• Chart of the Day: GDP Growth in Q3

    No surprises today: GDP in the third quarter grew significantly:

    The chart above is the normal look at GDP growth, but since the last two quarters featured such unusual behavior it might be better to take a different kind of look:

    Give or take a bit, we’re still about $1 trillion below where we’d otherwise be, so the effects of the coronavirus are very definitely still with us.

    In other news from the BEA release, personal income was down by half a trillion dollars and personal savings were down by $2 trillion. The drop in income was due to the end of pandemic relief programs, and the drop in savings was due to families drawing down their savings to make up for lost income. Roughly speaking, families used part of the money from the CARES Act to bolster savings and then started spending it down when that assistance ended.

    The Q3 increase in GDP was driven entirely by the private sector, led by big increases in purchases of durable goods and commercial equipment. The federal government did nothing to help, decreasing its spending thanks to the end of the CARES Act.

  • A Quick Note About GDP

    I’ve been out all day with a mystery illness, but now I’m back. I think. I won’t know for sure until morning.

    Just in case I’m not, a quick note: We’ll be getting the 3rd quarter GDP estimate on Thursday morning. Since GDP dropped something like 30 points last quarter, it’s inevitable that it will rebound by 20 points or more this quarter. Donald Trump is sure to call this the “biggest GDP gain in history” or some such, but obviously it’s no more meaningful than last quarter’s decline. Both are artificial results of government shutdowns and tell us nothing about the underlying economy. At this point, GDP growth isn’t much more than a measure of how much of the economy has been allowed to reopen.

  • Lunchtime Photo

    This is a foggy morning picture of an elevated freeway down at the Port of Long Beach. But which one? It might be Interstate 710 or it might be California 47. In fact, thinking about it a bit more, it’s probably the 47, and the viaduct on the far right is for rail traffic. But I’d have to go back there to be sure.

    October 4, 2020 — Long Beach, California
  • Donald Trump Doesn’t Have a Gender Problem. He Has Two Gender Problems.

    It is conventional wisdom that Donald Trump’s support has cratered among women, especially suburban women. But is that really true?

    This goes through mid-October. Trump’s basic approval rating has been remarkably steady among both men and women.

    However, voting intentions have changed a lot—though not in the way you might think. In 2016, Trump lost women by 13 points. According to a recent Pew poll, he’s likely to lose them by 16 points this year. That’s a 3-point drop and it means that Trump is suffering one of the worst blowouts among women of any presidential candidate ever.

    Among men, Trump won by 11 points in 2016. This year he’s likely to lose them by 4 points. That’s an astonishing 15-point drop. It’s among men that he’s truly cratered. And this has happened across nearly all demographic and racial groups.

    Other polls show things a little differently. A Washington Post poll conducted last week suggests that Trump has lost 11 points among men and 10 points among women. Either way, though, what this shows is that Trump isn’t doing badly just because women have turned against him. Everyone has turned against him, and men have turned as much or more than women.

    It’s unclear why this is, since news accounts almost unanimously focus on (a) unhappy women and (b) rural men who remain Trump supporters. What they’re missing is the great mass of men who voted for Trump in 2016 but have become disillusioned with him for talking big but doing nothing to make their lives better. That’s the story of 2020.

  • Lunchtime Photo

    This is a brilliant red camellia in my neighbor’s yard—back when my neighbors had such things. These days the whole yard is overrun by weeds. No one lives there, but for some reason they haven’t sold it either. It’s all very strange.

    The white background is just the sky, which was so bright it blew out the sensor.

    April 15, 2019 — Irvine, California
  • Loser CEOs Can Never Truly Lose, Pandemic Edition

    The masters of the universe can never be wrong, they can only be wronged.Kostas Lymperopoulos/CSM via ZUMA

    If you win, they pay you big bucks. If you lose, they pay you big bucks:

    The coronavirus recession tipped dozens of troubled companies into bankruptcy, setting off a rush of store closures, furloughs and layoffs. But several major brands, including Hertz Global, J.C. Penney and Neiman Marcus, doled out millions in executive bonuses just before filing for Chapter 11 protection, according to a Washington Post analysis of regulatory filings and court documents.

    Since the pandemic took hold in March, at least 18 large companies have rewarded executives with six- and seven-figure payouts before asking bankruptcy courts to shield them from landlords, suppliers and other creditors while they restructured, the Post review found. They collectively meted out more than $135 million, documents show, while listing $79 billion in debts.

    The putative reason for this is that all these loser executives will bail out if they don’t get their bonuses. And maybe they would. But it’s telling that apparently the boards of these companies can’t even fathom promoting one of their many vice presidents to take over the job, perhaps with some kind of incentive for negotiating favorable Chapter 11 terms. Nope. It’s the loser CEO or nothing.

    I suppose part of this is laziness, but part of it is probably an unwillingness to admit that the CEO they hired has done a bad job. He’s such a great guy! Customers love him! Events just didn’t go our way.

    Warning: Don’t try this trick if you are not part of the C-suite. It won’t work.

  • With a Week to Go, It’s Looking Like a Landslide

    With seven days to go, the Economist poll aggegrate shows Joe Biden as far ahead of Donald Trump as ever:

    Here are their state-level predictions:

    I really, really want to see a landslide election. I want Republicans to lose the presidency, lose the Senate, lose the House, and lose a bunch of state legislatures. I want them to be crushed for the sin of supporting Donald Trump for the past four years. I am so looking forward to this.

    POSTSCRIPT: Are you still paranoid because of 2016? I don’t blame you. So am I. But 2016 was a massive outlier. And keep in mind that, contrary to conventional wisdom, the 2016 polls weren’t actually very far off. There’s no reason to think this year’s polls will be either.