Innocent Bystanders

MMT, We Hardly Knew Ye April 26, 2024

Was noticing that I hadn’t heard much about Modern Monetary Theory (MMT) in the news lately. Since Biden’s economic policies appear to be based on MMT, either willfully or by chance, I was wondering if the economists advising the White House were cooling off on the notion that they could print arbitrary amounts of money and control inflation via taxation.

Then I ran across this recent article by some fellows in the UK, where they built economic models for MMT and “New Keynesian” (NK) theories, and compared the predictions of both to the economy from 2008 to 2019. From their conclusion:

Modern Monetary Theory (MMT) portrays a world in which fiscal activism need not be constrained by the government budget, for which it has received much attention since the Financial Crisis while the space for monetary policy has largely contracted. Nevertheless, while MMT economists have failed to sell their Theory as well as its associated policy advice with evidence established by formal economic models, the wider group of mainstream economists have not been able to assess MMT in a formal manner, either—the fundamental barrier being that none has been able to embody MMT in a structural model in a testable form.

In this paper, we filled this gap by spelling out MMT as a full DSGE model, and tested its empirical validity and implications on economic stability and welfare, side by side with a standard New Keynesian (NK) model treated as the benchmark model. By testing both models against the post-Crisis data with indirect inference, we found the MMT model was rejected at the usual 5% significance level, while the NK model passed the test with a high probability. Thus, there is strong evidence against the MMT narrative of how fiscal and monetary policies have interacted and affected the US economy post-Crisis; by contrast, the NK model with a Taylor rule explains the data fairly well.

[Emphasis mine in the second paragraph. DSGE is Dynamic Stochastic General Equilibrium, and no, I don’t know that is either.]

To those of you who thought MMT sounded like a complete crock; yeah, it’s a complete crock.

CPI March Badness April 10, 2024

The news is abuzz with the latest CPI release, wherein the month-over-month inflation was 0.4%, compared to the expectation of 0.3%.

As usual, I think year-over-year and month-over-month stats are not very illuminating, so here’s this month’s CPI chart (downloaded, also as usual, from the St. Louis Fed):

Can’t wait for Paul Krugman to lecture us again about its our perception of inflation that’s the real problem. Couldn’t possibly be the nasty post-Trump slope of the CPI.

A slope which doesn’t suggest that inflation is under control.

How About Some Misery With Your Meal? March 18, 2024

A lot of concern about the direction of “sustainable” food sources, with increasing pressure to consider insects, and now snakes, as high efficiency, low environmental impact, foods. Snakes don’t sound half-bad to me, but I’d prefer to keep insects out of my diet as much as possible.

Unfortunately, with the way things are going, eating bugs may be the lesser evil:

It’s hearty, it’s meaty, it’s mold

Scientists are exploring how tuning the genomes of mushrooms and molds can transform these food sources into gourmet, nutrient-packed meals made with minimal processing and a light environmental footprint.

Yeah – given a choice between bugs and mold, I’m thinking bugs every time.

The Latest Medical Panic March 17, 2024

Gotta get your panic on. First it was the onslaught of Flu/COVID/RSV. Then it was monkeypox. Then it was flesh-eating parasites. And now?

OMG, OMG, now it’s Hansen’s Disease coming to your town soon!! Yes, the latest medical panic-porn involves the horror of the ancient world ==> leprosy.

Leprosy Is Spreading Across The U.S. – Why Is The Ancient Disease Returning Now?

…

Leprosy is beginning to occur regularly within parts of the southeastern United States. Most recently, Florida has seen a heightened incidence of leprosy, accounting for many of the newly diagnosed cases in the U.S.

The surge in new cases in central Florida highlights the urgent need for health care providers to report them immediately. Contact tracing is critical to identifying sources and reducing transmission.

The actual data in the article (which has been making the rounds on the internet) is lacking, so I did a little investigating. First, the authors of the “surge in new cases” reference don’t really quantify the “surge,” except to include this chart in their appendix:

Weird that it stops in 2010, ain’t it? For a paper written in 2023 that’s agitating about a “recent” increase in cases in Florida? Also, they only plot every other year (to make it look more monotonic, I suppose). What happens if you include all the data up through 2022 (sorry, the Florida site only provides case data starting in 2003, rather than 1994)?

If only they had written the paper in 2016 or 2018, they’d have their “recent increase.” Of course, there aren’t that many cases in the first place, so this is really a nothing burger.

You can see how unimportant this “crisis” is from the national statistics (chart copied from Health Resources and Services Administration website):

Let’s recap: There is no “recent” surge. There is no “spread across the United States.” There is no “return of an ancient disease.”

There is one case in Florida where they can’t figure out what the means of transmission was (normally travel in a foreign land or armadillo-humping). That usually means the patient is lying – he had sex with someone he shouldn’t have (maybe an armadillo after all), and won’t admit it. Regardless, one case is not enough to panic about a new means of transmission.

As I said at the outset, it’s just more medical panic-porn.

[This reminded me of an awful joke from my adolescence (probably from the Boy Scout magazine): “That’s about as funny as a jukebox in a leprosy ward playing “What’s Eating You?”]

2/24 CPI: Up, Up, and Away March 12, 2024

Innocent Bystanders: Going to the St. Louis Fed site and making plots so you don’t have to.

…and here’s this month’s dollop of despair:

Can’t believe you aren’t reassured by the administration’s control over inflation.

Economic Drag Queens March 5, 2024

Found this over at ZeroHedge:

Dutch Immigration Study Demonstrates The Folly Of Mass Immigration

Socialism attracts losers. This is also true for immigration socialism. pic.twitter.com/OV2kCLtzxw

— Emil O W Kirkegaard (@KirkegaardEmil) February 26, 2024

One cannot replace low native fertility with foreigners to fix the ponzi scheme of welfare socialism. It just makes it worse because of the poor performance of foreigners. pic.twitter.com/JOvURaunSu

— Emil O W Kirkegaard (@KirkegaardEmil) February 26, 2024

This thing about asylum seekers is a new thing in Dutch history. pic.twitter.com/uwowCMDVhN

— Emil O W Kirkegaard (@KirkegaardEmil) March 1, 2024

As above, but with countries. Asian immigrants stay for a short time, then leave, and don’t use any welfare. Muslims stay forever and use a lot. pic.twitter.com/wOJaKxCcTE

— Emil O W Kirkegaard (@KirkegaardEmil) March 1, 2024

Something to consider as the Biden Administration floods America with millions of low-skilled migrants. 

Nice pithy encapsulations by Kirkegaard.

Just a side note on socialism. I think it attracts three classes of people: the losers mentioned above, the dreamers, and the ambitious. The dreamers have no grasp of economic or social reality, but at least have good intentions.

The ambitious look at socialism as a way to centralize power, and fully intend to be part of that centralized decision making. They don’t particularly care whether socialism improves the lot of the needy, they just want control.

You see these types every time the Left does something stupid, like Occupy Wall Street or CHAZ in Seattle. The ambitious take charge, the dreamers follow and focus on getting their hand signals right, and the losers just sit around and do drugs.

Is That a Ballot in Your Pocket…? March 2, 2024

In the ever-expanding effort to balkanize America, we now have gender-specific voting sites:

The first-ever transgender voting center is opening its doors on Saturday for the California primary election, according to CBS News.

The Connie Norman Transgender Empowerment Center in Los Angeles County will be available to voters from March 2 to March 5 and while it is open to all Californians, the center is mainly focusing on creating a safe environment for the LGBTQ community to vote in, CBS News reported. Democratic Lt. Gov. Eleni Kounalakis visited the center Thursday and touted it as a “significant milestone” for LGBTQ Americans, according to KFI, a local media outlet.

Hadn’t heard that voting was a particularly dangerous endeavor for the LGBTQ community, but I’m OK with the concept, so long as they open similar centers for cis-types as well. A place we can also feel safe and at home.

Like, installing voting booths at Hooters’ locations, for example.

…although that might corrupt me into trying to vote multiple times.

Economic Failure Newsom Evangelizing for Economic Failure Biden February 25, 2024

Gavin Newsom is fawning over Biden’s performance:

Newsom said, “I mean, what he’s done in three years, it’s been a masterclass. Close to 15 million jobs, that’s eight times more than the last three Republican presidents combined. The economy is booming. Inflation is cooling. It’s .6% more than it was in the summer of 2020 at just 3.1%.”

He continued, “We have American manufacturing coming home, all because of Biden’s wisdom, his temperance, his capacity to lead in a bipartisan manner, which is an underrepresented point.

So let’s look at that first claim – I may get to the rest of the claims this week, time and energy permitting.

The 15 million jobs number is true, but only because Biden took over during the COVID rebound. If you look at the jobs trend before COVID and project it forward (the dotted line on the graph below), you find that we still haven’t caught up to where we should be.

Oh for a world with no COVID or Biden.

BTW, regarding Newsom’s brown-nosing: I’m starting to think Newsome is angling for the VP slot, which will comfort Democrats who are worried about Biden’s capacity to serve.

When Life Imitates Olympic Art February 24, 2024

Given the way things have been going, this was inevitable:

Enhanced Games founder says steroid-approved event is ‘the future of sports,’ calls out hypocrisy of Olympics

Enhanced Games to be Olympic-style event that allows steroids

Obvious, but obligatory:

Mystery Solved? February 20, 2024

This headline from Front Page Mag…

Can Texas Stop Soros From Taking Over Conservative Radio?

220 radio stations, 200 million listeners, one radical billionaire.

…pretty much tells you what happened to Drudge.

Fani’s Cash February 20, 2024

Fani Willis’ ridiculous excuse that she reimbursed her paramour with cash taken from her 6-month-living-expenses-stash should have been hammered in court. In particular, I would have liked to see answers to the following questions:

• How much cash is that, exactly?
• If the bailiff accompanies you to your house, could you please show him the cash?
• Where are your bank records of refilling your cash stash?
• As a public servant, you know the importance of keeping records to demonstrate that you didn’t receive gifts (i.e., travel expenses) from entities that could be perceived as compromising your integrity and objectivity. Why didn’t you keep those records?

She’s a ridiculous woman with a ridiculous story. Justice had better be served.