Month: February 2021

In the Words of Marcel Marceau

No!

Republicans had a proposition for Joe Biden, a Covid relief package that was clearly inadequate, and Biden gave them a (polite) brush-off.

While Biden might have an honest commitment to bipartisanship, unlike his former boss, he does not see it as an end in itself, nor does he see it as a demonstration of just how awesome he is:

Ten Senate Republicans attempted to sell President Joe Biden Monday night on a coronavirus relief compromise, even as Biden’s own party made plans to leave the GOP in the dust.

In the two-hour meeting, the GOP senators presented their $618 billion counterproposal to Biden and Vice President Kamala Harris, and the president described his own $1.9 trillion plan to the senators. They agreed to keep talking, although senators conceded their discussions were just beginning.

………

Biden has spoken frequently of his ability to work with Senate Republicans after his long Senate service, and simply meeting with the group demonstrates his ability to hear his opposition out. But the reality is this: Republicans oppose Biden’s spending plans and are proposing something far smaller.

Sen. Susan Collins (R-Maine), who helped organize the meeting, praised Biden for hosting GOP senators: “We’re very appreciative that as his first official meeting in the Oval Office that the president chose to spend so much time with us.” But she also acknowledged there wasn’t an explicit breakthrough between sides that are so far apart.

………

Shortly before the meeting, Democratic leaders announced they would begin a process that would allow passage of Biden’s coronavirus stimulus plan without GOP votes, a sign that Democrats have little confidence that a suitable deal can be struck with Republicans. Sen. Jon Tester (D-Mont.), a centrist, said succinctly of the GOP’s plan: “The package has to be bigger than that.”

“This needs to be big enough to get the job done. If we’re having to come back time and time again, I just don’t think that’s good for the economy or for certainty,” Tester said at the Capitol.

Speaker Nancy Pelosi and Senate Majority Leader Chuck Schumer announced they would continue setting up budget reconciliation this week, which would evade the Senate’s 60-vote requirement. They will pass a budget this week instructing committees to write a $1.9 trillion coronavirus relief bill, which includes items like raising the minimum wage to $15 an hour and giving $400 in additional weekly unemployment assistance through September.

“While there were areas of agreement, the President also reiterated his view that Congress must respond boldly and urgently, and noted many areas which the Republican senators’ proposal does not address. He reiterated that while he is hopeful that the Rescue Plan can pass with bipartisan support, a reconciliation package is a path to achieve that end,” White House Press Secretary Jen Psaki said after the meeting.

It’s refreshing that we have a President who does not believe his own PR spin.

We have not had that in at least 20 years.

This is Not a Growing Vibrant Economy

Over the past 20 years, total employment in the US has grown by 11,767,000.

Over the same 20 years, employment among workers over 6o has increased by 11,879,000.

To put that in perspective, 101% of all the jobs gained in the past 20 years were among people who would have retired if the economy actually worked for people.

This might explain why the economists’ view of our economy, and that of ordinary people diverge so sharply.

To quote Douglas Adams, “This planet has – or rather had – a problem, which was this: most of the people living on it were unhappy for pretty much of the time. Many solutions were suggested for this problem, but most of these were largely concerned with the movement of small green pieces of paper, which was odd because on the whole it wasn’t the small green pieces of paper that were unhappy.” 

What is going on, at least if you don’t buy into the rosy scenario promulgated by the St. Louis Fed, is that older people are working longer, because life has become more more precarious, with the end of defined benefit pensions, Wall Street looting of defined contributions (IRA, 401(K), etc.), and the general fall in wages over the past 45 years.

So people CAN’T retire, and younger workers are finding that the jobs that they would ordinarily get during their careers are not opening up.

It is a recipe for social unrest and extremism, but the green pieces of paper are quite happy:

Total U.S. employment grew by 11,767,000, or 8.5%, in the 20 years ending in December 2020. All that growth—11,879,000, or 101% of the total—was due to increased employment of people age 60 and older. Meanwhile, the net employment change over the past two decades of people ages 16-59 was -112,000 (-1% of the total change), despite this younger group being 3.8 times as large as the older group in December 2000 and still 2.4 times as large in December 2020. (See the figure below above.)

What’s Driving This Outcome

This age-skewed labor-market outcome was the result of two differences between the groups:

  • The older population (60 and older) grew much faster than the younger population (16-59).
  • The employment-to-population (E-P) ratio among those 60 and older increased significantly while the E-P ratio among the younger population declined, on balance.

With the exception of the large decline in the E-P ratio of the younger population, which is difficult to predict in the years ahead, the basic trend of rising employment among older workers is likely to continue for some time for the following reasons:

  • The older population is likely to continue growing faster than the younger group.
  • The E-P ratio of the 60 and older group is likely to increase further as the health and educational attainment of older people continues to improve and the demand for older workers persists.

It’s Give no F%$# February

In January, I announced that, given the unprecedented events of that month, that I would be eschewing my embargo on profanity for the month.

To be accurate, I have never actually abjured profanity.

In fact, I would argue that my writing has rather more profanity that a lot of people out there, but I bowdlerize my swear words, so instead of the actual words, I will write, f%$#, or sh%#, or c%$#sucker, or motherf%$#er, 

So, it’s back to the f%$#ing, “%$#”s, though I may make actual profanity a January thing.

It has been a liberating experience for me.

I haven’t decided yet.

Trump Writ Small

I am referring, of course to Andrew “Rat-Faced Andy” Cuomo, the Governor of the great state of New York, who thinks that he is smarter than public health experts, which, among other things, has led to vaccines being thrown out because of fears of draconian fines under Cuomo’s directives:

The deputy commissioner for public health at the New York State Health Department resigned in late summer. Soon after, the director of its bureau of communicable disease control also stepped down. So did the medical director for epidemiology. Last month, the state epidemiologist said she, too, would be leaving.

The drumbeat of high-level departures in the middle of the pandemic came as morale plunged in the Health Department and senior health officials expressed alarm to one another over being sidelined and treated disrespectfully, according to five people with direct experience inside the department.

Their concern had an almost singular focus: Gov. Andrew M. Cuomo.

Even as the pandemic continues to rage and New York struggles to vaccinate a large and anxious population, Mr. Cuomo has all but declared war on his own public health bureaucracy. The departures have underscored the extent to which pandemic policy has been set by the governor, who with his aides crafted a vaccination program beset by early delays.

The troubled rollout came after Mr. Cuomo declined to use the longstanding vaccination plans that the State Department of Health had developed in recent years in coordination with local health departments. Mr. Cuomo instead adopted an approach that relied on large hospital systems to coordinate vaccinations not only of their own staffs, but also of much of the population.

I’m wondering if there are any major Cuomo donors at the “Large Hospital Systems.”

In recent weeks, the governor has repeatedly made it clear that he believed he had no choice but to seize more control over pandemic policy from state and local public health officials, who he said had no understanding of how to conduct a real-world, large-scale operation like vaccinations. After early problems, in which relatively few doses were being administered, the pace of vaccinations has picked up and New York is now roughly 20th in the nation in percentage of residents who have received at least one vaccine dose.

When I say ‘experts’ in air quotes, it sounds like I’m saying I don’t really trust the experts,” Mr. Cuomo said at a news conference on Friday, referring to scientific expertise at all levels of government during the pandemic. “Because I don’t. Because I don’t.

How very Trumpian.

………

In Albany, tensions worsened in recent months as state health officials said they often found out about major changes in pandemic policy only after Mr. Cuomo announced them at news conferences — and then asked them to match their health guidance to the announcements.

That was what happened with the vaccine plan, when state health officials were blindsided by the news that the rollout would be coordinated locally by hospitals.

But it also occurred earlier with revisions in a host of state rules from the fate of indoor dining and businesses like gyms to capacity limits on social gatherings, according to a person with direct experience inside the department.

………

But at least nine senior state health officials have left the department, resigned or retired in recent months. They include Dr. Elizabeth Dufort, the medical director in the division of epidemiology; Dr. Jill Taylor, the head of the renowned Wadsworth laboratory — which has been central to the state’s efforts to detect virus variants — and the executive in charge of health data, according to state records.

Additionally, the Health Department’s No. 2 official left for another job in state government, and another official, who helped oversee contact tracing, is expected to leave the department, also for another state government job.

………

Mr. Cuomo’s handling of the pandemic has come under criticism in recent days after the state attorney general, Letitia James, said his administration had undercounted the tally of Covid-19 deaths of nursing home residents by not publicly disclosing deaths of those residents that occurred at hospitals.

Given just how much of a control freak hizzoner is, this was not an accident.

This is Cuomo playing politics with the numbers, because he went to bat for his nursing home donors to get them immunity from their own malfeasance.

He knows that the horrific death numbers from New York nursing homes, if reported accurately, will be a source of criticism for any future elections.

Current and former health officials agreed to be interviewed about the crisis inside the public health bureaucracy only on condition of anonymity, saying that they feared retaliation for speaking out against the governor.

Also, he’s a vindictive son of a bitch, and managing through fear does not work.

………

The departures came as the state prepared for and then stumbled through the early weeks of its vaccine campaign, in which experts said speed was paramount because of the threat posed by more contagious variants of the coronavirus.

………

………

Mr. Cuomo said his approach had delivered results in New York, including a positivity rate that has been declining after a peak in early January and better vaccination rates. New York saw the worst of the pandemic in the spring, and roughly 43,000 have died, more than in any other state.

………

In the fall, Mr. Cuomo shelved vaccine distribution plans that top state health officials had been drawing up, one person with knowledge of the decision said. The plans had relied in part on years of preparations at the local level — an outgrowth of bioterrorism fears following Sept. 11 — and on experience dispensing vaccine through county health departments during the H1N1 pandemic in 2009.

………

But elements of the state’s approach hindered the rollout, New York City officials contended.

“Extensive red tape and unnecessary rigidity over who we could vaccinate and when — all with the looming threat of millions of dollars in punitive fines — made an extraordinarily difficult task all the more challenging in those first initial weeks of the rollout,” said Avery Cohen, a spokeswoman for Mayor de Blasio.

In his own planning for the vaccine rollout, Mr. Cuomo spoke with hospital executives, outside consultants and a top hospital lobbyist in closed-door meetings. In December, Mr. Cuomo announced that the state would rely on large hospital systems as “hubs” to coordinate vaccinations, not simply for their own staff but also for ordinary New Yorkers.

Again, I gotta figure that the hospital systems are major Cuomo donors.

The state designated as a regional vaccination hub in New York City not the city’s 6,000-person Health Department, but rather the Greater New York Hospital Association, a trade group with a multimillion-dollar lobbying arm that had been a major donor to the governor’s causes.

Ka-ching!

The approach included narrow eligibility rules and suffered from a lack of urgency by some hospitals. That led to fewer doses being administered in the early weeks, followed by abrupt shifts in policy that created a kind of free-for-all among those searching for vaccine appointments, according to interviews with more than two dozen current and former health officials, county leaders, vaccination experts and elected officials.

“The governor’s approach in the beginning seemed to go against the grain in terms of what the philosophy was about how to do this,” said Dr. Isaac Weisfuse, a former deputy commissioner at New York City’s Health Department who often served as an incident commander during emergencies. “It did seem to negate 15 to 20 years of work.”

Sounds like the Donald, doesn’t it?

………

For help in planning the vaccination campaign, the governor turned to consultants from Deloitte and Boston Consulting Group. The in-house lobbyist for New York’s largest hospital system, Northwell Health, had direct involvement in the rollout.

For about a month, starting in mid-October, the Northwell lobbyist, Dennis Whalen, worked from an office inside the State Health Department and helped shape the state’s approach. Mr. Whalen had worked previously as the department’s No. 2 official.

Yeah, Cuomo was rat-f%$#ing the vaccine roll-out to accommodate lobbyists.  Hoocoodanode?

………

Still, Dr. Denis Nash, a professor of epidemiology at the City University of New York and a former senior city health official, said that giving such a large share of doses directly to hospitals meant that the government lost control of the pace of vaccinations during the program’s first month.

“That was the bottleneck,” Dr. Nash said. “To put hospitals in charge of a public health initiative — for which they have no public health mandate, or the skills, experience or perspective to manage one — was a huge mistake, and I have no doubt that’s what introduced the delays.”

This is Cuomo considering his donors, and his ego, before the well being of the people of New York.

I am wrong.  That does not sound like Donald Trump at all.

Not Expecting This from the AEI


The Numbers


Are Stark

Given that rich Wall Street pigs are a major funding source, I am surprised that the American Enterprise Institute has published a study that the S&P 500 index has out-performed hedge funds by about an factor of five

When one considers the fees, 2% of the fund +20% of the gains, it’s clear that, absent possible tax evasion and money laundering, hedge funds are a sucker bet:

In 2007, Warren Buffett entered into a famous bet that an unmanaged, low-cost S&P 500 stock index fund would out-perform an actively-managed group of high-cost hedge funds over the ten-year period from 2008 to 2017, when performance was measured net of fees, costs, and expenses. See previous CD posts about Buffett’s bet here and here. In Warren Buffett’s 2017 annual letter to shareholders (released on February 24, 2018), he summarized the result of his bet in the section “’The Bet’ is Over and Has Delivered an Unforeseen Investment Lesson” as follows:

Last year, at the 90% mark, I gave you a detailed report on a ten-year bet I made on December 19, 2007. Now I have the final tally – and, in several respects, it’s an eye-opener. I made the bet to publicize my conviction that my pick – a virtually cost-free investment in an unmanaged S&P 500 index fund – would, over time, deliver better results than those achieved by most investment professionals, however well-regarded and incentivized those “helpers” may be.

………

Performance comes, performance goes. Fees never falter.

………

A final lesson from our bet: Stick with big, “easy” decisions and eschew activity. During the ten-year bet, the 200-plus hedge-fund managers who were involved almost certainly made tens of thousands of buy and sell decisions. Most of those managers undoubtedly thought hard about their decisions, each of which they believed would prove advantageous. In the process of investing, they studied 10-Ks, interviewed managements, read trade journals and conferred with Wall Street analysts.

………

Repeat: Most investors will get better financial results over time with with low-cost, unmanaged index funds than from high-cost actively managed stock funds and hedge funds run by highly-paid investment professionals, however well-regarded and incentivized those “helpers” may be.

MP: To get started following Warren Buffett’s investment advice, if you haven’t already, you can open an account in the Vanguard 500 Index Fund Admiral Shares with a minimum investment of $3,000 and the expense ratio is almost zero — only 0.04% (1/25th of one percent) or only $4 per year for every $10,000 invested!

I’ve been saying this for years, but I did not expect this from the corporate drones at AEI.

Linkage

Either Brian Williams is way cooler than his stiff manner implies, or someone in the control room deserves a massive raise.