Over at the Weekly Standard, Michael Warren interviews budget chief Mick Mulvaney:

If a budget proposal is a message about priorities, it's clear entitlement reform isn't even on President Trump's radar. When starting on 2018 budget proposal, Mulvaney came to the president with a one-page list of entitlement programs to reform.

"We went down the list: Yes, Yes, No, No, Yes, No, Yes, No, No," said Mulvaney. "The nos were all Social Security and Medicare. And that's it. He said, 'I promised people on the campaign trail I would not touch their retirement and I would not touch Medicare, and we owe it to them.'"

That's quite a trick memory Trump has. He actually promised not to touch Social Security, Medicare, and Medicaid. But he seems to have forgotten all about that last one. What happened?


Well, this is a kick in the gut. In tonight's season finale of Supergirl, the good guys unearth a weapon originally designed by Lex Luthor as a way of encouraging Superman to self-deport himself by irradiating the atmosphere with kryptonite. At the moment, however, the threat to Earth is from Daxamites, whose weakness isn't kryptonite, but lead:

At least Superman has the good sense to look unhappy about this. On the bright side, if irradiating the atmosphere with lead ends up causing more crime, that's a sort of job security for him, isn't it?

According to the Washington Post, James Comey wasn't the only person that President Trump pressured regarding the FBI's Russia investigation:

Trump made separate appeals to the director of national intelligence, Daniel Coats, and to Adm. Michael S. Rogers, the director of the National Security Agency, urging them to publicly deny the existence of any evidence of collusion during the 2016 election.

Coats and Rogers refused to comply with the requests, which they both deemed to be inappropriate, according to two current and two former officials, who spoke on the condition of anonymity to discuss private communications with the president....Trump’s conversation with Rogers was documented contemporaneously in an internal memo written by a senior NSA official, according to the officials. It is unclear if a similar memo was prepared by the Office of the Director of National Intelligence to document Trump’s conversation with Coats.

....In addition to the requests to Coats and Rogers, senior White House officials sounded out top intelligence officials about the possibility of intervening directly with Comey to encourage the FBI to drop its probe of Michael Flynn....“Can we ask him to shut down the investigation? Are you able to assist in this matter?” one official said of the line of questioning from the White House.

This. Is. Nuts. Trump is not only corrupt, he's an unbelievable moron. He personally asked the NSA director and the overall director of national intelligence to publicly weigh in on an ongoing investigation. Not only that, he basically asked them to lie, since they weren't privy to what the FBI was doing. In what universe did Trump think that either of them would respond positively to such a blunt request? Or that this kind of thing wouldn't leak?

What's more, in addition to directly asking Comey to shut down the FBI investigation, he apparently had some of his aides call senior intelligence officers to ask them to intervene with Comey. There are two big questions here:

If there really are contemporaneous memos from Comey, Rogers, and maybe Coats, and if all three can be called to testify about their conversations with Trump, then what more do we need? This is Nixon-level stuff.

This post is long and wonky and probably not worth your time to read. You have been warned! But it's something I've been wrestling with for a while, and this is basically a way of getting my thoughts in order so that I can continue pondering it.

The subject is inflation. Specifically, what's the best way to measure inflation? I'm talking here about the best general index, not specialized things like CPI-X (an attempt to measure inflation for the elderly) or core PCE (useful to the Fed as a way of judging the strength of the economy). The most common measure of inflation is the Consumer Price Index (CPI), and that's what you see in the headlines each month when the BLS reports a new inflation number.

But CPI has its problems, and lots of people prefer the Personal Consumption Expenditure index (PCE). Scott Winship has led the charge on this, and you can read a pretty readable explanation of his views here. Long story short, Winship makes a good case for the problems with CPI, but I'm not thrilled with PCE either. I'm usually interested in measuring the lived experience of people—especially the non-rich—and in my opinion PCE uses a weighting system that obscures this.

So what's the best index? First off, there are plenty of times when it doesn't matter. Here's a chart showing CPI and PCE over the last ten years:

They're nearly identical. If you're comparing something to last year, or even to ten years ago, just go ahead and use CPI. It doesn't really make any difference. Here's a comparison over 20 years:

There's a little more difference, but still not that much. Obviously this difference might be important in an academic or professional economic setting, but for everyday journalistic use, you can use CPI for a comparison of anything between a year and 20 years ago. It's going to be fine.

But what if you want to go back further? Here are both indexes going back to 1978:

Now we're up to a difference of 21 percent. That's enough to really matter. Luckily, the BLS has created a series called CPI-U-RS that's become pretty popular. I like it because it seems to hit the right sweet spot between fixing the problems with CPI but retaining better weightings than PCE. In terms of the actual things that people use and buy, I think that CPI-U-RS is probably the best measure we have.

Unfortunately, it only goes back to 1978. However, before then there's only a tiny difference between CPI and PCE. Here they are from 1929 to the present:

So the best index to use is PCE (indexed to 1978=104) from 1929-1977 and CPI-U-RS from 1978-present. It would be nice if BLS would merge the two series and give the result a snazzy name like CPI-A1, but they don't. Until then we'll just have to home brew it ourselves.

In some ways, it's sort of entertaining to have a president who's literally learning the most basic facts of the world on the job:

President Trump began a two-day visit to Israel on Monday with a blunt assessment for Prime Minister Benjamin Netanyahu: If Israel really wants peace with its Arab neighbors, the cost will be resolving the generations-old standoff with the Palestinians....“I was deeply encouraged by my conversations with Muslim world leaders in Saudi Arabia, including King Salman, who I spoke to at great length. King Salman feels very strongly and, I can tell you, would love to see peace with Israel and the Palestinians.”

It's an open question whether a Palestinian peace deal would really produce comity with the rest of the Arab world, but it's certainly a prerequisite and has been for decades. But I guess Trump hadn't really considered that a serious obstacle until he heard it face-to-face from the king.

Anyway, we all know where this is going, right? Benjamin Netanyahu wants to stay on good terms with Trump, and Trump wants a peace deal. Everyone on the planet knows perfectly well that Netanyahu has no interest in this, but he'll string Trump along anyway. A "peace process" will be set up, Jared Kushner will preside over a meeting or two, and Netanyahu will settle back and wait for some kind of bombing or other terror attack to declare that he tried but the Palestinians just can't be dealt with. Every neocon in America will immediately jump on the bandwagon and insist that this is the final straw. Things were so hopeful thanks to Trump's goodwill, but they bombed innocent women and children while Israel was earnestly trying to make peace! They're savages! Netanyahu will ask Trump for a statement of support, and of course Trump will provide it because terrorists are bad. And that will be that.

The whole thing will be a ridiculous charade, and everyone except Trump will know it.

Lunchtime Photo

I was out in Santa Monica for a few hours last week, and that means a bunch of Santa Monica pictures got added to the lunchtime photo queue. This one is a picture of a name painter on the pier.

What's interesting technically is that I actually wanted more grain in the photo. I was hoping for that old-school Tri-X-pushed-to-ISO-1600 look. But even at ISO 3200, there's really not a lot of grain here. I'll have to try this again someday at ISO 12800.

Here's a helluva weird story from Jim Puzzanghera of the LA Times:

The House Republican legislation scaling back Dodd-Frank financial regulations would reduce federal budget deficits by $24.1 billion over the next decade....Would reduce federal spending by $6.9 billion from 2018 through 2027....The bureau received $565 million in the 2016 fiscal year....The House Republican legislation would reduce the bureau’s funding to $485 million in 2018, and the CBO estimated that Congress would keep annual funding at about that level, adjusting for inflation, over the next decade.

So the bill would (a) reduce funding by $800 million, (b) reduce spending by $6.9 billion, and (c) reduce deficits by $24.1 billion. How do we get from $800 million to $24.1 billion?

I'm glad you asked! And trust me, you're going to love the answer. Here's how it breaks down:

This is a work of art. The savings come almost entirely from two places: eliminating the Orderly Liquidation Fund and modifying the way Dodd-Frank agencies are funded. Here's the impressive part: neither of these things actually saves any money.

The OLF is funded entirely by the financial industry. If the government has to liquidate a big bank, it foots the bill and then recoups the money via a fee on the banking sector. However, the money has to be spent immediately, while it gets recouped over time. So it's possible that, say, the feds would spend $10 billion to rescue a bank in 2027, but all the money would be recouped in later years. That counts as a $10 billion deficit in the the ten-year window 2018-2027.

So CBO guessed the probability of the OLF being used in each of the next ten years, along with the possible cash flow imbalances, and then calculated the expected value. They came up with $14.5 billion. CBO acknowledges that this estimate has "considerable uncertainty," and that's true. More to the point, though, the whole thing is just gimmickry. Using the OLF will cost the government nothing (or close to nothing), but expenses might fall inside the ten-year window while revenues fall outside the ten-year window. That's all.

Then there's the agency funding. It gets reduced $800 million, but somehow that becomes a deficit reduction of $9.2 billion. This one is even more impressive. Two agencies are affected—NCUA and CFPB—which currently get their funding from outside sources. This means their outlays count as "direct spending." Under the Republican law, their funding would come from Congress and be subject to annual appropriations. For some reason—and I admit this remains inscrutable to me—reducing "direct spending" and replacing it with the same amount of appropriated spending counts as deficit reduction even though CBO assumes that actual funding levels won't change.

This is the immaculate conception of congressional legislation. It doesn't actually reduce spending more than trivially, but thanks to obscure budget gimmicks it gets scored as a $24 billion reduction in the ten-year budget deficit. It's magic! Maybe it's the power of the orb at work.1

1You all know what this refers to, don't you?

Every year the International Energy Agency publishes the World Energy Outlook, which, among other things, forecasts the growth rate of solar PV installations. The 2016 edition even included a whole "special focus" on renewable energy. Presumably this means they took an extra careful look at their solar PV forecast. Here it is:

That looks...odd, doesn't it? Solar PV has grown at a pretty fast clip over the past decade, but the IEA assumes the growth rate will suddenly level out starting this year and then start to decline. And this is their optimistic scenario that takes into account pledges made in Paris.

What can we make of this? Auke Hoekstra provides some context:

Every single year, the IEA projects that solar is a passing fad and its growth rate will level out that year. And every single year, solar continues to grow anyway. But the next year the IEA makes the exact same forecast. It's almost as if they have some kind of hidden agenda here.

Commerce Secretary Wilbur Ross was in Saudi Arabia with President Trump this weekend, and today he appeared on CNBC to chat about it. This comes via TPM:

Ross: I think the other thing that was fascinating to me ... there was not a single hint of a protestor anywhere there during the whole time we were there, not one guy with a bad placard, instead ...

Host: But Secretary Ross, that may be but not necessarily because they don’t have those feelings there but because they control people and don’t allow them to to come and express their feelings quite the same as we do here.

Ross: In theory that could be true. But boy there was certainly no sign of it, there was not a single effort at any incursion. There wasn’t anything. The mood was a genuinely good mood. And at the end of the trip, as I was getting back on the plane the security guards from the Saudi side who’d been helping us over the weekend all wanted to pose for a big photo-op. And then they gave me two gigantic bushels of dates, as a present, as a thank you for the trip that we had had. That was a pretty from the heart, very genuine gesture. It really touched me.

Is everyone in the Trump administration a senile old man? The alternatives here are: (a) Ross is an idiot, (b) he's just spinning but doing an epically bad job of it, or (c) he's losing his mind. What the hell is it with this administration?

Remember the top secret intel that President Trump shared with the Russians in the Oval Office? We all pretty much know that it came from Israel, but for some reason Trump decided to confirm this today:

As many people have pointed out, this was just a photo op. Trump didn't have to say anything. But he's Trump, so he had to have the last word. It continues to be remarkable how easy it is to bait the guy.