While in this Atlantic piece via MSN Derek Thompson complains about the state of air travel:

Keyes: There’s a labor-supply issue, not just for airlines but also the TSA. If you live in Milwaukee and you’re looking for an entry-level job, you could become a transportation security officer for $19.41 an hour, or you could go on Amazon’s website and see that there’s a job in the area for $19.50. Would you rather help load and unload bags outside in the dead of winter in Milwaukee, or work in a climate-controlled environment in a warehouse for Amazon? That’s the trade-off a lot of folks are making. Labor shortages cause delays and cancellations. In normal times, airlines might have a reserve crew of pilots or flight attendants that they can call in. But now there is not the reserve in place to bridge the gap. The result is a huge swath of delays and cancellations.

Thompson: Laurie Garrow, a professor at Georgia Tech, directed me to FlightAware, a website that tracks airline-industry statistics. On any given day, it seems normal to have a cancellation rate of about 1 percent—or one cancellation for every 100 scheduled flights. Last Thursday, JetBlue canceled 14 percent of its flights. Last Thursday and Friday, American canceled 10 percent of its flights. On Friday, Saturday, Sunday, Delta canceled 8 percent of its flights. Meanwhile, Frontier and Spirit canceled just 1 percent of their flights in that time. Why are the major carriers having these major problems right now?

Keyes: Today’s airline that gloats about not having cancellations is tomorrow’s airline that’s experiencing a meltdown. I don’t want to pretend that Spirit and Frontier don’t experience meltdowns. They absolutely do. That said, a few factors can explain why we’re seeing higher rates of cancellations among legacy full-service airlines. First, many of the budget airlines like Spirit already trimmed their summer schedules when they realized they didn’t have enough pilots and crew to operate the schedule they had planned. The legacy full-service airlines can suffer sometimes from hubris.

Second, many of the legacy airlines have hubs in crowded corridors like New York, Chicago, and Boston, which can suffer from compounding cancellations when there’s a thunderstorm [which are more common in the summer]. Those cancellations beget more cancellations. A flight from JFK to Miami that gets canceled results in a further cancellation for that flight out of Miami.

One of the factors which he discreetly does not mention is that the pilots and other staff retiring are qualitatively different from those who are replacing them. Those retiring are largely Baby Boomers and those replacing them are preponderantly Millennials. For good or ill they are not interchangeable. Those two cohorts are drastically different not just in their levels of experience but in their attitudes towards work.

Over the weekend I was chatting with one of my relatives about retirements among physicians. The reality is that the level of dedication to their professions shown by Baby Boomer docs and Millennial docs is drastically different. Generally, Baby Boomer docs are working even when they’re not at work; not so Millennial docs. Note that I’m not saying that Baby Boomer docs are right and Millennial docs are wrong. I’m saying different and we’d better get used to it.

Let me answer Nicholas Goldberg’s question from his LA Times piece via Yahoo: are Biden And Feinstein too old to do their jobs?

But Feinstein, who turned 89 last week, has kicked off a heated national debate by refusing to step down from her job even as people begin to clamor about her age and competence.

And she is hardly alone among her peers in clinging to power as she ages. Famously, Ruth Bader Ginsburg sat unbudgingly on the Supreme Court until she died at age 87. (Remember how she fell asleep during the State of the Union address in 2015?)

There’s House Speaker Nancy Pelosi (D-San Francisco), who is 82 and apparently going strong. Sen. Mitch McConnell (R-Ky.) is 80, and he’s waiting to become senate majority leader again if Republicans win control in November.

Incumbency turns out to be a very pleasant place, and power an aphrodisiac that is difficult to give up — to the point that the word “gerontocracy” has suddenly become common.

Is this a problem? I think it is.

I disagree with his remarks about Nancy Pelosi and Mitch McConnell. They’re too old, too. So are Steny Hoyer, Jim Clyburn, Patrick Leahy, and Bernie Sanders. Before you say “Damn Boomers” none of them are Baby Boomers—they’re Silent Generation and they’re displaying the insecurities common to that cohort.

The preferred thing would be for them to retire gracefully but failing that they should be voted out of office and failing that House and Senate rules should be changed to require annual cognitive fitness tests of all members over age 70 with the results to be made public.

What happens inevitably in these circumstances is that the nature of their jobs change to accommodate them with their staffs picking up the slack. That really isn’t right. They weren’t elected to have their staffs do their jobs for them.

For the last several days I have been in San Antonio to attend a family wedding. The wedding itself was lovely and it was nice to see my siblings, their spouses, and their offspring. We all live in different cities and there is no longer a focal point as there was when my mom was still alive. Despite remaining close emotionally we don’t see each other that often these days.

My family is growing—most of my nieces and nephews have children of their own now, ranging in age from newborns to two. I suspect actually hope that this will be the last family wedding for a while. Stable marriages are sort of a tradition in my family—there have been two divorces in the last century and that includes not just my great-great-grandparents but all of their children and their children’s children. While it’s possible I’ll live to see another family wedding I doubt I’ll feel like traveling to one.

I am the eldest living member of my family. We’re getting old. Oddly, despite my age I’m probably the most active of my generation and I am one of only two (me and the spouse of one of my siblings) still working. I probably walk as much in a day as my mom did at my age in a month.

It has been some time since I’ve been in San Antonio. It is much changed but much the same. It struck me as a city of contradictions.

It is now the seventh largest city in the U. S.—almost as populous as Chicago. It doesn’t really look it. Here’s an example of the contradictions. In San Antonio’s downtown nearly every other building is either a hotel or a parking structure for a hotel. Banks and office buildings have been converted to hotels. Just three or four blocks from town center I saw a completely vacant lovely old Beaux Arts office building. Across the street from my hotel was a Sons of Hermann Hall. If you’re not familiar with it, the Sons of Hermann is a mutual aid society for German immigrants. We generally don’t think of Texas as being a locus for German immigration but it was back at the turn of the 20th century. Now the Sons of Hermann is basically an insurance company.

My impression is that San Antonio’s economy is in transition from what it was to technology, particularly biotech, which I suspect is true in many of Texas’s major cities. The need for large downtown areas is much reduced, particularly now with WFH taking hold. I didn’t have the time to do a lot of exploring but I suspect the level of sprawl is formidable. At the rate that Texas’s population is growing I wouldn’t be surprised if there were to be what amounts to a continuous suburb running from Dallas-Fort Worth all the way to San Antonio.

Matt Stoller is convinced that the key to controlling inflation is government regulation—a lot of government regulation. In his crosshairs are shipping, oil and gas, railroads, trucking, and airlines.

For decades, there hasn’t been a big shift in markups between industries. But that changed during the pandemic, because the pandemic and the policy response itself shaped who could profit. Big pharma wasn’t in a position to profit, but oil refineries were. While not every firm with market power raised prices, market power could still elevate profits in other industries.

Ironically, while this analysis might lead some to think that the Fed shouldn’t be raising rates and drawing down its balance sheet, I draw the opposite conclusion. If you look at the most potent industry markup, you’ll see it is not what you’d expect from a pandemic, like transportation or health care. It’s finance/insurance. Number two is oil and gas, a heavily junk bond fueled industry that shut refineries and has less capacity than it did in 2019. Number three is real estate and rentals. In other words, the most financialized sectors of the economy are the ones most adept at exploiting pricing power during the pandemic. That is likely a result of cheap money from the Fed sloshing around Wall Street, or what I wrote up as the Cantillon effect. That needs to stop.

Regardless, supply side measures focused on individual markets, like antitrust, regulatory policy, industrial subsidies to re-shore supply chains, and ending cheap capital for Wall Street are the key ways to address inflation. But reducing government spending or further lowering wages for workers, while they could work, aren’t hitting the drivers of the problem.

I think he’s jumbling up and confusing a lot of things. Prices, inflation, government power, monopoly power, and so on.

First, almost all monopolies are created by government action. Patents, licenses including occupational licensing, exclusive contracts, and so on. Take waste management, for example. Maybe there are some but I don’t know of any jurisdictions in which there are multiple waste management companies competing to take away you garbage. It’s a very highly regulated sector. Nearly every waste management company has a local monopoly.

Insurance and finance are among the most heavily regulated sectors and, sure enough, they are dominated by a handful of very large companies. The financial crisis of 2008 exacerbated that. Small banks that were in trouble were liquidated (bought by bigger banks). Big banks on the other hand received bailouts and got bigger.

But, according to the charts Mr. Stoller produces, waste management had very small increases in profits during the pandemic but insurance and finance had very large increases. Both of those groups are very consolidated and highly regulated. How is that possible? Mr. Stollers is that they’re not regulated enough. Mine is that they have been misregulated. Addditional misregulation won’t help.

I’m also curious about how he plans to control foreign shipping companies. I don’t believe that the shipping companies are as much at fault as over-reliance on overseas producers, much of which in turn has been created by industry consolidation (in other industries) and bad regulations.

Consequently, although I agree with Mr. Stoller that monopoly power is a problem, my preferred solution is different. I think that governments should be creating fewer monopolies in the first place.

I hear that Ken Griffin who IIRC is Illinois’s richest man is moving Citadel to Florida. That will means a loss of probably a billion dollars a year in state tax revenue when you add up his personal state income taxes, those of the highly compensated Citadel employees he’ll be taking with him, and Citadel itself’s taxes. That’s quite a chunk of change which the state can hardly afford to lose.

My interpretation of that is that Mr. Griffin has decided that Richard Irvin doesn’t have a chance to getting the Republican nomination for governor and it throwing in the towel. Griffin has been Irvin’s primary financial backing.

I have been too busy to post today but I didnt’t want to let the day go by without remarking on what is surely one of the biggest stories of the day if not the biggest—the reversal of Roe v. Wade by the Supreme Court,

As I’ve said before I think that abortion is wrong, that Roe v. Wade is bad law, and that present policy is bad policy but nonetheless I regret SCOTUS’s decision. I think they should have upheld it on grounds of stare decisis And freedom of religion but now the SCOTUS has spoken. I just hope there isn’t too much civil disorder.

My best guess is that some states will ban abortion outright, some will restrict abortion more than it is now. Some states like Illinois will try to set themselves up as abortion destinations.

As I’ve also said before the policy position that some are staking out (abortion on demand all the way to term with very few restrictions) is extreme—when nearly every G7 country has more restrictive laws than that abortion on demand to term is extreme.

Now I’ll be scouring the Internet for commentary. My guess is that most of the commentary will be quite agonistic.

One last thought. I wonder how many people will be asking themselves why they didn’t push for Roe v. Wade to be codified into law? Not many I suspect. I don’t think the Supreme Court should be creating law when the law is contrary to the policy a majority of its members prefer.

Update

If Amy Howe’s reporting at SCOTUSBlog is correct, I concur with Chief Justice Roberts’s opinion. Mississippi’s law should have been upheld, Roe and Casey should not have been reversed, and the decision is likely to harm the judiciary.

I’m not entirely sure what to make of this post by Neil Wilmshurst at RealClearEnergy on digital transformation of the power generation industry. It could be as simple as observing that the power generation industry could make better use of source data capture and digital technology than it does at present, something with which I agree, or it could be complete word salad. You be the judge.

I want to focus on one sentence:

Advanced sensors, process controls and automation, and data analytics are all available today.

What is meant by “today” in that sentence? Or maybe what is meant by “available”?

My definition would be that if you placed an order for them today, they would be delivered in the near term, say a week or so. Is that what he means? Or does he mean that they’ve designed or in somebody’s catalog but if you placed an order for them now, you’d get delivery in three years? It could mean either and it makes a difference.

It takes Ukrainian foreign minister Dmytro Kuleba quite a while to get to the actual plan but he does ultimately in this piece at Foreign Affairs. Here it is:

In the east, Ukraine can gain the upper hand with more advanced heavy weapons, allowing us to gradually stall Moscow’s crumbling invasion in the Donbas. (The Kremlin’s gains in this region may make headlines, but it is important to remember that they are limited and have resulted in extremely high Russian casualties.) The pivotal moment will come when our armed forces use Western-provided multiple launch rocket systems to destroy Russia’s artillery, turning the tide in Ukraine’s favor along the entire frontline. Afterward, our troops will aim to take back pieces of land, forcing Russians to retreat here and there.

On the battlefront in the south, the Armed Forces of Ukraine are already carrying out counterattacks, and we will use advanced weapons to further cut through enemy defenses. We will aim to put the Russians on the edge of needing to abandon Kherson—a city that is key to the strategic stability of Ukraine. If we advance in both the south and the east, we can force Putin to choose between abandoning southern cities, including Kherson and Melitopol, in order to cling onto the Donbas, and abandoning newly occupied territories in Donetsk and Luhansk so he can hold the south.

That’s pretty much it. They think that will bring Putin to the bargaining table. Much of the piece is devoted to encouraging the U. S. and other G7 supporters not to lose heart. The ratio of propaganda to intelligence in the reporting on Ukraine is so enormous I have no way of assessing the likelihood of success of the plan.

I found former Greek finance minister Yanis Varoufakis’s account at Project Syndicate of world economic history over the last half century interesting:

A half-century long power play, led by corporations, Wall Street, governments, and central banks, has gone badly wrong. As a result, the West’s authorities now face an impossible choice: Push conglomerates and even states into cascading bankruptcies, or allow inflation to go unchecked.

For 50 years, the US economy has sustained the net exports of Europe, Japan, South Korea, then China and other emerging economies, while the lion’s share of those foreigners’ profits rushed to Wall Street in search of higher returns. On the back of this tsunami of capital heading for America, the financiers were building pyramids of private money (such as options and derivatives) to fund the corporations building up a global labyrinth of ports, ships, warehouses, storage yards, and road and rail transport. When the crash of 2008 burned down these pyramids, the whole financialized labyrinth of global just-in-time supply chains was imperiled.

To save not just the bankers but also the labyrinth itself, central bankers stepped in to replace the financiers’ pyramids with public money. Meanwhile, governments were cutting public expenditure, jobs, and services. It was nothing short of lavish socialism for capital and harsh austerity for labor. Wages shrunk, and prices and profits were stagnant, but the price of assets purchased by the rich (and thus their wealth) skyrocketed. Thus, investment (relative to available cash) dropped to an all-time low, capacity shrunk, market power boomed, and capitalists became both richer and more reliant on central-bank money than ever.

I’m not sure I disagree completely with his assessment although I don’t think it was quite as concerted as he implies. And he neglects to mention how European (German in particular), Japanese, South Korean, and Chinese mercantilism contributed to the problem. In other words, yes, it’s Wall Street’s fault but it’s not all Wall Street’s fault. Ben Bernanke didn’t need to use quantitative easing to try and goose the economy. The U. S. could have imposed steep tariffs on imported goods. Unions could have gone to the mat over, for example, buying auto engines from Japanese suppliers. There are lots of things that might have prevented the rise of China as well as lifting on the order of a billion people out of abject poverty.

At this late date what can be done? We can’t undo the last 50 years but we can start doing some things better. One thing we can do better is to stop the sophistry about “investments”. Speculating in the stock market may or may not be investing. It really depends. Buy and hold is more likely to be genuine investment than making quick profits buying and selling stocks is. Paying for journalism, psychology, and interest studies degrees isn’t investment, either.

Whether infrastructure spending is investment depends also. It depends on the utility of the particular project over its expected life. Bridges to nowhere are not investments. Neither are projects that are never completed. Is California’s high speed rail system an investment or just frittering money away? The project has been under way for more than a decade with zero real outputs at this point. There’s talk that one fairly short leg of it will be complete by 2023 but I’ve also read analyses that is a fantasy.