actually work.

In spite of the sci-fi trope of immortal, galaxy-spanning corporations, the modern business firm is in fact a relatively vulnerable and short-lived thing. In the middle of the 20th century, a big corporation might be expected to stay in business for the better part of a century; today, the average big corporation will not live long enough to legally order a beer. McKinsey has estimated that three-fourths of the companies listed in the S&P 500 in 2017 will disappear within ten years. This is an inconvenient thing for people who expect to be taken care of for all of their adult lifetimes by a single employer, but it is the result of improved business practices rather than defective ones. As businesses become more focused on their core competencies and learn to adapt more quickly to changes in the market, they become ever more temporary partnerships among different kinds of capital: physical, financial, and human.

Author(s): Kevin Williamson

Publication Date: 9 March 2021

Publication Site: National Review