Uh oh. The latest CPI figures are out today. It's just another monthly reminder that inflation is spiraling out of—wait. What? Inflation went down in March? So it did:

As you can see, the Consumer Price Index (dark blue) declined last month by a fair amount. Why? Because oil prices (light blue) declined by a fair amount. The CPI is pretty sensitive to oil prices, which is why most economists look instead at core CPI, which excludes food and energy. It's not that those things aren't important—they affect your pocketbook the same as anything else—it's just that they don't tell you very much about the state of the economy. They tend to go up and down for reasons other than wage pressure and employment levels: bumper crops, wars in the Middle East, bad weather, etc.

Core CPI also dropped this month, and it's now back down to 2 percent. PCE price inflation is below 2 percent. Overall, there just isn't a lot of inflationary pressure in the economy, and not a lot of wage growth either.

In other economic news, consumer confidence is up but retail spending is down.

The retail “data are impossible to square with the stratospheric levels of consumer confidence recorded across an array of surveys,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics That suggests either that “spending will accelerate markedly…or confidence will decline.”

Retail spending has ticked down for the past few months even if you exclude food and gasoline to get a "core" retail sales figure:

So what's going on? Maybe nothing. A month or three does not a trend make. Maybe people are just taking a little breather after increasing spending for most of 2016. Whatever the reason, though, consumer spending seems to have hit a bit of a wall since January.

A couple of days ago I wrote that we, the traveling public, have conclusively demonstrated that we care about nothing but price. This is one reason air travel has become progressively more awful. Steve Randy Waldman is sick and tired of people like me saying things like this:

There are two things wrong with this line that air travel is awful because consumers’ true revealed preference is that it should be awful and cheap. First, there is the fact that air travel managed by the main domestic carriers in the United States is uniquely awful, and there is no evidence that US travelers are any more price conscious than consumers in other countries. No frills, discount air travel is popular in Europe as well, and it is sometimes awful, but it is on the whole much cheaper than “discount” air travel within the US. Mainstream carriers almost everywhere else in the developed world are notably less awful than the big American carriers, and often just as cheap.

When I was writing my post, this was actually at the top of my mind. Is American air travel really uniquely awful? The problem is not just that I couldn't think of any data to bring to bear on this question, I couldn't even think of any anecdotal data that would be meaningful. It's true that I hear griping about American carriers a lot more than I do about European carriers, but then, living in California I would, wouldn't I? Complaint rates might be germane, but should that be per flight or per 100,000 miles or what? And are fares really the same or lower than in the US? That's hard to say, since Europe is simply a different environment: different regulators, shorter distances, more concentrated population centers, real competition from trains, etc. Nor do I know how subsidies play out among various countries.

The bottom line is that this would take some very careful research indeed. However, if you absolutely insist, I just spent the past few minutes doing some un-careful research. All I can say about it is that I promise I didn't cherry pick. For the US, I chose the four biggest airlines. For Europe, I chose four representative big airlines, and I chose them before I looked at the data:

US data is for March 2017 here. European airline data is for Q1 2016 from Britain's CAA here. For Europe, this is not continent-wide data. It's only for complaints filed in the UK.1

I have absolutely no idea if these numbers are really comparable. Do Americans simply complain less than Brits? (Seems unlikely.) Is it easier to complain in Britain? Are "enplanements" (US) the same as "passengers" (Europe)? Or do European airlines really suck way worse than US airlines?

I don't know, and you shouldn't assume this chart tells you. Still, it definitely doesn't suggest that US airlines are uniquely awful. The bottom line is that we need real research to come to any conclusions here. If I'm bored this weekend, maybe I'll look for some.2

1One thing you can't do is use US data to compare domestic and international carriers. The international carriers are flying exclusively international flights into the US, and the rules and flying experiences are very different for domestic and international flights. One way or another, you have to use local data so that you get a roughly comparable split of domestic and international flights for all carriers.

2But probably not. I've got other work to do.

A few days ago I noted that Republican views of the economy changed dramatically when Donald Trump was elected, but Democratic views stayed pretty stable. Apparently Republicans view the economy through a partisan lens but Democrats don't.

Are there other examples of this? Yes indeed. Jeff Stein points to polling data about air strikes against Syria:

Democrats are about as supportive of the strikes as they were under Obama, with 38 percent backing them in 2013 and 37 percent agreeing with them now, according to the Washington Post. Now 86 percent of Republican voters back the strikes, compared with the just 22 percent who did so in 2013.

This is a pretty stunning difference. Democratic views stayed solidly negative regardless of who was president. But Republican approval rates skyrocketed from 22 percent to 86 percent when Trump became president. This despite the fact that Bashar al-Assad's use of chemical weapons was more extensive in 2013 than it was this year.

To be honest, I figured the data on economic views was a fluke. Now I wonder. It's difficult to make these comparisons over time because you rarely have identical circumstances to compare. Trump's Syrian bombing is unusually similar to the situation in 2013. Still, there are bound to be others. I wonder if this is a fairly consistent result? What other examples do we have of presidents of the opposite party doing extremely similar things and getting different responses from partisans?

How many Americans are atheists? Many people don't really like admitting it, but Brian Resnick points today to an attempt to get at the truth. In the cleverly titled "How many atheists are there?" a pair of researchers sent people surveys with a bunch of personal questions (Are you vegetarian? Do you work from home? Etc.). But they didn't ask for answers to the questions. All they asked for was the number that were true for you.

The researchers don't report the average number reported back. But let's suppose it was 4.3 out of 9. This is important, because they sent out a second set of surveys that were identical but added one question: "Do you believe in God?" If the average number of questions that were reported true in the second survey stayed at 4.3 out of 10, we can figure that no one believes in God. If it went up to, say, 5.1 out of 10, a little arithmetic suggests that roughly 80 percent of the respondents believe in God and 20 percent don't.

After grinding through all this, the paper concludes that about 26 percent of Americans are atheists. Maybe that's a reliable number, maybe not. This needs to be replicated a few times before we believe it. However, I was pretty gobsmacked by this table:

Granted, the error bars are large, but their point estimate is that no Republicans are atheists. None! If this methodology is accurate, it not only suggests a truly enormous religion gap between Republicans and everyone else, but also that self-reporting isn't worth a damn.

As it happens, the sample the researchers used was probably somewhat self-selected rather than being truly random, and that may have affected the results. There are other potential problems too. Still, it's an interesting first crack at this, and I hope that others follow it up.

Lunchtime Photo

This freeway sign hanging out in the middle of nowhere (well, above a Target parking lot anyway) has intrigued me for a long time, so here's a picture of it. Needless to say, your mileage may vary on how intriguing you find it. Marian's response to it was roughly the facial version of "oh."

Oddly enough, the next time I was over at Target after taking this picture there was no sign. At first I thought maybe I was living in some kind of virtual reality simulation after all, and the sysadmin had screwed up a detail. But no. I drove around a bit, and over in the corner was a mangled sign that some maintenance crew had hauled down. Apparently someone had taken the exit a little too fast and run into it.1

1Either that, or a software alert went off and the sysadmin, realizing what had happened, hastily created the mangled sign as a plausible way of keeping me from losing faith in consensus reality.

I missed this a couple of days ago, but Nancy LeTourneau alerts me to a recent CNN report about Susan Rice's requests to "unmask" the names of individuals in intelligence reports that she received when she was Obama's National Security Advisor. This was all part of the great Devin Nunes fiasco, where he went to the White House to read the reports, came back to Capitol Hill to hold a press conference, and then rushed back to the White House to tell President Trump all about it. But there's no there there:

After a review of the same intelligence reports brought to light by House Intelligence Chairman Devin Nunes, both Republican and Democratic lawmakers and aides have so far found no evidence that Obama administration officials did anything unusual or illegal....Over the last week, several members and staff of the House and Senate intelligence committees have reviewed intelligence reports related to those requests at NSA headquarters in Fort Meade, Maryland.

One congressional intelligence source described the requests made by Rice as "normal and appropriate" for officials who serve in that role to the president.

Fine. Susan Rice did nothing wrong. It's not as if we didn't know that already, but it's nice to see it confirmed. Rice must be getting really tired of being a handy Republican punching bag.

Let's say you're throwing a dinner party and it is a very important dinner party and your boss is coming over and many other people you want to impress and you and your family spend all day getting ready for this dinner party—cleaning the house, preparing the food, rehearsing songs the children can sing as they depart for bed before the adults have post-dinner drinks—and it's all very stressful but you're committed to it because the play isn't the thing, the dinner party is—and so you wake up early and clean the kitchen and the dining room and the entryway and the second bathroom and even the third bathroom, which probably won't get used but it would be very bad if it did get used and it was dirty, and in a fit of panic you even clean the closets—because what if someone goes to put their coat in the closet and the closet is messy and they think "wow, what a sick, disgusting family this is" and then they take a photo of the sick closet and post it on Instagram with no filter and everyone on the internet laughs at you and you lose your job and have to move with your family to the arctic because that is the only place you can live without shame?—so you clean the closet; and the food is also important so you spend forever making the best recipes from the Top Chef cookbook, recipes you really aren't even qualified to attempt but attempt them you do and after a few failures and misfires you make them good—and it is you who is the real Top Chef—and then it is the afternoon and you are ready, everything is perfect, but you are stressed and you want a drink but you don't want to be drunk when people show up so you don't drink because not again but you really are stressed out and your back is killing you, so you jump in the car and pop over to the local mall and go to the Sharper Image to sit in one of their massage chairs and while you're sitting in the massage chair unwinding before the big party you get a frantic call from your partner saying that there was a problem with the refrigerator and the meal you'd slaved over all day is ruined and there's no food and your dinner guests are going to be arriving any minute and now you're panicking because what are you going to do and you look around the Sharper Image in a daze and realize that there is nothing you can do because it is too late and your life is over and you resign yourself to the arctic but then you think maybe just maybe they sell steaks at Sharper Image and you ask the Sharper Image salesperson and they say, "actually, yes, we do" and you say, "but are they good steaks" and they say, "oh they are the world's greatest steaks" and so you buy a bunch of the steaks and go home and make the steaks and then the guests arrive and they love the steaks and the night is a success and when you sleep that night you dream of your new life where people come up to you on the street and say "I'd love to come to one of your dinner parties. I hear they're great." Maybe you'll invite them. Maybe you won't. Your fate is in your hands.

Bad news, my friend: You mishandled the steaks. You're moving to the arctic.

tldr: The Sharper Image used to sell Trump Steaks. Trump's Mar-a-Lago resort—which doesn't actually sell Trump Steaks since Trump Steaks no longer exists—was just dinged by health inspectors for mishandling meat. There is no reason to believe that Trump Steaks were spoiled or that the Sharper Image didn't handle their Trump Steaks correctly. This post is a joke about the fact that Donald Trump used to sell steaks at the Sharper Image. Please stop shouting at me.

I'm just writing these down for posterity:

Trump on health care: "I have to tell you, it's an unbelievably complex subject. Nobody knew health care could be so complicated."

Trump on China and North Korea: "[President Xi] then went into the history of China and Korea....And Korea actually used to be a part of China. And after listening for 10 minutes I realized that it’s not so easy. You know I felt pretty strongly that they have a tremendous power over China....But it’s not what you would think."

Trump on the Export-Import Bank: "I was very much opposed to Ex-Im Bank, [but] it turns out that, first of all lots of small companies will really be helped....So instinctively you would say it’s a ridiculous thing but actually it’s a very good thing and it actually makes money. You know, it actually could make a lot of money."

So far, Donald Trump has learned that health care is complicated; Korea used to be part of China; and the Ex-Im bank helps small companies too.

On health care, Trump gets solid marks. It is complicated. On the other hand, pretty much everyone except Trump already knew this. And the graders would have liked him to demonstrate a little more familiarity with why health care is complicated. Still, it's a good first step. Let's give him him a B-.

On Korea, Trump didn't do so well. Is it true that Korea "used to be a part of China"? Sort of, in the sense that, back in the day, China repeatedly invaded Korea with varying success. At times it was a vassal state, at other times it wasn't. But Trump talks as though maybe Korea was a province of China until maybe World War II or something. It's actually been more than six centuries. Still, I'm feeling generous, so I'll give a gentleman's C-.

The Ex-Im bank is even more problematic. The bank itself claims that "more than 90 percent of EXIM Bank's transactions—more than 2,600—directly supported American small businesses." But take a look at dollars:

This comes from a longtime opponent of the Ex-Im Bank, so take it with a grain of salt. Small businesses do a little better on other metrics. Still, there's not much question that agitprop aside, the Ex-Im Bank is primarily a tool for gigantic corporations. On the other hand, Trump is right that it makes money and doesn't cost the taxpayers anything. But I still think I have to give him a D on this for his core claim.

Overall, then, Trump is learning, but he's not learning especially well. So far I'd give him about a C-. He really needs to spend more time on his homework and less time watching TV.

The Guardian reports that European spy agencies, including Britain's GCHQ, were the first to notice an unusual number of contacts between Trump campaign advisors and Russian officials:

GCHQ first became aware in late 2015 of suspicious “interactions” between figures connected to Trump and known or suspected Russian agents, a source close to UK intelligence said....Over the next six months, until summer 2016, a number of western agencies shared further information on contacts between Trump’s inner circle and Russians, sources said. The European countries that passed on electronic intelligence — known as sigint — included Germany, Estonia and Poland. Australia, a member of the “Five Eyes” spying alliance, which also includes the US, UK, Canada and New Zealand, also relayed material, one source said.

....It is understood that GCHQ was at no point carrying out a targeted operation against Trump or his team or proactively seeking information.... Instead both US and UK intelligence sources acknowledge that GCHQ played an early, prominent role in kickstarting the FBI’s Trump-Russia investigation, which began in late July 2016.

....The Guardian has been told the FBI and the CIA were slow to appreciate the extensive nature of contacts between Trump’s team and Moscow ahead of the US election....“It looks like the [US] agencies were asleep,” the source added. “They [the European agencies] were saying: ‘There are contacts going on between people close to Mr Trump and people we believe are Russian intelligence agents. You should be wary of this.’

I don't know if any of this is, strictly speaking, new. But it's fairly damning. Five separate countries—Britain, Germany, Estonia, Poland, and Australia—noticed unusual activity in the Trump campaign. This suggests either a lot of contacts or an unusual level of ineptitude from the Trump folks.

Alternatively, of course, it could suggest that the Trump team didn't think it was doing anything wrong and therefore made no effort to hide its meetings. Knowing what we know about people close to Trump, though, I think that ineptitude probably has to be our first guess.

Yesterday I made fun of President Trump for not understanding why his tax cut plan would be easier to pass after Obamacare had been repealed. But I have a confession: I don't really understand it either. Jon Chait's explanation is typical:

The connection between the two issues might seem obscure, but it matters technically. The Republican plan to repeal Obamacare would eliminate all the taxes that were raised to help pay for the benefits — about $1.2 trillion over the next decade. This would lower the baseline of tax revenue, meaning that Republicans would need to design a tax code that raises $1.2 trillion less in revenue in order to be “revenue-neutral.” That makes it crucial for them to repeal Obamacare before they cut taxes.

I've read a whole bunch of explanations of why Obamacare repeal needs to come before tax reform, and this is the gist of all of them: It lowers the revenue baseline.

Fine. Using round numbers, suppose the tax code brings in $20 trillion over ten years. Once you repeal Obamacare, it brings in $19 trillion, so your shiny new tax plan only has to raise $19 trillion. Simple enough.

But what if you leave Obamacare in place? Now your new tax plan needs to raise $20 trillion. But $1 trillion is still coming from Obamacare, so you have to raise only $19 trillion ex-Obamacare. It's the same. I can't think of a chart to illustrate this, so instead here's one showing actual federal tax revenues aside from payroll taxes:

What am I missing here? The fact that all the explanations I've read vaguely invoke the phrase "revenue baseline" and then move on makes me suspicious. Is there something deeper going on here? It doesn't make sense that eliminating a roughly equal amount of revenue and spending by repealing Obamacare would have any effect on the deficit calculations of a subsequent tax bill. Could some grizzled expert please explain this?