Connect with us

Lumber, Labor, & Gas Markets Tell SAD Stories

Lumber, Labor, & Gas Markets Tell SAD Stories

Authored by Art Carden via The American Institute for Economic Research,

The hits just keep coming. First, lumber prices exploded. Second, there was a terrible jobs report. Third, there…

Published

on

Lumber, Labor, & Gas Markets Tell SAD Stories

Authored by Art Carden via The American Institute for Economic Research,

The hits just keep coming. First, lumber prices exploded. Second, there was a terrible jobs report. Third, there was a gas shortage. These are all SAD stories–Supply And Demand. They are also, of course, stories about adaptation, adjustment, resilience, and unintended consequences.

First, consider the lumber market. As my AIER colleague Peter C. Earle points out, lumber prices at the beginning of May 2021 were about six-and-a-half times what they were at the beginning of April 2020. On the supply side of the lumber market, lockdowns have limited production. In August, the Financial Post reported that “A plague of tiny mountain pine beetles…has already destroyed 15 years of log supplies in British Columbia, enough trees to build 9 million single-family homes.” Good, old-fashioned protectionism is at play, as well, but the Wall Street Journal reports that tariffs and trade restrictions on Canadian lumber don’t play that large a role.

On the demand side, the US is in the middle of another housing and construction boom. Zillow is calling it “The Great Reshuffling” and reports that about 11% of Americans “have already moved during the pandemic.” My family is among them: we moved this past fall in search of more space, home office space in particular. Not long after moving, we added stairs to our back deck in no small part because we expect to be spending more of our time with friends outdoors. Moving, new building, and remodeling is being driven at least in part by low interest rates–we knocked our rate down from 3.75% to 2.49% when we moved–and, I suspect, aggressive Fed purchases of mortgage-backed securities during the pandemic. The Fed has added about $800 billion in mortgage-backed securities to their holdings since March 11, 2020:

It will be a while before people have done the empirical work that will untangle and measure the contributions of these different causes, but at a fundamental level, it’s a Supply And Demand story. The massive increase in lumber prices, of course, has some people worried, but as Thomas Sowell constantly reminds people, “There are no solutions. Only trade-offs.” People adjust to the new reality by making incremental substitutions that might not be terribly revolutionary or that might not be especially easy to see but that still reflect exactly how people respond to the signals they are getting from rising prices. High lumber prices say “Are you sure you need to do that project right now?” Sometimes, the answer is yes and other times the answer is no. We considered buying lumber and building a doghouse, but at current prices, we’re going to delay that project for a while.

Second, there is the labor market. The rhetorical battle is between people outraged by the laziness and moral failings of people who “don’t want to work anymore” and people outraged by the rapacity and callousness of people who expect others to go back to work for low wages. Maybe it is a sudden explosion of laziness. Maybe it is a sudden development of class consciousness that finally has us on the brink of Solidarity Forever.

Or maybe it’s a change in people’s incentives–specifically, the extension of high unemployment benefits. As David R. Henderson points out, “Paying people an extra $400 a week as long as they’re unemployed is a bad idea.” In a post for EconLog, Henderson notes that he got this wrong–”it’s ‘only’ $300,” but with these extra benefits, it shouldn’t be surprising that people aren’t jumping at employment opportunities. In his article on unemployment in the Concise Encyclopedia of Economics, Lawrence Summers explains:

“…government assistance programs contribute to long-term unemployment…by providing an incentive, and the means, not to work. Each unemployed person has a ‘reservation wage’–the minimum wage he or she insists on getting before accepting a job. Unemployment insurance and other social assistance programs increase that reservation wage, causing an unemployed person to remain unemployed longer.” 

Why? A sign at a local fast food place advertises starting wages of $11 per hour. That doesn’t sound like much, but two people each working 35 hours per week at that rate would have a household income of $40,040. That’s about 80% of the Alabama median household income of about $50,000 and well above the federal poverty guideline of $26,500 for a family of 4.

According to this unofficial unemployment benefits calculator, someone in Alabama who earned $20,020 by working in fast food would, upon becoming unemployed, be eligible for $193 per week in unemployment benefits for 20 weeks. If you add to that the additional $300 per week in the new stimulus bill, you get $493 per week. Is it any surprise that fewer people want to work 40 hours a week at $11 an hour when they could take home about $50 a week more than that by remaining unemployed?

Scott Sumner offers an interesting hypothesis: “Because millions of unemployed workers in low pay service sector jobs earn more on unemployment than they did on their previous jobs, and because most of those jobs are unpleasant, employment will likely remain quite depressed all summer, before bouncing back in the fall.” Alabama is ending the payments on June 19, but that’s still more than a month from this writing of reservation wages propped up by high unemployment benefits.

Third, a cyberattack shut down an oil pipeline. This led to panic buying at gas stations, a tweet from the US Consumer Product Safety Commission saying, “Do not fill plastic bags with gasoline,” the usual social media hand-wringing about people panic-buying gasoline and storing it stupidly, and, of course, the usual sabre-rattling about “price gouging,” which I’ve previously called “knowledge embargoes.”

Once again, supply and demand does the explanatory work–and if we had left the mechanism alone and let prices rise after the pipeline shutdown, we wouldn’t have had the mess we were in (or, it must be admitted, the entertaining memes). People who don’t pay attention to current events would get the message that they need to conserve gas pretty quickly, and we wouldn’t be dealing with shortages. It’s a minor inconvenience, but when your gas light comes on (as mine did the other day), it’s cold comfort to pull into a gas station and discover that there is no gas at $2.89 a gallon rather than some gas at $5 a gallon. A station across the street had gas, fortunately–but they had run out of premium (which I don’t need for my Toyota Corolla) and customers were limited to $20 purchases. As economists emphasize whenever price gouging rules kick in, ignoring what supply and demand analysis has to teach us usually means making the problem worse rather than better.

An apparently apocryphal curse says “May you live in interesting times.” Alas, we do. We needn’t be confused, however. I tell my students that I love economics because it gives me a simple set of tools that makes a lot of sense out of seemingly-disparate situations. Are we wondering what is going on with lumber? It’s a SAD story. Labor? Also a SAD story. Gas? Another SAD story made genuinely sad by politicians ignoring the story’s lesson. While I wish I could say “They’ll know better next time,” it saddens me to say “They won’t.”

Tyler Durden Tue, 05/18/2021 - 19:25

Read More

Continue Reading

Government

Mike Pompeo Doesn’t Rule Out Serving In 2nd Trump Administration

Mike Pompeo Doesn’t Rule Out Serving In 2nd Trump Administration

Authored by Jack Phillips via The Epoch Times (emphasis ours),

Former Secretary…

Published

on

Mike Pompeo Doesn't Rule Out Serving In 2nd Trump Administration

Authored by Jack Phillips via The Epoch Times (emphasis ours),

Former Secretary of State Mike Pompeo said in a new interview that he’s not ruling out accepting a White House position if former President Donald Trump is reelected in November.

“If I get a chance to serve and think that I can make a difference ... I’m almost certainly going to say yes to that opportunity to try and deliver on behalf of the American people,” he told Fox News, when asked during a interview if he would work for President Trump again.

I’m confident President Trump will be looking for people who will faithfully execute what it is he asked them to do,” Mr. Pompeo said during the interview, which aired on March 8. “I think as a president, you should always want that from everyone.”

Then-President Donald Trump (C), then- Secretary of State Mike Pompeo (L), and then-Vice President Mike Pence, take a question during the daily briefing on the novel coronavirus at the White House in Washington on April 8, 2020. (Mandel Ngan/AFP via Getty Images)

He said that as a former secretary of state, “I certainly wanted my team to do what I was asking them to do and was enormously frustrated when I found that I couldn’t get them to do that.”

Mr. Pompeo, a former U.S. representative from Kansas, served as Central Intelligence Agency (CIA) director in the Trump administration from 2017 to 2018 before he was secretary of state from 2018 to 2021. After he left office, there was speculation that he could mount a Republican presidential bid in 2024, but announced that he wouldn’t be running.

President Trump hasn’t publicly commented about Mr. Pompeo’s remarks.

In 2023, amid speculation that he would make a run for the White House, Mr. Pompeo took a swipe at his former boss, telling Fox News at the time that “the Trump administration spent $6 trillion more than it took in, adding to the deficit.”

“That’s never the right direction for the country,” he said.

In a public appearance last year, Mr. Pompeo also appeared to take a shot at the 45th president by criticizing “celebrity leaders” when urging GOP voters to choose ahead of the 2024 election.

2024 Race

Mr. Pompeo’s interview comes as the former president was named the “presumptive nominee” by the Republican National Committee (RNC) last week after his last major Republican challenger, former South Carolina Gov. Nikki Haley, dropped out of the 2024 race after failing to secure enough delegates. President Trump won 14 out of 15 states on Super Tuesday, with only Vermont—which notably has an open primary—going for Ms. Haley, who served as President Trump’s U.S. ambassador to the United Nations.

On March 8, the RNC held a meeting in Houston during which committee members voted in favor of President Trump’s nomination.

“Congratulations to President Donald J. Trump on his huge primary victory!” the organization said in a statement last week. “I’d also like to congratulate Nikki Haley for running a hard-fought campaign and becoming the first woman to win a Republican presidential contest.”

Earlier this year, the former president criticized the idea of being named the presumptive nominee after reports suggested that the RNC would do so before the Super Tuesday contests and while Ms. Haley was still in the race.

Also on March 8, the RNC voted to name Trump-endorsed officials to head the organization. Michael Whatley, a North Carolina Republican, was elected the party’s new national chairman in a vote in Houston, and Lara Trump, the former president’s daughter-in-law, was voted in as co-chair.

“The RNC is going to be the vanguard of a movement that will work tirelessly every single day to elect our nominee, Donald J. Trump, as the 47th President of the United States,” Mr. Whatley told RNC members in a speech after being elected, replacing former chair Ronna McDaniel. Ms. Trump is expected to focus largely on fundraising and media appearances.

President Trump hasn’t signaled whom he would appoint to various federal agencies if he’s reelected in November. He also hasn’t said who his pick for a running mate would be, but has offered several suggestions in recent interviews.

In various interviews, the former president has mentioned Sen. Tim Scott (R-S.C.), Texas Gov. Greg Abbott, Rep. Elise Stefanik (R-N.Y.), Vivek Ramaswamy, Florida Gov. Ron DeSantis, and South Dakota Gov. Kristi Noem, among others.

Tyler Durden Wed, 03/13/2024 - 17:00

Read More

Continue Reading

International

Riley Gaines Explains How Women’s Sports Are Rigged To Promote The Trans Agenda

Riley Gaines Explains How Women’s Sports Are Rigged To Promote The Trans Agenda

Is there a light forming when it comes to the long, dark and…

Published

on

Riley Gaines Explains How Women's Sports Are Rigged To Promote The Trans Agenda

Is there a light forming when it comes to the long, dark and bewildering tunnel of social justice cultism?  Global events have been so frenetic that many people might not remember, but only a couple years ago Big Tech companies and numerous governments were openly aligned in favor of mass censorship.  Not just to prevent the public from investigating the facts surrounding the pandemic farce, but to silence anyone questioning the validity of woke concepts like trans ideology. 

From 2020-2022 was the closest the west has come in a long time to a complete erasure of freedom of speech.  Even today there are still countries and Europe and places like Canada or Australia that are charging forward with draconian speech laws.  The phrase "radical speech" is starting to circulate within pro-censorship circles in reference to any platform where people are allowed to talk critically.  What is radical speech?  Basically, it's any discussion that runs contrary to the beliefs of the political left.

Open hatred of moderate or conservative ideals is perfectly acceptable, but don't ever shine a negative light on woke activism, or you might be a terrorist.

Riley Gaines has experienced this double standard first hand.  She was even assaulted and taken hostage at an event in 2023 at San Francisco State University when leftists protester tried to trap her in a room and demanded she "pay them to let her go."  Campus police allegedly witnessed the incident but charges were never filed and surveillance footage from the college was never released.  

It's probably the last thing a champion female swimmer ever expects, but her head-on collision with the trans movement and the institutional conspiracy to push it on the public forced her to become a counter-culture voice of reason rather than just an athlete.

For years the independent media argued that no matter how much we expose the insanity of men posing as women to compete and dominate women's sports, nothing will really change until the real female athletes speak up and fight back.  Riley Gaines and those like her represent that necessary rebellion and a desperately needed return to common sense and reason.

In a recent interview on the Joe Rogan Podcast, Gaines related some interesting information on the inner workings of the NCAA and the subversive schemes surrounding trans athletes.  Not only were women participants essentially strong-armed by colleges and officials into quietly going along with the program, there was also a concerted propaganda effort.  Competition ceremonies were rigged as vehicles for promoting trans athletes over everyone else. 

The bottom line?  The competitions didn't matter.  The real women and their achievements didn't matter.  The only thing that mattered to officials were the photo ops; dudes pretending to be chicks posing with awards for the gushing corporate media.  The agenda took precedence.

Lia Thomas, formerly known as William Thomas, was more than an activist invading female sports, he was also apparently a science project fostered and protected by the athletic establishment.  It's important to understand that the political left does not care about female athletes.  They do not care about women's sports.  They don't care about the integrity of the environments they co-opt.  Their only goal is to identify viable platforms with social impact and take control of them.  Women's sports are seen as a vehicle for public indoctrination, nothing more.

The reasons why they covet women's sports are varied, but a primary motive is the desire to assert the fallacy that men and women are "the same" psychologically as well as physically.  They want the deconstruction of biological sex and identity as nothing more than "social constructs" subject to personal preference.  If they can destroy what it means to be a man or a woman, they can destroy the very foundations of relationships, families and even procreation.  

For now it seems as though the trans agenda is hitting a wall with much of the public aware of it and less afraid to criticize it.  Social media companies might be able to silence some people, but they can't silence everyone.  However, there is still a significant threat as the movement continues to target children through the public education system and women's sports are not out of the woods yet.   

The ultimate solution is for women athletes around the world to organize and widely refuse to participate in any competitions in which biological men are allowed.  The only way to save women's sports is for women to be willing to end them, at least until institutions that put doctrine ahead of logic are made irrelevant.          

Tyler Durden Wed, 03/13/2024 - 17:20

Read More

Continue Reading

Uncategorized

Part 1: Current State of the Housing Market; Overview for mid-March 2024

Today, in the Calculated Risk Real Estate Newsletter: Part 1: Current State of the Housing Market; Overview for mid-March 2024
A brief excerpt: This 2-part overview for mid-March provides a snapshot of the current housing market.

I always like to star…

Published

on

Today, in the Calculated Risk Real Estate Newsletter: Part 1: Current State of the Housing Market; Overview for mid-March 2024

A brief excerpt:
This 2-part overview for mid-March provides a snapshot of the current housing market.

I always like to start with inventory, since inventory usually tells the tale!
...
Here is a graph of new listing from Realtor.com’s February 2024 Monthly Housing Market Trends Report showing new listings were up 11.3% year-over-year in February. This is still well below pre-pandemic levels. From Realtor.com:

However, providing a boost to overall inventory, sellers turned out in higher numbers this February as newly listed homes were 11.3% above last year’s levels. This marked the fourth month of increasing listing activity after a 17-month streak of decline.
Note the seasonality for new listings. December and January are seasonally the weakest months of the year for new listings, followed by February and November. New listings will be up year-over-year in 2024, but we will have to wait for the March and April data to see how close new listings are to normal levels.

There are always people that need to sell due to the so-called 3 D’s: Death, Divorce, and Disease. Also, in certain times, some homeowners will need to sell due to unemployment or excessive debt (neither is much of an issue right now).

And there are homeowners who want to sell for a number of reasons: upsizing (more babies), downsizing, moving for a new job, or moving to a nicer home or location (move-up buyers). It is some of the “want to sell” group that has been locked in with the golden handcuffs over the last couple of years, since it is financially difficult to move when your current mortgage rate is around 3%, and your new mortgage rate will be in the 6 1/2% to 7% range.

But time is a factor for this “want to sell” group, and eventually some of them will take the plunge. That is probably why we are seeing more new listings now.
There is much more in the article.

Read More

Continue Reading

Trending