I agree with the editors’ of the Wall Street Journal’s assessment of the thinking of the Congressional Democratic leadership regarding Joe Manchin’s vote on the “Build Back Better” bill:

Politico reports that some Democrats are pushing Majority Leader Chuck Schumer to bring the climate and social-spending behemoth to the Senate floor, daring Mr. Manchin to kill it. “People have to face the reality of yes or no,” Majority Whip Dick Durbin told Politico, adding Mr. Manchin’s had “more than enough time.”

Basically, they think either a) he’ll vote for anything or b) that if they sweeten the deal enough Sen. Manchin will vote for whatever bill of whatever size and whatever structure they bring to the floor.

Here’s how the editors summarize Sen. Manchin’s issues with the bill:

Mr. Manchin hasn’t committed himself either way on the bill, but he has been consistent in what he wants. He made that clear in a memo he wrote in July in private talks with Mr. Schumer that later leaked to the media. His top-line spending amount for 10 years was $1.5 trillion, which he later increased to $1.75 trillion.

He has also been consistent in his calls to “pause” to evaluate the growing threat of inflation and has been equally consistent in seeking a bill free of budget gimmicks, fossil-fuel penalties and new entitlements that aren’t means-tested or don’t require work.

I have no insight whatever into the workings of Sen. Manchin’s mind. I do know that he won re-election in 2018, defeating a primary challenger decisively, is not running for re-election in 2022, is popular in West Virginia, and that BBB is very unpopular in West Virginia. Make of that what you will. Sounds like it’s a formula for considerable independence on Sen. Manchin’s part but I have no idea what that implies.

Is one too hot, another too cold, and the third just right? I found this editorial in the Wall Street Journal interesting and informative:

The Bank of England is the most hawkish, increasing its benchmark interest rate to 0.25% from 0.1%. It will maintain at £895 billion ($1.2 trillion) the stock of government and corporate bonds it has bought over the years under quantitative easing, but it had already stopped new purchases last year. Investors had thought (or hoped) the omicron Covid variant might derail the BoE’s plans, but Governor Andrew Bailey thinks inflation is the bigger worry.

Not so in Frankfurt, where the European Central Bank is the most dovish. President Christine Lagarde will phase out the pandemic-linked QE program next year, by which point the central bank will have accumulated nearly €1.85 trillion ($2.1 trillion) in assets. But the ECB will extend, apparently indefinitely, the pre-pandemic QE program once purchases taper to €20 billion a month later next year. The ECB’s negative policy rate, of minus-0.5%, will linger until QE ends (if it ever does).

Compared to these two, Fed Chairman Jerome Powell is trying to split the baby. He announced Wednesday an accelerated taper of pandemic QE while talking up future rate increases that may or may not ever happen.

The message is that each major monetary area is on its own, though a conspicuous feature of the current inflation is that it’s everywhere. The Fed is facing consumer-price increases of nearly 7%. Inflation in Britain hit 5.1% in November, the highest in a decade. Eurozone inflation overall was 4.9% in November, and as high as 6% in Germany and 5.6% in the Netherlands.

The lack of a coordinated response to a common problem will make it harder to control mounting economic risks. One worry is exchange rates. The British pound gained as much as 0.7% versus the dollar after Mr. Bailey’s rate announcement, presumably due to global investors chasing higher returns. The euro’s counterintuitive 0.4% appreciation versus the dollar Thursday may result from investors’ view that “only” €20 billion in monthly QE is hawkish—which shows how warped perceptions have become.

I would say that my own view is congruent with the editors’ although not identical to it. I think that, although the United Kingdom, the European Union, and the United States all face inflation they have very different situations and would have great difficulty in formulating any “coordinated response” that would satisfy all of them. Furthermore, I’m skeptical that the central banks can exert the kind of influence on their home economies as they did in the 1980s. We’re much more globalized now than then and Russia, China, and who knows how many other countries may have veto power.

For his part in his latest Washington Post column Fareed Zakaria muses over why President Joe Biden isn’t more popular:

I find President Biden’s unpopularity puzzling. He is rounding out his first year in the White House with the lowest end of first-year approval ratings of any elected president in modern times with the exception of Donald Trump. Why? Biden is a genial, likable person. Many of the policies he has pursued have been popular, some even with Republican support. The country is doing reasonably well economically, as measures such as declining unemployment, the stock market and interest rates demonstrate. So why did the latest CNN average of the polls have him at 45 percent?

which I suspect illustrates Mr. Zakaria’s and, perhaps, the WaPo’s detachment from the lives and expectations of ordinary people more than anything else.

I’ll try to explain it to him. First, Joe Biden has never been particularly popular. His attempts at running for president prior to 2020 were complete flops. Such popularity as he had in 2020 was largely predicated on his not being Donald Trump. Mission accomplished. He’s not Donald Trump.

My impression of Mr. Biden, far from his being “a genial, likable person”, is that he’s an insincere phony. He’d like people to believe that he’s a regular guy but everything I’ve heard from people who’ve had direct dealings with him is that he’s arrogant and imperious.

Next, there was no sanitary, pure, right way of exiting Afghanistan which is precisely why Presidents Obama and Trump didn’t do it. And leaving Afghanistan bucked the Washington establishment view which resulted in the sad, messy withdrawal getting considerable adverse press coverage.

An ancestor of mine gave what is (at least in Switzerland) a famous bit of advice: don’t set the fence too far. The funny thing about running on a platform of being the un-Trump, bringing peace, justice, and mercy to our southern border, restoring relationships with our allies, ending COVID-19, and a general return to normalcy and you fall short of those things while inflation runs hotter than it has in 40 years, people don’t like it. It may not help that it feels as though we’re on the brink of war with Russia and in space.

This post may sound more critical of President Biden than is actually my intent. I actually sympathize with him. I just think that people should have realized what they were going to get when they voted for Biden.

Judging by his latest Washington Post column, Lawrence Summers concurs with the views of the editors of the Wall Street Journal I mentioned yesterday:

There have been few, if any, instances in which inflation has been successfully stabilized without recession. Every U.S. economic expansion between the Korean War and Paul A. Volcker’s slaying of inflation after 1979 ended as the Federal Reserve tried to put the brakes on inflation and the economy skidded into recession. Since Volcker’s victory, there have been no major outbreaks of inflation until this year, and so no need for monetary policy to engineer a soft landing of the kind that the Fed hopes for over the next several years.

The not-very-encouraging history of disinflation efforts suggests that the Fed will need to be both skillful and lucky as it seeks to apply sufficient restraint to cause inflation to come down to its 2 percent target without pushing the economy into recession. Unfortunately, several aspects of the Open Market Committee statement and Powell’s news conference suggest that the Fed may not yet fully grasp either the current economic situation or the implications of current monetary policy.

The Fed forecast calls for inflation to significantly subside even as the economy sustains 3.5 percent unemployment — a development without precedent in U.S. economic history. The Fed believes this even though it regards the sustainable level of unemployment as 4 percent. This only makes sense if the Fed is clinging to the idea that current inflation is transitory and expects it to subside of its own accord.

In fact, there is significant reason to think inflation may accelerate. The consumer price index’s shelter component, which represents one-third of the index, has gone up by less than 4 percent, even as private calculations without exception suggest increases of 10 to 20 percent in rent and home prices. Catch-up is likely. More fundamentally, job vacancies are at record levels and the labor market is still heating up, according to the Fed forecast. This portends acceleration rather than deceleration in labor costs — by far the largest cost for the business sector.

The not-very-encouraging history of disinflation efforts suggests that the Fed will need to be both skillful and lucky as it seeks to apply sufficient restraint to cause inflation to come down to its 2 percent target without pushing the economy into recession. Unfortunately, several aspects of the Open Market Committee statement and Powell’s news conference suggest that the Fed may not yet fully grasp either the current economic situation or the implications of current monetary policy.

The Fed forecast calls for inflation to significantly subside even as the economy sustains 3.5 percent unemployment — a development without precedent in U.S. economic history. The Fed believes this even though it regards the sustainable level of unemployment as 4 percent. This only makes sense if the Fed is clinging to the idea that current inflation is transitory and expects it to subside of its own accord.

In fact, there is significant reason to think inflation may accelerate. The consumer price index’s shelter component, which represents one-third of the index, has gone up by less than 4 percent, even as private calculations without exception suggest increases of 10 to 20 percent in rent and home prices. Catch-up is likely. More fundamentally, job vacancies are at record levels and the labor market is still heating up, according to the Fed forecast. This portends acceleration rather than deceleration in labor costs — by far the largest cost for the business sector.

and concludes:

Perhaps the Fed’s restraint reflects less conviction about what ultimately will be necessary than a desire to avoid being itself a source of economic shocks. We should hope that what we have seen is just the first part of what will be, if necessary, a more radical policy redirection. Time will tell.

My own view is that the Fed governors have forgotten the late 70s-early 80s, don’t appreciate the Fed’s central role in fighting inflation, and, as we have learned about our political leadership over the last year or so, risk averse in the extreme. At least as far as risks to themselves go.

I wanted to pass along some remarks on Glen Loury and John McWhorter’s conversation about Jussie Smollett. For example:

The reason Smollett did this remains a little mysterious, as he still refuses to admit that he fabricated the whole thing. We can only speculate. But the reactions to the assault before it was revealed as a hoax are quite telling. The usual suspects were all too willing to take things at face value and to interpret Smollett’s story as yet another example of American white supremacy run amok. That narrative was ready and waiting—Smollett just had to slip into the victim role. The credulity of Smollett’s supporters wasn’t mere naiveté. It was a political stance, one that requires victims if it’s going to hold steady. In fact, it’s easy to imagine Smollett getting away with the whole thing and ascending to the role of antiracist icon, if only he hadn’t cooked up such an outlandish scenario.

It’s not mysterious at all. The first thing you need to understand is that an actor is an individual who lies for a living. A good actor lies convincingly. A mediocre one less so.

Maybe it’s not true of everyone in the profession but my experience has been that you can’t remain an actor without craving attention. Garbo’s “I vant to be left alone” was an indication that she was through with the acting business. I know people who got out of performance because their relish for being the center of attention either had waned or wasn’t that strong to begin with.

I don’t know whether Mr. Smollett sought more attention from the producers of Empire or just more attention but he certainly decided that concocting a fabulous story would garner him the attention he craved and the media’s prevailing narrative on Trump and Trump supporters gave him the script. There’s nothing like confirming a pundit’s claims to get you the praise of the pundit.

And I found this interesting:

But Glenn, this is the thing. Those people sincerely believe that something like that could happen. They actually think that racism is still so bad—I’m not going to speak for homophobia—but racism is so bad that that story could be plausible. I don’t think they’re acting. And so a lot of what frustrates us, I often say that these people are striking a pose because it’s part of this religion. But I have to understand that, to an extent, they mean it. They actually think that could happen. They think it’s 1950. And I don’t quite know why, except that they sequester logic off when it comes to race. This is where my religious analysis comes from. Kamala Harris, for example. I’m not trying to dog pile on her.

… but how could she believe that

Well, just consider that maybe she didn’t really believe it, but that her response of the sort that she gave, “Oh, poor Jussie, a victim of a modern-day lynching. We’re with you. Solidarity. White supremacy must be stopped,” is a part of the act. It is in itself as much of a pose as was the original …

It must be!

Read the whole thing.

The folks at TIPP Insignts comment on the “flash mob” looting many cities including Chicago have experienced lately:

Break down in law and order is a threat to civil society. It affects everyone, to varying degrees. Even those who, in theory, support a radical shift in policing policy and the “defund-the-police” rhetoric are not immune. As the Golden/TIPP Poll reveals, there is palpable alarm across all sections of society.

The statistics they report are interesting: there is overwhelming concern about these events with Democrats and Republicans expressing equal amounts of alarm. I see a disconnect here. I wonder how it will be resolved?

They close by advising the Biden Administration to stop blaming COVID-19 and start blaming the criminals. I don’t see how that is politically possible for them at this point.

The editors of the Wall Street Journal are disappointed with the Federal Reserve’s Federal Open Market Committee:

The median estimate by Fed officials for personal-consumption expenditure inflation, the Fed’s preferred measure, jumped to 5.3% for this year. How could it not given reality? But they estimate that PCE inflation will crash in 2022 to 2.6%, and keep falling after that.

From this comforting scenario flows the FOMC’s modest policy shifts. The Fed will speed up its tapering of bond purchases, finishing in March instead of June. This isn’t monetary tightening—it’s merely a faster reduction of extraordinary monetary ease. The central bank’s balance sheet will keep growing for three more months even as inflation is running at nearly 7%. Amazing.

Mr. Powell made clear that interest-rate increases won’t begin until after its bond taper ends, and then the forecast is for only three quarter-point rate increases in 2022. This means real interest rates, after accounting for inflation, will remain negative throughout next year. This isn’t a hawkish policy, and the happy reaction of the stock market suggests that investors see a reduced threat to asset prices from higher rates.

There were no dissents on the FOMC, as Mr. Powell was eager to underscore. That’s a surprise given the gulf this year between the central bank’s predictions and inflation reality, but then conformity has been a hallmark of the Powell Fed.

Perhaps the FOMC members want to show solidarity as Mr. Powell and Fed governor Lael Brainard face Senate confirmation hearings—Mr. Powell for another four as chairman and Ms. Brainard as vice chair.

Mr. Powell’s strategy seems to be to steer through his confirmation by talking tougher on inflation while doing little about it anytime soon. The Senators can decide if they feel as confident as the Fed chairman does that he has it all under control.

Unless the increases in prices abate soon, we’ll start seeing demands for “cost of living” wage increases which risks inducing a wage/price spiral which could make the present situation self-sustaining. None of the remediations at that point are particularly appealing.

The Biden Administration could be moved to impose wage and price controls as I intimated yesterday or the Fed could raise interest rates quickly and sharply which under present circumstances would be likely to throw the economy into a tailspin.

The editors of the Washington Post are worried about the omicron variant of SARS-CoV-2:

The warnings are coming fast and furious. “Tidal wave,” said British Prime Minister Boris Johnson. “Omicron is spreading at a rate we have not seen with any previous variant,” said Tedros Adhanom Ghebreyesus, the World Health Organization’s director general. “I’m a lot more alarmed,” said Marcus Plescia, chief medical officer of the Association of State and Territorial Health Officials. A new wave of highly transmissible coronavirus is engulfing the world and will explode soon in the United States. It is vital to grasp what this means and how to respond.

Cases will rise fast. Omicron appears to transmit more rapidly than the delta variant, and it will almost certainly bring more breakthrough infections in people who are already vaccinated. Cornell University shut down its Ithaca, N.Y., campus after a covid-19 outbreak marked by a significant share of omicron cases, including in the fully vaccinated. (Though this omicron outbreak did not bring severe disease.) In South Africa, omicron rapidly overtook the delta variant, and omicron cases appear to be doubling every two days in Britain.

Such rapid transmission demands the United States double down on proven mitigation measures: face masks, distancing and improved ventilation. Rapid spread also poses a potential threat to hospitals already burdened by delta and battered by nearly two years of pandemic. “The sheer number of cases could once again overwhelm unprepared health systems,” Dr. Tedros warned. Hospitals must prepare for another onslaught. And, critically, more people must get booster shots.

and insist that we should hope that the variant is a kitten but assume it will be a tiger. Unfortunately, they don’t elaborate on how they would differentiate those two poles or what policies would be put into place assuming it is “a tiger”. My sense is that their alarm encourages state and local leaders to impose (or reimpose) measures which are only effective at temporizing in self-defense.

I also wish we had a much better idea of the actual prevalence of COVID-19. My researches have mostly found models estimating presumed prevalence based on test positivity, mortality, etc. of which I’m skeptical.

At the Washington Post Sean Bock and Landon Schnabel report that more Americans than you might expect are switching parties:

Many observers of U.S. politics talk about contemporary “polarization.” The word suggests two camps of people firmly entrenched in their views, growing further and further apart on issues, and increasingly disliking each other, implying that we are a nation divided.

This narrative leads people to assume that party identities are strong and stable, that Republicans stay Republican and that Democrats stay Democrats. But is that the case?

It can be hard to track party switching. Surveys may ask the same questions over time, but they tend to ask them of different people. It often looks like the percentage of people who are Republican, Democratic and independent remains fairly steady over time, making those identities seem stable. But researchers don’t know whether that’s because people aren’t switching or because they are — just in a way that leads to a generally similar distribution of Republicans, Democrats and independents from year to year.

To better understand this, we took advantage of new General Social Survey panel data, which tracks the same people over time. The General Social Survey is a nationally representative survey of American adults, conducted since 1972 out of the National Opinions Research Center at the University of Chicago. The survey monitors trends in attitudes, opinions and behaviors and is often considered the gold standard in the social sciences. In a new study, we considered whether the particular individuals that the GSS interviewed in 2016 had different party identities in 2020.

We found that 70 percent of partisans — Democrats and Republicans alike — kept the same political identifications between 2016 and 2020. But that leaves a significant minority who did not. About 10 percent of Democrats and Republicans switched to the other party. An additional 15 percent of both Democrats and Republicans in 2016 identified as independents by 2020. The most volatile group was independents: Over 50 percent of independents in 2016 identified with either the Democratic or Republican party in 2020.

I suspect that their finding on “independents” (I think that “non-affiliated” or “neither of the above is acceptable” would be more accurate) is more complicated than that. Here in Illinois for example, you must request either a Democratic ballot or a Republican ballot to vote in those primaries, respectively. I interpret that as indicating that you can’t tell much by it.

I wish they reported more numbers in their analysis but, sadly, it is largely qualitative. For example, it would be interesting to know the statistics on party switching in people of different age brackets. Some studies have suggested that people are impelled to switch parties by certain life events, e.g. marriage, having a child, buying a home, etc.

However, the more notable factor than people merely switching from Republican to Democrat and vice versa, from either to “independent”, or from “independent” to either is reflected in Gallup’s regular party affiliation report which they have been updating regularly since 2004. The percentage of people reporting that they are Democrats is nearing its low water mark for the period while the percentage of those reporting they are Republicans is nearing its high water mark for the period but higher than either is the percentage of those reporting they are “independents”.

That suggests to me that under a proportional representation system American government would look a lot different than it does at present. While it might mean that more extreme splinter groups would gain representation, I suspect it means that a considerable number would not vote reliably for either party.