The horizon is not so far as we can see, but as far as we can imagine

Week-end Wrap – Political Economy – March 29, 2020

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

The Pandemic

The Doctor Who Helped Defeat Smallpox Explains What’s Coming
[Wired, via The Big Picture 3-24-20]

Flatten the Curve

By slowing it down or flattening it, we’re not going to decrease the total number of cases, we’re going to postpone many cases, until we get a vaccine–which we will, because there’s nothing in the virology that makes me frightened that we won’t get a vaccine in 12 to 18 months. Eventually, we will get to the epidemiologist gold ring.

What’s that?

That means, A, a large enough quantity of us have caught the disease and become immune. And B, we have a vaccine. The combination of A plus B is enough to create -herd immunity, which is around 70 or 80 percent….

How will we know when we’re through this?

The world is not going to begin to look normal until three things have happened. One, we figure out whether the distribution of this virus looks like an iceberg, which is one-seventh above the water, or a pyramid, where we see everything. If we’re only seeing right now one-seventh of the actual disease because we’re not testing enough, and we’re just blind to it, then we’re in a world of hurt. Two, we have a treatment that works, a vaccine or antiviral. And three, maybe most important, we begin to see large numbers of people–in particular nurses, home health care providers, doctors, policemen, firemen, and teachers who have had the disease–are immune, and we have tested them to know that they are not infectious any longer. And we have a system that identifies them, either a concert wristband or a card with their photograph and some kind of a stamp on it. Then we can be comfortable sending our children back to school, because we know the teacher is not infectious.

And instead of saying “No, you can’t visit anybody in nursing home,” we have a group of people who are certified that they work with elderly and vulnerable people, and nurses who can go back into the hospitals and dentists who can open your mouth and look in your mouth and not be giving you the virus. When those three things happen, that’s when normalcy will return.

Total Cost of Her COVID-19 Treatment: $34,927.43

[Time, via Naked Capitalism Water Cooler 3-23-20]
And this isn’t even actually treatment for COVID19, because she was sent home before the test results came back positive. 

Israeli doctor in Italy: We no longer help those over 60.

[Jerusalem Post, via Naked Capitalism 3-23-20]

Trevor Bedford, 31 January 2020
[GeekWire 3-18-20]

The first part of the strategy depends on a massive campaign of testing, followed by isolation for those who test positive. “If someone can be tested early in their illness before they show symptoms, they could effectively self-isolate and reduce onward transmission, compared to isolation when symptoms develop,” Bedford explained.

He noted that such a strategy appears to be working in South Korea. Getting enough tests has proven to be a problem in the US, and that’s where Bedford’s Apollo program comes into play.

[GeekWire 3-24-20]

COVID-19 can remain “stable” on cardboard for up to 24 hours, according to a study published in the New England Journal of Medicine. Variables affecting stability include temperature, air quality, and more.

The CDC said “there is likely very low risk of spread from products or packaging that are shipped over a period of days or weeks at ambient temperatures.”

“The likelihood of an infected person contaminating commercial goods is low and the risk of catching the virus that causes COVID-19 from a package that has been moved, travelled, and exposed to different conditions and temperature is also low,” the WHO noted.

Grover Norquist’s Dismantled State Struggles to Respond

I hope some experts and scholars out there are examining this hypothesis: The diminution of government capabilities resulting from the past half century’s assault on “big government” has resulted in the perfidious situation that in an existential crisis, it is the actors with the most economic power — and hence the ones who least need it — that get bailed out. Emergency planning based on defending the General Welfare — i.e. Public Health — was defunded and hence dismantled, resulting in a Spencerian-Darwinian race when the crisis hit. So, survival of the fittest, meanest, and most cunning. 

“A Greater Depression?” 
[Nouriel Roubini, Project Syndicate, via Naked Capitalism Water Cooler 3-24-20]

“The shock to the global economy from COVID-19 has been both faster and more severe than the 2008 global financial crisis (GFC) and even the Great Depression. In those two previous episodes, stock markets collapsed by 50% or more, credit markets froze up, massive bankruptcies followed, unemployment rates soared above 10%, and GDP contracted at an annualized rate of 10% or more. But all of this took around three years to play out. In the current crisis, similarly dire macroeconomic and financial outcomes have materialized in three weeks….

3.3 Million File For Unemployment Claims, Shattering Records
[NPR 3-26-20]

[Bloomberg, via Naked Capitalism Water Cooler 3-23-20]

[Guardian, via Naked Capitalism 3-28-20]
We are about to discover how terribly bad it is to link health coverage to employment status. A vector is a vector is a vector whether they have a job or not.

Here’s the $2 Trillion Economic Stimulus Bill

[U.S. Congress, via Naked Capitalism 3-28-20]
All 880 pages of it. 
[Twitter, via Naked Capitalism 3-28-20]

For $2 trillion, you could give $500 billion to frontline health care facilities and then cut a $10,000 check to every single worker in America.Please try to explain to me how this wouldnt be better than giving much of the emergency stimulus money to corporations.

[NYT, via Naked Capitalism 3-22-20]
[MarketWatch, via Naked Capitalism Water Cooler 3-23-20]

“Saying ‘aggressive action’ was needed to soften the blow to the economy from the coronavirus pandemic, the Federal Reserve on Monday announced it would purchase an unlimited amount of Treasurys and securities tied to home and business mortgages to ward off a credit crunch. The Fed said it would buy assets ‘in the amounts needed’ to support smooth market functioning and effective transmission of monetary policy. The Fed had previous set a $700 billion limit for asset purchases. In addition, the Fed announced several new lending programs worth $300 billion to support all corners of the financial markets. Economists said the Fed action was big. ‘The only parallel that comes to mind is with [former ECB chief Mario] Draghi’s ‘whatever it takes’ moment, except that these are not just words,’ said Robert Perli, a former Fed staffer and now an analyst with Cornerstone Macro.”

Unsanitized: Bailouts, A Tradition Unlike Any Other
David Daven, March 25, 2020 [The American Prospect]

The number you’re hearing is $500 billion. Of that, $75 billion goes to the airline industry and the mysteriously named “businesses critical to national security.” The other $425 helps capitalize a $4.25 trillion, with a T, leveraged lending facility at the Federal Reserve. The taxpayer dollars would soak up any losses from that lending program. The loans won’t be secret anymore, but the oversight is largely after the fact, without subpoena power, and mainly reduced to writing reports….

…it’s not a bailout for the coronavirus. It’s a bailout for twelve years of corporate irresponsibility that made these companies so fragile that a few weeks of disruption would destroy them.

Robert Reich, March 17, 2020 [Truthdig]

…let’s admit something more basic. The system would be failing even under a halfway competent president. The dirty little secret, which will soon become apparent to all, is that there is no real public health system in the United States….

Instead of a public health system, we have a private for-profit system for individuals lucky enough to afford it and a rickety social insurance system for people fortunate enough to have a full-time job.

At their best, both systems respond to the needs of individuals rather than the needs of the public as a whole. In America, the word “public” – as in public health, public education or public welfare – means a sum total of individual needs, not the common good.

Contrast this with America’s financial system. The Federal Reserve concerns itself with the health of financial markets as a whole. Late last week the Fed made $1.5 trillion available to banks at the slightest hint of difficulties making trades. No one batted an eye….

Even if a test for the Covid-19 virus had been developed and approved in time, no institutions are in place to administer it to tens of millions of Americans free of charge. Local and state health departments are already barebones, having lost nearly a quarter of their workforce since 2008, according to the National Association of County and City Health Officials.

Healthcare in America is delivered mainly by private for-profit corporations which, unlike financial institutions, are not required to maintain reserve capacity. As a result, the nation’s supply of ventilators isn’t nearly large enough to care for projected numbers of critically ill coronavirus victims unable to breathe for themselves. Its 45,000 intensive care unit beds fall woefully short of the 2.9 million that are likely to be needed.

[CNBC, via Naked Capitalism 3-28-20]
Clearly a violation of the oath of office, and the promise to “govern for all Americans.” Republicans just cannot help themselves, but note well that vindictiveness is a trait of petty tyrants. 

Carl T. Bergstrom [via Naked Capitalism 3-27-20]

How the Coronavirus Became an American Catastrophe 

[Atlantic, via Naked Capitalism 3-22-20]

[The Hill, via Naked Capitalism 3-26-20]

“The Governor’s order not only protects tenants but all Arizonans,” Pamela Bridge, director of Advocacy and Litigation at Community Legal Services, told the Arizona Republic. “Losing a home is catastrophic at any time, and during the COVID-19 pandemic, forcing families out of their homes in search of other housing endangers the public health of all Arizonans.”

[Office of Governor of State of California 3-27-20]

Democratic governor of California Gavin Newsom imposed a statewide ban on all evictions until May 31, 2020.

Capitalism in the time of COVID

Matt Stoller [Stigler Center at the University of Chicago Booth School of Business, via Mike Norman Economics 3-24-20]

Boeing… wants a $60 billion bailout. Financial problems for this corporation predated the crisis, with the mismanagement that led to the 737 Max as well as defense and space products that don’t work (I noted last July that a bailout was coming).

The corporation paid out $65 billion in stock buybacks and dividends over the last ten years, and it was drawing down credit lines before this crisis hit. It is highly politically-connected: the board of Boeing includes Caroline Kennedy, Ronald Reagan’s Chief of Staff Ken Duberstein, three Fortune 100 CEOs, a former US Trade Representative, and two Admirals, one of whom is the board’s only engineer.

Using the excuse of the coronavirus, Boeing is trying to get the taxpayer to foot the bill for its errors, so it can go back to making more of them.

7 Rules for the Boeing Bailout – should be applied to all companies
Richard “RJ” Eskow, March 26, 2020 [Economy for All, reposted at Naked Capitalism 3-26-20]
These seven rules should be embodied in the next bailout package and applied to every corporate recipient. 

  1. Public rescue must come with significant public ownership. Nobody in the business world would be expected to rescue a failing company—whether through loan guarantees, liquidity, direct subsidies, or any other actions—without significant ownership concessions in return. Why should the American people, who are being asked to take on risk that’s considered too toxic for the private sector?
  2. Bailed-out corporations must be managed in the long-term interests of customers and employees….
  3. Shareholders, employees, and customers must understand that the corporation needs rescuing because the corporation’s leaders failed at their jobs. CEOs and key executives didn’t handle risk properly. A pandemic outbreak is an unusual event, but not an unpredictable one. We’ve been warned of the possibility for many years, and responsible business leaders would have planned for it. Boeing’s profits, for example, depend largely on an industry that was always at high risk during an epidemic: travel. You and I knew that. Its multi-millionaire executives knew it, too. They just didn’t care. That means:
  4. Senior executives must be replaced, and their past compensation must be reviewed for signs of malfeasance, stock manipulation, expense account padding, or any other signs of overpayment. Clawbacks of excess compensation should be considered, where appropriate….
  5. There must be legal and financial consequences for socially irresponsible or criminal behavior. That includes financial accountability and, where appropriate, criminal penalties for illegal behavior. Executives at bailed-out corporations should expect thorough investigations. They may dread them. But these investigations should be welcomed by customers, employees, most shareholders, and the public at large.
  6. All major bailouts should come with a full management audit.
  7. A rescued company and its executives may never again make political contributions, directly or indirectly—ever. This ban must be permanent and inflexible. While it’s a start, Sen. Warren’s proposal doesn’t do enough to end this legalized corruption, especially given shareholder self-interest and the politics of many corporate boards. Political contributions created the absurdity of a government asking aircraft manufacturers to “self-inspect,” and hundreds died. It created the absurdity of asking major banks to self-regulate, and trillions were lost.
[New York Times, via Naked Capitalism 3-27-20]
Matt Stoller, March 25, 2020 [Big]

[Twitter, via Naked Capitalism 3-27-20]
Matt Stoller: This announcement of layoffs by United Airlines came literally a few hours after they got $25B in grants from the government so they wouldn’t have to lay anyone off. United Airlines announces layoffs.

What the Government Needs to Do Next to Tackle the Crisis

James K. Galbraith, March 24, 2020 [Institute of New Economic Thinking, via Naked Capitalism]

The first big need is medical supplies, facilities and personnel. That is why we need to finance immediate domestic production of masks, oxygen tanks, ventilators, and the construction and staffing of field hospitals, including the conversion of existing structures such as hotels, dormitories and stadiums, and the hiring and upgrading of staff.

Ideally HHS should finance supplies, the Army Corps of Engineers should run construction, and FEMA should manage and coordinate. The Federal Reserve should be empowered to buy unlimited debt from state and local governments and both debt and equity from private companies. If Congress cannot agree quickly on specifics, create a government-owned Health Finance Corporation and give it unlimited full-faith-and-credit bonding authority, as was done for the Depression and WWII.

Maintaining vital civilian supplies, especially food, medicines and fuel, is the second big need. This is a two-part problem. The first part is to make sure that there are goods in the stores and pharmacies, and that gas stations and drive-through restaurants can remain open. The second part is to ensure that those at home have the means to pay, and that local distribution remains orderly.

To keep supplies flowing, there must be higher pay and credible protections for essential workers, such as drivers, stockers, checkout clerks and security guards. Amazon and Walmart are already raising pay. Groceries, pharmacies and service stations must most urgently protect their workers, who are exposed to hundreds of customers every hour, from getting sick. After health care, protection should go there. Distribution networks will break if stores can’t stay open or if shoppers won’t go in.

Payroll replacement through the business is the best solution for those on existingpayrolls, as Glenn Hubbard has written. The employer can get an interest-free loan from the bank, cover payroll, and claim a reimbursement from the federal government on quarterly taxes. Small business owners can pay themselves, up to a cap….

For self-employed and gig workers, the fast efficient way is to qualify them for unemployment insurance as long as necessary….

Orderly distribution must be maintained…. Rationing and price controls can be run by local authorities under a general hold-the-line order, as was done in World War II from April, 1943 onward….

All evictions, foreclosures and utility stoppages must be stopped. People need to remain safe and secure in their homes whether they can pay the bills or not….

Basic communications – internet, cable, phone – should be made free for the duration….

All other utilities need to run as public services; the crucial goal being to maintain access, calm and order, at stable prices….

What Would Roosevelt Do?
Pavlina R. Tcherneva, March 20, 2020 [Project Syndicate]

We are at war with COVID-19, and in wartime, civilian production grinds to a halt and the only work that is needed is for the war effort itself.

Moreover, a recession is sadly necessary to stop the spread of this virus. In the United States, over 50% of jobs are at risk from layoffs, furloughs, reduced pay, and lost hours. Virtually every sector of the economy stands to lose a large chunk of its business, household incomes will be devastated, and spending by consumers and firms will rapidly decline. The manufacturing collapse has already begun; the service economy, which employs 80% of all workers, will be next….

How should governments respond? The same way the US government did under President Franklin D. Roosevelt in the World War II era.

The first priority is to mobilize. That means building temporary field hospitals, drive-through clinics, and emergency health centers. It means cranking up production of essential equipment and medication, staffing health facilities adequately, and establishing support services for the hungry, homeless, and most vulnerable. And it means deploying an army to disinfect airports, schools, and critical public places.

Second, we need to make it easier for people to stay home, such as by implementing short-term debt deferments (including on small business and mortgage loans) and suspending utility bills, as some European countries are already doing. Governments also should be providing income support in the form of extended unemployment insurance, food stamps, and housing benefits. In the US, all work requirements for public benefits should be abolished, and the federal government should extend immediate financial assistance to state governments constrained by balanced-budget laws.

The coronavirus-response package recently adopted by the US does not go nearly far enough. As it stands, the legislation still would leave 80% of private-sector workers without medical and paid-leave coverage….

Only big government, big public investments, and big public-employment programs will ensure a quick bounce back, rather than another protracted jobless recovery. In the last crisis, much of the stimulus fueled runaway inequality; this time needs to be different.

Dirk Ehnts, Warren Mosler – A Euro Zone Proposal for Fighting the Economic Consequences of the Coronavirus Crisis
[via Mike Norman Economics 3-24-20]
Warren Mosler proposes

1. “Immediate $1,000 per capita distribution to state governments and territories
to offset lost tax revenues of state and local governments and sustain public services.”
2. Nationalize financially failing enterprises deemed strategically important to the promotion of
public purpose….
The crisis may not be the fault of the shareholders, but it is a risk they take when investing.
3. Increase minimum Social Security payment to $2,000 a month, offsetting losses from uninsured pensions…
4. Increase minimum unemployment compensation to $500 per week….
5. Fund $15 per hour jobs for qualifying non profit organizations to allow them to employ
anyone willing and able to work for that wage.
6. Lower the eligibility age of free Medicare from 65 to 0….

Trump Bets Business Will Answer Call to Fight Virus, but Strategy Bewilders Firms
[New York Times 3-22-20]

The U.S. Chamber of Commerce and the heads of major corporations have lobbied the administration against using the [Defense Production Act]. They say the move could prove counterproductive, imposing red tape on companies precisely when they need flexibility to deal with closed borders and shuttered factories. Mr. Trump and the director of his national economic council, Larry Kudlow, as well as Mr. Kushner, were persuaded by those arguments, administration officials said.

How the Pandemic Will End
[The Atlantic 3-25-20]
Mentions the Defense Logistics Agency—a 26,000-person group that prepares the U.S. military for overseas operations and that has assisted in past public-health crises, including the 2014 Ebola outbreak.

This agency can also coordinate the second pressing need: a massive rollout of COVID-19 tests. Those tests have been slow to arrive because of five separate shortages: of masks to protect people administering the tests; of nasopharyngeal swabs for collecting viral samples; of extraction kits for pulling the virus’s genetic material out of the samples; of chemical reagents that are part of those kits; and of trained people who can give the tests….

A recent analysis from the University of Pennsylvania estimated that even if social-distancing measures can reduce infection rates by 95 percent, 960,000 Americans will still need intensive care. There are only about 180,000 ventilators in the U.S. and, more pertinently, only enough respiratory therapists and critical-care staff to safely look after 100,000 ventilated patients. Abandoning social distancing would be foolish. Abandoning it now, when tests and protective equipment are still scarce, would be catastrophic.

The U.S. Government Has Mobilized Private Companies to Face Crises Before. Here’s What to Know
[Time, via Naked Capitalism 3-26-20]

Ford partnering with GE, 3M to build ventilators, respirators, face shields”
[Automotive News, via Naked Capitalism Water Cooler 3-24-20]

“Ford Motor Co. plans to build respirators, ventilators and face shields in partnership with its UAW work force, manufacturing company 3M and GE Healthcare to aid medical workers as the coronavirus pandemic threatens to overwhelm their supply. Known internally as “Project Apollo” and inspired by the quick-thinking ingenuity of the Apollo 13 space mission, executives on Tuesday said Ford workers plan to use car parts and factory tools to help get some equipment out to doctors, nurses and first responders as early as this week…. Ford is partnering with manufacturing company 3M to build air-purifying respirators on two fronts. It will aid 3M in boosting production of respirator designs 3M is already producing, while simultaneously building its own respirators using a makeshift design that includes fans from F-150 pickup seats, 3D-printed parts and portable tool battery packs that could allow the devices to run for up to eight hours. Respirators using Ford’s makeshift design would be built at its advanced manufacturing center near Detroit in Redford, Mich. Ford said it initially would be able to make up to 1,000 respirators per month.”

“Your No-Panic Guide: What We Do (And Don’t) Know About The U.S. Medical Stockpile”
[LAist, via Naked Capitalism Water Cooler 3-23-20]

“About $8 billion worth of vaccines, pharmaceuticals, protective gear, ventilators and other kinds of medical equipment are housed in warehouses that are strategically located around the United States. From the outside, these warehouses look ordinary. Inside, however, armed guards stand watch over a vast collection of materials. Giant freezers keep certain products cold. Locked, caged-off sections of the warehouses store controlled substances like painkillers. Rows of ventilators, which can support people who are having trouble breathing, are kept charged-up and ready to roll at a moment’s notice. When the stockpile started, back in 1999, the goal was to get prepared for unusual, unprecedented national threats, says O’Toole, who chaired an advisory committee on the stockpile for the National Academies of Sciences, Engineering, and Medicine… The stockpile can fill gaps in supply chains or respond to sudden surges in demand caused by emergencies, says O’Toole, but ‘it is not big enough, and it can never be big enough to replace the supply chains.’ ‘It’s a bridge,” she says. ‘It’s not a replacement for the private sector.’ That means there could still be shortages of critical items, as it will take time for manufacturers to ramp up production.”

“Just-in-time has turned out to be just-not-enough for grocery stores.

 [Wall Street Journal, via Naked Capitalism Water Cooler 3-24-20]

A run on supermarkets in the U.S. is exposing the downside of the food industry’s decades long efficiency drive to boost profit margins by paring inventories” “Producers and grocery stores had gone from keeping months of inventory on hand to holding only a four to six weeks’ supply, and now manufacturers, distributors and retailers are rapidly reversing course as consumers strip shelves bare. Suppliers are tossing out carefully calibrated distribution plans and instead shipping truckloads of goods straight to stores’ warehouses. Retailers are overriding replenishment algorithms and heading straight to manufacturers to restock. Many producers are pressing raw materials suppliers to speed up manufacturing to get more goods into pipelines.”

“How Panic-Buying Revealed the Problem With the Modern World”

[The Atlantic, via Naked Capitalism 3-27-20]

“Any student of economics will tell you that modern supply chains rely on just-in-time ordering…. Under normal circumstances, this just-in-time system is convenient. Yet it is also, as we have discovered in the past fortnight, fragile…. What happened at supermarkets [with toilet paper] is worth dwelling on, because it reveals a problem with one of the modern world’s most hallowed concepts: efficiency. As businesses and governments chase ever-tighter margins—ever-greater efficiency—they have created systems that are finely tuned, but also delicate. … This is, however, a fundamentally inhuman philosophy. People aren’t machines. We are inherently inefficient, with our elderly parents and sick children, our mental-health problems, our chronic diseases, and our need to sleep and eat. And, as the past few months have demonstrated, our susceptibility to novel viruses. We have been trained to see efficiency as a desirable goal. We often don’t see, or don’t acknowledge, the risk of catastrophic meltdown.”

Wendell Potter explains how health insurers are going to profit tremendously from COVID19
[via Naked Capitalism 3-27-20]

How do health insurers continue to see huge profits during this crisis? “If medical claims start to rise uncontrollably,” @bobjherman  reports, “they’ll increase everyone’s premiums next year.” Humana CEO Brian Kane put it more opaquely: “We would price for this for 2021.” (7/11)

“Canada’s Coronavirus Response Shows Why We Need Medicare for All to Fight This Pandemic” [Jacobin, via Naked Capitalism Water Cooler 3-26-20]

“I’m a dual American-Canadian citizen, and over the past weeks, I’ve read countless stories on social media of exasperated American friends seeking coronavirus testing who describe a complex journey navigating between primary-care providers, hospitals, and local health departments. The fragmented nature of the US health-care system has made it difficult to coordinate a response or testing strategy, especially between completely separate health-care providers that often have different testing equipment and protocols. Meanwhile, in Canada, the provincial government is essentially the only financier of hospitals and health-care providers in each province, making it much easier to coordinate strategies. In Ontario, for example, anyone who suspects they have coronavirus is instructed to self-assess using an online tool, then either call a central Telehealth number, call their primary provider, or visit a dedicated assessment center. All three resources are receiving regular information from the provincial government and are able to determine what steps someone should take next: arranging testing, instructing the person to self-isolate, or providing reassurance. Each province has set up their own similar centralized system, and even before some of the newer resources were created, health departments at the local, provincial, and federal level were acting as central contact points for individuals and organizations. This coordination stands in stark contrast to the confusing and contradicting information provided by different levels of government in the United States, especially in the earlier days of the crisis.”

Why France is hiding a cheap and tested virus cure

[Asia Times, via Naked Capitalism 3-28-20]

“COVID-19: Which Workers Face The Highest Unemployment Risk?”

[Econintersect, via Naked Capitalism 3-25-20]

“Of the 46% of workers employed in occupations at “high risk” of a layoff, the largest share is in food preparation or serving-related occupations. This is followed by sales occupations, which in this case are predominately retail salespersons. The occupations at the highest risk of unemployment also tend to be lower-paid occupations. The average annual earnings of the low-risk occupations are $64,600, about 75% higher than earnings in the high-risk occupations, at $36,600. This indicates the economic burden from this health crisis will most directly affect those workers who are likely in the most vulnerable financial situation.”

[New York Times 3-25-20]

Column: How coronavirus turned supermarket workers into heroes

[Los Angeles Times, via Naked Capitalism COVID-19 and Class in the United States, by Lambert Strether 3-26-20]

Without masks or barriers, employees are working long hours, risking infection and battling exhaustion to do their jobs. They connect us to material essentials, like bread and toilet paper. But they’re also part of the social fabric that holds us together in unsettling times.

Delivery Drivers Face Pandemic Without Sick Pay, Insurance, Sanitizer
[Reuters, via New York Times March 25, 2020]

On his delivery route through Orange County, California, Joseph Alvarado made 153 stops one day last week for Inc, touching the inside and outside of his van, more than 225 packages, and dozens of customers’ doors and gates….

“I’m being exposed,” said Alvarado, 38, who has delivered Amazon packages for three years. “I would think that a company like Amazon that is filthy rich, doing great, not going anywhere anytime soon, would want to take care of its employees.”

[NEJM, via Naked Capitalism 3-26-20]

Duke University uses vaporized hydrogen peroxide to clean N95 face masks for reuse

[CNBC, via Naked Capitalism 3-27-20]


Disrupting mainstream economics

Marshall Steinbaum [ Boston Review,via Naked Capitalism Water Cooler 3-26-20]

“The tendency in economics now—as well as in a great deal of public discussion—is to view the economy as a natural force, existing independently from our ideas about what it is and how it ought to work. This book systematically demolishes that self-serving conceit by charting in extensive detail how differently it has operated at different periods of time, and how its operation is conditioned by the ideologies with which it co-develops. ‘The market and competition, profits and wages, capital and debt, skilled and unskilled workers, natives and aliens, tax havens and competitiveness—none of these things exist as such,’ Piketty insists. ‘All are social and historical constructs’ that ‘depend entirely’ on the ‘systems that people choose to adopt and the conceptual definitions they choose to work with.’… An exhaustive assessment of Capital and Ideology would require more space and expertise than I have, but the basic contours of the book are easy enough to describe. ‘Every human society must justify its inequalities,’ the book begins. What follows is a comprehensive investigation of how different societies have done precisely that, ranging through what the book terms various ‘inequality regimes.’”

Debt and Power: An Interview With Michael Hudson

[Naked Capitalism 3-24-20]

Is society going to say that all debts have to be paid, without regard for the economic and social consequences? Almost 90 percent of American debts are owed to the richest 10 percent of the population…. Private debt is created for different reasons than public debt. Public banks would not lend for corporate takeover loans. They would not lend to corporate raiders, or for stock buybacks. They would not create junk mortgages way beyond the ability of borrowers to pay. Government debt would be extended presumably for spending for the public purpose – to increase economic growth and increase prosperity. Private debt these days has become largely dysfunctional. Its effect has often been to shift prosperity from 90% of the population to the 10% of the population that controls the banks and the creditors. So private debt has become corrosive and parasitic….

 The only way you can escape and maintain stable economic relations is to write down the debts. That means you have to let many banks and their loans go under. That almost happened in 2008. Sheila Bair, the Federal Deposit Insurance Corporation head, wanted to foreclose on one bank that she wrote was more incompetent and crooked than the others. That was the largest bank: Citibank. The problem is that its sponsors were President Obama, Robert Rubin and basically Wall Street. Rubin was Secretary of the Treasury under Bill Clinton, and had become head of Citibank. His protege Tim Geithner became the bagman for Citibank, and was made Secretary of the Treasury. Geithner blocked the Obama administration and Sheila Bair from taking over Citibank.

Here would have been a wonderful chance. You take over one of the worst bank in the United States – the bank that made the bad bets and so many junk mortgage loans that it was called a serial criminal by former S&L prosecutor Bill Black, now at the University of Missouri at Kansas City. Imagine if Citibank would have been taken into the public domain and made a public bank. It wouldn’t have made more crooked loans. It would have made loans for what people and business actually needed. But Obama invited the bankers to the White House, and promised to protect them from the “mob with pitchforks.”

Tlaib proposes minting two $1 trillion platinum coins to finance monthly coronavirus debit cards

[Washington Examiner, via Naked Capitalism 3-22-20]

Lambert Strether: Note that the Coin came from the MMT community, was thoroughly vetted by wonks, and made it all the way to the desk of Trump’s predecessor – who, naturally, did nothing.Direct Stimulus Payments to Individuals [pdf summary of research]

Claudia Sahm, Board of Governors of the Federal Reserve System [Hamilton Project, via The Big Picture 3-23-20]

This chapter proposes a direct payment to individuals that would automatically be paid out early in a recession and then continue annually when the recession is severe… A rapid, vigorous response to the next recession in the form of direct payments to individuals would help limit employment losses and the economic damage from the recession….

…during the Great Recession and the recovery, individuals received more than $420 billion in broad-based stimulus from the federal government through three large, consecutive policies: a stimulus payment in 2008, a tax credit in 2009 and 2010 (the Making Work Pay tax credit), and a payroll tax reduction in 2011 and 2012…  The range of stimulus programs in the Great Recession has supported a rich body of research on the efficacy of various tools.

Disrupting mainstream politics

[Politico, via Naked Capitalism 3-23-20]

Last week, Republicans joined Democrats — and in some cases got in front of them — in calling for direct payments to Americans to help cope with the economic fallout from the pandemic. The Trump administration, after laboring for years to repeal Obamacare, said it was considering creating a special enrollment period for the program due to the coronavirus. When Donald Trump himself suggested the government could take equity stakes in private companies that receive federal aid, it was a Democratic governor, Colorado’s Jared Polis, who accused the president of being a socialist….

And former New Mexico Gov. Bill Richardson said “some of the issues that are being proposed and voted on now are going to become the norm in our political system, both with Republicans and Democrats.” He predicted that new normal including paid sick leave, and even guaranteed income of some kind. “In other words,” Richardson said, “the era of big government is back, and both parties are going to embrace it to resolve problems. And [the change] is caused by the virus.”

Republicans, too, see this shift unfolding. As negotiations over a rescue picked up in Washington last week, it was Republicans pressing for direct cash assistance to Americans, irritating progressive Democrats who feared the GOP was out-flanking the Democratic Party on the left.

Note the new tune being sung by conservative think tanks:

Getting COVID-19 financial relief to millions of Americans in need requires a multichannel strategy
[Peterson Institute for International Economics, March 25, 2020]A business fiscal response to a COVID-19 recession
[American Enterprise Institute, March 20, 2020]

The goal should be to replace a large portion of the revenue (not just the payroll expenses) those businesses would have generated in the absence of being shut down due to the coronavirus. Low-margin businesses will face great financial difficulty losing multiple months of revenue, and many if not most small businesses would rather shut down or lay off a significant fraction of their workforce than take out a loan, even with a favorable or zero interest rate. The number of potential layoffs the U.S. economy is facing is deeply troubling, and an aggressive policy response is urgently needed. We estimate the cost of replacing 80 percent of the revenue for three months of private-sector firms with fewer than 500 employees, excluding the manufacturing, health, education, and finance industries, to be $1.2 trillion.

Restoring balance to the economy

Finland ends homelessness and provides shelter for all in need
[, via Mike Norman Economics 3-22-20]

But in 2008 the Finnish government introduced a new policy for the homeless: It started implementing the “Housing First” concept. Since then the number of people affected has fallen sharply. Finland has set itself a target: Nobody should have to live on the streets – every citizen should have a residence.

And the country is successful: It is the only EU-country where the number of homeless people is declining….

Creating housing for people costs money. In the past 10 years, 270 million euros were spent on the construction, purchase and renovation of housing as part of the “Housing First” programme. However, Juha Kaakinen points out, this is far less than the cost of homelessness itself. Because when people are in emergency situations, emergencies are more frequent: Assaults, injuries, breakdowns. The police, health care and justice systems are more often called upon to step in – and this also costs money.

In comparison, “Housing First” is cheaper than accepting homelessness: Now, the state spends 15,000 euros less per year per homeless person than before.

[ProPublica, via Naked Capitalism Water Cooler 3-26-20]

“A fine would not be a sufficient deterrent, the DEA’s Dhillon added, since Walmart ‘has more money than it knows what to do with.’ ‘Not that there’s anything wrong with that,’ Rosenstein responded, according to five people familiar with the investigation. ‘We are all capitalists here.’ Rosenstein’s quip brought the prosecutorial team up short. They weren’t pursuing Walmart because it was profitable but because, in their view, the company had put its customers at deadly risk. Not long after, Rosenstein’s assistant entered the room to say he had a call. He left. The prosecutors’ push to persuade Rosenstein to revive the criminal case had failed.”

Climate and environmental crises

“Coronavirus: ‘Nature is sending us a message’, says UN environment chief” 

[Guardian, via Naked Capitalism Water Cooler 3-25-20]

“[Inger] Andersen, executive director of the UN Environment Programme, said the immediate priority was to protect people from the coronavirus and prevent its spread. ‘But our long-term response must tackle habitat and biodiversity loss,’ she added. ‘Never before have so many opportunities existed for pathogens to pass from wild and domestic animals to people,’ she told the Guardian, explaining that 75% of all emerging infectious diseases come from wildlife. ‘Our continued erosion of wild spaces has brought us uncomfortably close to animals and plants that harbour diseases that can jump to humans.’”

[Science, via Naked Capitalism Water Cooler 3-25-20]

“It’s become an all-too-common tale: An introduced insect takes hold in a new home and then spreads, wreaking havoc with ecosystems and economies. Take, for instance, the emerald ash borer, an Asian beetle first spotted in North America in 2002; researchers estimate it has killed hundreds of millions of ash trees and caused more than $10 billion in damage. Now, in a bid to prevent such catastrophes—and get an early warning of which exotic pests are likely to cause trouble—researchers from the United States, Europe, and China are trying a new approach: planting ‘sentinel trees’ from their own regions in distant nations, and then observing which insects attack. The findings should help authorities more quickly recognize and snuff out threatening introduced insects if they show up in the trees’ native countries. Sentinel trees are ‘the new frontier’ in fighting forest pests, says entomologist Jiri Hulcr at the University of Florida. Already, groves of North American and European trees planted in China have enabled scientists to identify and start to study more than a dozen insects of concern.”

“Pesticides as a cause of soil degradation” 

John Kempf [Quoting Michael McNeill, from the Regenerative Agriculture Podcast, via Naked Capitalism Water Cooler 3-27-20]

[MCNEILL:] The other day I was cleaning out a drawer in my desk, and I found some old pictures that I had taken back in 1972 or 1973 of crops that were growing. I had some close-ups and some overviews of the field. The thing that I noticed was how healthy the plants were. There were no disease lesions on them anywhere. The corn plants were just perfect. And the whole field was that way.

It’s really hard to find a field today that is that way. I was looking at the weeds that were growing along the fence rows, and they were big and healthy and looked great. They don’t look so good today, comparatively speaking. And you say, “Well, maybe that’s a good thing!” No, it’s not. The whole area that we’re farming is unhealthy. It makes me ask the question—what’s changed?

To me, the big difference from that era until today is that farmers have been drawn into big ag. You need to use herbicides. You don’t want to use a cultivator. You have to farm more land. So you use herbicides, but herbicides are doing things to the soil, because they’re all chelators. So now the plants become a little bit imbalanced in the nutrition that they’re taking up, and you find more disease—you find more insect pressure. So you start using fungicides and insecticides—more chelators, more poisons being dumped onto the ground. And you’re pretty impressed with how they work. The field is perfectly clean, and weed free—excellent. The diseases were dramatically reduced. The fungicides worked really well. The corn borers and some other of the insects that were issues went away. It was magic. The chemistry was totally magic—it looked beautiful.

But as time went on, the chemistry started poisoning the good things that were in the soil. And so, today, I’m called out to look at farms where the guy’s production has dropped off dramatically and the soil is virtually dead.

Information Age Dystopia

‘Oh Hell No’: DOJ Using Coronavirus Crisis to Push for Expansive Emergency Powers
[Common Dreams, via Naked Capitalism 3-22-20]

Working class suicide

[Payday Report, via Naked Capitalism 3-247-20]
Lambert Strether: “She also opposes fracking, and supports the #GreenNewDeal.”


Open Thread & March 28th US Covid Numbers Update


March 30th US Covid Data, Doubling Rate Slows


  1. The best interview, EVER, of a scientist on covid-19 and public policy is on youtube: “Perspectives on the Pandemic | Dr John Ioannidis of Stanford University | Interview”

    If you haven’t heard of Ioannidis, that’s too bad. From wikipedia:

    His 2005 paper “Why Most Published Research Findings Are False”[2][3] is the most downloaded paper in the Public Library of Science, and has the highest number of Mendeley readers.”

  2. KT Chong

    Nameste: Guided Meditation for Neoliberals with Shim Shai:

  3. Zachary Smith

    This shows an animated graph of the progress of the Coronavirus since March 1.
    Remember as you watch it the unending efforts of Republicans to shrink Government till it can be drowned in a bathtub. Of the “pretend” opposition of the Democrats to that effort as well as their greatly delayed and sham Impeachment. And of course think of Saint Hillary for hand-picking her 2016 opponent – presumably the worst and weakest of all those in the Republican Primary. She got half of it right.

  4. Zachary Smith

    link found in the comments section of MOA:

    The $3,000 ventilator which didn’t happen. (and guess who killed the project)

  5. Stirling S Newberry

    We don’t know were the HIT rate for Covid-19. Since there are “super-spreaders” the mean the maximum needs to be used, not the average. 74% or so in the average rate, so 70% is too low and 80% is extremely optimistic.

  6. DMC

    I remember in the early 2000’s, at my in-laws in suburban DC, they became curious about some sort of bug that “acted like box elder bugs” in that they sought shelter under shingles and indoors and in their linen closet, as fall turned into winter. A little research identified them as Brown Marmorated Stink Bugs(Halyomorpha halys), an Asian species, just introduced a couple of years earlier, which had a very unfortunate characteristic, namely that they could eat a very large number of things that humans also like to eat and as an introduced species, had no natural predators. They are wreaking havoc on any number of tree crops, as well as berries, peppers, corn, soybeans and tomatoes. And it’s not even the worst recently introduced insect menace. That honor goes to the spotted lantern bug(or fly, though it is in fact a bug, Hemiptera). That whole globaliztion thing is starting to look a bit ill-considered.

  7. Hugh

    Your first link about flattening the curve: massive testing, treatment and isolation of the sick and positive tests, building up immunity in the population, and vaccine is like Epidemiology 101, but it is important to get this message out there. Who knows, maybe even Trump and Pence may get it? OK, well, probably not.

    Grover Norquist certainly did his part to weaken the institutions needed to combat COVID-19, but there are a host of others to thank going back to Reagan. And of course, Trump is hands down the worst possible President to have for such a crisis or really any crisis. He is an intensely ignorant man, indecisive, erratic, spiteful. He lies constantly. But let’s not forget both the Democrats and Republicans who have suppressed and fought universal single payer healthcare and real national healthcare planning for decades. These are people who never met a war they didn’t like, never shied away from spending tens of trillions to bail out a criminal financial system and the rich, never had a problem sending millions of jobs to China or creating complex incredibly unstable supply chains thousands of miles long. Think of what kind of a society we could have had if all these had looked out for our interests and not there own. Not only would a COVID-19 been less likely, we would have been much better prepared for it.

    BTW the monthly job report from the BLS will be out Friday. It is comprised of two surveys, the CES and the CPS. The CES is Current Employment Statistics or Establishment survey. It is much larger (and accurate) and gets information from businesses. It basically counts jobs. The CPS is the Current Population Survey. It is smaller, less accurate, and is based on self-reported questionnaires from individuals. It counts employment/unemployment. Because of how the surveys are conducted, while the CES is overall more accurate, it is not as good as the CPS in registering rapid changes. So the CPS will be the place to look for these. And because of definitions, in the CPS, it may be more useful to look at the decline in employment rather than in the rise in unemployment.

    Just to repeat, the blogger beowulf, a self-described conservative, came up with the idea for the trillion or multi-trillion dollar platinum coin. The federal government ceded most money making (almost certainly unconstitutionally) when it created the Fed in 1913. It retained the right to mint coins (a few percent of actual money created). Under law, the value of these coins was to reflect the value of the materials which comprised them, with two notable exceptions, coins made from platinum and palladium. beowulf’s suggestion was that government mint platinum coins as needed at the value it chose and deposit them in its account at the Fed. The point of the exercise was to give back some of the money creation power which it had previously ceded to the Fed. And no, this would not have created hyper-inflation, if reasonably handled, just as the trillions and tens of trillions the Fed creates doesn’t.

    Most of the links illustrate what we saw back in 2008-2010. The PTB will loot up to a crash and then loot the crash. They will steal the golden eggs, eat the goose that laid them for lunch, and then go looking for another goose. All I can say is think locusts.

  8. Stirling S Newberry

    We are watching his history action – specifically why many people must die before the change takes place. Under usual circumstances, the government is run very badly, and it is supposed to be run very badly. Every 4 years to not very distinguished candidates, or worse yet to candidates who promise to make money for the elite, go up against each other in a presidential election. It was made sealable by the designers and has repeatedly been made resistant to attempts to be unscalable. Because ordinarily mediocre people want a president who they know will do mediocre things.

    But when events happen so that it matters who is president, ignoring the usual die-off rate which is expected, the elites are not going to roll over and play dead. Let us take the presidential election of 1928. The mechanics for the great depression were already in progress, but it was not obvious either the elites or much of the electorate. So we elected Hoover. Contrary to popular opinion, he was not a bad president. Unfortunately, he was not a good president either, he was just a mediocre Pres. at an inopportune time. So we had to wait for 4 years and demanded a great president.

    There is no way to know whether we are going to get that chance, but this is not 1932 it is 1928: 2 mediocre, all right much worse than mediocre, contenders are lining up to claim the prize being a mediocre Pres. in inopportune times. One can see why this is so: both of these men were working the levers years in advance. And there was no obvious reason why it should not the mediocre president to either the elites or a plurality of the electorate. Yes, people who think about things can see why an excellent president could be elected, but these are few in number, and more people want their fortunes to be protected or there arcane rites to abuse other people, so that is what will win out: a mediocre president who will protect enough elites and other members of the electorate in their peculiar institutions. Take the 15th president as an example.

    This means that the slightly greater numbers of the public should look forward. There is at the present time an excellent reason to elect an excellent president. We are going to get 4 years to remind us, in detail, what masses of the dead will look like. 200,000, by their own estimates, are going to die. It might be more than that it might be less than that, but it is also destroying wealth at an obscene rate. 20% of GDP is going to suffer next quarter. A lot of that is going to come from the pocket of the elites because they have destroyed almost everything that the bottom of society has.

    See you on the other side.

    (Grammarly thinks this missive in “informative.”)

  9. This proto-pandemic has proven just what a shitstain on humanity Christianity is. While everyone else in the world are at home, with all of the synagogues – with the exceptions of Gaza and the West Bank the Apartheid State of Israel is locked down – and mosques closed (they’re not calling from the rooftops to prayer, they’re calling ‘pray at home, pray at home); with wizards’ moots and witches’ covens canceled and even the Satanists and those without religion – the Atheists – staying home, trying not to catch this thing, this thing new to the human race, trying not to pass it around, trying not to overwhelm the system and fuck us all, and there are the god-damned christians: thousands of ’em, tens of thousands of ’em, rolling on the floor babbling incoherently while gleefully passing it amongst themselves, and carrying it back out into the community. They don’t give a good god-damn about the rest of us, they’ll kill us all, and there’s your metaphor for a shitstain on society, on history, on humanity.

    I have no sympathy, they are a threat to the public health. Lock. Them. In.

  10. Ché Pasa

    Oh well, now The Woman With the Shoulder Scarves and Fauci are rather cheerfully offering up 200,000 dead in the USA “if we do everything right” from this point. Of course the Christianists are delighted as it fulfills some bizarre death cult revelation of theirs, and the more that die, the better it is for the survivors.

  11. anon

    The media is going with potentially 100-200k deaths. The key words that they leave out of the headlines is the caveat that 100-200k die if we do everything perfectly, which has not and will never be the case. The USA will never lock down its country in the same way China did nor will it do massive testing in the way South Korea did. The worst case scenario of millions dead is very plausible.

    Americans are still being told not to wear masks because social distancing and hand washing are enough. The truth is that wearing masks and gloves help significantly both in protecting the healthy and preventing the sick from spreading the virus – the Asians have known this for a long time – but there simply aren’t enough masks available in the USA, so the little we have are being sent to health care professionals. All I can recommend is do wear a mask if you have were able to get your hands on some. Even wearing a bandana over your mouth and nose is better than wearing nothing at all if you must go outside for shopping and errands.

  12. different clue

    Marmorated stink bugs are just beginning to show up in South East Michigan. They seek out relatively warmer places in the Fall to shelter from the descending cold. I have avoided any in my dwelling unit so far by letting my indoor temperature fall to match my outdoor temperature deep into fall. So my dwelling unit is not a thermal attractant to the bugs.

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