13 August 2017

Touching Me, Touching You

So, let me get this straight, once again. Clinton lost because 77,900 more shit kickers in shit kicking counties in three states voted for Donald J. Quisling than for her. Explain to me how any Democrat could reach out and touch the votes of such deplorables? Not Dixiecrates, but real Democrats.

10 August 2017

Second Thought for the Day, 10 August 2017

[T]hey've got to draw in their horns and stop their aggression, or we're going to bomb them back into the Stone Age. And we would shove them back into the Stone Age with Air power or Naval power -- not with ground forces.
-- Curtis LeMay/1965

Thought for the Day, 10 August 2017

As mentioned before in these endeavors, and bears repeating today: the SOP of would be dictators is to instigate war, institute martial law, and claim all governance in the name of protecting the homeland. The shit kickers who bought Donald J. Quisling's white supremacy spiel will buy this transparent ruse. Will the rest of us?

[update]
in answer to a comment in another version of these endeavors, I offered:
Well, another few factoids to consider:

- Donald J. Quisling claims to be second only to Lincoln as President

- the White Power folks consider the Civil War to have been instigated by Lincoln

- Lincoln did institute martial law

Quisling would be doing the right thing.


31 July 2017

Thought for the Day, 31 July 2017 [update]

So, we have the latest spewing from the "Lord of the Flies" White House:
I'm not Steve Bannon. I'm not trying to suck my own cock.

During the election, we had this from HRC:
You know, to just be grossly generalistic, you could put half of Trump's supporters into what I call the basket of deplorables. Right? The racist, sexist, homophobic, xenophobic, Islamaphobic -- you name it. And unfortunately there are people like that. And he has lifted them up. He has given voice to their websites that used to only have 11,000 people -- now 11 million. He tweets and retweets their offensive hateful mean-spirited rhetoric. Now, some of those folks -- they are irredeemable, but thankfully they are not America."

Ya think may be she was right?

[update]
Well, he didn't last long.

26 July 2017

I Still Hate Neil Irwin, part the ninth [update]

Poppy Bush called it voodoo economics. Its zealots call it supply side theory. It's all bogus wealth transfer from the many to the few. If any form of supply side were true, producers would rev up the production lines whenever demand goes slack. They don't do that, of course.

The inevitable inference is that growth is demand driven. Yet, it takes a 'radical' paper to make the point.
It's a chicken or egg problem: Does low productivity cause slow growth, or does slow growth cause low productivity?

The second possibility is the provocative argument of a new paper published Tuesday by the Roosevelt Institute, a liberal think tank. The paper argues that the United States economy is not actually closing in on its full economic potential and has plenty of room for continued growth -- so long as the Federal Reserve doesn't put on the brakes of the expansion prematurely.

The data, and logic, lead one to conclude that capitalists respond to increasing demand, not to decreasing cost. The former impels them to produce. The latter to pocket the savings.
"On Mondays and Wednesdays, economists argue that wages are low because robots are taking people's jobs. On Tuesdays and Thursdays, it's that we can't have wages rise because productivity growth is low," said Mr. Mason, an economist at John Jay College. "Both can't be true."

In other words, instead of worrying so much about robots taking away jobs, maybe we should worry more about wages being too low for the robots to even get a chance.

Foxconn, which may or may not be building plant here, has been doing the robot thing in response to labor costs (that's 2011, and there're lots more recent reports of carrying this out).
Yesterday, Foxconn announced (at an employee dance party of all places) that they're planning on buying some robots to replace their human workforce. And by some robots, they mean one million robots over the next three years.

So, in addition to the segue from actual production in the economy to overhead labor (and the loss in global productivity), we find that we can't get growth if wages don't expand to demand more of what the economy actually produces. The lower and middle classes don't consume financial services to the degree that the 1% does.

[update]
Well, that didn't take long. Hot off today's presses is more info on Foxconn.
The technology futurists Andrew McAfee and Erik Brynjolfsson of MIT recently told Yahoo Finance that the technological change of the last 20 years is nothing compared with the imminent revolution to be wrought by artificial intelligence and machine learning. "We are never again going to have a large, prosperous, stable middle class in this country doing routine industrial-era work," McAfee said. "The assembly line jobs of the 1970s, those jobs are gone. To try to go back to the 1950s, I find that un-American."

Un-American?? A bit extreme. Who's gonna have the moolah to buy the stuff? London Whales?

Neo Nazi Youth

Just when you figure Donald J. Quisling couldn't be anymore transparent a dictator, he goes and turns the Boy Scouts into Neo Nazi Youth. All because 77,900 shit kickers had just enough brain stem activity to fill in the circle.

21 July 2017

Divide and Conquer

Well, it does the olde heart a bit of good to realize that the mainstream pundits have finally caught up with Your Humble Servent and figured out that the left/right political war isn't based on Red states and Blue states, but rather on city slickers and shit kickers. The shit kickers are poor and unhappy mostly because they continue to elect right wing fascists to state and local governments. Said legislators, continue, to ill-educate their citizens. God, guns, and abortion being the only subjects. They're competent to be biblical goat herds, but not much else. Once again, go look at the voting results map from last year to see the real truth.
This map tells many particularly interesting stories on which I'll elaborate in future posts, but suffice to say that most of the precinct swing can be explained by one variable: education level, perhaps augmented somewhat by race and ethnicity.

As mentioned here more than once, the flow of money inter-state, is unambiguously Blue to Red (via DC) and has been for decades, perhaps dozens of them. The shit kickers are the moochers. Without medicaid, they'll have nearly no hospitals. And, of course, Medicaid is mostly white. Contrary to the right wing propaganda, Medicaid isn't all about negro ghetto hoes popping out runts. Which brings us to the Constitutional justification of Senate structure to "protect" the small population rural states from the rapacious urban states of the Northeast. Well, that turns out, with just a quick wiki-look to be a totally bogus argument, even at the time.

urban population, USofA/1800: 6.1%
urban population, USofA/2010: 80.7%

So, it isn't surprising that 19th century USofA was run by uneducated shit kickers. And so it will be again, if Donald J. Quisling and Sessions get their way.
.

20 July 2017

Inside Quisling's Brain

The NYT interview went public during the MSNBC (I know, Snowflake News) nightly shows. One of the points of wonderment amongst the groups assembled was Donald J. Quisling's assertion that he wouldn't have appointed Sessions if he told Donald J. Quisling that he'd be recusing himself in the Russian investigation. In sum, "Mueller wasn't appointed yet when Sessions was offered the job." Oddly, there is a way to connect the dots in such a way that such an assertion makes (half) sense.

Here we go.

At the time of considering the appointment, Trump and Sessions knew some facts.

1 - That there was an investigation into Russian meddling, including whether or not the Donald J. Quisling folks had aided and abetted said meddling.

2 - That Sessions was knee deep in the campaign.

3 - That Sessions, at least, knew he had lied about meeting with Russians.

4 - That DoJ protocol required anyone in DoJ and possibly a subject of a DoJ investigation must recuse.

So, Sessions, had he thought things through, could have apprised Donald J. Quisling of the situation, and it's impending implications. But they both have the same voter suppression agenda, above all others, so it just slipped his mind.

And, not mentioned by said pundits (that I heard, at least) was this smoking gun:
Asked if Mr. Mueller's investigation would cross a red line if it expanded to look at his family's finances beyond any relationship to Russia, Mr. Trump said, "I would say yes." He would not say what he would do about it. "I think that's a violation. Look, this is about Russia."

Why is that a Dirty Harry moment, you might ask? All along, Donald J. Quisling has been braying that he had nothing, nothing at all, to do with Russia. But here he admits that he has financial ties to Russia. And some may be quid pro quo for the meddling. Ya think?

So, yes, Donald J. Quisling is in hock to Russians and wants to be the USofA's Putin. A match made someplace.

The half wrong part, of course, is that Donald J. Quisling isn't (yet) Putin and the DoJ isn't his personal enemies unit.

17 July 2017

Minority Report, part the second

Well, this has turned into a series of episodes. Here's some of today's reporting demonstrating, once again, that Donald J. Quisling is just another Third World Dictator. All he cares about is his cabal of oligarches and billionaires, not bringing the country together. He keeps the shit kickers in the Empty States in thrall by screeching God, Guns, and Abortion. The whole point of dictatorship is to shift resources from the many to the few.
On Thursday, President Trump will mark six months in office with the lowest approval rating of any president going back 70 years.

A new national poll out Sunday shows just 36 percent of Americans approve of Mr. Trump's job performance so far.

Mr. Trump's disapproval rating has jumped to 58 percent.

Again, go check out the ongoing research confirming that money flows from Blue States to Red States through DC. Donald J. Quisling will only accelerate the flow, and blame the Effete Eastern Intellectuals for the failure of his Voodoo Supply Side tax cuts.


10 July 2017

Burn, Baby, Burn [update]

Well, as the first quote says, this is clearly treason. Donald J. Quisling, Jr. meets with a Russian intelligence person, and lies about it.

Time for the NSA to burn some S&M (no, that doesn't mean what your dirty mind thinks) and give us all the audio and signals intel they have on this dirty crew. Subversion of democracy is the most important attack to punish.

[update 11 July]
The flames: the NYT now reports Donald J. Quisling, Jr. was told explicitly that info was coming from Russia. The Intelligence Community is slicing off its pound of flesh. How does one think the emails might have surfaced? Who would have access to them, outside TTO? Hmmm?

09 July 2017

The Next Version

Regular reader will likely recall earlier missives on Yellen's determination to raise Fed managed short-term rates, in particular the inevitable rate inversion and the pernicious effects of same. Well, may be not. Recent reporting states that the Fed is about to unleash the Treasuries it's been holding since the advent of QE. Increase supply, decrease price, and raise the interest rate. Since this also raises the rate on new issues, of course, then (of course) the little people who actually pay taxes gain the additional benefit of giving yet more of their moolah to the idle rich.

Next thing we'll hear is that Donald J. Quisling decrees that data collection and reporting from BLS, Commerce and the rest will be suspended, since such data is the source of so much fake news.

04 July 2017

I Still Hate Neil Irwin, part the eighth

Yes, but he's nearer The Truth today, wherein he compares consumer confidence survey results to just extrapolating recent hard data. People are confident when they're certain that they'll have at least as much free moolah to spend tomorrow as they do today. More tomorrow would be better, of course.
Confidence isn't some magic elixir for the economy: Businesses will hire and invest only when they see concrete evidence of demand for their products, and consumers intensify their spending only when their incomes justify it.

Something of a non-sequitur, but still yet another stake through the heart of the Voodoo Supply Side Economist.

In my dead-trees version, Irwin shares the bottom of the first Business Section page with Neal Boudette, who introduces us to yet another canary.
Luxury-car makers began to grab an increasing slice of the American car market as baby boomers reached their peak income years and splurged on upscale automobiles. In 2007, they had 11.8 percent of the market, up from about 9 percent in 2001.

You'd think that all those Smartest Guys in the Room would recognize a non-repeatable bump in their demand function based on once-in-a-lifetime (props to the 'Heads) demographics. Perhaps not.
They had some initial success, but many models introduced in the last several years are now floundering. In June, sales of Cadillac's ATS were just 1,185, 37 percent fewer than in the same period a year ago. BMW i3 sales this year have totaled fewer than 3,000 cars, less than half the pace of two years ago. At Mercedes-Benz, sales of the CLA declined 8 percent in June -- and are down 37 percent in the first six months of the year.

Automotive Goodwill Industries might actually exist? They're not used cars, after all. They're Previously Owned Certified Batmobiles.
But more difficulties for the luxury brands may be on the way. Their efforts to sell new cars this year are facing increased competition from used cars that were leased two or three years ago and have been turned in to dealers. Many have been driven fewer than 40,000 miles and sell for about half the price of new models.

Could it be that the ranks of the aspirational 1%-ers are thinning?? Ya think?

02 July 2017

Still Can't See the Voodoo

Trust me. If you deep dive through these missives you will see, in various syntaxs, the following:
if the Fed persists with raising short-term rates, you'll get a rate inversion that'll make your head explode

Well, now Jeff Somer gathers up some quotes from "experts" to weigh in on the possibility.
Simply put, while the Federal Reserve has been raising short-term interest rates since December, the bond market hasn't gotten the memo. The longer-term rates that are set through bond market trading have, for the most part, been declining, though there was a brief reversal in the last few days. But the disconnect over the last few months is a sign that bond investors believe economic growth and inflation are still weak and the Fed's actions are premature.

What's truly stupid: Yellen and the rest of the Fed management can see this happening in real time. Moreover, they fully well know that their control of short-term interest is far less than absolute and their control of long-term rates is non-existent. Yet, she persists. Why?
"... The economy keeps growing, the stock market keeps going up, yet inflation remains very low. Where are we heading? There are many possibilities here. This isn't the economy we used to know."

No. It isn't. And, as these missives (and others) have asserted for some years, the hegemony of FIRE over the rest of the economy has to lead to slower growth, as typically measured. Once again, Baumol's book ("Performing Arts, The Economic Dilemma: a study of problems common to theater, opera, music, and dance") on service sectors is a must read. In sum, capital can replace labor only when labor is menial. Such as accountants and para-legals.

Well, those in the know do know: it's Poppy Bush's Voodoo Economics all over again. All that capital infusion went to the 1% and corporations, who've either sat on it, or begorrah!, bought and bid up the price of Treasuries. By simple arithmetic, that drives down the interest rate. So, in the end, the 99% have no more moolah to buy stuff, so the prices of that stuff remains phlegmatic, while fiduciary assets soar. They could use all that moolah to invest in physical investment and added production, but of course they don't. These pundits really need to read their Samuelson.
For now, the rally in risky assets like stocks continues unabated, while the conflict between the Fed and the bond market continues. Fed officials indicate that they are determined to keep raising short-term rates and to begin reducing the Fed's bond holdings -- perhaps preparing the central bank for action whenever the next recession comes.

At a bare minimum, the policy choices ahead are difficult. And for investors, there is ample reason for caution.

Despite what the Rand-ians say, any degree of Government makes for winners and losers. The only issue is whether Government favors the most or the Elites.

28 June 2017

My Signature Accomplishment

When I saw that first EO display by Donald J. Quisling, I thought of a Rorschach blot. Well, others have been weighing in on that scribble since then, too. Here are some of their thoughts.

Candace Sutton
"When a script is completely devoid of curves, the writer lacks empathy and craves power, prestige and admiration.

"Besides the bigheadedness that shows in this script there is something else that is rather oversized -- the 'p' in 'Trump'. This large phallic symbol shouts, 'Me ... big hunk of man'."

Linda Rodriguez McRobbie
[Sheila Lowe, a Ventura, Calif., handwriting analyst] first came across Trump's handwriting and signature in the 1990s and has been keeping a professional eye on it since. "Handwriting changes over time in people who grow and change. . . . It's like a road map of who you were," she said. Trump's handwriting, she said, has remained largely consistent for the last 20 years. "He's the same person he was all those years ago -- an empty narcissist."

Lily Pickard
Tracey Trussell of the British Institute of Graphologists has taken a look to see what it can reveal about the man soon to be taking up the Oval Office.

"She explains that the large writing, upright slant and long tall letters indicate a whole host of characteristics about Mr Trump. Ms Trussell says: "His signature transmits wild ambition, dynamism, bravery and fearlessness.

"He's hungry for power and has both determination and stubbornness in spades."

Katy Waldman
After staring at this accursed cursive for hours, I've come to the conclusion that this signature is a cry for help. Donald J. Trump is trying to tell us that he's not really Donald J. Trump. His real name is AuuuUUuuuuuA.

You get the idea: a 6 year old dictator. That's a bit redundant, of course.

25 June 2017

You're Not as Smart as a Fifth Grader

A continuing thread in these endeavors is that the rose-colored glasses assertions of the billionaires and their fellow travelers, that we're going through the same sort of transition as happened during farm-to-factory, is bunk. The main point made in these missives is that the higher incomes from factory work over farming didn't demand higher skills or IQs. If anything, assembly line drones needed smaller brains than any marginally successful farmer.

So, today we get the experience of an AI expert. He agrees.
Unlike the Industrial Revolution and the computer revolution, the A.I. revolution is not taking certain jobs (artisans, personal assistants who use paper and typewriters) and replacing them with other jobs (assembly-line workers, personal assistants conversant with computers). Instead, it is poised to bring about a wide-scale decimation of jobs -- mostly lower-paying jobs, but some higher-paying ones, too.

Anyone who thinks Donald J. Quisling will stop the carnage is an idiot (nearly all of those "saved" jobs in Indiana, fewer than he claimed of course, are headed South). It's no surprise that the article addresses the key question: new jobs will be a small fraction of removed old jobs. And mostly at lower wages, if social darwinism is the sole wage setting mechanism.
Who will pay for these jobs? Here is where the enormous wealth concentrated in relatively few hands comes in. It strikes me as unavoidable that large chunks of the money created by A.I. will have to be transferred to those whose jobs have been displaced. This seems feasible only through Keynesian policies of increased government spending, presumably raised through taxation on wealthy companies.

Do you really think that Donald J. Quisling will support that? Well, do you punk?

It's also worth remembering, though not mentioned by this author, that the current procession of job creation is in FIRE. Which is to say jobs that cater to the 10% and 1%. Or, to put it another way, back during the farm-to-factory migration, output was geared to the masses, which is to say, aggregate demand kept expanding. Today, FIRE doesn't create demand for anywhere near the displaced workers, much less new ones.

Have a nice day.

22 June 2017

Cruz Missile

Heard the Tedster on cable saying that the best part of the Senate ACA replacement was the allowance for NotInsurance plans that were outlawed by the ACA. Which caused the Right Wingnuts to decry the killing "choice". As if permitting insurance companies to scam the unwitting into paying for NotInsurance is a good thing.

The results of NotInsurance are easily seen:
1) those with it will end up in emergency rooms since nothing of note will be covered, and on the dole of the rest of us
2) siphoning those from even minimal real plans also siphons off real premiums, thus rising the premiums for the rest of us

Right Wingnuts, never saying so of course, want health insurance to be treated as just another consumer spend. Which it isn't. It's insurance, and thus only works if all are in the pool. Some degree of penalty for those who actively undermine the process is reasonable. But making such folks pay full price just turns insurance into another consumer spend. Which it isn't.

21 June 2017

Right, But For the Wrong Reason

Yet another story on the vampire loans, ARM. They've come back from the dead. What's interesting about the story is that it gets the reason for using ARM (from the house buyer's perspective, of course) completely wrong.

The folks who are the best for ARM are the Yuppy. Or, for that matter, anyone with strong expectations of rising income, especially above the expected inflation rate. If you're setting out to flip the house, as was the come-on which led to the Great Recession, then we'll just have another one. Those with rising incomes can chose to either flip or stay when the interest rate ratchets; everyone else has to sell, no matter what. We do all remember that was the proximate cause of the Crash. Don't we???? That CBS News would allow such a knucklehead to write such drivel is disturbing.
According to a study by the Federal Reserve, ARMs are a play on rising interest rates. When rates are low, as they have been for many years, homebuyers prefer a fixed-rate 30-year mortgage. But the Fed is gradually raising interest rates due to an improving U.S. economy.
[my emphasis]

Of course, this is nonsense. What matters in capital purchases, specifically consumer ones, is the monthly nut. Keep the nut (monthly mortgage plus fees) to some mythic percent, say 25% of gross income. Only those with rising incomes can withstand mortgage payment resets. Non-earned equity in that bungalow happens when the market value of the bungalow rises above the remaining mortgage value. Simple arithmetic. Just what the marginal flipper is expecting; a few years in a McMansion, then sell it out. Same as 2005. Some other simple arithmetic: what happens to capital values when interest rates rise? Class???? They fall, to match the implied return, which has gone up. What happens to house values as interest rates rise? Class??? They fall so as to keep the nut stable. So, what happens when ARM mortgages, held by those on stagnant or falling wages, rise? They all have to sell or be foreclosed. We've really have seen this movie before. Gad. So, for the house buyer, ARM in a time of rising rates is the absolutely worst time to sign on the dotted line. Except for the truly upwardly mobile. Given that the middle class is in rapid decline, what's the answer? Class???

18 June 2017

I Still Hate Neil Irwin, part the seventh

Yes, I still do. He "steals" my PINO meme with his piece today. Admittedly, he gets quotes, but hey; he's a highly paid reporter for the NYT, so he should. The lede:
The thing about populism is it usually involves doing things that are popular.

This is something that European nationalists and Latin American strongmen have long known. When they come to power, they aim to deliver concrete benefits to their supporters, even at the cost of their nations' long-term fiscal health.

What he does miss is that old bugaboo, the multiple sources of inflation:
The government would pay for it all with higher deficits. Free candy for everyone! The cost -- in the form of higher interest rates and perhaps inflation -- would come later.

Of course, only if the billionaires aren't required to pull some freight. Recall an earlier missive which showed that income tax started as a rich man's tax: they paid seven times as much as the lowest tier, and that tier was much above median.

Even if Donald J. Quisling did go about doing anything, it'd be based on shovelling money to the Billionaire Boys' Club. Real fiscal policy? Not until Hell freezes over.

He offers up quotes from a tome on Latin American populism, which tome concludes that wealth equalization (the only cogent point of populism, of course) must needs lead to catastrophe through the currency. However, comparing Latin American mini-economies (and their dependent currencies) to the USofA is silly. The US Buck is New Gold, mentioned in these missives many times, and, among other things, the USofA is thus obligated to spread its Bucks around the globe to keep the world's economy running. And, of course, since the US Buck is New Gold, we still get to say how much it's worth. Latin American tin horn dictators never could make such a claim for their paper money.
the populist movements of Latin America had often generated a disastrous boom-bust cycle

Shown here, in graphic detail more than once, is the depression laden 19th century USofA economy: even with a currency in specie (actually, because of it), economic life is mostly bad for most folks. We're supposed to be smarter than lower forms of life. There's something to be said for that scene in "2001" where the hominids break bones by the monolith. Monolith, gold, monolith, gold... Supportive fiscal policy isn't, by design, disastrous. If it were, we would still be in our Post-WWII Depression.

Gifts for the BBC:
Despite the president's talk of a bold $1 trillion infrastructure plan, there is not yet an actual legislative proposal, and the approach the administration has described relies heavily on tax credits to encourage private investment. That tends to limit the scope of any projects to those that can generate revenue to pay off investors.

13 June 2017

About That Duck

So, it looks like a duck, walks like a duck, and quacks like a duck. What is it? It's a Kim Jong-Don. Some readers took exception to that extreme epithet. Today's news that he's on the verge of firing Mueller, and that Dear Leader cabinet meeting yesterday was enough proof.

Fair's Fare

Mulvaney justified cutting the social safety net, and the scientific one too, by describing this budget as "taxpayer friendly". Clearly, a swipe at Romney's 47% diatribe.

Well, here's some factoids. The current income tax is the result of the 16th amendment. The first tax levels
Later that year, Congress enacted the Revenue Act of 1913. The tax ranged from 1% on income exceeding $3,000 to 7% on incomes exceeding $500,000.

Now, that's really progressive: 7 times higher for the rich. Moreover, the median income (to the nearest available year) was
According to a U.S. News and World Reports article comparing income in 1915 and 2015, "back in 1915 . . . you were doing about average if you were making $687 a year, according to the Census. That is, if you were a man. If you were a woman, cut that number by about half."

So, income tax didn't kick in until well above the 50th percentile. Way, way above. And that assumes the original used "average" as median rather than mean. Unlikely, so the median wage was almost certainly even less.

Any way you cut it, the 47% have been with us since the beginning of income taxation.

12 June 2017

Push Me, Pull You

One of the most predictable, and (of course) predicted, results of Brexit would be inflation. The UK gets a lot of widgets from the EU, and the Pound has dropped more than a bit (13%, as of the article). As mentioned many times in these missives, inflation has three forebears:
- demand pull
- cost push
- wage push

The Right Wingnuts always attribute any bit of inflation to the last, and always call for punitive measures on wages. Doesn't always work. Well, never. Volcker demonstrated that one could rid an economy of inflation by destroying the whole edifice, by going after wages.
Accelerating inflation may help explain the stunning electoral rebuke of Prime Minister Theresa May and her governing Conservative Party as well as the unexpected strengthening of the Labour Party in Thursday's parliamentary elections. Consumers are grappling with rising prices, and wages have not kept pace. The economy is weakening.

I wonder how the Tories will spin this direct cause-and-effect to greedy, lazy, takers in the wage earning sector? They should hire Ryan, I suppose.

In at least as stunning, recent news is that the Kansas legislature has passed tax increases over Brownback's veto (the article title is a play on Frank's "What's the Matter with Kansas", from some time ago). He and Pence were running neck-and-neck for most hated governors. Voodoo economics only works for the high priests. Once again, the Darwinian/Randian set don't care how their slice of the GDP pie gets bigger relative to the remaining. In fact, they seem to prefer that they get an increasing proportion of a shrinking pie. There's a neat sequence in a "Criminal Intent" episode (no claim to be the first such) I saw recently where Goren hounds the perp by comparing shoe size to junk size, and that those with itty bitty junk prefer petite woman. Makes the junk seem bigger. By comparison.
The cuts came. But the growth never did. As the rest of the country was growing at rates of just above 2 percent, Kansas grew at considerably slower rates, finally hitting just 0.2 percent in 2016. Revenues crashed. Spending was slashed, even on education: In March, the State Supreme Court ruled that state-level school spending was unconstitutionally low. The court is ideologically mixed, but its ruling was unanimous.

The 1% just want to feel their junk's bigger.

Could the hard right have met its Waterloo? One can only hope.

09 June 2017

Penny Wise is Pound Foolish

Here's a tweet that some have professed will lower drug prices. The notion, just use less. No.

The problem with drug prices, to some extent actually true, is that most of the price (the part which reflects cost recoupment only) goes to paying amortization of the R&D and approval tasks. The variable/marginal cost of 99.44% of drugs is in the noise. The chargeback from the CxO suits amounts to more.

So, no, using less will only *raise* the unit cost. Accounting is boring, but often correct.

07 June 2017

Minority Report

Much pundit bloviating, especially from the Left, over the last few weeks has centered on three subjects: the incompetence of Donald J. Quisling's governance, the lack of legislative accomplishment, and approval in the 30 percents. The conclusion? Donald J. Quisling isn't getting anything done. If you're any kind of quant or macro policy analyst (other than the au courant tsunami of customer manipulation applications), you would be quite wrong to feel complacent. Donald J. Quisling is doing some very bad things for both groups. The executive power of the president is nearly limitless; the executive order regime is only the most public enforcement. The reports of curtailing civil rights process in the agencies is one sub-rosa implementation. Dictatorship is so much easier than governing.

The whole point is that having a 30-ish percent approval is what Donald J. Quisling actually wants: the whole point of his position is not to govern the population, but to bilk the 99% to his benefit. And his other billionaire buddies.

So far as pure quants go, government data is disappearing, and when (not if) the economy goes in the crapper, BLS and Commerce and Census will be ordered to stop collecting and publishing data; just as already happened at EPA. The point, of course, is that dictators don't want real data out in the open to contradict them. The point of dictatorship is that
Nobody knows the system better than me, which is why I alone can fix it. I have seen firsthand how the system is rigged against our citizens

We can add to RINO and DINO, PINO where the 'P' stands for Populist. Donald J. Quisling has never been about supporting the lower classes, only pandering to them with God, Guns, and Abortion propaganda. He convinced 77,000 empty county shit kickers and was installed. He's all about implementing Leona's mantra:
We don't pay taxes. Only the little people pay taxes

Moreover, research going back to, at least, FDR has found that net Federal moolah flow is from Urban Blue states to Empty Red states. If you see that the "infrastructure" plan is mostly giving money and tax breaks to developers, and in Red state counties, rather than government led and managed projects affecting the largest populations, will you be convinced? How about bridges to nowhere?. Expect roads and bridges in the middle of North Dakota: from nowhere to nowhere. All the while taking from the 99% and giving to the 1%.

Will the shit kickers in the Empty States ever figure out they're cannon fodder for an autocrat? Don't bet on it.

02 June 2017

Thought For The Day - 2 June 2017

The drop in the unemployment rate comes as the labor force participation rate took a leg lower after having held steady -- and slightly increased -- over the last year or so. The labor force participation rate in May fell to 62.7%, down from 62.9% in April and 63% in March. The employment to population ratio also fell in May to 60% from 60.2% in April.

The number of Americans not in the labor force rose by 608,000.
-- Myles Udland/2 June 2017

That's from Yahoo Finance, and one might wonder how long we'll have to wait for Donald J. Quisling's tweet blaming Obambi for the fall in participation. Throwing more folks off of SSI!! That's the ticket.

01 June 2017

Thought For The Day, part the second - 1 June 2017

A second thought for the day, thanks to Donald J. Quisling.

Here's the "research" he quoted, justifying coitus interruptus climatus. When I heard the sound byte, I knew the numbers were bogus. Ya think?
"NERA" is shorthand for National Economic Research Associates, an economic consulting firm SourceWatch identifies as the entity that published a June 2011 report on behalf of coal industry front group American Coalition for Clean Coal Electricity (ACCCE). ACCCE's report concluded, "clean-air rules proposed by the Obama administration would cost utilities $17.8 billion annually and raise electricity rates 11.5 percent on average in 2016."

More alternative facts.

Thought For The Day - 1 June 2017

Ya think the shit kickers in West Virginia, and elsewhere, might be feeling a tad betrayed? Or, are they really so stupid that Guns, God, and Abortion will keep them loving Donald J. Quisling?
When Budget Director Mick Mulvaney assumed the podium in the White House briefing room last week and previewed the administration's 2018 budget, Heather Block's fears quickly turned to outrage.

Block, a 54-year-old former international aid worker from Lewes, Delaware, listened with growing anger as Mulvaney promised to slice $72 billion from Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI) over the next ten years. The cuts are among $1.74 trillion in social welfare cuts proposed by the Trump administration, a sweeping plan that could kick people like Block off a program, known as SSDI, that keeps her financially afloat.
[my emphasis]

As mentioned more than once, West Virginia is the SSI capital of America. And these shit kickers voted for their deaths. Good on them.

27 May 2017

About That Little Dutch Boy

If you're old enough you know the the story of the little Dutch boy
A short story within the novel has become well known in its own right in American popular culture. The story, read aloud in a schoolroom in England, is about a Dutch boy who saves his country by putting his finger in a leaking dike. The boy stays there all night, in spite of the cold, until the adults of the village find him and make the necessary repairs.

Donald J. Quisling keeps yapping about leaks, generally alleging that the "deep state", aka the civil service, is sabotaging his regime. The problem with this is that it's false ("Averages by Appointment Type Through September 2014") that the upper level of civil service is Obama insurgents: on average they pre-date Obama by some years.

So, what's going on? It looks rather simple. The Intelligence Community understands that Donald J. Quisling is implementing an oligarch regime just as Putin did: passing USofA resources to favored private entities. From a national security point of view, that's a tad anti-democratic. The best way to slow that move down is to get rid of Donald J. Quisling, and put the fear of God into Pence and Ryan.

Not to mention Jared consorting with known Russian spies.

26 May 2017

I Wish I Had a Photographic Memory

The attentive reader notes that the quote preamble to these endeavors has changed structure some over the years. These days, the top few are (semi-)permanent, while the middle change every now and again as part of the housecleaning, while the last turns over on Sunday (if I remember!).

Among the permanent is the quote from Ernst Haas, which he spoke while leading a workshop I attended in Maine. The they, as noted, was Magnum Photo. According to the Wiki article, no one was asked to leave, which is the legend I've known, but a rather large number are listed as "Withdrawn". I suspect that's resignation in front of firing. For example, Charles Harbutt's Wiki page says:
He left the group in 1981, citing its increasingly commercial ambitions and the desire to pursue more personal work.

In any case, Haas continued a level of association. My recollection, not in the Wiki article, was that Haas was one of the first members who was not a founder. Which brings us to today. The NYT has an article on the new version of the International Center for Photography in NYC. Alas, Haas isn't mentioned in the article, but I'll offer up Part The Second after I see the show. Anyone within a hundred miles of NYC really ought to go.

25 May 2017

The Deplorables

Remember that quote from Hillary?
"To just be grossly generalistic, you can put half of Trump supporters into what I call the basket of deplorables," Clinton said. "Right? Racist, sexist, homophobic, xenophobic, Islamaphobic, you name it."

Well, just toss this one in the basket:
At that point, Gianforte grabbed Jacobs by the neck with both hands and slammed him into the ground behind him. Faith, Keith and I watched in disbelief as Gianforte then began punching the reporter. As Gianforte moved on top of Jacobs, he began yelling something to the effect of, "I'm sick and tired of this!"

Neville Chamberlain Trump's sycophants are Neanderthal. And proud of it. And, if you don't read up on the story, Jacobs was just trying to get an answer to a simple question: what was Gianforte's view of the AHCA with the just released CBO score.

24 May 2017

Can You Hear Me Now?

Regular reader will, likely, recall the missives offered in these endeavors to the effect that Neville Chamberlain Trump has always had a simple grift as goal: to implement the Leona Principle, "Only the little people pay taxes!". In particular, that he and the other members of his Billionaires Club object to progressive taxation, now more than ever. Again, the notion of progressivity in income taxation rests on the notion of shared sacrifice, and that such sacrifice should, to some extent, be based on the further notion that those who can afford to pay a bit more should. When income is more or less not starkly unequal, the degree of progressivity need not be stark. It's not full blown Marxism, "from each according to his ability, to each according to his needs", but as income inequality grows ever more stark, the maintenance of a Federal budget which maintains according to the needs of the neediest (viewed per capita, not per budget year expenditure) of necessity means that the 1%'s contribution must, of course, grow, being the only ones with any moolah. Since the 99% have a diminishing share of GDP. The 1% have won. They've gotten the President who will take the pressure off, just like he did with Comey.

"What have you got to lose?" was Neville Chamberlain Trump's bait. His first budget is the switch. The 99% will lose a lot. And it didn't take long for the truth to out. But with Right Wingnuts controlling the other 3 branches of government, and the next 2 individuals in the line of succession, dumping Neville Chamberlain Trump for one of them won't fix the problem. The justification, of course, is that the USofA has become two countries: the job/wealth creators and the spongers, and that the Life of Riley enjoyed by the spongers is over. There's a new sheriff in town, and he's kicking ass. Not the Populist Reality promised by the Populist Candidate.

As the dictators which Neville Chamberlain Trump is so enamoured of know, such a bifurcated society can only exist with a Police State. That's close on the horizon.

Will the low information, low education, low skilled voters who did this to the rest of us figure it out? Don't bet on it.

Of course, the top 5 states getting SS disability are Trump States.

18 May 2017

Your Order is Shipping

During the campaign Neville Chamberlain Trump made a point of criticising Obambi for his use of Executive Orders. Obambi, by such talk, was the prime abuser of executive power in all the history of the country. Here's a list and you can see that Neville Chamberlain Trump is way, way ahead. On an annual basis or term basis since Truman, Obambi is at the bottom. Another big lie.

And, BTW, the count for the first 100 days is 32 for Neville Chamberlain Trump which puts his annualized total at 116. Another big lie.

Who said we're a data driven society?

12 May 2017

At Your Service

A current argument over on "Seeking Alpha" is what Moore's Law means to the notion of innovation. Moore didn't want "Law" associated with his observation.
Despite a popular misconception, Moore is adamant that he did not predict a doubling "every 18 months." Rather, David House, an Intel colleague, had factored in the increasing performance of transistors to conclude that integrated circuits would double in performance every 18 months.

This is what he actually wrote
The complexity for minimum component costs has increased at a rate of roughly a factor of two per year (see graph on next page). Certainly over the short term this rate can be expected to continue, if not to increase. Over the longer term, the rate of increase is a bit more uncertain, although there is no reason to believe it will not remain nearly constant for at least 10 years. That means by 1975, the number of components per integrated circuit for minimum cost will be 65,000.

In simple terms, he observed that the cost of a given circuit halved over time. Since the structure of such circuits obey the laws of physics, which don't change (they are further understood at times, but none have been discarded outright in a very long time), their implementation (generally, TTL) doesn't "improve" per se. But with more transistors available per mm2 to produce such a circuit, that was the easy surrogate for the cost curve. So, Moore's became that. It never was. These days, we've seen that ever smaller nodes have been at escalating cost of R&D and the machines to make such nodes.
A Skylake transistor is around 100 atoms across, and the fewer atoms you have, the harder it becomes to store and manipulate electronic 1s and 0s. Smaller transistors now need trickier designs and extra materials. And as chips get harder to make, fabs get ever more expensive. Handel Jones, the CEO of International Business Strategies, reckons that a fab for state-of-the-art microprocessors now costs around $7 billion.

In all, innovation doesn't necessarily follow the accepted wisdom. These endeavors yapped about the notion of growth for some time, but impelled by Gordon's book, have yapped ever more, and what steps governments can take to produce more of it. And see that it gets to the majority, rather than the 1%. Solow has been mentioned as the standard issue economist who ignores distribution issues in growth. There has been an exception, and from Solow's generation, William Baumol. He just passed away. I read him in grad school, but haven't paid any attention to him in decades. Too bad. I just rechecked my Gordon, and he does mention Baumol on page 173. It was Baumol's later writing that leads to that reference (from the NYT obit):
For example, he said, it takes exactly the same number of people and the same amount of time to play a Beethoven string quartet today as it did in, say, 1817. Yet the musicians who spent years studying and practicing -- and still have to eat and live somewhere while doing that -- cannot be paid the same as their 19th-century counterparts. Their wages, too, will rise, even though they are no more productive than their predecessors were. As a result, their work eventually becomes increasingly expensive compared with more efficiently produced goods.

So, what happens when Moore and Baumol meet? Ever slowing productivity, which means that there's ever less increase to worry about distributing:
"What this says is that the quality of life 30 years from now could deteriorate," Professor Baumol said in 1983, "because many of the services that we associate with quality of life will become relatively more expensive while mass-produced things become cheaper and cheaper."

And it gets worser:
"The real danger is that the nation, mistakenly thinking it must rein in runaway costs, will curtail valuable health services and render them inaccessible for the less affluent. Well-meaning reformers may take the same misstep in education, law enforcement and other handicraft services."

What is striking, to me for sure, is that the notion of service sectors not being on a productivity curve was obvious for some years. Yet I hadn't been aware of Baumol's writings from those years. At least, not consciously. I do remember that "priming the pump" isn't my idea.

The Moore's Law side of things devolves from the observation that much of PC software (the three primary ones being wordprocessing, spreadsheets, and wordprocessing) hasn't led to increases in service sectors' productivity since their original release. The primary reason, which I expect Baumol would agree with, is that such computing doesn't actually maker the user smarter (i.e., productive): I offer up Alt-A loans and London Whales as proof.
His insight about the low productivity growth in services also helped explain why overall growth in an economy increasingly dominated by services can stagnate.

One of the prime notions, again which I think is mine but who really knows, is that FIRE has been the private sectors' way to absorb the college educated in non-productive overhead labor. It may be that Baumol had figured that out too 30 years ago, although perhaps not in such inflammatory words. My bad.

Ya think Orange Julius Caesar, Laffer, or Bannon can figure that out? Don't bet on it. Just dig more coal and make our city air just as bad China cities'. Wonderful.

I Pledge Allegience to the United States of Trumpistan

I told you so.
I told you so.
I told you so.
I told you so.
I told you so.
I told you so.
I told you so.
I told you so.
I told you so.
I told you so.
I told you so.
I told you so.
I told you so.

11 May 2017

Uh Oh!

The title says it all. Here's the latest Q Poll on Orange Julius Caesar. Not that he cares, of course.
The most common responses -- "idiot," "incompetent," and "liar" -- did not reflect well on the president, whose approval ratings from the same poll are near record lows.

The most common words were:

1. "Idiot," 39 times
2. "Incompetent," 31 times
3. "Liar," 30 times
4. "Leader," 25 times
5. "Unqualified," 25 times
6. "President," 22 times
7. "Strong," 21 times
8. "Businessman," 18 times
9. "Ignorant," 16 times
10. "Egotistical," 15 times

10 May 2017

Thought For The Day - 10 May 2017

Well, we now know how this works out. Orange Julius Caesar issues pre-emptive presidential pardons to all his turncoat minions. And the obsequious Congress let's it pass. Through further election manipulation, the Right Wingnuts solidify control of Congress, ensuring that Orange Julius Caesar and his chosen successors run the USofA for the benefit of the Billionaire Boys Club.

You read it here first.

The Oracle Gets It Right

A day later, at least in the press I see, and a dollar better. This gem from Buffett:
Everything in valuation gets back to interest rates.

A good proportion of the quant, certainly macro, musings in these endeavors goes back to growth, and how that happens. Which consideration is over and above distribution, that ultimately determines whether growth is sustainable. The short answer to the latter is: if it's hogged by the hogs it dies out soon enough.

When I first mentioned Gordon's book, I was forthright in saying that the asymptote of progress was a concept I'd seen coming for a long time and had mused about in these endeavors. Gordon, between the lines, makes the same argument, which is that the globe is finite in resources and laws of nature. We've certainly found the latter, and are close to the former in the areas that matter. Real growth in economies results from new technologies which boost both productivity and output. An economy grows more prosperous, on the whole, by spreading around that additional output from tech progress. That's where the real interest rate comes from.

The theory of interest, in econ terms, rests on a static view of an economy where holders of wealth choose between consumption and (real) investment on the basis of time preference, not productivity gains. Which term boils down to: how much extra moolah does the holder demand for deferring consumption for the time of the loan? This is a zero sum game, without tech progress; aggregate consumption in the current period (and subsequent term periods) is diminished by the aggregate interest paid. Pure fiduciary investment is the version we have today. And, it's not a one-sided process. The holders of wealth may well want 10 or 20 percent return for the use of their moolah, but they'll only get that vig if the borrowers can make at least that much from real world use of the funds. And that can only happen, in the aggregate, if better mouse traps keep being made. Is the problem getting clearer?

Monopoly is the most convenient, and crude, way to generate the vig. Not so good for the public weal, however. Moreover, in the real world of investing, the base return/interest rate is the risk-less government bond. For some decades that's been the Uncle Sugar Bond. Being not entirely stupid, at least in recent perspective, said bonds are sold on auction with a fixed payment, not fixed rate. When, in times as these, there's a tsunami of idle moolah, the auction pricing driven up by excess supply of moolah drives down the interest rate. So long as that tsunami continues to circulate, governments can try to raise those fiat interest rates that they have, precious few and very short term, but there's nothing they can do about long term. The long term rate, if you follow the bread crumbs back to ground zero, is set by tech progress. As Gordon and Your Humble Servant have said, the perimeter of our knowledge of the physical world is, at most, within eyesight. At worst, we're already there, but just haven't felt the bump.

You'll know that the plutocrats have taken total control when they push through law mandating US Treasuries sell at a fixed rate.

09 May 2017

The Oracle Gets It Wrong

Warren Buffett had this to say
He said if you go back to about 1960, corporate taxes were about 4 percent of GDP and now they're about 2 percent of GDP. At that time, healthcare was 5 percent of GDP and now it's 17 percent of GDP. "So when American business talks about taxes strangling our competitiveness," he said, "they're talking about something that as a percentage of GDP has gone down from 4 to 2." Meanwhile, medical costs have exploded. "So medical costs are the tapeworm of American economic competitiveness," he said.

In some other reporting, he also said that healthcare would kill the economy. What he ignores, of course, is that healthcare has been, and is, a very strong employment driver. IOW, healthcare does good by doing good. Or, to put it another way, your taxes drive wages and thus inflation by producing un-consumables as nucular bombs and aircraft carriers. Healthcare, OTOH, produces a consumable product. A virtuous circle, as different from the vicious cycle of defense spending.

This time, the Oracle is wrong.

08 May 2017

On Death and Taxes

They are said to be the only two unavoidable events in life. Well, your friend and mine Raul Labrador had his 15 minutes of fame this past week, by uttering this gem:
nobody dies because they don't have access to health care.

Funny thing is, morality aside (and economists and Right Wingnuts do so at all times), he's mostly right. Most of the money spent on keeping coggers alive for a few extra months before cancer or heart disease kills them, fits his statement. With or without healthcare, they'll die of the disease that healthcare can't actually cure. "We can't afford it!!!!" Some, Right Wingnuts especially, point to the increase in life span since 1900 (or some similar year) as the reason that Social Security and Medicare must soon collapse. The problem with that assertion is that it's totally false. Yes, average life span at birth is up by a couple of decades since some earlier date, but that increase is almost entirely due to childhood vaccination and antibiotics getting more folks to maturity. In other words, the average/mean life span went up just because more people make it to 65 (pulling the average to the right of the graph), rather than people at 65 living lots of more years.

For those not in the Medicare cohort, mandatory service means that if a 30 year old ghetto junkie gets hit by a bus, he'll be treated at some sort of hospital ER. He may not survive such quality healthcare, and he may spend the rest of his worthless life in destitution being forced to pay back for that service. But he did get healthcare when he needed it. So Labrador isn't fully wrong. The quality of life of those without real healthcare is lots worse than it is with healthcare, but the 1% don't give a shit. And there's a practical reason for that.

This core problem is subtle. As many, including Your Humble Servant, have said, the AHCA is a charade. Rather than being a serious attempt to do what Orange Julius Caesar promised, "everyone, better, cheaper" than Obamacare, it's a bait and switch ploy to give $1,000,000,000,000 in taxes back to the rich folks. Recall, Obamacare included a bit of a tax increase on the upper brackets to defray the subsidies for the poor. Further, Congress has budget rules which make it difficult (modulo another Nuclear Option as Gorsuch) to pass a tax cut without certain preconditions. In sum, by "refunding" the onerous taxes on the rich from Obamacare, the really big cut promised the rich by Orange Julius Caesar is procedurally greased. Who would have thought an avowed Populist would be so thoughtful to the rich? Shit kickers in the Empty States sure didn't, of course.

Here's the subtlety. A progressive tax system works, the populace buys into it, when most of the money rests with the middle class. They largely are the ones paying for the Damn Gummint services. The rich pay some bit more, but not enough to piss them off. As the income distribution skews ever further right, pulling the average ever higher than the median, the middle contributes a declining amount to the total since they have a declining part of the income pie. The rich, who can and do afford what have historically been public services, have rebelled. Why should they pay for a ghetto junkie's rehab or yet another ghetto kid or a bridge in the Rust Belt that's about to fall down?? It just ain't fair.

Yet more subtlety. If you go spelunk the FRED data, you'll find that the US GDP distribution by sector has changed mightily over the last few decades. In sum: in the past the rich put up with progressive taxation since their businesses depended on the poor having enough moolah to buy the stuff they sold. A quasi-symbiotic relationship. But, these days the GDP is skewing evermore toward services "consumed" mostly by rich folks. The rich are more and more making stuff that is sold only to the rich themselves. Why put up with income transfer if none of it comes back? So, yet another reason to opt out of taxation.

And, Orange Julius Caesar, neo-Populist, and Right Wingnut Congress are happy to oblige. Will the shit kickers in the Empty States ever realize they were lied to and care? Don't bet on it.

03 May 2017

Watch Your Headv [update]

Not for the first time, I suppose, but a question: isn't 99.44% of quant work just overhead, not output? And for the .56% that is sold output, well that's just sold to MegaCorp to do overhead tasks that MegaCorp chooses not to do in-house.

The recent United fiasco and Southwest mea culpa got me to cogitating, not for the first time, about whether we're actually making much "progress" in both the technical and cultural meanings; have the last couple of generations of invention produced anything as meaningful as the steam engine or washing machine? Gordon's book gets it right.

My current bete noir is dealing with some tracking of mandatory healthcare consumption, specifically my annual physical. The insurer decided I have to have one, despite the evidence (and more each day) that there's really not much value to an annual physical, as commonly executed; certainly the one I get.
The unequivocal conclusion: the appointments are unlikely to be beneficial. Regardless of which screenings and tests were administered, studies of annual health exams dating from 1963 to 1999 show that the annual physicals did not reduce mortality overall or for specific causes of death from cancer or heart disease. And the checkups consume billions, although no one is sure exactly how many billions because of the challenge of measuring the additional screenings and follow-up tests.

Of course, the fact that I did have said physical, all with Windows based software tracking each and every move, didn't get from my doctor's office to the insurer and/or from the insurer to the third-party nanny nagger. Many a slip twixt the cup and the lip. And, of course, the insurer threatens to charge multiple hundreds of dollars per month for failure to have the physical. Sounds like an opportunity much like Catch-22. Losing notifications along the way is to the insurer's advantage. I wonder whether how many quants in Hartford are calculating how many notifications to lose and stay under the regulatory radar? Do the quants get paid on a commission-only basis? Said commission on the penalty charges?

With cheap diagnostics of mortal conditions (pan can, for example), then annual (or so) screenings make sense. As it is, the resting EKG I got is utterly worthless as a diagnostic of my underlying cardiac health.
The test is not useful in routine checkups for people who do not have risk factors for heart disease such as high blood pressure or symptoms of heart disease, like chest pain.

So, the insurer pays this third-party to track whether I've done my Good DooBees each year. The doctor's office tells the insurer, who tells the third-part, who then tells the insurer. I think that's a decent definition of a circle jerk. Which they've managed to screw up, so to speak.

The whole point of quant, in the profit making world at least, is that the cost of a quant exercise brings greater value than the cost of the exercise. We see, may be, this with the overbooking scandal. On the one hand, airlines claim they overbook, and do some calcs to set the percent of such overbooking:
Ms. Owens, along with her main job of setting various fares on a single flight, tweaks the overbooking numbers. Then, each week a report comes out that lists all US Airways flights that bumped 10 or more people. The analyst with the most flights on the report is stuck with a stuffed toy crow for the week. And occasionally they hear from angry airport workers who handled the bumping.
On the other hand, the airlines sell "unbooked" seats through discount brokers, which pretty much guarantees more butts than seats. That text is from 2007, if you noticed, so perhaps the quants have gotten more stats since then, but I doubt it. There's really no penalty for not doing the job smart. Well, a toy crow isn't much punishment.

Not the best use of all the data available as mentioned in an earlier missive. The airlines know that the consumer traveller, with those early and last minute bought tickets, are in no refund land. The discretionary no shows are nearly always business junket guys (and, I suppose, gals) on expensive tickets, so they'll lose far more than just the revenue of the high priced ticket: the cost of the bump has to be included. Not to mention that those steeply discounted broker tickets don't come close to making up the difference.

Could the airlines be bumping out Ma and Pa Kettle who just got excess, cheap tickets from a broker to accommodate Mr. Master of the Universe who just found out he has to get to Orlando for a sales meeting and is willing to pay full freight? What do you think?

So, back to the healthcare situation. In my callow youth, I worked on a Progress application called Optimed (it was bought a few times since I left and before it was sold by the company that bought it, so I don't know if it's still around) which was (is?) a pre-qualification screener. The clients would add rules for certain procedures, based on some, sort of, established criteria shipped with the application. The point, of course, was an ever more elaborate ring-around-a-rosy to justify denying services. Welcome to health as profit. So, the value of quant in this sort of case is cost avoidance. I remain convinced that, modulo fraud avoidance, it's likely cheaper to allow physicians to be doctors, and fire all those $100K/annum quants. YMMV.

The idle educated keep taking more of GDP for nothing gained. What a way to run a country?

[update]
Turns out, the subtitle of one version of these endeavors (penned nearly a decade ago, BTW), "It's the Distribution, Stupid" is gaining some traction:
"The 'jobs of the future' are likely to be performed by robots," said Nathaniel Borenstein, chief scientist at Mimecast, an email company. "The question isn't how to train people for nonexistent jobs. It's how to share the wealth in a world where we don't need most people to work."

01 May 2017

Fruit Pies

Let's do some dot connecting.

1 - United Airlines has some rent-a-cops manhandle a elderly doctor out of his seat and off the plane. United eventually settles for an, as yet, undisclosed sum.

2 - Southwest says it will cease overbooking. The same report also says that, at 15,000, Southwest had more passenger bumps than any other airline.

3 - Airline reservation systems, computer division, go back to the 1950's, but the most well known, ACP (some might argue SABRE, but that's just a specific implementation), goes back to the mid-1960s. Of note, it continues today, in much modified form, as TPF.

The distinguishing feature of both ACP and TPF is that they're, at heart, assembler programs with bespoke "transactions" embedded in OS files. Very lean, very fast. According to reports from 2001, SABRE was going to port to Compaq machines.

Much has been made here about the many failures of quant methods when dealing with human systems/processes. When doing data from Mother Nature, who doesn't change the rules every now and again, quant works rather well. In the human realm we get The Great Recession.

So, the dot connecting exercise leads one to conclude that the quants doing computer reservation haven't paid much attention for the better part of 60 years. It's an exercise one might (well, can, actually) find in an upper-level undergraduate program (11.128): on a per-flight basis, calculate the percent overbooked such that only 5% or 1% or 10% of flights actually bump passengers. What might be called low hanging fruit.

The airlines have all the data needed to accomplish the exercise. They know the actual load for each flight going back forever. They know the external factors which affect variability of load: holidays, weather, conventions, and so on. So, why the United and Southwest experiences? The only logical answer is simple: airlines have found that they can get away with not paying attention. Where's a competent data scientist when we need one?

28 April 2017

Dee Feat is in Dee Flation - Part the Thirty Second

It's been many months since the last entry in this subject. My bad. The fact remains: all that TARP and QE money still hasn't generated inflation. You can only get wage push or demand pull inflation if the newly printed moolah ends up in the hands of the underclasses. Period. That is also, as it happens, how you get growth. Growth is caused by increasing demand, and that only happens when new moolah gets to the hands of those who buy stuff with that new money. The 1%-ers who got the QE moolah weren't and didn't. The "supply side" notion has been disproven every time it's been tried. It was never anything more than an excuse to send moolah to the 1%. As you will see below, producers do all they can to constrain output. Cartels are one fairly well known mechanism. Deflation is still the big bad bear; it stifles both production and demand. And, once again, Neil Irwin reads my mind.
There is a worldwide glut that includes oil wells, steel plants and eager would-be workers, and it will take more than a United States presidential election and a few months of solid global growth to fix it.

So, why don't they just stop producing? That nasty capital albatross: they gots to pay the Piper no matter how much they produce, so they're boxed into generating any cashflow they can. And who's the Piper? All those 1%-ers with idle cash they want return on. Get a job, for crying out loud.

As has been mentioned by a few of the saner mainstream pundits: since the 1980s, manufacturing output has about doubled with about a third less labor. It wasn't China or Mexico, but automation that took the jobs. Everywhere.

All the trickle down folks, including by default Obambi/Bernanke, simply ignore that handing out Bongo Bucks to the .1% who already have more than they can spend doesn't do anything for GDP growth. On a zero-sum basis, well, some win and others lose. But nothing good happens overall. The Revenge of Laffer is in the Mnuchin propaganda.
The Republican tax-cut plan is designed to reduce the tax burden for the very rich, and, since this is a highly unpopular thing to do, Republicans are going to spend a lot of time lying about it. Treasury Secretary Steve Mnuchin was dispatched to do the round of morning shows, and his first attempt at lying did not go especially well.

Back to I Still Hate Neil:
... many of the biggest forces in the economy don't announce themselves with an election or a central banker's announcement, but through shifts in the underlying forces that make the global economy tick. And those don't change overnight.

Here, Neil is a bit too naive`: the Great Recession did announce itself pretty much to those paying attention. And the Trump tax cut, if it happens as now stated, will generate the Permanent Depression. Of course, Orange Julius Caesar is certainly on the way to starting a War, if only to install himself as dictator. It's happened before, you might know.

We'll really know the Right Wingnuts are worried when they demand the Damn Gummint pay them more interest on bonds than they can get from private investment.

26 April 2017

That Capital-Labor Ratio

A long standing meme in these endeavors, both quant and macro, is that capital is constraining vis-a-vis labor. You can't lay off your capital; you have to pay for it, no matter what. So long as output remains steady, or better increases, going all in on capital makes sense. But it doesn't always work. This is especially true if you overpay for that capital:
Last year, the network's new nine-year agreement with the NBA to televise pro basketball games took effect. The reported cost to ESPN: somewhere around $1.5 billion per year, a massive increase over the previous deal. That's on top of deals the network already had with the NFL ($1.9 billion annually), various NCAA conferences and the College Football Playoff (well over $1 billion), and Major League Baseball ($700 million).

All of those contracts aren't the usual kind of capital, but they really are. So, having lost tons of subscribers (and the ESPN set have the advantage of being in the default delivery for most services).
[C]able and satellite companies including Comcast and Time Warner Cable say they have to do something to keep cash-strapped customers from cutting the cord.
...
In order to keep costs down, it won't have ... ESPN, ESPN2...

What kind of economy do we have if the default cable bill is too much for so many folks? The canary just died.

So, in order to pay for all that capital, ESPN is chopping up to 100 heads. Is that anywhere near enough to finance all those $$$ billion contracts. Not even close. Most, from what's been published so far, are regional/specific sports reporters. The only two general faces so far are Ed Werder and Jay Crawford. The latter has always been the most intelligent presence on the network. Figures.

21 April 2017

Thought For The Day - 21 April 2017

The Right Wingnuts are forever pointing at Unicorns to justify all manner of divide-and-conquer manuevers. Chief among such is that "college doesn't matter, just look at Bill Gates!" The Unicorn Theory of Success. Is and always was nonsense, but even most of the Unicorns find it useful to justify both their paths and also the constriction of access to various paths for the less fortunate. Gates was born with millions in trust funds. Not exactly a bootstrap tale.

Well, another research study puts the lie to the Unicorn Theory:
We found about 94 percent of these U.S. leaders attended college, and about 50 percent attended an elite school. Though almost everyone went to college, elite school attendance varied widely. For instance, only 20.6 percent of House members and 33.8 percent of 30-millionaires attended an elite school, but over 80 percent of Forbes' most powerful people did. For whatever reason, about twice as many senators - 41 percent - as House members went to elite schools.

Where did Devin Nunes go?
After receiving his associate of arts degree from the College of the Sequoias, Nunes graduated from Cal Poly San Luis Obispo with a bachelor's degree in agricultural business and a master's degree in agriculture.

And what about that associate's degree? oops!
WASC placed the college on "show cause" status in early 2013 and required to demonstrate to WASC that it should remain accredited. In early 2014, the accreditation status of COS was changed to "warning" as many of the original deficiencies were corrected but others remained; a follow-up report is due in October.

A shit kicker in Congress.

18 April 2017

See The Dots, Connect The Dots

Work with me on this one.

We know that Empty Counties are Red just because they're white, uneducated, unskilled, and unemployed. Incestuous hollers. Enough Empty Counties in a state, and it runs Red.

We know that cities are Blue just because they're polyglot, educated, skilled, and employed. Enough cities in a state, it's true Blue. Have you noticed that mongrel mutts are almost always tractable and smart? Same with people. Thoroughbred horses are a nightmare. Same with people.

We know that Red states aren't pure Red, but dotted (or swamped, in some cases) with Blue cities. All that matters is who breeds faster (I'll leave that as an exercise for the reader) and who is dumb enough to believe lots of things that aren't true. And who actually votes.

So, today we find that real estate experts (or some, anyway) expect city rents to decline due to overbuilding. But that this will last only a year or two, since liberals and progressives and the smart and employed continue to flock to cities.

In a few years, not even the Red-est of states will be able to find enough votes in their Empty Counties to overwhelm their Blue cities. Oh the irony of it!! The real Tea Party happened in that most socialist city of all, Boston.

The KKK's worst nightmare.

17 April 2017

Eventual Data

Another in the grab bag of tricks with these endeavors: events drive data, and not the other way round. Of course, one can find hundreds of books on Amazon with the search 'financial engineering'. 6,296 as I type this. That's a bunch. Beginning, in earnest, with Samuelson, my initial profession of economics slid down the rabbit hole of quant. Political economics has always been about policy, which is just a polite way of saying, "how do I kill my opponents and reward my allies?" Orange Julius Caesar as President should dispel any notion of a higher purpose.

Well, surprise. The announcement of the second tier international economics award comes as a big surprise. Or, perhaps not. These missives have oft mentioned Gordon's book the last few months. His approach is very much the wordy approach to analysis that Samuelson and Solow attempted, successfully, to kill off.
The economics association highlighted Mr. Donaldson's interest in historical research, an unusual focus for a leading economist. In one paper, Mr. Donaldson found that the spread of railroads in 19th-century India increased prosperity by increasing trade. A subsequent paper reached a similar conclusion about the United States.

Study the events, and you'll see why the data turned out as it did.
The economics association also highlighted Mr. Donaldson's research techniques. It said he had "formed and become the principal practitioner of a distinctive style of research, based on important conceptual questions, careful data work and credible identification combined with state-of-the-art structural methods."

One might dismiss such as reactionary, but given Trumpism and Creationism and Isolationism and Populism and the like, why not?

Finally, the real surprise to anyone who's kept track of econ research and punditry over the last decade,
Mr. Donaldson, 38, was born in Canada. He graduated from Oxford University with a degree in physics and then earned a doctorate in economics at the London School of Economics. He joined the faculty at Stanford in 2014.

When I was at UMass, I opted into then out of, the Ph.D. program and took the participation trophy MA rather than put up with just such graduate program professors. They could spit derivatives off the end of the chalk (yes, it was that long ago) with supreme confidence, but hadn't much of a clue about economics. Not a one of them would have written what Donaldson has. Not even as punishment for high crimes.

14 April 2017

Thought for The (Good Fri)day - 14 April 2017

Just when you thought Orange Julius Caesar was going to Make America Great Again (whenever, and for whomever, that might be), we get the CPI summary that can, reasonably, be his alone.
The Consumer Price Index for All Urban Consumers (CPI-U) decreased 0.3 percent in March on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today.

Some of that was gas went down (it's been rising since that data was collected), but
The index for all items less food and energy fell 0.1 percent in March, its first decline since January 2010.

Of course, that month was still a Great Recession month, despite what some BLS wonks have said. Falling prices, aka Defeat is in Dee Flation, are the canary in the coal mine keeling over just before it blows up. Welcome to Trump Crater, where the Billionaire Boys get richer and the poor die sooner. The imploding Middle Class (what's left of it) doesn't have lots o moolah to push up prices. If that all sounds like you've read that here before. Well, you have.

10 April 2017

Times A Wastin'

Have many stopped to consider why Orange Julius Caesar is so hot to trot with his "disruptive initiatives"? You might notice that most of the damage is coming from his anti-American agency heads. Pruitt (yeah, it's a tort law firm link, but it was the first one that came up with a money quote, which is what matters) declaring asbestos benign.
Hon. Mr. Pruitt: Asbestos has been identified by the EPA as a high-priority chemical that requires a risk evaluation following the process established by the Lautenberg Act to determine whether conditions of use of the chemical substance pose an unreasonable risk. Prejudging the outcome of that risk evaluation process would not be appropriate.

As if the effects of asbestos were unknown? DeVos expressly denied holding all schools to equal performance metrics
Betsy DeVos admits to Sen. Tim Kaine that she does not support holding charter schools "equally accountable" as public schools.

Of course, Orange Julius Caesar and DeVos made millions fleecing vulnerable folks and the Federal government. I spent about a year "teaching" for one of those for-profit schools (not, so far as I know, owned by either). No diploma? No GED? No problem. We'll turn you into a MultiMate expert in a few months. [If you've ever heard of MultiMate...] Just sign here.

One could go on for hours listing the cynical anti-American exploitation of this crew over the course of just three months. But the underlying question is why the need? Orange Julius Caesar knows, for sure, how much collusion there was between himself, his helpmates, and the Russians. He likely knows how far along the FBI (with help from NSA and CIA) investigation is. He's counting the days until his perp walk. Time's a wastin'.

What he's too dumb to figure out: the sooner he craters the country, the longer the electorate lies prostrate into the 2018 election. And, thus, the greater the threat to the Right Wingnut control of Congress. Even shit kickers in Empty States know when they're being kicker in the face while they grovel in the mud. The Obambi employment surge has past, so good luck.

06 April 2017

Who Was That Masked Man?

In a NYT interview published yesterday, Kim Jong-Don had this to say about Susan Rice:
I think the Susan Rice thing is a massive story. I think it's a massive, massive story. All over the world. It's a bigger story than you know in terms of what other people have done also. The Russia story is a total hoax. There has been absolutely nothing coming out of that.

She's been on various "news" chat shows, and didn't say what needed to be said. I offer up this example of how to do it.
Trump is either an idiot or a pathological liar; likely both. His assertion amounts to saying that the National Security Advisor receives these reports with names of US citizens covered by a piece of tape with "US Person" printed on it, and then the Advisor peels off some of those tapes to see who is named. The further assertion that the Advisor was using these reports to "spy" on Trump and associates requires that the Advisor know, beforehand, that a Trump or associate name is under the piece of tape. That's nonsense, of course. If a report, during the campaign, mentioned Russians and election fiddling, then it would be my job to determine which US citizens were colluding with Russians. That these US citizens just happened to be Trump and his associates is just tough luck for them. Caught red handed. Boo hoo.

In order "unmask" a US citizen name (which is the text "US person number X" and such), the Advisor can only request the name of the US citizen from the originating agency, which may or may not oblige. The Advisor cannot "unmask" unilaterally.

That's what she should have said.

03 April 2017

Orwell Got It Wrong

Two ways of using quant have been, to my mind, wrong: financial engineering because it's been the source of collapse since the beginning of the Nation, and psychoquant which uses data to manipulate the rest of us to the advantage of the few. Well, Noam Scheiber goes long in today's NYT with a detailed expose` of how Uber does it. It should give you the willies. May be not. What the story doesn't tell you: Uber, despite these very expensive efforts to manipulate its "contractors", is massively underwater.
Uber exists in a kind of legal and ethical purgatory, however. Because its drivers are independent contractors, they lack most of the protections associated with employment. By mastering their workers' mental circuitry, Uber and the like may be taking the economy back toward a pre-New Deal era when businesses had enormous power over workers and few checks on their ability to exploit it.
[my emphasis]

The point, of course, is to re-institute the indentured servitude (or, in the extreme, slave) model of the 19th century. For those who think that immigration in the century was the result of National magnanimity, well no. Various folks, generally on a racial basis, were imported to deal with specific projects. Asians building railroads likely the best known. As explained many times previously, as capital substitutes for labor, the less there is for the capitalist to gain from squeezing the workforce. And it matters not whether they're "employees" or "sub-contractors".

The destruction of employment will, in all likelihood, have some predictable effects. Healthcare will devolve to the pre-New Deal model where it's just another consumer spend, and quality will devolve to that level. The reason healthcare evolved so rapidly in the post WWII period was just because of all that moolah injected into the system. Most of the basic tech that was implemented was known before the War. There just wasn't much money coming from the 1% to finance progress. In other words, money can't buy you love or better health. It takes a bit more than a few village people to fund R&D in healthcare.

Retirement funding, similarly. And, by the same mechanism: divide and conquer. The Right prefers the verbiage of "freedom to choose", but, of course, the only way to fend off the powerful few is if the many merge together.

The Editors, most likely, buried the lede to the last graph:
"You have all these players entering into this space, and the assumption is they'll do it through vast armies of underemployed people looking for extra hours, and we can control every nuance about what they do but not have to pay them," said David Weil, the top wage-and-hour official under President Barack Obama.

When you stop to consider the enormous cost advantages, Mr. Weil said, "it says to me this is an area that will grow fast."

Take the time to read the whole piece. It will curl your hair, if you're among those who've not been paying attention to this quant space.

29 March 2017

Location, Location, Location [update]

One of the recent themes of these endeavors is that substituting capital for labor leads to covert side effects. Note, I did not say unintended or unanticipated. I said covert, and mean it. As the share of labor decreases, the need to ever more drastically cut out labor costs, in order to maintain capital return improvements, increases. Saving 10% on 80% of cost is vastly different from saving 10% on 15% of cost. That ole asymptote problem.

One of the long known glitches in the American form of healthcare is that a given billable item will have a different value, depending on the location where the item was delivered. It's also been long known that the doctor's office is, was, and will remain the least expensive. Full fledged hospitals, the most expensive. And with good (well, sorta) reason: hospitals have all that plant and equipment to amortize. See where this might be going?

Well, of course you do. Today's reporting puts some hard numbers to the problem. And their source is the Billionaire Boyking's pals, the corporate hospital.
When my wife fell on the ice a few years ago, she thought her wrist was broken. She went to see her doctor, who advised her to have an X-ray taken in the same building. Since her wrist was still crooked months later, she had a second X-ray done at an imaging facility nearby.

Afterward, her health insurance company sent the "explanation of benefits" for each X-ray. The initial one was billed at $1,200, while the second one cost only $100.

Figures don't lie, but liars figure. A couple of things are going on here. First, the hospitals seek to amortize all that plant and equipment they've bought. One way to do that is to exploit differential payments, which is further explained in the article. It's assumed that service "in hospital" will, some times, require further hospital service due to complications or further information gleaned from the initial procedure. This is the excuse used by anti-choice zealots to require clinics to be, or have immediate access to, full hospitals.

Second, corporate hospitals are vacuuming up physician practices to eliminate the competition. The wonderfully efficient free market in healthcare working its invisible hand magic. More like a handjob, if you ask me. Given a largely free hand to spend like drunken sailors, hospitals incur ever more fixed cost, in the belief they'll be allowed to charge whatever they want. And they do.

OK, Kim Jong-Don fix this:
"Across the country hospital systems are scouring the market in attempts to acquire physician groups," said Medical Billing Advocates of America in an article on its website. "This has contributed to increased costs so far, because some of the services and procedures that were formerly billed as doctor visits are now being billed as outpatient services -- even if it is the same office. In one year, this [facilities fee] added up to $1.5 billion more in charges to the Medicare program."

Medical Billing Advocates referred to this practice as "a real cash cow for hospital systems."

Of course not. Just put a stop to corporate hospital concentration. How about it Kim Jong-Don?

[update}
An older link, may have been offered up, which details the problem and a long standing solution.
In 1964, New York became the first state to enact a statute granting the state government power to determine whether there was a need for any new hospital or nursing home before it was approved for construction. In 1974, the federal government tied funding to CON programs. The 1974 federal Act required all 50 states to have structures involving the submission of proposals and obtaining approval from a state health planning agency before beginning any major capital projects such as building expansions or ordering new high-tech devices. By 1975, 20 states had enacted CON laws; by 1978, 36 states had enacted them. Eventually, all states except Louisiana enacted such laws.