Kevin Drum

A blog of my opinions. Plus charts and cats.

  • Donald Trump Is Mad at the European Central Bank

    June 18, 2019

    Mario Draghi, president of the European central bank, says stimulus is on the way if Europe needs it:

    Speaking at the ECB Forum in Sintra, Portugal, Draghi gave a defiantly dovish tone, saying that if the economic situation deteriorates in the coming months the bank would announce further stimulus. The euro dropped 0.2% against the dollar in a matter of minutes as Draghi delivered the remarks. The German 10-year bund yield hit -0.30% for the first time ever and the U.S. 10-year Treasury yield hit its lowest since September 2017 at 2.0475%.

    This prompted a series of rage tweets from President Trump, who thinks it’s unfair that the European central bank might stimulate the European economy while the Federal Reserve sits around and does nothing to help Trump’s reelection chances. However, there’s a pretty obvious reason that Draghi is talking about stimulus while Jerome Powell isn’t, and it’s one that Trump brags about constantly: the US economy is in pretty good shape. Conversely, the EU economy has been declining for over a year:

    There’s another reason Draghi is making stimulus noises: EU interest rates have been at zero for the past four years, so there’s no way for the central bank to stimulate the economy via interest rate cuts. For that reason, Draghi is trying to convince everyone that the ECB still has stimulus tools in its kit if the economy needs them. The Fed has no reason to do this, since it still has plenty of scope to lower interest rates if it needs to:

    In other words, it makes perfect sense that Draghi is trying to reassure markets while Powell is being relatively more subdued. Trump doesn’t like it because he wants the US economy to be skyrocketing next year while he’s running for reelection. The fact that this might very well produce a huge recession when the Fed-engineered bubble breaks means nothing at all to him.

  • David Brooks Has Gotten Lazy

    June 18, 2019

    The topic of New York Times op-ed columnists came up recently while I was chatting with a friend. He is, among other things, a fan of David Brooks, and I told him I wasn’t. Why? In the past I’ve been pretty tolerant of Brooks, but over the past few years I feel like he just isn’t earning his rep. He’s gotten lazy. He sees a single poll or a single study and he suddenly divines the meaning of life from it—but without doing the work to find out what the study really means, whether it’s supported by other work, and just how broadly its results apply.

    Ivo Daalder points out a perfect example of this today. A few days ago Brooks took a look at a single poll from the Center for American Progress and immediately concluded that Americans are exhausted by the rest of the world and want to pull back from it. But even a cursory look at other data suggests exactly the opposite. So for your reading pleasure, here’s the antidote to Brooks, courtesy of Daalder:


    My “in short” summary would be a little different: Americans are just as bloodthirsty as they’ve ever been. All we need is a push from a demagogish president and we’re ready to bomb the crap out of anybody. Brooks has nothing to fear on that score.

    On the “liberal internationalist” axis, too, nothing much has changed: Americans still favor treaties and trade and alliances as much as ever—which is to say, we vaguely think they’re good things, but our support for them is pretty thin.

    As for the things Brooks says he’s most worried about—promoting democracy, taking on Chinese aggression, promoting trade, fighting global poverty, and defending human rights—“the core activities of building a civilized global community”—Americans have never really cared much about that stuff. We’ll tolerate a fair amount of it here and there, and of course we were always happy to use it as an excuse for various Cold War depredations—or for bombing the crap out of our enemy du jour these days—but that’s about it. I love my country, but it’s silly to pretend that we’ve ever been anything we aren’t.

    POSTSCRIPT: Just to be completely clear, I’m not saying that Brooks is unquestionably wrong here. Maybe he’s right! I’m just saying that it’s really lazy to base a whole column on a single poll without doing even the minimal research it would take to see how well it fits with other research on public opinion.

  • Facebook’s New “Cryptocurrency” Makes No Sense (to Users)

    June 17, 2019

    Andre M. Chang/ZUMA

    Facebook is developing a new competitor to Bitcoin:

    The closely guarded yet much-discussed cryptocurrency initiative, code-named “Project Libra,” could become a major e-commerce tool for Facebook users across the social network’s suite of services, from Instagram to messaging….The project is expected to be unveiled on Tuesday, where more details will be released.

    A Facebook equivalent of Bitcoin could allow users to buy products from popular Instagram influencers more quickly and easily than with cash — while remaining within the company’s social media domain. And importantly for Facebook shareholders, the company could make money off a fee for every processed transaction.

    I really don’t understand the crypto-sphere. But I mean that in a very specific way. I don’t mean it in the sense that Bitcoin is obviously ridiculous. It is, of course, but I can kinda sorta understand its appeal by virtue of it being the first cryptocurrency and therefore having a certain amount of credibility just from being around for a long time. But what about brand new cryptocurrencies? Even in nutball conspiracy theory land, what’s the supposed value of these things? This is the part that I don’t get.

    Then there’s Facebook’s Libra, which I don’t get for an entirely different reason: it’s not, as near as I can tell, a cryptocurrency. It’s just scrip, backed by dollars. Maybe they’re using blockchain somewhere in there as a distributed ledger, but if they are it’s not because they need to. It’s only so they can say “blockchain” at their press conference.

    And in what way will it make transactions more frictionless? It’s going to be connected to the banking system in some way, since it’s designed for use by merchants who will insist on actually being paid for stuff, and that means it will be tied to a bank account or a credit card or a jarful of quarters that you prepay to the FaceBank. This is how the One-Click button works on Amazon, and it’s hard for me to understand how anything online could be any more frictionless than that.

    The answer, as near as I can guess, comes from the final bit of the excerpt quoted above:

    ….And importantly for Facebook shareholders, the company could make money off a fee for every processed transaction.

    Right-o. That explains why Libra is good for Facebook, but why is it good for the rest of us? Will it provide a discount on prices, which Facebook monetizes by charging normal transaction fees to merchants but negotiating discounted fees with the credit card folks? That would be sort of a real-time cashback scheme, I suppose, and it might be attractive to users. Beyond that, I can’t really guess what this might be all about. But whatever it is, I’ll bet my entire collection of old USB cables that it’s not a cryptocurrency in any meaningful sense of the word.

  • Health Update

    June 17, 2019

    By an amazing coincidence, half an hour after I griped about not being allowed to see my test results, they popped up on my screen. The squeaky wheel gets the grease, I guess. Unfortunately, the news is disappointing:

    Instead of stabilizing at around 0.5, my M-protein level took a big jump up to 0.67. That’s too bad. I had hoped that the Darzalex by itself would be effective since it has no side effects.¹ But this means that either I’ll have to start up again on the dex or else add something else to the mix. I’ll find out when I see my oncologist in a couple of weeks.

    What I’d really like to do is to try starting up the dex again, but using it only once a month on the same day as the rest of the chemo. Unfortunately, my doctor is not fond of “trying” things. He prefers to precisely follow the treatment used in the clinical tests of the Darzalex. But I’ll ask anyway and see what he says. This is the first time that I’ve thought I’d like to get an opinion from a multiple myeloma specialist, but I’m not even sure how to go about that.

    ¹As opposed to the dex, which saps my energy and ruins my sleep. It’s now been several months since I quit the dex, and it’s amazing how much better I feel.

  • Lunchtime Photo

    June 17, 2019

    This is a small waterfall that I found off the road a little north of the Lynn Cove Viaduct on the Blue Ridge Parkway. It took a bit of tramping to get to it, but it was worth it. It’s a very nice, serene picture.

    Also a very delicate one, it turns out. I ordered a blowup of this picture, but tweaked the exposure and colors to compensate for the paper I had it printed on, and cropped it differently to fit a particular space. I didn’t think I’d adjusted things very much, but I overdid it and the end result was too bright, too saturated, and too focused on just the waterfall at the expense of its surroundings. What seemed like some minor changes made it too vibrant for a picture that should feel very calming. Live and learn.

    May 9, 2019 — Rough Ridge Lookout, Blue Ridge Parkway, North Carolina

  • The Federal Minimum Wage Hardly Matters Anymore

    June 17, 2019

    Charts showing the history of the minimum wage usually adjust for inflation, which always begs the question of which inflation measure is “most accurate.” But the best way to see the trend of the minimum wage is to simply compare each year’s level to the median family income in the same year. Here it is:

    This view has less of the familiar sawtooth pattern, and shows that the federal minimum didn’t really peak in the 60s and then decline. In reality, it’s been slowly declining ever since we started collecting income statistics in the 50s. Back then, a full year of minimum-wage work earned you about 40 percent of the median. Today that’s down to 20 percent, and on current trends the minimum wage will decline to its lowest point in history by next year.

    For all practical purposes, Republicans have finally reached a long-cherished goal: to eliminate the federal minimum wage. Today, thanks to their unwillingness to support an increase, well under one percent of workers earn the federal minimum wage, which makes it effectively meaningless.

    Thanks, GOP! I’m sure your wealthy donors appreciate your flat refusal to entertain even a modest bit of help for the working poor and the working class, instead spending all your energies on tax cuts for corporations and the rich.

  • Doctors Should Stop Lying to Patients

    June 17, 2019

    <grumble>

    I’m in the infusion center right now getting my monthly dose of cancer cure, and I asked the nurse for a copy of the results of my recent bloodwork. Last month I did this accidentally, and it turned out that the printed copy contained my M-protein levels. I normally have to wait for those until my doctor manually releases them.

    I figured I had discovered a loophole in the system, but no. Today’s nurse told me the M-protein test was “in process” and therefore unavailable. I told her this just meant that Dr. A hadn’t released them yet. No, no, she insisted, and turned the screen around so I could see the words “In Process.” I repeated that this just meant the results were waiting for Dr. A to let me see them and then grumbled something about not understanding why I had to wait to see my own test results.

    A minute later my nurse returned and said she had asked, but it was policy not to release this stuff, and last month’s nurse was new and didn’t realize that.

    OK, fine. I don’t like it, but it’s fine. What really gets me, though, is their persistent unwillingness to admit that it’s “policy” at fault here, not something else. My first oncologist blamed it on IT and said I couldn’t see my M-protein results at all until an office visit. My current oncologist admits that I can see them, and blames the policy about manually releasing them on mysterious forces beyond his ken. The nurses try to pretend that it takes several days for the lab to do its job, and that’s why I can’t see them.

    I’m not sure what bugs me more: not being allowed to see the results immediately or being routinely lied to. I even understand the reason for the policy (I think), and I admit that it probably makes some sense. But don’t doctors know that when they lie to patients about one thing, it makes patients wonder if they’re lying about other stuff too? Why not just tell me why they have the policy they do; admit that they themselves are the authors of that policy; and then promise to release the results promptly? I suppose that would prompt arguments from patients, and they don’t want to waste time on arguments.

    I get that. I really do. But still. I wonder how many other things they don’t tell me because they figure it’s not worth the hassle?

    </grumble>

  • Joe Biden and the Phantom “Electability” Argument

    June 17, 2019

    Kevin E. Schmidt/Quad-City Times via ZUMA

    Washington Post media columnist Margaret Sullivan thinks the press is being too easy on Joe Biden:

    As Iowa journalist Robert Leonard talks to voters around his state, he finds himself baffled at the national portrayal of Joe Biden’s dominance in the presidential campaign….He shakes his head at the extensive coverage and commentary that depicts Biden as almost a shoo-in for a nomination that’s more than a year away.

    I keep hearing this, but I’ve never seen it. Can someone please give me an example of Biden being treated as a shoo-in?

    One example: CNN’s morning briefing newsletter recently called Biden “the most formidable threat” to President Trump’s reelection chances.

    CNN is far from alone. It’s common across the national media to see Biden pegged as the safest candidate for Democrats to put up to unseat Trump. He’s got that secret sauce: electability.

    Saying that Biden, the frontrunner in all the polls, provides the most formidable threat to Trump is not even close to calling him a shoo-in, nor does it say anything about his electability. So where does this come from?

    I’m pretty sure I’ve read at least a dozen pieces complaining about Biden’s supposed electability for every piece that actually says Biden is the most electable candidate. In fact, let’s check that out. Here are the top results from a Google search for “Biden electable”:

    You’d think that in a column headlined “Joe Biden and the ‘electability’ delusion,” Sullivan could manage to provide at least one example of Biden being called the most electable candidate, but she can’t. Or doesn’t. Or something. Like everyone else, she complains about this phantom argument, but can’t really point to anyone making it.

  • The Price of Insulin Is a National Disgrace

    June 17, 2019

    Erik Mcgregor/Pacific Press via ZUMA

    Over on Twitter, my post about the soaring price of insulin provoked an argument over the cost of producing the stuff. Let’s run through that. For comparison, the aspirin you buy at your local drug store is priced at about 5-10x the cost of the raw material, depending on whether you buy name brand or generic. Here’s how things pencil out for insulin:

    • The cost of producing the raw active material for a fairly expensive type of analog insulin is $100,000 per kilogram.
    • That’s $0.0001 per microgram.
    • A typical daily dose is around 100 units, or 3,500 micrograms.
    • That comes to a production cost of 35 cents for an average single-day supply.
    • Or $10 per month.
    • Or $126 per year.

    For old-school RHI (regular human insulin) the production cost is about a quarter of that. Call it $30 per year. The total cost of creating the final product and distributing it is higher, of course, but no more than double or triple the cost of manufacturing the dry powder.

    And how much do ordinary people pay for insulin? Thousands of dollars per year. This is for drugs that have been on the market for decades and have long since paid back their R&D costs.

    Two or three decades ago, insulin was priced at about 5-10x the production cost of the raw material. This is about how aspirin is priced. Today, pharmaceutical companies charge at least 20-30x their production cost for insulin and more likely around 100x. Nevertheless, every year the price keeps going up. Why? Because there’s nobody to stop them.