Morning Report: The labor market is still struggling.

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S&P futures 3814 -4.8
Oil (WTI) 62.41 1.16
10 year government bond yield   1.48%
30 year fixed rate mortgage   3.14%

Stocks are flattish this morning on no real news. Bonds and MBS are down small.


Jerome Powell is scheduled to speak at a Wall Street Journal webinar today. Expect to hear dovish remarks about monetary policy and also a push-back against the “inflation is coming” narrative.


Initial Jobless Claims came in at 745,000 last week. To put that number in perspective, the ADP jobs report showed only 117,000 jobs were added last month. The 4 week moving average for initial claims is 790k, so last month that means 3.16 million jobs were lost while 117,000 were created. Meanwhile, companies announced 34,500 job cuts according to outplacement firm Challenger, Gray and Christmas.


Nonfarm productivity decreased 4.2% as output increased 5.5% and hours worked increased 10.1%. Unit labor costs rose 6%. Unit labor costs rose 6%. I think the pandemic is introducing a lot of noise into these statistics. FWIW, productivity measurement has been an issue for a while with the advent of “free” internet services which receive payment in monetizable data.


The Fed reported that economic activity grew “modestly” in January and February. “Modest” is fed-speak for “meh” which means growth probably decelerated in the first quarter from the 4% reported in Q4. “Most Districts reported that employment levels rose over the reporting period, albeit slowly.” Nothing in this report suggests that the Fed is at the point of contemplating any sort of tightening. One interesting tidbit: The Philly Fed said anecdotally that the $15 minimum wage is already here, as they are seeing warehouse jobs being advertised for $23 an hour. Still leisure and hospitality jobs are the hardest-hit area, so I am not really buying the big jump in wages arguments.

81 Responses

  1. Worth a read:

    “David Shor on Why Trump Was Good for the GOP and How Dems Can Win in 2022
    By Eric Levitz”


  2. Pretty good:

    “Oh, the books that you’d ban!

    By Matt Bai
    March 4, 2021”

    And absurd:


  3. Now that the March 4 insurrection has failed to transpire, what excuse will “moderate” Joe Biden invent next to maintain the militarisation of the nation’s capital?


  4. Good primer on Critical Race Theory. Now that we have a Democratically controlled congress and executive branch, it is probably worth trying to understand the source of much of the insanity they will be foisting upon us.

    Unlike traditional civil rights discourse, which stresses incrementalism and step-by-step progress, critical race theory questions the very foundations of the liberal order, including equality theory, legal reasoning, Enlightenment rationalism, and neutral principles of constitutional law.

    That, BTW, is a description by someone who supports CRT. I wonder how many Biden voters understood this at the time they pulled the lever?


    • I think that you overstate or overestimate the acceptance of CRT among Democrats.

      I certainly hope that is the case.

      The immediate problems of the country – COVID and the economy – are what the focus of political energy will be about in 2021, for both parties. No matter who is talking about CRT or from what perspective – whether it is me saying it is BS or the NYT pushing the idea – is out on the fringe of relevancy, for now.

      When we get to the next level of problems the Parties will be disputing the size and structure of an infrastructure bill. I think real world nuts and bolts stuff will stifle CRT as politics and policy for the duration but the far left will push it and it will be a bogey for everyone else. In other words, a noisy distraction.

      We shall see.


      • I long for the days when CRT meant Cathode Ray Tube. Alas.


      • I think that you overstate or overestimate the acceptance of CRT among Democrats.

        I certainly hope that is the case.

        I think that is wishful thinking.


        • I don’t think it matters if it’s wishful thinking or not. It might not be. Probably isn’t in terms of elected Democrats in DC, most of whom probably don’t care that much one way or another.

          But it doesn’t matter. The bureaucracies will still get overtaken by it. Academia is already overtaken by it for the most part. The media is in the process of being overwhelmed by it. Hollywood already has a lot of it. It’s the Eugenics of the 21st century.


      • Mark:

        I think that you overstate or overestimate the acceptance of CRT among Democrats.

        On the contrary, I wouldn’t say that it is widely accepted among D’s at all, and indeed I would venture to guess that most Democrats have never even heard of it. But in their ignorance, they have been and will continue to be the means by which this invidious ideology will push its political objectives. The Dems are CRT’s useful idiots. Which is one reason why the Dems such a unique threat to the nation.

        The immediate problems of the country – COVID and the economy – are what the focus of political energy will be about in 2021, for both parties. No matter who is talking about CRT or from what perspective – whether it is me saying it is BS or the NYT pushing the idea – is out on the fringe of relevancy, for now.

        You may think that is the way it should be, but that doesn’t mean it is that way it is. And it obviously isn’t. The very first EO that Biden signed after taking the oath of office – the very first one – was the Executive Order On Advancing Racial Equity and Support for Underserved Communities Through the Federal Government. Note the specific use of the term “equity”…that is very specific and meaningful CRT language. It is indeed a “fringe” ideology, but it is wielding outsized power at Universities, in corporate HR departments, in the Dmeocratic party, and now in the very seat of government.

        I recall several years ago you dismissed the whole trans bathroom controversy as insignificant “little shit” not worthy of any attention. You were wrong about that, and now we not only have a mental health care crisis among teens (mostly teen girls) on the back of that very same trans movement that was complaining about bathrooms, but we have a President who is re-writing Title IX and will destroy women’s sports because of it. I think you should rethink your dismissiveness of CRT and its relationship to the Democratic party.


        • I recall several years ago you dismissed the whole trans bathroom controversy as insignificant “little shit” not worthy of any attention.

          Except as a wedge issue, I agreed with Mark then and agree now. The problem is–those wedge issues are typically only the beginning.

          And I will say it represented something about our dive into absurdity generally I don’t think I perceived. The issue from either side was, as a practical matter, a non-issue. If I’ve ever been in a bathroom with a transgender person, I wasn’t aware. If I ever found myself in a bathroom with a transgender person in the other stall, I wouldn’t care. Nor have I ever seen bullying cis-hetero patriarchs standing outside the bathroom policing who gets to go in and demanding proof of penis or vagina. I’ve rarely seen anyone who cares outside in the real world.

          It’s not an organic issue–it’s a manufactured issue. It’s also not a problem for transgenders to use the bathroom of their biological sex. I’ve used the women’s bathroom when the men’s bathroom was unavailable. The bathrooms in my house are gender neutral. It’s just a distraction. It seems to me that flashpoints like that are more and more just distraction bullshit so that much worse stuff can permeate the culture while we’re arguing about the .000001% of occasions where there’s some sort of bathroom-based gender kerfuffle (though we are sold an image from multiple angles that it is a universal problem of significant stature).

          Then we find out we’ve got a bunch of state DAs that intentionally release murderous thugs out into the general public because they like to kill the right sorts of people.

          Tangentially: The modern world seems, to me, to have completed obliterated any capacity we might once have had to keep things in perspective. From trans people in bathrooms to COVID to the Capitol riots we seem to have no sense of scale, and quake in terror of an ant while remaining blissfully unaware of some monstrous Godzilla stomping through the streets. So while I was never in on the battle of the bathrooms, I’m definitely in on “everything we’re hearing about this issue is absurd and fact- and context-free.


        • Agreed again, Kev.

          I do believe in distinguishing “Dicks” and “Janes without them” for school locker room purposes. Wouldn’t matter to me their birth gender if they were surgically other. This stuff will work out.

          I think Title IX and the various sports federations will prevail over the stupid permission to let the equivalent of faux East German women steroid enhanced athletes compete as females. We shall see.

          Imagine if Bruce Jenner had been able to get his surgical choice of gender appearance when he was in his athletic prime. Hmmm.

          Fringe issues, fun to talk about.


        • Mark:

          Fringe issues,

          It is amazing to me that anyone can look at what is going on in the culture, what is taking place at the NYT, what is playing out in corporate board rooms and HR departments, what is coming out of the oval office and the federal bureaucracy, and say such thing. It is genui9nely bewildering. You are truly playing the fiddler while Rome burns around you.


        • I think that depends on how close you’re looking. It is–believe it or not–possible for people to be largely unaware of what’s going on and feel it’s far outside their realm of existence.

          So I a hundred percent see it. Going back to manufactured or at least way-over-emphasized issues (COVID) I think there are big bright blinking neon lights to occupy most people. So awareness of CRT and what it means and what the likely end game is there is just . . . largely non-existent, I think, even for people better-informed than the masses generally. It takes a lot for issues like CRT to penetrate society as a whole, IMO. Things feel local (eh, it’s happening at my company, only place I see it though) and non-consequential (it’s stupid, but it’s just a couple of hours of training and then I can get back to work) . . . until it’s not.


        • It’s a fringe issue if you do not accept Andrew Breirbart’s maxim that politics is downstream from culture.


        • I don’t think there’s ever been a better example of politics being downstream from culture than Critical Race Theory and transgender rights. Critical Race Theory was penetrating the bureaucracy during Trump’s admin so no surprise that, with the Biden staff now acting as president and Dem control of congress it’s going to become dominant.

          While bad, in a lot of ways it is not a new bad (maybe a new bad for the military, but even then . . . eh, the endless war orientation ain’t that great, either, IMO). Lots of agencies being co-opted by CRT and transgenderism either went sour long ago or started sour (I feel like the FBI and CIA have actually met their mandates mostly accidentally over their existence). So this is just new pollution in those cesspools.

          While I don’t like CRT and transgender-fictions dominating the culture or the bureaucracy, I don’t find them nearly as concerning as the push towards prosecution of Domestic Terrorism (whether based on CRT or not, honestly) and the I find the fencing around the Capitol singularly offensive and symbolic (gating their neighborhoods while throwing open the borders, for just one part of that objection).

          Capitol riot probably wasn’t a false flag but it might as well have been. The new focus on a huge swath of the population as active or potential terrorists for the thoughtcrime of disagreeing with the ruling elites is–at present–fringey. But should be so fringey our benevolent leaders should already be sending away the National Guard and dismantling the Warsaw-fencing in embarrassment and contrition . . . and that’s not happening.

          Which goes back to my main problem with CRT and transgenderism or pick your poison. It’s less the advancement of the issues as HOW they are being advanced. The context in which they are being advanced is dissent is being censored out of the public space. And we have elected officials pressuring cable channels to deplatform Fox (Fox! Whose news division is slightly less left than MSNBC) and admittedly right-wing NewsMax and OANN. Facebook and Twitter and YouTube are censoring willy-nilly, and it seems every week what can and is censored expands.

          My sense is all this will backfire due to overreach but still . . . the political/corporate/academic censorship paradigm is far more concerning to me than requiring anti-white bigotry posing as “job training” in businesses and government offices. By itself. That if they tweet, “This training I got at work is racist,” and then get fired . . . that’s the bigger problem. IMO.


        • I love Fred Biletnikoff! I probably have told this story but I once saw him catch a ball without his hands, there was so much stickum on his jersey the ball just… stuck.


        • I do believe in distinguishing “Dicks” and “Janes without them” for school locker room purposes

          Well, me too, though I think the solution there is–again–gender-neutral facilities with individual privacy for everyone who uses them. So floor-to-ceiling stalls, be they for showering, changing, or using the restroom. A little more expensive, but is more flexible and I don’t think anyone really enjoys showering with other people, same-sex-or-different. Assuming we get back to shared environments, period.

          I think Title IX and the various sports federations will prevail over the stupid permission to let the equivalent of faux East German women steroid enhanced athletes compete as females. We shall see.

          In some form or fashion. There are lots of ways to address it, including breaking up sports teams by weight and BMI classes. Strength or skill-test if possible. It’s less an issue for a transwoman to compete if they are obligated to compete in similar size and weight classes.

          Lots of competitions are tiered by skill level, so win one competition then you must compete with others who won that competition. So competition is always “at level”. There are lots of ways to get around the issues of letting biological men attempt to ruin women’s sports. That’s just one.

          But I’m hoping your right and biological women get to maintain their own sports category that don’t allow men or transwomen to compete. But I’m not too hopeful.

          Fringe issues: yes and no. All sports stuff is fringe to me because I don’t actually care that much, and also think people should compete against their own personal best. However, if I was into it, I’d probably ticked if my daughter had to compete with a biological male who asserted they were a female just like my daughter. Wouldn’t be fringe to me then!

          Same with Critical Race Theory. Oddly enough, I work in an environment where it is less likely to be an issue as there is a lot of racial diversity and all the top management is non-white. And the majority of employees are non-white. So there isn’t going to be a whole lot of tolerance or, frankly, interest in super-white progressives’ concept of anti-racism/anti-whiteness. But if I were in an environment where that was a serious problem, it wouldn’t be a fringe issue to me.

          Given that a lot of this is growing in scale and scope, as to if they are fringe issues for the larger culture and society or not is unknown. Eugenics was a fringe issue until it wasn’t. Most cultural trends were fringe-y (for good or ill) until they weren’t. It’s far enough from being purely fringe to becoming mainstream in billion dollar companies and a variety of federal agencies (and becoming legislation in certain states) that, in a lot of ways, these issues aren’t so much on the fringe any more.

          That said: they can go back there any time. I’m not saying there will be, but if there were an unprecedented red-wave in the house and in the state governments in 2022, that might put an end to a lot of the nonsense. For the time being. If the left does fine politically in the next few election cycles, it is reasonable to expect fringe positions on a number of things will become further entrenched.


        • Mark:

          If you think the trans political movement is all harmless nonsense that will eventually somehow just “work out”, I suggest you read Abigail Shrier’s book Irreversible Damage.


        • *before it’s banned and the author canceled


        • KW:

          before it’s banned and the author canceled


          I tried to find the whole Joe Rogan interview on YouTube, but could only find 1 or 2 clips. The full interview seems to be hidden.


        • Presumably it’s on Spotify now? Or was that one of the ones that was pre-spotify, and “technical problems” have prevented it from being made available on the platform?


        • KW:

          It’s not an organic issue–it’s a manufactured issue.

          I think that is exactly right. But it wasn’t manufactured just because someone was bored one day and thought what the hell. It was manufactured for a purpose. It has an end goal. And that goal is being accomplished, much to the detriment of the culture, society, and the nation.


        • I agree. I just don’t see a positive outcome, culturally, as long as such issues can be manufactured and occupy so much of the cultural headspace on all sides while basically being illusionary. If it wasn’t transgenderism (itself a minor issue, let us be honest, as an organic thing) then it would be some other cultism that deconstructs gender or the nuclear family or organizational hierarchy or capitalism . . .

          I find that the method is so readily available and so clearly effective more disturbing, honestly, than the specific paint job of the bullet put in the chamber.


        • I don’t think these are fringe issues at all. I think they go to the core of what democrats are.


        • … Maybe? Some of this seems like a hysterical fever, a sort of mass fashion-choice for eugenics or something. Which I guess if they are all catching the contagion, it becomes “what they are”–at least in the political and pundit classes, for sure. But also the academic class. But I think run-of-the-mill Democrats aren’t particularly aware of CRT or the many other things the Democrats are doing that may be mainstream within elite progressive bubbles but fringe to regular folks for whom Trump was “Orange Man Bad” and Biden represents “Normal Joe”.

          One thing I am sure about is–with each passing week–the idea that Biden represented “a return to normalcy” point Trump is increasingly ironic. The next several years seem like they might be the least normal in my lifetime.


      • I think Critical Race Theory will be advanced not through legislation per se (or not much) but by appointment–various bureaucracies will advance it internally. Including the military and the DoD. Critical Race Theory will have more influence inside various alphabet agencies than it will in actual legislation and/or executive orders, in most likelihood. But could be a flashpoint in terms of the guidance that begins to come out of the Department of Education. That’s my guess.

        Critical Race Theory flashpoints will likely see more legislative action in the state legislatures and from the governor’s mansions of deep blue states–and in school systems, private and public, coming from local boards of education or state boards of education (or from private school administration), rather than federally. Thus likely much of this would have been happening to some extent even if Trump had won 2020.

        IMO. Could be wrong. But I’m seeing a likely march of Critical Race Theory through the bureaucracy and the corporations and academia, though little of that being from actual legislation or even EOs.


      • Even if most mainstream democrats don’t believe in CRT, they don’t have the balls to stand up to the ones that do.

        And the media / culture is 100% bought in on it.


        • Most elected Democrats are immune from having to have a position or having any need to publically advance or oppose. It can burn like a wildfire through academia, the federal bureaucracy, and corporate America without elected Democrats having to do a thing or even take a position.

          Republicans will likely have to take a position and at least pretend to try to do something, because their voters do care about it.


      • “I think that you overstate or overestimate the acceptance of CRT among Democrats.

        I certainly hope that is the case”

        I thought that too, but it’s looking more and more like I was wrong.

        It hasn’t died down since Trump left office. It’s accelerating.

        On the other hand, it may well be less prevalent in Texas than in other parts of the country at the moment.


        • The state you occupy certainly makes a difference. And ultimately state governments, present and elected in the future, could potentially provide a bulwark. Not holding out much hope for NY or CA however.


        • You’d never know it by Abbott’s abysmal Covid performance. Pretty sure he’s blown any Senate or POTUS shot.


        • jnc:

          it may well be less prevalent in Texas than in other parts of the country at the moment.

          If this is accurate, I would imagine it is plenty prevalent in Austin, especially as Austin is a university town.


        • My group of local male friends are mainly retired engineers and professionals. I am still close to a couple of people my age who have not retired – a real estate appraiser and a commercial construction owner. So while not self identifying as liberal or conservative we all think CRT is bullshit. I get reinforced on being an issue by issue conversant. I was exposed to both farther left and farther right thinking as a practicing lawyer just because the client pool knows no boundaries.

          Our Friday morning zoom meetings tend to be about the Mars shot, or Tesla’s moves in Austin, or Samsung’s expansion and probable fab in Austin, or figuring out the power failure in the cold. I don’t guess that we ever wasted an entire paragraph on CRT –
          Back when it came out in that 1619 NYT series David Heath, who was a NASA engineer in Houston during the first moon shot and for 30 years after, asked what we thought of it and we didn’t think much of it and rolled right on.

          We do talk about China policy and immigration, for example, but often from the perspective of patent theft for the former and not enough retention of tecchie talent trained here on the latter.

          We all get University newsletters, and attend various seminars. Usually they are of a STEM nature. My last one was on biologics and vaccines.

          So as I become more isolated in a bubble of my own making I get less interested in culture wars. Hell, my two friends of longest standing are a retired heart surgeon and a retired NASA chief science officer who negotiated START with his Russian counterpart.

          The most conservative people I have contact with are here and the most liberal ones are on other web sites, not in my group of friends. This would not have been true when I was practicing law. So I do enjoy forcing myself out of my retirement bubble of small biz and STEM interests from time to time.

          All by way of thanking you for the links, but especially thanking Brent for the Morning Report.


        • I don’t see an area where CRT would likely impact you. I expect a lot of culture wars-stuff–even where it intrudes into law or corporate discrimination or training or other places where it would be a pain in the ass to a lot of people–would impact you. Which (a) is a pretty sweet place to be and (b) anyone in that position should just enjoy it.

          Hopefully there is eventually enough pushback that things correct a bit, but if it really becomes the primary way the culture looks at race things are going to suck for a lot of people. But it may not! Fingers crossed, anyway.


        • Mark:

          So as I become more isolated in a bubble of my own making I get less interested in culture wars.

          I get that, but I don’t think what we are currently experiencing is a mere extension of the normal, traditional “culture war” between conservatives and liberals. That has generally taken place within the context of a widely shared value system, as evidenced by the fact that liberals would generally argue for cultural change, often convincingly, on the basis that our fundamental cultural values (eg equality, freedom of speech, etc) needed to be extended and more broadly applied (to blacks, women, gays, etc). The cultural war that is taking place now is not that. It is not an attempt to expand the reach of our fundamental values, but rather to destroy them. If you dig down, you will see that this attempt is quite explicit. As my citation from one of the founders of CRT the other day said, it is a challenge to “the very foundations of the liberal order, including equality theory, legal reasoning, Enlightenment rationalism, and neutral principles of constitutional law.” But you do need to get into the weeds of CRT, intersectionality, trans-activism etc to see this, and it is understandable that most people have neither the time nor the inclination to do so.

          It would be one thing to dismiss these movements if they were simply playing out in the sociology departments at Berkely and Brown. But they aren’t. They are exercising real power, and achieving real victories, both cultural and political. You note that you and your group didn’t think much of the NYT’s 1619 project, and rolled past it. But the 1619 project wasn’t some one-off column on the op-ed page. The 1619 project is emblematic of both what the NYT now sees as its core mission and its fundamental understanding of American society. It is even now being promoted as a “learning tool” in schools nationwide. And even though I suspect that most Democrats couldn’t tell us the first thing about CRT or intersectionality or the intellectual foundations of trans-activism, all of these movements are superficially appealing to, and are being advanced by, the Democratic party.

          Surely if the single most influential new outlet in the nation – one that I suspect you rely on for information – has adopted, and is framing its reporting within, a worldview that questions the foundations of the liberal order, that is a pretty important thing to know and consider, isn’t it? Your interests in biz and STEM issues will be irrelevant in a nation whose culture and politics rejects values like equality, Enlightenment rationalism, free speech and neutral principles of Constitutional law. And it seems to me, now that we have a government unified under a party that, perhaps unwittingly to some extent, is advancing that very same worldview, that is where we are rapidly headed.


        • And things like math being racist and “showing up on time” being white supremacy are getting a really toehold. Smithsonian took down the graphic about how individual Liberty and self-reliance and working for a living were white supremacist concepts but the ideas are still spreading.

          SPLC has targeted the Dr. Seuss book “Sneeches” because it advances the now-racist idea of equality.

          While looking for that link I coincidentally discovered the educational activist group “Teaching Tolerance” has changed its name to “Learning for Justice” to reflect its evolving standards or something, of which “tolerance” clearly is no longer part of.

          I tend to agree it’s a big deal. Although if I were in a position I felt would allow me to ignore it I well might.


    • Most of them probably didn’t and still don’t. There’s a non-trivial amount of the public for whom understanding comes only when they crack a previous innocuous joke at a party and then get arrested and held indefinitely for thoughtcrime. After which, for obvious reasons, their new understanding does precious little good. 🙂


  5. Meanwhile, Canada is embracing modular nuclear reactors, which is a good thing in my view. Their CANDU reactors can also run on Thorium, and I have not understood why they haven’t done so, unless plutonium is cheaper than radioactive isotopes of thorium.


    • It may be cheaper to use plutonium in terms of reactor expense or usage–I don’t know, I’m just guessing, because I didn’t know the differences between Thorium and Plutonium in nuclear reactors until I Googled this:

      But it doesn’t seem like the downsides of Thorium are generally more significant than the benefits, which include that it doesn’t produce waste that can be turned into nuclear bombs.

      What are the downsides of Thorium?
      We don’t have as much experience with Th. The nuclear industry is quite conservative, and the biggest problem with Thorium is that we are lacking in operational experience with it. When money is at stake, it’s difficult to get people to change from the norm.

      Thorium fuel is a bit harder to prepare. Thorium dioxide melts at 550 degrees higher temperatures than traditional Uranium dioxide, so very high temperatures are required to produce high-quality solid fuel. Additionally, Th is quite inert, making it difficult to chemically process. This is irrelevant for fluid-fueled reactors discussed below.

      Irradiated Thorium is more dangerously radioactive in the short term. The Th-U cycle invariably produces some U-232, which decays to Tl-208, which has a 2.6 MeV gamma ray decay mode. Bi-212 also causes problems. These gamma rays are very hard to shield, requiring more expensive spent fuel handling and/or reprocessing.

      Thorium doesn’t work as well as U-Pu in a fast reactor. While U-233 an excellent fuel in the thermal spectrum, it is between U-235 and Pu-239 in the fast spectrum. So for reactors that require excellent neutron economy (such as breed-and-burn concepts), Thorium is not ideal.

      Liked by 1 person

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