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.

UPDATE 1/20/22: The CDC now admits the exact opposite of its absurd claim.


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."




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%.


Crypto thoughts

I can't tell you anything about the technology, but here's an investor's simplistic view.

- Everybody should own a little crypto, maybe 1% - 3% of your financial assets.

- Bitcoin and Ethereum are the only two legit cryptos at the moment. That could easily change in the future, but for now I'm not messing with the others.

- PayPal is the easiest way for newbies to get started buying crypto, followed by Coinbase. For exposure in IRAs and other brokerage accounts, GBTC and ETHE will work.

- When an asset is this volatile, you should be thinking dollar-cost averaging. I'm making small weekly automatic purchases in Coinbase.

- I really like the idea behind the Simplify US Equity Plus GBTC ETF (ticker: SPBC). It's the S&P plus 10% bitcoin ETF, and it rebalances quarterly, meaning you're taking advantage of the volatility and buying low, selling high.



Make new friends
But keep the old
One is Ether
And the other is Bitcoin


Democrats plan to repeal state and local tax (SALT) deduction limits

Democrats are talking about repealing the SALT limits. What nobody's talking about is that SALT is largely irrelevant to the middle class. A SALT repeal only helps the rich. And it's a lot of money. 

The middle class being largely untouched by SALT limits is due to two main factors. First, the large increase in the standard deduction. You need a lot of deductions to get over the $24,000 standard deduction. Yes, you can get there pretty easily with a huge mortgage and high state taxes. But then there's the AMT. The Alternative Minimum Tax already didn't allow SALT deductions, and upper-middle-income people in high-tax states were the people most affected by AMT. If you were previously paying AMT, the Trump SALT limits are irrelevant to you. Tax reform effectively eliminated AMT for almost everyone.

Here are some hypothetical examples of how SALT limits and tax reform affected people in a high-tax, high-property-value, blue state city.

Will the Democrats really repeal SALT limits for the rich, just to let the middle class fall back into AMT?


San Diego County's idiot health department says it will vaccinate children before middle-aged adults

Without government, who would hire the incompetent people?

San Diego County Health web site:

It's anyone's guess where the incompetence lies: the people establishing the vaccination phases or the people posting them on the web site.

Happy Super Tuesday!