Hispanic-Americans are twice as likely as African-Americans and 3 times as likely as White Americans to be uninsured.
The 40 states that adopted the expansion of Medicaid to cover medical costs for low-income families have uninsured rates about one-half the level of the other 10 who rejected this federal program.
The decline in the medically uninsured has been relatively consistent across racial/ethnic groups from 1984 to 2009 to 2019. Whites 14% to 17% down to 11%. Blacks 20% to 19% to 11%! Hispanics 30% to 33% to 23%.
14 states have much higher uninsured rates than the nation at large. TX and OK at 15%. GA, FL, MS and WY at 12%. NC, AL and AZ at 11%. NC, TN, SC, AL and NM at 10%. Rural, southern and mountain states, by and large.
There were 28M uninsured people in the US in 2021. Just six of the high uninsured percentage states account for 42% of all uninsured people. TX (5.2), GA (1.3), FL (2.6), AZ (.8), NC (1.1), and TN (.7). The other 8 high uninsured percentage states include 2.6M uninsured citizens, for a cumulative total of 14.3M; more than one-half of the uninsured in 14 states, about one-third of the country. Five high population states with 5-7% uninsured rates account for another one-fourth of the total: 6.9M. CA, NY, IL, OH and PA.
Summary
Between 2013 and 2015, the US reduced its uninsured population by one-third and has slowly reduced its uninsured population in the last 7 years.
Everyone complains about “the weather” and the “weather forecast”, but forecasting accuracy has improved markedly since 1980, which was already at least twice as accurate of the best (pre-computer) forecasts of the 1940’s and 1950’s.
Unfortunately, there is no really simple intuitive way to gauge the improving accuracy, but scientists have provided a variety of measures to indicate the relative improvement.
The correlation between forecast and actual weather has improved consistently between 1981 and 2019 for 3-5-7-10 day forecasts. A 5-day forecast today is as accurate as a 1 day forecast in 1980. 9-10 day forecasts are useful today.
A seven-day forecast can accurately predict the weather about 80 percent of the time and a five-day forecast can accurately predict the weather approximately 90 percent of the time. However, a 10-day—or longer—forecast is only right about half the time.
a five-day forecast is accurate about 80% (link resides outside ibm) of the time. A one-day temperature forecast is typically accurate within 2.5 degrees.
The forecast error rate has dropped by anywhere from about 70% (for a 24-hour forecast) to about 90% (for a 72-hour forecast) since 1970. To put that in perspective, the average error for a 72-hour forecast was about 450 miles off in 1970. Today, it’s about 50 miles off.
I’m using data from the FBI Unified Crime Reports. Total country violent crime increased by 25% from 600 events per 100,000 people in 1980 to 758 events in 1991 (thick black line). Violent crimes dropped dramatically to 500 events (33%) by 2001. There was a minor decline to 479 in the next 5 years and then another major decline to a minimum of 362 events, a 52% decline from the peak. Violent crime has increased to 399 in 2020, a 10% increase from the 4-decade minimum, but still 47% below the 1991 peak rate. In summary, the total country violent crime rate increased by 25% in the 1980’s, dropped by more than half in the next 25 years and has bumped back up to a level about one-half of the peak and one-third lower than the 1980 start. This is a quite positive result.
Indiana’s (orange line) general pattern mirrors the national figures. However, Indiana started at 378 violent events per 100K people in 1980, more than one-third lower than the national average. This is a quite significantly lower crime rate. Indiana’s violent crime rate increased by a larger 42% to a peak of 537 events in 1996. This was half again faster than the 27% increase for the country as a whole. Indiana was becoming more like the rest of the nation. Indiana’s violent crime rate dropped very quickly to just 349 events by 2000 (-35%), returning to 69% of the national level from 84% of the national level in 1996, a modest amount above the 63% ratio in 1980. Indiana violent crime inched down by 10% to 314 by 2010. The national crime rate was falling twice as fast, so Indiana was now at 78% of the average. In the “teens” decade, Indiana violent crime increased by 10%, returning to where it had been in 2000. National violent crime was flat during the “teens”, ending at 400 events. Indiana violent crime rate was essentially the same as the national rate during the “teens”, no longer one-third lower. It had returned to its starting point of roughly 400 events per year.
The city of Indianapolis (yellow line) is measured by the right hand scale, twice as high as the other 3 measures. Like most central cities, its violent crime rate is much higher than the national average. The Indianapolis crime chart follows the nation from 1980 through 2006. It starts at 1,134 events per 100K people, increases by 42% (like IN) to 1,611 in 1996, then drops by 45% to 884 events in 2003. The city’s violent crime rate is 1.9 times the national average at the beginning and the end of this 23-year period, but peaked at 2.5 times the average in 1996. The crime rate leapt up by 28% in 2007, reaching 2.6 times the national average. Violent crime in Indianapolis grew by 11% by the peak in 2016, 3.6 times the national average. The reported Indy crime rate has fallen by more than one-third in the last four years, ending at 2.2 times the national average. Looking at ten-year averages to smooth out the difficult to interpret variability, Indy has increased from 1.8 to 3.0 times the national average. The last 2 years look suspiciously low, just like 2007 looked suspiciously high. The 1,300 level for most of the last decade is more than 10% below the 1,500 peak level of the 1990’s. So … Indiananapolis violent crime is now down a little compared with the peak, up very significantly compared with the national average and roughly within the range of the first 30 years.
The Indy metro data follows the city of Indianapolis pattern very closely.
The national homicide rate per 100,000 people averaged 9 from 1980 to 1995. It dropped by one-third to just 6 by 2000 and stayed at that level through 2007. It declined to an average of just 5 for the next decade, before spiking up in 2020 (and 2021, FBI official data unavailable). The national homicide rate is up significantly, but one-third lower than in the eighties and early nineties.
Indiana started at an unusually high 9 homicides per 100,000 people in 1980, but averaged just 6 for most of the eighties, just two-thirds of the national level. Indiana homicides jumped quickly to a peak of 8.2 in 1992 and remained near 8 for six years. The national homicide rate fell rapidly from 10 to 6 during the nineties, leading to a six-year period (1997-2002) where Indiana homicide rates were slightly above the national average. Indiana homicide rates closely matched the national average for the next decade, falling to 5 in 2008. Indiana homicides increased by 50% between 2014 and 2020, from 5.0 to 7.5 while the national average increased about 50% from 4.4 to 6.5 events per 100K people. Indiana has averaged about 6 homicides per 100K people during this 4-decade period except for the 8 homicides rate in the mid-nineties. The most recent murder rate has returned to that peak level.
The city of Indianapolis very closely matches the Indiana pattern for the first two decades, with 12 homicides per 100K people in 2000, about double the national average of 6. The Indy rate pops back up to 14.2 in 2001 versus the 5.6 rate for the country (2.5 times higher). Indy follows the slow national decline through 2012 to 11.6 events versus the 4.7 country level (2.5X). Indy’s murder rate jumped 31% to 15.2 in 2013, and has climbed steeply since then. It reached 19.5 in 2019, a two-thirds increase in 7 years. It jumped again in 2020 to 24.2 and is estimated to be more than 28 in 2021. Indy averaged about 14 murders per 100,000 people in the first 32 years of this period. 2019 was a 40% increase. 2020 was a 73% increase. 2021 is a doubling.
The Indy metro area pattern follows the city of Indianapolis. Metro Indy’s homicide rate averaged 1.35 times the national rate from 2003-2011. It has averaged 1.76 times the national average from 2012 to 2020.
Summary
Indianapolis has a huge violence and murder problem. Period. Violence at the national level is way down. Murders at the national level are much lower than the peak period. Indianapolis’ violence rate shot up in 2007 and only declined in the past 2 years. Indianapolis’ murder rate shot up in 2013 and has continued to climb. I try to highlight the “good news”. I emphasize long-term data to provide context. I try to minimize/offset the sirens of local and national journalists. But, for this topic, there is no apparent “silver lining” or “on the other hand” conclusion.
I tried to find a “mainstream media” article that objectively and insightfully evaluates the state of the US economy as of the end of the second quarter without success. So, I’ll take a shot at it.
First, I want to highlight that “this time, it’s different”. The US and global economies are recovering from a global pandemic situation last seen more than 100 years ago. The global economy is more integrated than ever. Viruses spread faster than ever. Businesses and governments have more information and ability to change quickly than ever before. The economic contraction was sharp, far more severe than the Great Depression or the Great Recession. The health care experts were unable to immediately evaluate the threat or recommend public policies. Nonetheless, “they persisted” and the medical, travel and economic recovery was far quicker than ANYONE expected in March, 2020 or December, 2020 or September, 2021 or January, 2022.
Second, I apologize for the required details involved to evaluate the simple question, “are we in a recession?”. Unfortunately, there is some judgment involved, as we have to evaluate three factors. Is there a clear downturn versus the trend rate? Is the downturn of significant length? Is this a widespread downturn, effecting most sectors of the economy?
At the aggregate level, we clearly have a peak. Do we have an extended downturn? Not yet, based on the total. The rapid recovery from the second quarter 2020 bottom could not be sustained. A significant slow-down in the growth rate was expected. Typical annual real GDP growth in recent years has been only 2%, so the difference between “extended expansion” and “recession” is thin.
Components
Macroeconomic theory focuses on aggregate demand and aggregate supply. Real, inflation adjusted, gross domestic product (GDP) is a measure of the productive output of a nation. The demand side is split into consumption, investment, government and net exports. I’ll go one level deeper, reviewing 9 components of GDP.
The business cycle is influenced by the relative sizes of the components of GDP and their relative variability from quarter to quarter and typical changes as the business cycle moves from expansion to decline to recovery.
From most to least correlated with the business cycle, with their current percentage share of GDP (sums to more than 100 because imports are a negative factor and changes in private investment can be negative), the 9 components are: Change in private inventories (1%), Residential Investment/Housing (5%), Business Investment (14%), Durable Goods Consumption (9%), Imports (16%), Non-durable Goods (food, energy) (15%), Services (45%) !!!!, Exports (8%) and Government (17%).
Overall, I see 4 sectors as “maybe” trending to a recession and 5 sectors currently at “no”. Unfortunately, the two most sensitive, Housing and Business Inventories, are in the “maybe” category, along with non-durable goods consumption and government consumption.
It is critical to look at the longer-term trends and context to evaluate short-term changes. There is significant month-to-month and quarter-to-quarter variability in the final numbers for GDP and especially for the initial estimates, like those we just saw for the second quarter of 2022. Significant revisions are made for 6 months, which is why the NBER committee which officially declares recessions is typically waiting longer to make a final call than everyone desires. Hence, I won’t usually share a long-term graph, a short-term graph, annual percentage changes and quarterly percentage changes annualized for each component. The media tends to focus on the preliminary quarterly percentage change annualized as the “gospel”. This is unwise. Let us begin to review the 9 main components.
Durable goods demand spiked by an incredible 20-30% during the pandemic, fueled by government transfers and fewer opportunities to consume services. Demand for durable goods has flattened at this 20% higher level, it has not declined. In my view, this sector is not signaling recession.
Non-durable goods consumption jumped by a real 12% during the pandemic and has essentially remained at this elevated level. We have two quarters at slightly lower consumption levels, so I rate this as “maybe” moving to a recession. Focus on the “big picture”. Both durable and non-durable goods consumption increased by historic percentages during the pandemic period and have remained at that elevated level 2 years later. It is not surprising that this demand has flattened or fallen off a bit. The surprising feature is the willingness of the American consumer to voluntarily spend much more money on “things” during the pandemic and maintain that level of spending as service opportunities returned, government transfers ended, and savings were drawn down.
The very large (44% of GDP) services sector was slower to recover from the pandemic, but demand for services remains quite strong, even though the percentage growth rate is lower than during the initial recovery period.
New housing investment grew by 50% between 2012 and 2016 and then remained at that level for the next 4 years before the pandemic. Long-run supply and demand factors indicate a “need” for more housing construction in the US to make up for the “missing” construction from 2008-2016. New housing construction did not decline with the pandemic, it increased by 15% in real terms! As with durable and nondurable goods consumption/production, this would not have been predicted in March, 2020 by anyone. Residential construction has levelled off 15% above 2019, equal to 2007 before the Great Recession. The increased mortgage interest rates indicate that demand will soften and this sector will decline somewhat in the second half of 2022, so this is a “maybe”. The long-term shortage of housing supply provides a floor for this sector.
“Supply chain issues” have restricted the accumulation of business inventories since the pandemic began. The unexpected spike in demand for durable and nondurable goods and residential construction lead to shortages. Worries about supply chain resiliency have led to higher targeted business inventory levels. Retailers have overstocked some product categories as the recovery has slowed and are being forced to discount prices to move these goods. Overall, this is a slight “maybe” recession indicator. I think that businesses would like to have 20% higher inventories overall.
Although imports act as a reduction in the calculation of GDP, they tend to decline when the US economy declines. Import demand remains high, not indicating a recession.
Government (17%, 9/9 Volatile)
A majority of government spending is accounted for as a simple transfer, not part of the annual production of goods and services.
Government production activity grew quite significantly from 2014 to 2020. It has since declined by less than 1%. I rate this as a “maybe” indicator of recession, even though government activity is typically a countercyclical indicator, rising when recession arrives.
Summary
Services (45%), Business Investment (14%), Exports (12%), Imports (16%) and Durable Goods (9%) are NOT in recession. Housing (5%) and Non-durable Goods (15%) point towards recession, while Government (17%) and Business Inventories (1%) show warning signs. If I were a member of the NBER board, I would not designate a recession in the first half of 2022 as of today.
For the second half of 2022, a recession is possible. The Fed raising interest rates is already affecting the housing industry. But businesses continue to report solid to record profits. The stock market has declined by a bear market 20% but may or may not have found a bottom. The global risks from Russia’s attacks on Ukraine and China’s Covid lockdown strategy remain. Consumer confidence is weak, especially in a partisan world. Business confidence is weaker than in recent months, but most measures remain marginally positive. The labor market is at its strongest position in 50 years, supporting consumer demand. Higher than expected inflation has slowed consumer spending, but not to recession levels. Consumer savings and debt levels remain positive. Business debt levels have increased, but most businesses locked in low debt interest rates during 2020-22.
Why So Positive?
Governments operate with expansionary fiscal policy, ensuring that aggregate demand is adequate. There is a risk of too much stimulus and “modern monetary theory” excesses, but so far this is not a risk in the major economies.
Central banks are more effective. They provide credit in downturns, increase interest rates when required, coordinate with each other and pressure banks to hold adequate capital.
Governments and central banks take proactive steps to avoid currency crises,
After the Great Recession, lending in the US housing market is more reasonable.
Businesses have worked through many challenges in the last 15 years and are well positioned to prosper.
The overall economy is increasingly based on services more than manufacturing, mining and agriculture. The operations leverage of manufacturing facilities is a smaller factor in the world economy.
Labor power is lower. Cooperation with management is stronger.
Demand for labor is high. US has record open jobs and voluntary quits. The effective minimum wage has increased from $8-10 per hour to $12-15 per hour without major business disruptions.
Trade is lightly restricted.
Global economy is multipolar, relying on US, EU, Japan, China, India, Middle East, etc.
Technological progress continues. Better goods and services. Better processes, trade, transportation, markets, communication and insights.
The baby boomers have caused the relatively higher death rate aged 55+ groups to almost double their share of total workers. While the death rate for EACH age group has gone down in the last 20 years, the blended average has been flat for the last decade.
Covid Provided Special Challenges and the Results Could Always Be Even Better
The US averaged 35,000 annual cases of polio in the 1940’s. The disease was eradicated in the US by 1979.
Global cases were 350,000 in 1988. Concerted efforts by governments, health care professionals, philanthropists and civic organizations (Rotary) eliminated polio from 5 continents by 2020. The last African case was reported in Nigeria in 2016.
Active cases were reported in only Afghanistan and Pakistan last year.
Soon, this will be the second ever human infecting disease to be eliminated (after smallpox).
Africa 25%. Middle East 25%. Afghanistan $5B, Israel $3B, Jordan $2B, Egypt, Iraq, Ethiopia, Yemen, Colombia, Nigeria, Lebanon $1B each. Top 10 $16B, one-third of total.
Criticisms of Foreign Aid
Limited evidence that specific country investments provide political returns
Limited evidence of anti-terrorism campaign effectiveness (counterexamples)
Weak administrative structure and oversight at all levels
Direct evidence of individual country economic growth due to aid is limited
Some autocratic governments have benefitted from aid
Some aid is diverted to corrupt governments and individuals
Specific high priority countries have provided weak returns (Egypt, Pakistan, Afghanistan, Iraq)
Higher returns could be gained from investing in Western Hemisphere, Eastern Europe.
Health measures, disease rates, lifespans. Global health. Economic development results globally and in individual countries. US trade benefits from developing trade lanes. Global education. Increased number of democracies, commitment to mixed capitalist economies. Lower cost of defense. Terrorism activities thwarted. Improved strength of US alliances. Improved flow through NGOs, multilateral organizations improves effectiveness. Dollar allocation provides US policy leverage.
Good News 
