Author: Tony Wikrent Page 43 of 51

by Tony Wikrent

The Risks – Know Them – Avoid Them
[ErinBromage, via Mike Norman Economics 5-8-20]

We know most people get infected in their own home. A household member contracts the virus in the community and brings it into the house where sustained contact between household members leads to infection.

But where are people contracting the infection in the community? I regularly hear people worrying about grocery stores, bike rides, inconsiderate runners who are not wearing masks…. are these places of concern? Well, not really. Let me explain….

Remember the formulae: Successful Infection = Exposure to Virus x Time

….Ignoring the terrible outbreaks in nursing homes, we find that the biggest outbreaks are in prisons, religious ceremonies, and workplaces, such a meat packing facilities and call centers. Any environment that is enclosed, with poor air circulation and high density of people, spells trouble.

Some of the biggest super-spreading events are:

• Meat packing: In meat processing plants, densely packed workers must communicate to one another amidst the deafening drum of industrial machinery and a cold-room virus-preserving environment. There are now outbreaks in 115 facilities across 23 states, 5000+ workers infected, with 20 dead. (ref)

• Weddings, funerals, birthdays: 10% of early spreading events

• Business networking: Face-to-face business networking like the Biogen Conference in Boston in March.

As we move back to work, or go to a restaurant, let’s look at what can happen in those environments.

Restaurants: Some really great shoe-leather epidemiology demonstrated clearly the effect of a single asymptomatic carrier in a restaurant environment (see below). The infected person (A1) sat at a table and had dinner with 9 friends. Dinner took about 1 to 1.5 hours. During this meal, the asymptomatic carrier released low-levels of virus into the air from their breathing. Airflow (from the restaurant’s various airflow vents) was from right to left. Approximately 50% of the people at the infected person’s table became sick over the next 7 days. 75% of the people on the adjacent downwind table became infected. And even 2 of the 7 people on the upwind table were infected (believed to happen by turbulent airflow). No one at tables E or F became infected, they were out of the main airflow from the air conditioner on the right to the exhaust fan on the left of the room. (Ref)

Workplaces: Another great example is the outbreak in a call center (see below). A single infected employee came to work on the 11th floor of a building. That floor had 216 employees. Over the period of a week, 94 of those people become infected (43.5%: the blue chairs). 92 of those 94 people became sick (only 2 remained asymptomatic). Notice how one side of the office is primarily infected, while there are very few people infected on the other side.

Strategic Political Economy

[The Big Picture, May 9, 2020]

by Tony Wikrent
Economics Action Group, North Carolina Democratic Party Progressive Caucus

Strategic Political Economy

Organizing for Survival in New York City

[Commune, via Naked Capitalism 4-26-20]China Spends $600 Billion To Trump America’s Economy
[Forbes, May 1, 2020]

Ten years from now, when economists mull the exact moment the U.S. ceded the future to China this week’s events are sure to top the list of time-stamp candidates.

This was the week, after all, when Chinese President Xi Jinping tossed another 4 trillion yuan, or $565 billion, at an economy taking devastating coronavirus blows….

Within the same 24 hours during which Xi’s announced a nearly $600 billion plan to build even more airports, railways and power grids, Senate Majority Leader McConnell gave the thumbs down to comparable upgrades to America’s economic hardware. “Infrastructure is unrelated to the coronavirus pandemic that we’re all experiencing and trying to figure out how to go forward,” McConnell said.

Music to Xi’s ears. The trillions of dollars his government lavished on the “Made in China 2025” extravaganza is already positioning China to lead the future of artificial intelligence, automation, micro-processing, renewable energy, robotics, self-driving vehicles, you name it. And Trump made it easy for Xi. As China prepares for the global economy it will confront in 2025, Trump is making coal great again.

Why Mitch McConnell Wants States to Go BankruptDavid Frum, April 25, 2020 [The Atlantic]
Note this is by former Bush Jr. speech writer Frum, so represents thinking inside the Republican party elites.

State bankruptcy is not some passing fancy. Republicans have been advancing the idea for more than a decade. Back in 2011, Jeb Bush and Newt Gingrich published a jointly bylined op-ed advocating state bankruptcy as a solution for the state of California. The Tea Party Congress elected in 2010 explored the idea of state bankruptcy in House hearings and Senate debates. Newt Gingrich promoted it in his run for the 2012 Republican presidential nomination…. A bankruptcy is not a default…. A default is a sovereign act. A defaulting sovereign can decide for itself which—if any—debts to pay in full, which to repay in part, which debts to not pay at all. Bankruptcy, by contrast, is a legal process in which a judge decides which debts will be paid, in what order, and in what amount….

Since 2010, American fiscal federalism has been defined by three overwhelming facts.

First, the country’s wealthiest and most productive states are overwhelmingly blue. Of the 15 states least reliant on federal transfers, 11 are led by Democratic governors. Of the 15 states most reliant on federal transfers, 11 have Republican governors.

Second, Congress is dominated by Republicans. Republicans controlled the House for eight of the last 10 years; the Senate for six. Because of the Republican hold on the Senate, the federal judiciary has likewise shifted in conservative and Republican directions.

A state bankruptcy process would thus enable a Republican Party based in the poorer states to use its federal ascendancy to impose its priorities upon the budgets of the richer states.

Regional compacts on #COVID19
[Twitter, via Naked Capitalism Water Cooler 4-28-20]
The fabric of the Union begins to unravel under the pressure of Trump’s incompetence and Republican intransigence.

Grover and the Bathtub Barry Levinson [Huffington Post, December 6, 2017]

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(Guest Post by Tony Wikrent)

Over $3 trillion in emergency spending has been authorized by Congress in the past month, with another $6 trillion plus in money creation and lending powers given to the Federal Reserve. Judged solely by its size, this has been an impressive response.


There are two crucial facts to note and questions to ask:


1. Little of these trillions of new dollars has gone to help the people and businesses who need it most. Why?
2. In the discussion of these emergency spending measures, why is there no one asking: How are we going to pay for it? 

The answers to these two questions are pretty much the same: The United States is no longer a republic ruled by the Constitutional mandate to promote the General Welfare. As even former President Jimmy Carter has observed, the US has become a plutocratic oligarchy, and the federal government has been mutated to protect and promote the wealth, power, and privilege of plutocrats and their retainers.

Ben Mathis-Lilley, Slate’s chief news blogger, argues that even the retainers are beginning to understand: The Coronavirus Is Showing Members of the Professional Class That the Government Doesn’t Work for Them Either.

…government programs in the United States–even those supported by the purportedly pro-government party–are not designed to solve problems. Rather, they are designed to solve a given problem only to a degree–and that degree can’t require an amount of spending that would necessitate financial sacrifice on the part of high-income taxpayers. This is not a leftist conspiracy theory, but the overt position of the party’s leaders, who believe they will not be able to achieve crucial voting margins in upscale suburbs if they authorize too much taxation and spending….

A bewildering array of socio-economic schools of analysis offer explanations for why the American political system no longer responds to the demands and aspirations of most Americans, from the libertarian argument that there is not enough capitalism, to the Marxist argument that the problem is capitalism itself.

We do not have time for an academic debate, however. This is a deadly pandemic that has caused an economic collapse faster and deeper than the collapse of the 1929-1933 Great Depression. The remarkably fast responses by Congress show that the political capacity to act promptly exists. What needs to be done now is to redirect that political capacity away from serving the plutocrats almost exclusively, to actually benefiting the American people, and to try to redirect as much as possible of the $3 trillion already passed, and the new $1 trillion package now being discussed, directly into the hands and pockets of the American people and small businesses. [1]

This requires a fast and massive mobilization of political factions that can outweigh and counteract the lobbyists and special interests which serve the plutocrats. There are hundreds of progressive and liberal political action and interest groups, each pursuing their unique agenda, but past experience instructs us it will require too much time and effort to get them out of their silos to cooperate together.

Week-end Wrap – Political Economy – April 26, 2020
by Tony Wikrent
Economics Action Group, North Carolina Democratic Party Progressive Caucus

Vic DiBitetto: Dear government: We need a real fucking plan, you shitbags

Shorter Twitter video:
Dear government: We need a real fucking plan, you shitbags
[via Mike Norman Economics]

Strategic Political Economy

Bill Clinton guru James Carville famously blurted “It’s the economy stupid.” Actually, it’s the economic ideology. If the American people are going to save themselves, they need to understand that their ruling elites are Malthusians of the Social Darwinian type.

McConnell Says He Favors Letting States Declare Bankruptcy
[Bloomberg, April 22, 2020]

McConnell, a Kentucky Republican, said he blocked additional state and local aid in the latest relief package, which passed the Senate Tuesday and is set for a vote Thursday in the House. “I said yesterday we’re going to push the pause button here, because I think this whole business of additional assistance for state and local governments needs to be thoroughly evaluated,” McConnell added. Later, on Fox News, McConnell said that any state or local aid must be specifically linked to the pandemic and shouldn’t be viewed as an opportunity for “revenue replacement.”

“We’re not interested in solving their pension problems for them,” McConnell said. “We’re not interested in rescuing them from bad decisions they’ve made in the past. We’re not going to let them take advantage of this pandemic to solve a lot of problems that they created for themselves with bad decisions in the past.”

The Right Wing Wants You to Die

Earlier this week, someone showed up at a protest in Nashville, Tennessee with a sign reading “Sacrifice the weak.”….

Other rich, advanced countries like South Korea and Germany have arrived at a solution. By using state power to do what scientists and economists say is necessary—testing the population, isolating the infected, and tracing their contacts, while financially supporting citizens who have lost income—they’ve reduced death and the spread of the virus without imposing mass suffering, offering the possibility of a return to something like normal life. The United States hasn’t seriously prepared or planned to do any of these things. Instead of organizing a response, federal leaders are engaged in piracy. The Senate’s majority leader wants states to declare bankruptcy. Trump has suggested injecting bleach into patients’ lungs….

The phrase “death cult” has been used to describe the Republican Party enough lately that it’s probably lost any real meaning, but it’s not far off as a descriptor. Ohio congressman Jim Jordan, head of the House Freedom Caucus, supports the protests and doesn’t understand why the economy shouldn’t have been opened yesterday. Pennsylvania lawmaker Mike Jones participated in a protest in Harrisburg this week, calling it “the best of America.” A protest in Michigan was organized by the vice-chair of Trump’s state campaign and the grassroots vice-chair of the state Republican Party. Government is organizing protests of itself to rally support for policies that would result in mass death.

“Two Americas: COVID & Community”

[Sapienta, via Naked Capitalism Water Cooler 4-22-20] Interview with Chris Arnade.

“What I find particularly unsettling is the utter lack of commitment to a given place demonstrated by many with wealth in American society. By leaving Manhattan for a Long Island beach bungalow or Jersey City for a Hudson Valley home, they are denying any responsibility for acquaintances, neighbors, or friends and effectively refusing membership in a larger community–a community that serves them in good times. Compare this to the actions of people with lesser means than Arnade’s elite. Struggling local restaurants prepare meals for overworked EMTs. Young people stand in long grocery store lines to pick up food for elderly neighbors. Volunteers stitch together face masks for sleep-deprived nurses. Arnade writes about ‘front row’ and ‘back row’ America and urges us to perceive the dignity and the worth of those sitting in the back row. But what does the COVID-19 pandemic tell us about front row Americans? Do they deserve our respect?”

“The Economy of Evil” 

[Historic.ly, via Naked Capitalism Water Cooler 4-22-20]

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by Tony Wikrent
Economics Action Group, North Carolina Democratic Party Progressive Caucus

Strategic Political Economy

Is America Going to Have a Covid-19 Apocalypse?
Ian Welsh, April 17, 2020

In the US, we have predictions of a 30 percent unemployment rate. I just saw that less than half of Los Angeles county still has a job. The bailout for regular people is $1,200. In a place like Los Angeles, that won’t even cover most people’s rent.

There’s been a vast bailout, mainly–though not exclusively–through the Fed, for the rich. Basically, as much free money at the trough as they can gorge on. But small businesses are toast. A third of households, at least, are on the verge of not just homelessness but not being able to eat….

by Tony Wikrent
Economics Action Group, North Carolina Democratic Party Progressive Caucus

Strategic Political Economy

Is Capitalism a Threat to Democracy?

In a sweeping, angry new book, “Can Democracy Survive Global Capitalism?” (Norton), the journalist, editor, and Brandeis professor Robert Kuttner… [argues] today’s political impasse is different from that of the nineteen-thirties. It is being caused not by a stalemate between leftist governments and a reactionary business sector but by leftists in government who have reneged on their principles. Since the demise of the Soviet Union, Kuttner contends, America’s Democrats, Britain’s Labour Party, and many of Europe’s social democrats have consistently tacked rightward, relinquishing concern for ordinary workers and embracing the power of markets; they have sided with corporations and investors so many times that, by now, workers no longer feel represented by them. When strongmen arrived promising jobs and a shared sense of purpose, working-class voters were ready for the message.

• You want to save and preserve small and local businesses in your community or town.
• You don’t want a local economy that consists almost entirely of chain restaurants and big box stores and a central business district full of empty storefronts.
• You value the diversity, creativity, idiosyncratic character, and friendliness that thriving small business owners bring to your community or town.

In a phoned-in interview on CNBC, Wilfred Frost urgently reported that Bank of America has received 177,000 applications for some $32.6 billion in emergency liquidity, but so far, only 100 of these loans have been disbursed.
The bank hopes to get most of the stack processed by mid-week, but it’s unclear what they’re basing these hopes on.

So why the reticence from the banking sector? I think liability is a red herring; are they really afraid of the heavy regulatory hand of Steve Mnuchin (or any law enforcer involved in the financial crisis)? It looks to me like they don’t want to do the work. Every expectation is for an absolute crush of applications. Thirty million small businesses could be on the line here. The compliance requirements are minimal but banks always whine about the expense of that; that’s why BofA is restricting to already-vetted customers. And the guidelines, which have been “changing by the minute,” could change again. So why bother with the hassle? The money’s good, but it’s marginal, and the big banks think in billions, not millions….

…I’ve talked to dozens of small business owners who are confused by this program, but who are also desperate to participate. There’s not going to be enough money — Congress gave $350 billion — to begin with. If lenders are slow to open the spigot, a lot of these businesses will go down. They don’t have any cash reserves. There’s a lot of concern. Maybe SBA should have found someone more willing to act quickly.

Germany Announces “Limitless” Aid Program for Small Business: SBA Are You Listening? [Zerohedge, 4-6-20]

…Angela Merkel’s government announced a new “limitless” aid program for small- and medium-sized companies (Ed. Note: not a bailout of Germany’s mega corporations) as part of an effort to support Europe’s largest economy in the coronavirus pandemic.
Merkel’s government will provide guarantees of as much as 100 percent, German Finance Minister Olaf Scholz announced at a joint press conference with Economy Minister Peter Altmaier Monday, Bloomberg reports, adding that loans of up to 800,000 euros ($862,000) that will pay out very quickly will be available.

The existing program only provides for an 80 percent to 90 percent loan guarantee and banks have been reluctant to take on new risk as the economy falters. Private lenders have thus pressed the government to expand the existing program by guaranteeing 100 percent of the loans, which it now appears to be doing.

Over the past week, it has come into focus for policymakers just how much strain state and local government budgets are under. They have to make emergency healthcare expenditures among other emergency expenditures, expand unemployment insurance with very low levels of reserves in unemployment insurance funds and do this while tax revenues fall off a cliff since incomes and sales have collapsed. The CARES act provides $340 billion all together with 80 percent or so going to financing  Coronavirus-related expenditures. 150 billion of which is direct aid to state and local governments. Given the scale of the crisis, this is far from adequate….

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by Tony Wikrent
Economics Action Group, North Carolina Democratic Party Progressive Caucus

Economic Armageddon

Coronavirus batters US economy as 6.65 million file for unemployment last week
[The Guardian April 2, 2020]

Some 3.3 million had filed for unemployment the previous week, bringing total claims to 9.95 million for the two weeks.

US Labor Market Update
Len Kiefer April 3-2020
Click through to his animated gif graph, which helps visualize the catastrophic economic convulsion we are in. It takes a few seconds to get to the stunning, shocking end.
http://lenkiefer.com/img/charts_2020_04_03/claimsSA_2020_04_03.gif

Jobs Aren’t Being Destroyed This Fast Elsewhere. Why Is That?

This dramatic spike in jobless claims is an American peculiarity. In almost no other country are jobs being destroyed so fast. Why? Because throughout the world, governments are protecting employment. Workers keep their jobs, even in industries that are shut down. The government covers most of their wage through direct payments to employers. Wages are, in effect, socialized for the duration of the crisis.

Instead of safeguarding employment, America is relying on beefed-up unemployment benefits to shield laid-off workers from economic hardship. To give just one example, in both the United States and Britain, the government is asking restaurant workers to stay home. But in Britain, workers are receiving 80 percent of their pay (up to £2,500 a month, or $3,125) and are guaranteed to get their job back once the shutdown is over. In America, the workers are laid off; they must then file for unemployment insurance and wait for the economy to start up again before they can apply for a new job, and if all goes well, sign a new contract and resume working….

This situation for laid-off workers would be bad enough if it were not aggravated by a second American peculiarity. As they are losing their jobs, many workers are also losing their employer-provided health insurance — and now find themselves faced with the Kafkaesque task of obtaining coverage on their own.

One option involves continuing to be covered by one’s former employer, a program known as COBRA. It is prohibitively expensive: Participants have to bear the full cost of insurance, $20,500 per year on average. Another option is to go shopping for a plan on the Affordable Care Act insurance exchange, where one is faced with a bewildering choice between plans like Blue Shield’s Bronze 60 PPO (with a deductible of up to $12,600 per year) and Aetna’s Silver Copay HNOnly (with a $7,000 deductible and up to $14,000 in annual out-of-pocket expenses). The last option is to join the ranks of the uninsured, a catastrophic solution during a pandemic. There are reports that people have already died of Covid-19 because they refused to go to the hospital, worried about bills, or because they were denied treatment for lack of insurance.

Red April: What happens on the first of the month when residents, restaurants, and retail stores don’t pay rent?
Henry Grabar [Slate, March 27, 2020]

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