AOC has Covid

Anybody else think horse paste might be worth a try?

CDC reached completely unsupported conclusion to downplay natural immunity, support mandates

The CDC announced a study showing that "vaccination offers higher protection than previous COVID-19 infection." 

The study shows no such thing. In fact, the data considered in the study aren't sufficient to even attempt to make such a conclusion. 

The media gleefully and unquestioningly repeated the CDC's nonsense.

In case I get banned from Twitter for questioning "The Science," here are the tweets:

Bottom line: you can't possibly infer the efficacy of either the vaccine or natural immunity from the ratios of positive to negative tests in two narrowly selected groups that bear no resemblance to each other or the general population. Any high school statistics teacher could tell you that.

For example, the vaccinated people skew much older than the recovered in this study. If, as seems obvious, older people tend to go to the hospital more with non-Covid respiratory illnesses than young people do, that would explain this data. Yet the CDC insists this says something about Covid natural immunity instead.

Or if some people went to the hospital due to side effects from the vaccine. "See," the CDC claims, "that improves the ratio and proves vaccines are better than natural immunity!"

Others have pointed out that the 90-179 day post-vaccination window seems cherry-picked to maximize favorable outcomes for the vaccine, as the Israeli and other studies have shown vaccine efficacy drops off significantly after that period. And others have pointed out the tiny sample size of recovered people who were hospitalized and tested positive (i.e. it's both extremely rare for natural immunity to fail, and it's bad science to try to draw conclusions!). And Thomas Massie points out that they are counting “long Covid” as re-infections which might very well explain most of the cases in the study!

This is obviously a politically ordered result to support Biden's vaccine mandate push. The fact that they couldn't come up with a supportable conclusion is telling.

More stuff that broke around 1971

We've noted before that a bunch of economic trends turned bad when Nixon closed the gold window and we launched into the current pure fiat experiment: commodity volatility, labor share of productivity gains, wealth inequality, etc.

Here's another one courtesy of Alex Tabarrok at Marginal Revolution: 

In Launching the Innovation Renaissance I said that “If total factor productivity had continued to grow at its 1957 to 1973 rate then we today would be living in the world of 2076 rather than in the world of 2014.” Sadly, the future is continuing to recede. Consider the graph below. If growth had continued at the rate expected by the CBO in 2005 then we today would be living in the world of 2037 rather than in the world of 2021. (n.b. I am eyeballing.)

Interesting that the break in productivity growth happened at the time we went off the gold standard.

Is there a causal relationship either way? Did we stop becoming productive because it was easy to get rich buying levered assets with a depreciating currency? Or did we devalue the currency because we ran out of productivity growth?

UPDATE: Edward Snowden and Jack Dorsey are noticing too. And there's a web site dedicated to it: wtfhappenedin1971.com

Rand Paul educates Javier Baccaria on the science

"Senator, I'd have to get back to you on that one. I'm not familiar with that study."

 

WTF? The Padres want dick pics?

Milestones

I talk a lot about inflation.

But today was the first time in my life I actually used a dollar bill as toilet paper.

Stocks for the long-run inflation!

 Jared Dillian at Mauldin Economics:

I get this a lot. People say, “We are experiencing inflation, so stocks should go down! Because that’s what happened in the 1970s.”

This isn’t the 1970s. This is a different sort of inflation.

What we are experiencing now is a monetary inflation, compounded by big government interventions in the labor market. This is not stagflation.

In fact, the period of stagflation that we experienced in the 1970s was an anomaly, as far as great inflations go, and isn’t likely to be repeated.

If you’ve been shorting stocks in advance of CPI numbers, and you’re not broke already, you will be soon. Inflation benefits stocks. Stocks are inflation pass-thru vehicles, though most people realize that by now.

In fact, stocks have been a better inflation hedge (so far) than gold, which has seen a lot of outflows to cryptocurrencies. This is why I’ve been increasing my allocation to equities and real estate and decreasing it elsewhere.

This is something I've felt intuitively, but haven't really had a good answer when people have said stocks historically aren't good inflation hedges. It's all about the 70's being the only inflation in recent memory!

 
As for the other period I've been comparing the current fiscal situation to, the years after WWII, it's true that during the worst inflation year, 1946, stocks were down. But over the full inflation cycle, from 1946 through 1951, stocks did quite well. The S&P returned a nominal 13% annually including dividends, well outpacing inflation.

I like Dillian's description of stocks as "inflation pass-thru vehicles." This is what I was getting at back in 2008:

Do you buy the Treasury bond that will be destroyed with inflation, or do you buy the chip stock whose products, assets, and dividends will rise with inflation?

That semiconductor stock is up more than 300% since then. Its dividend has increased 148%, and your yield on cost from 2008 would now be 6.5%. Meanwhile bonds as represented by the Vanguard Total Bond Market ETF ($BND), are up less than 13% in price and yield less than 2%.