Trump, the Mail and the Unbinding of America
The Postal Service facilitates citizen inclusion. That’s why Trump hates it.
By Paul Krugman
In June the independent website Factcheck.org made a dig at Joe Biden, publishing a post titled “Biden Floats Baseless Election Conspiracy.” Biden, you see, had suggested that Donald Trump “wants to cut off money for the post office so they cannot deliver mail-in ballots.” There was, said the post, no evidence that Trump’s “stance toward the U.S. postal system is related to the presidential election.”
A few days ago Factcheck.org conceded that Biden had, in fact, been right. The confirmation? Trump’s own statements.
Nancy Pelosi is calling the House back from summer recess to consider legislation on the issue, and for good reason: There are not one but two possible constitutional crises looming. In one, millions of votes never get counted. In the other, delays in the counting of mail-in votes lead Trump to claim victory in an election he actually lost.
These November nightmares are the reason we need to act urgently to secure the integrity of America’s mail. But there’s also a larger, longer-term aspect to the assault on the postal system. It’s part of a broader attack on the institutions that bind us together as a nation.
There was, after all, a reason the Constitution specifically granted Congress the ability to “establish post offices and post roads.” Clearly, the founders saw some kind of national postal system as one way to help turn the still shaky idea of the United States as a nation into reality. In fact, in its early years one of the post office’s key roles was the delivery of newspapers, as a way to keep Americans informed and connected.
The Postal Service as we know it now didn’t emerge all at once. Instead, it evolved gradually, through an accumulation of both formal legislation and precedents.
Direct delivery of mail to urban homes didn’t begin until 1863, and permanent rural free delivery until 1902. The Parcel Post wasn’t created until 1913; previously, rural customers had to rely on a cartel of private companies that conspired to keep shipping rates high.
All these changes, however, had a common theme: bringing Americans into better contact with one another and the world at large. A key part of the post office’s ethos has long been that it has a “universal service obligation,” “binding the nation together” and “facilitating citizen inclusion.”
For much of America’s history this largely involved bringing remote areas access to the fruits of urban economic progress; it’s hard to overstate how much difference the rise of the mail-order business, made possible by postal expansion, made to the quality of rural life. And postal delivery remains crucial in rural areas, which are poorly (and expensively) served by private delivery companies.
But it’s not just the rural population; the Postal Service remains a lifeline, sometimes literally, for many Americans who for whatever reason have limited ability to, say, visit a pharmacy to pick up prescriptions. The Department of Veterans Affairs delivers about 80 percent of its outpatient prescriptions by mail.
As the mail-in voting crisis has erupted, some of the usual suspects on the right have taken to denouncing the Postal Service as a bad, money-losing business. But the founders didn’t put the postal clause in the Constitution because they saw it as a business opportunity; the Postal Service was supposed to serve broader national goals — and it still does.
But, you may ask, why should this logic apply only to the mail? Shouldn’t we support other institutions that bind the nation together? Yes, we should — and do.
The Rural Electrification Administration, created in the 1930s to bring power to rural areas, was about national integration as well as economic development — and beginning in 1949 it subsidized the expansion of rural telephone networks, too. The Interstate Highway System was justified in part with dubious claims about national security, but it had the effect of reinforcing national unity.
What about the internet? Should we have a policy to ensure that Americans have access to modern telecommunications, too? Actually, yes.
Internet access in America is far more expensive than in other advanced countries, because largely unregulated private providers abuse their market power, much like the private shippers that exploited farmers before the creation of the Parcel Post.
Of course, we don’t expect every service in the modern economy to be subject to a universal service obligation. We don’t all need golf course memberships or private boats to participate fully in our national life.
But most Americans — presumably including most of the 91 percent of the public with a favorable view of the Postal Service — believe that there are some things that should be universally available, even if providing those things isn’t profitable, because they’re important components of full citizenship.
Unfortunately, Trump and those around him don’t share that belief, perhaps because they don’t really buy into this notion of “full citizenship” in the first place. And that’s one reason they might have been trying to cripple the post office even if it weren’t their best hope of stealing this election.
Covid-19 Is Creating a Wave of Heart Disease
Emerging data show that some of the coronavirus’s most potent damage is inflicted on the heart.
By Haider Warraich
SARS-CoV-2, the virus that causes Covid-19, was initially thought to primarily impact the lungs — SARS stands for “severe acute respiratory syndrome.” Now we know there is barely a part of the body this infection spares. And emerging data show that some of the virus’s most potent damage is inflicted on the heart.
Eduardo Rodriguez was poised to start as the No. 1 pitcher for the Boston Red Sox this season. But in July the 27-year-old tested positive for Covid-19. Feeling “100 years old,” he told reporters: “I’ve never been that sick in my life, and I don’t want to get that sick again.” His symptoms abated, but a few weeks later he felt so tired after throwing about 20 pitches during practice that his team told him to stop and rest.
Further investigation revealed that he had a condition many are still struggling to understand: Covid-19-associated myocarditis. Mr. Rodriguez won’t be playing baseball this season.
Myocarditis means inflammation of the heart muscle. Some patients are never bothered by it, but for others it can have serious implications. And Mr. Rodriguez isn’t the only athlete to suffer from it: Multiple college football players have possibly developed myocarditis from Covid-19, putting the entire college football landscape in jeopardy.
I recently treated one Covid-19 patient in his early 50s. He had been in perfect shape with no history of serious illness. When the fevers and body aches started, he locked himself in his room. But instead of getting better, his condition deteriorated and he eventually accumulated gallons of fluid in his legs. When he came to the hospital unable to catch a breath, it wasn’t his lungs that had pushed him to the brink — it was his heart. Now we are evaluating him to see if he needs a heart transplant.
An intriguing new study * from Germany offers a glimpse into how SARS-CoV-2 affects the heart. Researchers studied 100 individuals, with a median age of just 49, who had recovered from Covid-19. Most were asymptomatic or had mild symptoms.
An average of two months after they received the diagnosis, the researchers performed M.R.I. scans of their hearts and made some alarming discoveries: Nearly 80 percent had persistent abnormalities and 60 percent had evidence of myocarditis. The degree of myocarditis was not explained by the severity of the initial illness.
Though the study has some flaws, and the generalizability and significance of its findings not fully known, it makes clear that in young patients who had seemingly overcome SARS-CoV-2 it’s fairly common for the heart to be affected. We may be seeing only the beginning of the damage.
Researchers are still figuring out how SARS-CoV-2 causes myocarditis — whether it’s through the virus directly injuring the heart or whether it’s from the virulent immune reaction that it stimulates. It’s possible that part of the success of immunosuppressant medications such as the steroid dexamethasone in treating sick Covid-19 patients comes from their preventing inflammatory damage to the heart. Such steroids are commonly used to treat cases of myocarditis. Despite treatment, more severe forms of Covid-19-associated myocarditis can lead to permanent damage of the heart — which, in turn, can lead to heart failure.
But myocarditis is not the only way Covid-19 can cause more people to die of heart disease. When I analyzed data from the Centers for Disease Control and Prevention, I found that since February nearly 25,000 more Americans have died of heart disease compared with the same period in previous years. Some of these deaths could be put down to Covid-19, but the majority are likely to be because patients deferred care for their hearts. That could lead to a wave of untreated heart disease in the wake of the pandemic.
Many patients are understandably apprehensive about coming back to the clinic or hospital. The American Heart Association has started a campaign called “Don’t Die of Doubt” to address the alarming reduction in people calling 911 or seeking medical care after a heart attack or stroke.
Since the beginning of the pandemic, it’s been clear that people with heart disease or related conditions such as diabetes or high blood pressure are at increased risk for severe Covid-19 illness. The C.D.C. recommends that the more than 30 million Americans living with heart disease practice extra precautions to avoid infection. Hospitals and clinics should work overtime both to ensure they are safe for patients and to bolster telemedicine services so that patients can be cared for without having to leave their homes.
Doctors and researchers should no longer think of Covid-19 as a disease of the lungs but as one that can affect any part of the body, especially the heart. The only way to prevent more people dying of heart disease, both from damage caused by the virus as well as from deferred care of heart disease, is to control the pandemic.
Quick Note on Lost GDP Due to Shutdowns
By Dean Baker
Some folks have complained about the loss of GDP over the last five months and questioned whether the shutdowns have been worth the price. While people often toss around huge numbers in the trillions of dollars as the cost of the shutdown, these big numbers are often both inaccurate and misleading.
Measuring Lost GDP
The first place to start is getting a measure of lost GDP. This is fairly straightforward. We can just apply a 2.0 percent growth projection (approximately the projection from the Congressional Budget Office) and apply it to GDP for the 4th quarter of 2019. The difference between this projection and actual GDP for the first and second quarters gives a reasonable approximation of the cost of the shutdown for the first two quarters. There will be continuing costs going forward, but these are at least as much due to fear of the pandemic, as the impact of ongoing shutdowns. (Air traffic has been running at 25 to 30 percent of year ago levels, even though no restrictions prevent people from flying.)
This simple calculation shows a combined loss of GDP for these quarters of $645 billion measured in 2012 dollars, which would be roughly $745 billion in today’s dollars. That comes to a bit less than $2,300 per person.
If this sounds less than the numbers often tossed around, this is because we generally annualize our GDP numbers. This means that numbers show how much production/spending we would have if the economy kept on the same pace for a full year. As a result, our second quarter GDP showed the economy falling a 32.9 percent annual rate in the second quarter, but it actually only shrank by roughly 8.0 percent. To be clear, this is still a very large loss of output, but it is probably considerably less than many people had envisioned.
Next, it is worth getting a better handle on where this drop in output came from. The figure above shows the breakdown between consumption, investment, and government expenditures. The striking part of this figure is the extent to which the decline in spending on consumer services accounts for the bulk, almost two-thirds, of lost output. This sector ordinarily accounts for less than 45 percent of GDP.
Before looking at consumer services more closely, it is worth commenting on the relatively smaller declines in other areas. The drop in investment means that we will be somewhat less wealthy in the future because we invested at a slower rate due to the shutdowns. While that is a loss to the economy, any reduction in future productivity due to lost investment is likely to be swamped by the effective gains in productivity associated with increased telecommuting and other changes due to the crisis. So, as a general rule, more investment is better than less investment, but the enduring reduction in work expenses due to changes made during the pandemic will far more than offset the impact of this lost investment on productivity.
There was very little change in residential investment as a result of the shutdowns. While construction did slow when the shutdowns were in place most strongly in March and April, it has been close to normal in the months since then, as demand for housing has remained strong. This means we will not be seeing any shortages of housing due to the pandemic.
It turns out that there has been little net change in government expenditures as a result of the shutdowns. A modest reduction in federal expenditures was mostly offset by an increase in expenditures at the state and local level. It is important to remember that these data refer to actual expenditures on goods and services by the government. While they would include payments for education and hospital care, they exclude transfer payments such as unemployment benefits or the $1,200 per person pandemic checks.
Turning to consumption, there were modest declines in goods consumption, but much of this is likely linked to work-related expenses. In the case of the decline in durable goods consumption, more than half is explained by reduced spending on cars, jewelry and watches, and luggage. These are mostly expenditures that are work-related. The other major drop was in therapeutic appliances and equipment, like eyeglasses. This is an important issue, that I will come back to shortly.
There was a small drop in consumption of nondurable goods, where a large increase in spending on food purchased for home consumption almost offset sharp declines in spending on gasoline and clothes. These drops are clearly due in large part to lower work-related expenses. (It is worth noting that spending on newspapers and periodicals was more than 20 percent higher in the second quarter than it had been in the 4th quarter of 2019.)
The real story of the GDP plunge is in services and it is not hard to guess which ones. The ones involving work-related expenses all saw sharp declines. Spending on “personal care services,” which involves items like hair salons and dry cleaning, was down by 77 percent from the fourth quarter of 2019 to the second quarter of 2020. Transportation services were down by 41.3 percent, with public transportation seeing a falloff of more than 80 percent.
The second major category involves recreation and entertainment spending. Spending on recreation services, which includes things like amusement parks, concerts, and movies, was down 58.8 percent. Spending on restaurants and hotels was down 40.1 percent.
The third major category was health care, with spending down by 25.3 percent. The sharpest decline was in areas like physicians’ offices and dental services.
How should we think about these areas of lost consumption. The first category of work-related expenses is probably not a big loss. (I know everything in this category is not directly work-related, but most of the decline is.) If people spend less money on transportation because they aren’t driving or taking the bus to work, that is not an obvious loss in their well-being.
The second category involves activities that people enjoy doing. For several months they have not been able to go to restaurants and movies, visit with friends and family members, or engage in other normal activities. It is possible to see these things as frivolous, and that might be right compared to dying from the coronavirus, but we are only alive for so long. If we can’t do the things we enjoy, and see people we care about, for six months or a year, that is a big deal.
Finally, we have the category of health care services. Much of this involves things like putting off a checkup or a teeth cleaning. Most of the time, there will not be major consequences from a delay of a couple of months, but in some cases there will be. A person who has to wait another three months to have a cancer detected or to discover they have a heart problem may suffer serious and lasting health damage.
There is also the issue that fear of the pandemic may have discouraged people from getting necessary treatment or tests. For example, would a cancer patient, whose immune system is seriously compromised, feel comfortable going into a doctor’s office or hospital for tests? This is likely less an issue of shutdowns blocking care as opposed to the pandemic itself.
In fact, as we move into a period where most of the legal barriers have been removed or relaxed, this fear is likely to be the greatest issue going forward. People will not return to their former way of life until they can be sure that it is safe, and that means getting the pandemic under control.
I haven’t touched on the issue of schools thus far. This is huge for both the children and the parents. Undoubtedly, the shutdowns and school closings created hardships for many families, especially for mothers of small children. This may have been the largest cost of the shutdowns, as many families found themselves in cramped living spaces for long periods of time. We will likely get a better picture of the full impact some months down the road, when more data are available, but it is likely that the shutdowns have been associated with more incidents of domestic violence.
From the standpoint of children, it seems clear that the lack of in-school instruction will further exacerbate the education gap between the children from lower income families and children from the upper middle class. The latter group is likely to have the resources to ensure that their kids receive adequate instruction. That is not the case with children from poorer backgrounds, where parents may be forced to work outside the home and they may not have access to computers or reliable Internet.
This could mean that these children will face lasting consequences in the form of lower graduation rates, lower rates of college completion, and lower incomes during their working careers. There is no easy short-term fix here. We can talk about programs to try to make up the lost ground for students from low- and moderate-income families, but realistically, this is not going to happen. We have failed miserably at trying to equalize educational opportunities over the last sixty years, we are not suddenly going to be able to turn things around in the next decade or so for the children currently in school.
To my view, the more promising route is to try to reduce the huge wage gaps we see now so that it matters much less who got the better education. If we had a minimum wage of $24 an hour and CEOs got paid $2-$3 million a year (with corresponding pay cuts for other top execs), the differences in opportunities would not condemn today’s children to a life of hardship. Unfortunately, few people in high level policy positions want to have this discussion.
Getting the Virus Under Control
While the cost of the shutdowns this spring were substantial, the cost of not shutting down much of the economy would have been enormous. When the country began to shut down in mid-March, the rate of infection was exploding. It was doubling every three or four days, and the reported rate was almost certainly a gross understatement of the actual rate, since testing was very limited. By early April, the pandemic was causing more than 2,000 deaths a day. The number peaked around 2,300 in mid-April and then began to fall gradually until early July, when it was just over 500 a day. It since has risen again to more than 1,200 a day.
Had it not been for the initial lockdown in mid-March, it is almost certain that the infection would have continued to spread exponentially and the number of deaths would have grown along with the number of infections. There can be little doubt that the shutdowns saved many hundreds of thousands of lives in the United States, and quite possibly well over a million.
It is also important to recognize that many of the people who get the virus, but don’t die, suffer lasting effects. There have been a number of accounts of people who have recovered from the disease but have enduring cognitive and/or physical problems. At this point, we do not have good data on the percentage of the people who get sick who will suffer lasting effects. But it would be wrong to ignore the consequences of the disease for people who get sick but don’t die.
Also, when we consider possible costs for restrictions in the United States going forward, it is important to realize the extent to which we are an outlier. Most other wealthy countries have largely succeeded in bringing the pandemic under control. The European Union (EU), in spite of a recent upsurge, has been averaging less than 7,000 cases a day. That compares to 60,000 in the United States, in spite of the fact that the EU’s population is 20 percent larger. The EU has been averaging around 150 deaths a day, compared to well over 1,000 in the United States.
Other wealthy countries generally had stricter shutdowns and smarter re-openings. As a result, the cost to their economies is likely to end up being considerably lower than in the United States. So, even if we decide that the benefits to public health may have been worth the cost to the economy, that doesn’t mean that we could not have had the same or larger benefits at a lower price, with good planning.
Chinese mainland reports 22 new COVID-19 cases, no new deaths
The Chinese mainland registered 22 new cases of COVID-19 on Monday – all from overseas, the Chinese health authority said on Tuesday.
No deaths linked to the disease were recorded on Monday, while 39 COVID-19 patients were discharged from hospitals.
The total number of confirmed cases on the Chinese mainland stands at 84,871 and the cumulative death toll at 4,634, with 356 asymptomatic patients under medical observation.
Krugman: “But the founders didn’t put the postal clause in the Constitution because they saw it as a business opportunity;”
The author of the Wikipedia article on the Postal Clause seems to disagree: “The Postal Clause was added to the Constitution to facilitate interstate communication as well as to create a source of revenue for the early United States.”
A blast from my life’s past growing up in Chicago “Last Chicago Sears Store Closing” At Christmas time the Sears would have 1/2 a floor of toys and games. We would be up there playing with them until Sales people chased us away. The building is to be torn down and 400 upscale apartments are to be built there.
On the corner of Cicero and Irving Park Road was an old fashion newsstand. Cars would pull up and get the latest newspapers.
“Designed by Chicago architects Nimmons, Carr & Wright, the costly $1 million store was the first of the company’s gigantic solid-walled stores in Chicago featuring the largest display window in the city at the time in 1938. Other Sears stores had relied on windows for addition light and outside air circulation.”
The fierce, politically driven mistake of incautiously opening Israeli schools and businesses.
How severe the incautious opening of Israel has been, after the coronavirus spread had appeared to be controlled, can be understood in realizing that little Israel has experienced 96,093 infections in all now, while China has experienced 84,871.
The WEI is an index of real economic activity using timely and relevant high-frequency data. It represents the common component of ten different daily and weekly series covering consumer behavior, the labor market, and production. The WEI is scaled to the four-quarter GDP growth rate; for example, if the WEI reads -2 percent and the current level of the WEI persists for an entire quarter, one would expect, on average, GDP that quarter to be 2 percent lower than a year previously.
Japan’s Economy Contracts 7.8 Percent, Worst Decline on Record
The quarterly slide, an annualized drop of 27.8 percent, coincides with a long and uncertain road to recovery.
By Ben Dooley
Reeling From a Storm, Iowans Worry They Have Been Forgotten
In Cedar Rapids, where President Trump stopped briefly on Tuesday, thousands of people are unable to return to their homes after devastating winds tore through the state.
By Nicholas Bogel-Burroughs and Lucy Tompkins
[ The matter of media coverage of the fierce storm and aftermath in Iowa has been raised. Importantly, the New York Times has covered the Iowa disaster with 5 articles so far, beginning the day after the storm. ]
Manhattan Vacancy Rate Climbs, and Rents Drop 10%
There were more than 67,300 units available in July across the city as it tries to rebound from the coronavirus outbreak.
By Matthew Haag
Chinese mainland reports 17 new COVID-19 cases, no new deaths
The Chinese mainland registered 17 new cases of COVID-19 on Tuesday – all from overseas, the Chinese health authority said on Wednesday.
No deaths linked to the coronavirus disease were recorded on Tuesday, while 43 patients were discharged from hospitals.
The total number of confirmed cases on the Chinese mainland stands at 84,888 and the cumulative death toll at 4,634, with 345 asymptomatic patients under medical observation.
One really encouraging thing about the past few days is that nobody seems to care about the stock market hitting new highs. Good judgment! The stock market is not the economy. Still, is there a puzzle here? Less than you might imagine 1/
One really encouraging thing about the past few days is that nobody seems to care about the stock market hitting new highs. Good judgment! The stock market is not the economy. Still, is there a puzzle here? Less than you might imagine 1/
9:12 AM · Aug 19, 2020
In 2020, the stock market is dominated by a handful of tech giants that can expect to earn a steady stream of monopoly or quasi-monopoly rents for years to come. The value of these companies should depend on the discounted value of those streams 2/
What affects this discounted value? The expected state of the economy over the next few quarters *shouldn’t* matter much, as long as we’re eventually going to recover. What should matter a lot, however, is the discount rate 3/
That is, how much should an expected dollar of FAANG * profits 5 years from now be worth today? That depends on the returns on alternative assets — like, say, inflation-protected government bonds. And those returns are at record lows 4/
So even if you think 2020-21 is going to be lousy, if you think Amazon will be making money in 2025 — and your alternative is govt bonds that yield 1% less than inflation — buying Amazon isn’t that strange 5/
Not saying that this is the whole story, but anyone talking about stocks without mentioning bond yields is missing a large part of what’s going on 6/
Should We Be More Worried About the Economy?
By Dean Baker
We are really in an unprecedented period where the economy is trying to recover from the shutdowns of April and May, while being faced with partial shutdowns due to the resurgence of the pandemic in large parts of the country. We are struggling to make sense of data, which often has a substantial lag. We are still getting data from July even as we are in the last weeks of August. Furthermore, when we have large monthly changes, the picture at the end of July could have been very different from the beginning of the month.
The Opportunity Insights program at Harvard University is trying to help navigate the storm with its Economic Tracker. * This provides much more current data on a variety of measures by relying on various industry sources. The latest picture is not good.
Starting with the one I find most troubling, their source on job posting shows a huge falloff in August. Nationally, we are almost back to the lows reached in May.
[Graph]
There is the qualification that these are posting at small businesses, so perhaps the story would look different if we included mid-sized and large businesses, but still this picture is not encouraging. Their data on small businesses that are open and revenue are also not good.
The other very disturbing item is their data on consumer spending, which is derived from credit and debit card spending.
[Graph]
The data show a healthy bounce back in June, but then spending levels off in July. Then, spending begins to trail off at the end of the month and start of August. Note that this is just as unemployment insurance supplements are ending.
These are new data sources that I and most other economists are not familiar with. That means that there can be quirks that explain the plunge in job postings and falloff in spending that we do know about. But on its face, these data suggest a recovery that is stalling, with many businesses closing and millions of workers not being able to go back to their jobs.
That should make the case for a new rescue package more urgent and also again remind us of the importance to the economy of bringing the pandemic under control.
The fierce, politically driven mistake of incautiously opening Israeli schools and businesses.
How severe the incautious opening of Israel has been, after the coronavirus spread had appeared to be controlled, can be understood in realizing that little Israel has experienced 97,969 infections in all now, while China has experienced 84,888.
The Dominican Republic has been the faster growing country in GDP per capita in the Western Hemisphere since 1971. Cuba has been continually sanctioned economically by the US through these years, however Cuba has a far superior healthcare system as reflected now in the coronavirus experience of the countries and for years past in other critical healthcare reflections.
The Dominican Republic has been the fastest growing country in GDP per capita in the Western Hemisphere since 1971. Cuba has been continually sanctioned economically by the US through these years, however Cuba has a far superior healthcare system as reflected now in the coronavirus experience of the countries and for years past in a range of critical healthcare experiences.
Debunking the Myth of ‘Debt-trap Diplomacy’: How Recipient Countries Shape China’s Belt and Road Initiative
By Lee Jones and Shahar Hameiri
Summary
The Belt and Road Initiative (BRI) is seen by some as a geopolitical strategy to ensnare countries in unsustainable debt and allow China undue influence. However, the available evidence challenges this position: economic factors are the primary driver of current BRI projects; China’s development financing system is too fragmented and poorly coordinated to pursue detailed strategic objectives; and developing-country governments and their associated political and economic interests determine the nature of BRI projects on their territory.
The BRI is being built piecemeal, through diverse bilateral interactions. Political-economy dynamics and governance problems on both sides have led to poorly conceived and managed projects. These have resulted in substantial negative economic, political, social and environmental consequences that are forcing China to adjust its BRI approach.
In Sri Lanka and Malaysia, the two most widely cited ‘victims’ of China’s ‘debt-trap diplomacy’, the most controversial BRI projects were initiated by the recipient governments, which pursued their own domestic agendas. Their debt problems arose mainly from the misconduct of local elites and Western-dominated financial markets. China has faced negative reactions and pushback in both countries, though to a lesser extent than is commonly believed, given the high-level interests at stake in the recipient countries.
To improve the quality of BRI projects, Chinese policymakers should develop a coherent, integrated decision-making system with sufficient risk assessment capacities and strict, clear and enforceable rules. This would involve tackling vested interests within China, particularly among commercially oriented agencies and in the state-owned enterprise (SOE) sector.
Recipient governments must take greater responsibility for the evaluation of potential projects to ensure their viability and financial sustainability. They must also develop their ability to bargain with Chinese partners to make certain that local people benefit from the BRI. Since China continues to place great emphasis on host-country regulation, BRI partners must bolster their laws and regulatory environment.
Policymakers in non-BRI states should: avoid treating the fragmented activities of the BRI as if they were being strategically directed from the top down; provide alternative development financing options to recipient states; engage recipients and China to improve BRI governance; and help improve the transparency of ‘megaprojects’.
Civil society and political opposition groups in recipient countries should focus their efforts on demanding transparency and public participation around the design, feasibility, selection, pricing, tendering and management of megaprojects.
Chinese mainland reports 7 new COVID-19 cases, no new deaths
The Chinese mainland registered 7 new cases of COVID-19 on Wednesday – all from overseas, the Chinese health authority said on Thursday.
No deaths linked to the coronavirus disease were recorded on Wednesday, while 60 patients were discharged from hospitals.
The total number of confirmed cases on the Chinese mainland stands at 84,895 and the cumulative death toll at 4,634, with 352 asymptomatic patients under medical observation.
The Burden of the Debt: Lessons for Biden Adviser Ted Kaufman
By DEAN BAKER
Top Biden adviser, and long-time personal friend, Ted Kaufman was seen * in the Wall Street Journal warning that the debt run up by the Trump administration will seriously limit what Biden will be able to do as president. This is wrong big time, and it is the sort of silly thing that no one in a Biden administration should ever be saying.
The government’s ability to spend is limited by the economy’s ability to produce, not the debt. If the government spends too much, it will lead to inflation. When we have a period of high unemployment, as is the case now and almost certainly will still be the case if Biden takes office in January, we are very far from hitting the economy’s inflation barriers.
It takes some very deliberate head-in-the-ground economics ** to argue that we are somehow limited by the size of the government debt. Japan provides a great model here. Its ratio of debt to GDP is more than 250 percent, more than twice the current U.S. level. Yet, the country is seeing new zero inflation and has a 0.03 percent interest rate on its long-term debt. The interest on its debt is near zero, since much of its debt carries a negative interest rate.
The idea that we would not address pressing needs, like climate change, child care, and health care because we are concerned about the debt burden is close to crazy. As long as the economy is not near its capacity, there is zero reason not to spend to address these priorities, and even when it does approach its capacity, we can impose higher taxes on the economy’s big winners over the last four decades.
I will also throw in one important item of logic that our deficit and debt hawks should be forced to deal with. When the government issues patent and copyright monopolies to pharmaceutical and software and other companies, this is a form of implicit debt. These monopolies are effectively private taxes that the government allows these companies to collect in exchange for their innovations or creative work.
The rent payments on these monopolies run into many hundreds of billions annually *** and quite possibly exceed $1 trillion annually. They dwarf interest payments on the debt. The debt whiners don’t get to exclude this implicit debt from their calculations just because they like the companies and individuals who benefit from these rents.
If people are having a hard time understanding the logic here, we can go back to pre-revolutionary France. To deal with its huge debt the government would sell off the right to collect specific taxes. I guess Mr. Kaufman and other deficit hawks would say this is fine since the country now had a lower debt burden, but that is not a serious position. It would be good if the economics profession could be united in explaining this simple logic to laypeople, but as is often said, economists are not very good at economics.
The fierce, politically driven mistake of incautiously opening Israeli schools and businesses. Then, an inability to comprehensively test for infections and isolate.
How severe the incautious opening of Israel has been, after the coronavirus spread had appeared to be controlled, can be understood in realizing that little Israel has experienced 99,201 infections in all now, while China has experienced 84,895.
Stocks Are Soaring. So Is Misery.
Optimism about Apple’s future profits won’t pay this month’s rent.
By Paul Krugman
On Tuesday, the S&P 500 stock index hit a record high. The next day, Apple became the first U.S. company in history to be valued at more than $2 trillion. Donald Trump is, of course, touting the stock market as proof that the economy has recovered from the coronavirus; too bad about those 173,000 dead Americans, but as he says, “It is what it is.”
But the economy probably doesn’t feel so great to the millions of workers who still haven’t gotten their jobs back and who have just seen their unemployment benefits slashed. The $600 a week supplemental benefit enacted in March has expired, and Trump’s purported replacement is basically a sick joke.
Even before the aid cutoff, the number of parents reporting that they were having trouble giving their children enough to eat was rising rapidly. That number will surely soar in the next few weeks. And we’re also about to see a huge wave of evictions, both because families are no longer getting the money they need to pay rent and because a temporary ban on evictions, like supplemental unemployment benefits, has just expired.
But how can there be such a disconnect between rising stocks and growing misery? Wall Street types, who do love their letter games, are talking about a “K-shaped recovery”: rising stock valuations and individual wealth at the top, falling incomes and deepening pain at the bottom. But that’s a description, not an explanation. What’s going on?
The first thing to note is that the real economy, as opposed to the financial markets, is still in terrible shape. The Federal Reserve Bank of New York’s weekly economic index suggests that the economy, although off its low point a few months ago, is still more deeply depressed than it was at any point during the recession that followed the 2008 financial crisis.
And this time around, job losses are concentrated among lower-paid workers — that is, precisely those Americans without the financial resources to ride out bad times.
What about stocks? The truth is that stock prices have never been closely tied to the state of the economy. As an old economists’ joke has it, the market has predicted nine of the last five recessions.
Stocks do get hit by financial crises, like the disruptions that followed the fall of Lehman Brothers in September 2008 and the brief freeze in credit markets back in March. Otherwise, stock prices are pretty disconnected from things like jobs or even G.D.P.
And these days, the disconnect is even greater than usual.
For the recent rise in the market has been largely driven by a small number of technology giants. And the market values of these companies have very little to do with their current profits, let alone the state of the economy in general. Instead, they’re all about investor perceptions of the fairly distant future.
Take the example of Apple, with its $2 trillion valuation. Apple has a price-earnings ratio — the ratio of its market valuation to its profits — of about 33. One way to look at that number is that only around 3 percent of the value investors place on the company reflects the money they expect it to make over the course of the next year. As long as they expect Apple to be profitable years from now, they barely care what will happen to the U.S. economy over the next few quarters.
Furthermore, the profits people expect Apple to make years from now loom especially large because, after all, where else are they going to put their money? Yields on U.S. government bonds, for example, are well below the expected rate of inflation.
And Apple’s valuation is actually less extreme than the valuations of other tech giants, like Amazon or Netflix.
So big tech stocks — and the people who own them — are riding high because investors believe that they’ll do very well in the long run. The depressed economy hardly matters.
Unfortunately, ordinary Americans get very little of their income from capital gains, and can’t live on rosy projections about their future prospects. Telling your landlord not to worry about your current inability to pay rent, because you’ll surely have a great job five years from now, will get you nowhere — or, more accurately, will get you kicked out of your apartment and put on the street.
So here’s the current state of America: Unemployment is still extremely high, largely because Trump and his allies first refused to take the coronavirus seriously, then pushed for an early reopening in a nation that met none of the conditions for resuming business as usual — and even now refuse to get firmly behind basic protective strategies like widespread mask requirements.
Despite this epic failure, the unemployed were kept afloat for months by federal aid, which helped avert both humanitarian and economic catastrophe. But now the aid has been cut off, with Trump and allies as unserious about the looming economic disaster as they were about the looming epidemiological disaster.
So everything suggests that even if the pandemic subsides — which is by no means guaranteed — we’re about to see a huge surge in national misery.
Oh, and stocks are up. Why, exactly, should we care?
Chinese mainland reports 22 new COVID-19 cases, no new deaths
The Chinese mainland registered 22 new cases of COVID-19 on Thursday, all from overseas, the Chinese health authority said on Friday. This was the fifth consecutive day without domestic transmissions.
No deaths linked to the coronavirus disease were recorded on Thursday, while 47 patients were discharged from hospitals.
The total number of confirmed cases on the Chinese mainland stands at 84,917 and the cumulative death toll at 4,634, with 353 asymptomatic patients under medical observation.
https://www.nytimes.com/2020/08/17/opinion/trump-us-mail.html
August 17, 2020
Trump, the Mail and the Unbinding of America
The Postal Service facilitates citizen inclusion. That’s why Trump hates it.
By Paul Krugman
In June the independent website Factcheck.org made a dig at Joe Biden, publishing a post titled “Biden Floats Baseless Election Conspiracy.” Biden, you see, had suggested that Donald Trump “wants to cut off money for the post office so they cannot deliver mail-in ballots.” There was, said the post, no evidence that Trump’s “stance toward the U.S. postal system is related to the presidential election.”
A few days ago Factcheck.org conceded that Biden had, in fact, been right. The confirmation? Trump’s own statements.
Nancy Pelosi is calling the House back from summer recess to consider legislation on the issue, and for good reason: There are not one but two possible constitutional crises looming. In one, millions of votes never get counted. In the other, delays in the counting of mail-in votes lead Trump to claim victory in an election he actually lost.
These November nightmares are the reason we need to act urgently to secure the integrity of America’s mail. But there’s also a larger, longer-term aspect to the assault on the postal system. It’s part of a broader attack on the institutions that bind us together as a nation.
There was, after all, a reason the Constitution specifically granted Congress the ability to “establish post offices and post roads.” Clearly, the founders saw some kind of national postal system as one way to help turn the still shaky idea of the United States as a nation into reality. In fact, in its early years one of the post office’s key roles was the delivery of newspapers, as a way to keep Americans informed and connected.
The Postal Service as we know it now didn’t emerge all at once. Instead, it evolved gradually, through an accumulation of both formal legislation and precedents.
Direct delivery of mail to urban homes didn’t begin until 1863, and permanent rural free delivery until 1902. The Parcel Post wasn’t created until 1913; previously, rural customers had to rely on a cartel of private companies that conspired to keep shipping rates high.
All these changes, however, had a common theme: bringing Americans into better contact with one another and the world at large. A key part of the post office’s ethos has long been that it has a “universal service obligation,” “binding the nation together” and “facilitating citizen inclusion.”
For much of America’s history this largely involved bringing remote areas access to the fruits of urban economic progress; it’s hard to overstate how much difference the rise of the mail-order business, made possible by postal expansion, made to the quality of rural life. And postal delivery remains crucial in rural areas, which are poorly (and expensively) served by private delivery companies.
But it’s not just the rural population; the Postal Service remains a lifeline, sometimes literally, for many Americans who for whatever reason have limited ability to, say, visit a pharmacy to pick up prescriptions. The Department of Veterans Affairs delivers about 80 percent of its outpatient prescriptions by mail.
As the mail-in voting crisis has erupted, some of the usual suspects on the right have taken to denouncing the Postal Service as a bad, money-losing business. But the founders didn’t put the postal clause in the Constitution because they saw it as a business opportunity; the Postal Service was supposed to serve broader national goals — and it still does.
But, you may ask, why should this logic apply only to the mail? Shouldn’t we support other institutions that bind the nation together? Yes, we should — and do.
The Rural Electrification Administration, created in the 1930s to bring power to rural areas, was about national integration as well as economic development — and beginning in 1949 it subsidized the expansion of rural telephone networks, too. The Interstate Highway System was justified in part with dubious claims about national security, but it had the effect of reinforcing national unity.
What about the internet? Should we have a policy to ensure that Americans have access to modern telecommunications, too? Actually, yes.
Internet access in America is far more expensive than in other advanced countries, because largely unregulated private providers abuse their market power, much like the private shippers that exploited farmers before the creation of the Parcel Post.
Of course, we don’t expect every service in the modern economy to be subject to a universal service obligation. We don’t all need golf course memberships or private boats to participate fully in our national life.
But most Americans — presumably including most of the 91 percent of the public with a favorable view of the Postal Service — believe that there are some things that should be universally available, even if providing those things isn’t profitable, because they’re important components of full citizenship.
Unfortunately, Trump and those around him don’t share that belief, perhaps because they don’t really buy into this notion of “full citizenship” in the first place. And that’s one reason they might have been trying to cripple the post office even if it weren’t their best hope of stealing this election.
https://www.nytimes.com/2020/08/17/opinion/covid-19-heart-disease.html
August 17, 2020
Covid-19 Is Creating a Wave of Heart Disease
Emerging data show that some of the coronavirus’s most potent damage is inflicted on the heart.
By Haider Warraich
SARS-CoV-2, the virus that causes Covid-19, was initially thought to primarily impact the lungs — SARS stands for “severe acute respiratory syndrome.” Now we know there is barely a part of the body this infection spares. And emerging data show that some of the virus’s most potent damage is inflicted on the heart.
Eduardo Rodriguez was poised to start as the No. 1 pitcher for the Boston Red Sox this season. But in July the 27-year-old tested positive for Covid-19. Feeling “100 years old,” he told reporters: “I’ve never been that sick in my life, and I don’t want to get that sick again.” His symptoms abated, but a few weeks later he felt so tired after throwing about 20 pitches during practice that his team told him to stop and rest.
Further investigation revealed that he had a condition many are still struggling to understand: Covid-19-associated myocarditis. Mr. Rodriguez won’t be playing baseball this season.
Myocarditis means inflammation of the heart muscle. Some patients are never bothered by it, but for others it can have serious implications. And Mr. Rodriguez isn’t the only athlete to suffer from it: Multiple college football players have possibly developed myocarditis from Covid-19, putting the entire college football landscape in jeopardy.
I recently treated one Covid-19 patient in his early 50s. He had been in perfect shape with no history of serious illness. When the fevers and body aches started, he locked himself in his room. But instead of getting better, his condition deteriorated and he eventually accumulated gallons of fluid in his legs. When he came to the hospital unable to catch a breath, it wasn’t his lungs that had pushed him to the brink — it was his heart. Now we are evaluating him to see if he needs a heart transplant.
An intriguing new study * from Germany offers a glimpse into how SARS-CoV-2 affects the heart. Researchers studied 100 individuals, with a median age of just 49, who had recovered from Covid-19. Most were asymptomatic or had mild symptoms.
An average of two months after they received the diagnosis, the researchers performed M.R.I. scans of their hearts and made some alarming discoveries: Nearly 80 percent had persistent abnormalities and 60 percent had evidence of myocarditis. The degree of myocarditis was not explained by the severity of the initial illness.
Though the study has some flaws, and the generalizability and significance of its findings not fully known, it makes clear that in young patients who had seemingly overcome SARS-CoV-2 it’s fairly common for the heart to be affected. We may be seeing only the beginning of the damage.
Researchers are still figuring out how SARS-CoV-2 causes myocarditis — whether it’s through the virus directly injuring the heart or whether it’s from the virulent immune reaction that it stimulates. It’s possible that part of the success of immunosuppressant medications such as the steroid dexamethasone in treating sick Covid-19 patients comes from their preventing inflammatory damage to the heart. Such steroids are commonly used to treat cases of myocarditis. Despite treatment, more severe forms of Covid-19-associated myocarditis can lead to permanent damage of the heart — which, in turn, can lead to heart failure.
But myocarditis is not the only way Covid-19 can cause more people to die of heart disease. When I analyzed data from the Centers for Disease Control and Prevention, I found that since February nearly 25,000 more Americans have died of heart disease compared with the same period in previous years. Some of these deaths could be put down to Covid-19, but the majority are likely to be because patients deferred care for their hearts. That could lead to a wave of untreated heart disease in the wake of the pandemic.
Many patients are understandably apprehensive about coming back to the clinic or hospital. The American Heart Association has started a campaign called “Don’t Die of Doubt” to address the alarming reduction in people calling 911 or seeking medical care after a heart attack or stroke.
Since the beginning of the pandemic, it’s been clear that people with heart disease or related conditions such as diabetes or high blood pressure are at increased risk for severe Covid-19 illness. The C.D.C. recommends that the more than 30 million Americans living with heart disease practice extra precautions to avoid infection. Hospitals and clinics should work overtime both to ensure they are safe for patients and to bolster telemedicine services so that patients can be cared for without having to leave their homes.
Doctors and researchers should no longer think of Covid-19 as a disease of the lungs but as one that can affect any part of the body, especially the heart. The only way to prevent more people dying of heart disease, both from damage caused by the virus as well as from deferred care of heart disease, is to control the pandemic.
* https://jamanetwork.com/journals/jamacardiology/fullarticle/2768916
Haider Warraich is a cardiologist and researcher at Harvard Medical School.
August 17, 2020
Quick Note on Lost GDP Due to Shutdowns
By Dean Baker
Some folks have complained about the loss of GDP over the last five months and questioned whether the shutdowns have been worth the price. While people often toss around huge numbers in the trillions of dollars as the cost of the shutdown, these big numbers are often both inaccurate and misleading.
Measuring Lost GDP
The first place to start is getting a measure of lost GDP. This is fairly straightforward. We can just apply a 2.0 percent growth projection (approximately the projection from the Congressional Budget Office) and apply it to GDP for the 4th quarter of 2019. The difference between this projection and actual GDP for the first and second quarters gives a reasonable approximation of the cost of the shutdown for the first two quarters. There will be continuing costs going forward, but these are at least as much due to fear of the pandemic, as the impact of ongoing shutdowns. (Air traffic has been running at 25 to 30 percent of year ago levels, even though no restrictions prevent people from flying.)
This simple calculation shows a combined loss of GDP for these quarters of $645 billion measured in 2012 dollars, which would be roughly $745 billion in today’s dollars. That comes to a bit less than $2,300 per person.
If this sounds less than the numbers often tossed around, this is because we generally annualize our GDP numbers. This means that numbers show how much production/spending we would have if the economy kept on the same pace for a full year. As a result, our second quarter GDP showed the economy falling a 32.9 percent annual rate in the second quarter, but it actually only shrank by roughly 8.0 percent. To be clear, this is still a very large loss of output, but it is probably considerably less than many people had envisioned.
[ https://cepr.net/wp-content/uploads/2020/08/Book2_5101_image001.png ]
Next, it is worth getting a better handle on where this drop in output came from. The figure above shows the breakdown between consumption, investment, and government expenditures. The striking part of this figure is the extent to which the decline in spending on consumer services accounts for the bulk, almost two-thirds, of lost output. This sector ordinarily accounts for less than 45 percent of GDP.
Before looking at consumer services more closely, it is worth commenting on the relatively smaller declines in other areas. The drop in investment means that we will be somewhat less wealthy in the future because we invested at a slower rate due to the shutdowns. While that is a loss to the economy, any reduction in future productivity due to lost investment is likely to be swamped by the effective gains in productivity associated with increased telecommuting and other changes due to the crisis. So, as a general rule, more investment is better than less investment, but the enduring reduction in work expenses due to changes made during the pandemic will far more than offset the impact of this lost investment on productivity.
There was very little change in residential investment as a result of the shutdowns. While construction did slow when the shutdowns were in place most strongly in March and April, it has been close to normal in the months since then, as demand for housing has remained strong. This means we will not be seeing any shortages of housing due to the pandemic.
It turns out that there has been little net change in government expenditures as a result of the shutdowns. A modest reduction in federal expenditures was mostly offset by an increase in expenditures at the state and local level. It is important to remember that these data refer to actual expenditures on goods and services by the government. While they would include payments for education and hospital care, they exclude transfer payments such as unemployment benefits or the $1,200 per person pandemic checks.
Turning to consumption, there were modest declines in goods consumption, but much of this is likely linked to work-related expenses. In the case of the decline in durable goods consumption, more than half is explained by reduced spending on cars, jewelry and watches, and luggage. These are mostly expenditures that are work-related. The other major drop was in therapeutic appliances and equipment, like eyeglasses. This is an important issue, that I will come back to shortly.
There was a small drop in consumption of nondurable goods, where a large increase in spending on food purchased for home consumption almost offset sharp declines in spending on gasoline and clothes. These drops are clearly due in large part to lower work-related expenses. (It is worth noting that spending on newspapers and periodicals was more than 20 percent higher in the second quarter than it had been in the 4th quarter of 2019.)
The real story of the GDP plunge is in services and it is not hard to guess which ones. The ones involving work-related expenses all saw sharp declines. Spending on “personal care services,” which involves items like hair salons and dry cleaning, was down by 77 percent from the fourth quarter of 2019 to the second quarter of 2020. Transportation services were down by 41.3 percent, with public transportation seeing a falloff of more than 80 percent.
The second major category involves recreation and entertainment spending. Spending on recreation services, which includes things like amusement parks, concerts, and movies, was down 58.8 percent. Spending on restaurants and hotels was down 40.1 percent.
The third major category was health care, with spending down by 25.3 percent. The sharpest decline was in areas like physicians’ offices and dental services.
How should we think about these areas of lost consumption. The first category of work-related expenses is probably not a big loss. (I know everything in this category is not directly work-related, but most of the decline is.) If people spend less money on transportation because they aren’t driving or taking the bus to work, that is not an obvious loss in their well-being.
The second category involves activities that people enjoy doing. For several months they have not been able to go to restaurants and movies, visit with friends and family members, or engage in other normal activities. It is possible to see these things as frivolous, and that might be right compared to dying from the coronavirus, but we are only alive for so long. If we can’t do the things we enjoy, and see people we care about, for six months or a year, that is a big deal.
Finally, we have the category of health care services. Much of this involves things like putting off a checkup or a teeth cleaning. Most of the time, there will not be major consequences from a delay of a couple of months, but in some cases there will be. A person who has to wait another three months to have a cancer detected or to discover they have a heart problem may suffer serious and lasting health damage.
There is also the issue that fear of the pandemic may have discouraged people from getting necessary treatment or tests. For example, would a cancer patient, whose immune system is seriously compromised, feel comfortable going into a doctor’s office or hospital for tests? This is likely less an issue of shutdowns blocking care as opposed to the pandemic itself.
In fact, as we move into a period where most of the legal barriers have been removed or relaxed, this fear is likely to be the greatest issue going forward. People will not return to their former way of life until they can be sure that it is safe, and that means getting the pandemic under control.
I haven’t touched on the issue of schools thus far. This is huge for both the children and the parents. Undoubtedly, the shutdowns and school closings created hardships for many families, especially for mothers of small children. This may have been the largest cost of the shutdowns, as many families found themselves in cramped living spaces for long periods of time. We will likely get a better picture of the full impact some months down the road, when more data are available, but it is likely that the shutdowns have been associated with more incidents of domestic violence.
From the standpoint of children, it seems clear that the lack of in-school instruction will further exacerbate the education gap between the children from lower income families and children from the upper middle class. The latter group is likely to have the resources to ensure that their kids receive adequate instruction. That is not the case with children from poorer backgrounds, where parents may be forced to work outside the home and they may not have access to computers or reliable Internet.
This could mean that these children will face lasting consequences in the form of lower graduation rates, lower rates of college completion, and lower incomes during their working careers. There is no easy short-term fix here. We can talk about programs to try to make up the lost ground for students from low- and moderate-income families, but realistically, this is not going to happen. We have failed miserably at trying to equalize educational opportunities over the last sixty years, we are not suddenly going to be able to turn things around in the next decade or so for the children currently in school.
To my view, the more promising route is to try to reduce the huge wage gaps we see now so that it matters much less who got the better education. If we had a minimum wage of $24 an hour and CEOs got paid $2-$3 million a year (with corresponding pay cuts for other top execs), the differences in opportunities would not condemn today’s children to a life of hardship. Unfortunately, few people in high level policy positions want to have this discussion.
Getting the Virus Under Control
While the cost of the shutdowns this spring were substantial, the cost of not shutting down much of the economy would have been enormous. When the country began to shut down in mid-March, the rate of infection was exploding. It was doubling every three or four days, and the reported rate was almost certainly a gross understatement of the actual rate, since testing was very limited. By early April, the pandemic was causing more than 2,000 deaths a day. The number peaked around 2,300 in mid-April and then began to fall gradually until early July, when it was just over 500 a day. It since has risen again to more than 1,200 a day.
Had it not been for the initial lockdown in mid-March, it is almost certain that the infection would have continued to spread exponentially and the number of deaths would have grown along with the number of infections. There can be little doubt that the shutdowns saved many hundreds of thousands of lives in the United States, and quite possibly well over a million.
It is also important to recognize that many of the people who get the virus, but don’t die, suffer lasting effects. There have been a number of accounts of people who have recovered from the disease but have enduring cognitive and/or physical problems. At this point, we do not have good data on the percentage of the people who get sick who will suffer lasting effects. But it would be wrong to ignore the consequences of the disease for people who get sick but don’t die.
Also, when we consider possible costs for restrictions in the United States going forward, it is important to realize the extent to which we are an outlier. Most other wealthy countries have largely succeeded in bringing the pandemic under control. The European Union (EU), in spite of a recent upsurge, has been averaging less than 7,000 cases a day. That compares to 60,000 in the United States, in spite of the fact that the EU’s population is 20 percent larger. The EU has been averaging around 150 deaths a day, compared to well over 1,000 in the United States.
Other wealthy countries generally had stricter shutdowns and smarter re-openings. As a result, the cost to their economies is likely to end up being considerably lower than in the United States. So, even if we decide that the benefits to public health may have been worth the cost to the economy, that doesn’t mean that we could not have had the same or larger benefits at a lower price, with good planning.
August 17, 2020
Coronavirus
US
Cases ( 5,612,027)
Deaths ( 173,716)
India
Cases ( 2,701,604)
Deaths ( 51,925)
Mexico
Cases ( 522,162)
Deaths ( 56,757)
UK
Cases ( 319,197)
Deaths ( 41,369)
Germany
Cases ( 226,686)
Deaths ( 9,296)
Canada
Cases ( 122,872)
Deaths ( 9,032)
China
Cases ( 84,849)
Deaths ( 4,634)
August 17, 2020
Coronavirus (Deaths per million)
UK ( 609)
US ( 524)
Mexico ( 440)
Canada ( 239)
Germany ( 111)
India ( 38)
China ( 3)
Notice the ratios of deaths to coronavirus cases are 13.0% and 10.9% for the United Kingdom and Mexico respectively.
https://news.cgtn.com/news/2020-08-18/Chinese-mainland-reports-22-new-COVID-19-cases-all-from-overseas-T321OnEezu/index.html
August 18, 2020
Chinese mainland reports 22 new COVID-19 cases, no new deaths
The Chinese mainland registered 22 new cases of COVID-19 on Monday – all from overseas, the Chinese health authority said on Tuesday.
No deaths linked to the disease were recorded on Monday, while 39 COVID-19 patients were discharged from hospitals.
The total number of confirmed cases on the Chinese mainland stands at 84,871 and the cumulative death toll at 4,634, with 356 asymptomatic patients under medical observation.
Chinese mainland new locally transmitted cases
https://news.cgtn.com/news/2020-08-18/Chinese-mainland-reports-22-new-COVID-19-cases-all-from-overseas-T321OnEezu/img/af9101d3030447b1bf03587a67ff9aa3/af9101d3030447b1bf03587a67ff9aa3.jpeg
Chinese mainland new imported cases
https://news.cgtn.com/news/2020-08-18/Chinese-mainland-reports-22-new-COVID-19-cases-all-from-overseas-T321OnEezu/img/49da0d9ab9924279b4f89fa3d5a509bc/49da0d9ab9924279b4f89fa3d5a509bc.jpeg
Chinese mainland new asymptomatic cases
https://news.cgtn.com/news/2020-08-18/Chinese-mainland-reports-22-new-COVID-19-cases-all-from-overseas-T321OnEezu/img/f8f5e1f6dbbb44b8864f9e0c55b73200/f8f5e1f6dbbb44b8864f9e0c55b73200.jpeg
August 18, 2020
Coronavirus
US
Cases ( 5,618,746)
Deaths ( 174,021)
Krugman: “But the founders didn’t put the postal clause in the Constitution because they saw it as a business opportunity;”
The author of the Wikipedia article on the Postal Clause seems to disagree: “The Postal Clause was added to the Constitution to facilitate interstate communication as well as to create a source of revenue for the early United States.”
Dean Baker importantly suggested:
https://www.washingtonpost.com/news/morning-mix/wp/2018/10/16/searss-radical-past-how-mail-order-catalogues-subverted-the-racial-hierarchy-of-jim-crow/
October 16, 2018
Sears’s ‘radical’ past: How mail-order catalogues subverted the racial hierarchy of Jim Crow
By Antonia Noori Farzan – Washington Post
Anne:
A blast from my life’s past growing up in Chicago “Last Chicago Sears Store Closing” At Christmas time the Sears would have 1/2 a floor of toys and games. We would be up there playing with them until Sales people chased us away. The building is to be torn down and 400 upscale apartments are to be built there.
On the corner of Cicero and Irving Park Road was an old fashion newsstand. Cars would pull up and get the latest newspapers.
“Designed by Chicago architects Nimmons, Carr & Wright, the costly $1 million store was the first of the company’s gigantic solid-walled stores in Chicago featuring the largest display window in the city at the time in 1938. Other Sears stores had relied on windows for addition light and outside air circulation.”
August 18, 2020
Coronavirus
Israel
Cases ( 96,093)
Deaths ( 705)
Deaths per million ( 77)
———————————–
July 4, 2020
Coronavirus
Israel
Cases ( 29,170)
Deaths ( 330)
Deaths per million ( 36)
The fierce, politically driven mistake of incautiously opening Israeli schools and businesses.
How severe the incautious opening of Israel has been, after the coronavirus spread had appeared to be controlled, can be understood in realizing that little Israel has experienced 96,093 infections in all now, while China has experienced 84,871.
August 18, 2020
Coronavirus
US
Cases ( 5,626,946)
Deaths ( 174,268)
https://fred.stlouisfed.org/graph/?g=s1t5
January 15, 2020
Weekly Economic Index, * 2020
* Lewis-Mertens-Stock
The WEI is an index of real economic activity using timely and relevant high-frequency data. It represents the common component of ten different daily and weekly series covering consumer behavior, the labor market, and production. The WEI is scaled to the four-quarter GDP growth rate; for example, if the WEI reads -2 percent and the current level of the WEI persists for an entire quarter, one would expect, on average, GDP that quarter to be 2 percent lower than a year previously.
August 18, 2020
Coronavirus
US
Cases ( 5,637,892)
Deaths ( 174,582)
https://www.nytimes.com/2020/08/16/business/japan-economy-recession.html
August 16, 2020
Japan’s Economy Contracts 7.8 Percent, Worst Decline on Record
The quarterly slide, an annualized drop of 27.8 percent, coincides with a long and uncertain road to recovery.
By Ben Dooley
https://www.nytimes.com/2020/08/18/us/iowa-storm-derecho.html
August 18, 2020
Reeling From a Storm, Iowans Worry They Have Been Forgotten
In Cedar Rapids, where President Trump stopped briefly on Tuesday, thousands of people are unable to return to their homes after devastating winds tore through the state.
By Nicholas Bogel-Burroughs and Lucy Tompkins
[ The matter of media coverage of the fierce storm and aftermath in Iowa has been raised. Importantly, the New York Times has covered the Iowa disaster with 5 articles so far, beginning the day after the storm. ]
https://www.nytimes.com/2020/08/18/nyregion/nyc-vacant-apartments.html
August 18, 2020
Manhattan Vacancy Rate Climbs, and Rents Drop 10%
There were more than 67,300 units available in July across the city as it tries to rebound from the coronavirus outbreak.
By Matthew Haag
August 18, 2020
Coronavirus
US
Cases ( 5,655,974)
Deaths ( 175,074)
India
Cases ( 2,766,626)
Deaths ( 53,023)
Mexico
Cases ( 525,733)
Deaths ( 57,023)
UK
Cases ( 320,286)
Deaths ( 41,381)
Germany
Cases ( 228,105)
Deaths ( 9,305)
France
Cases ( 221,267)
Deaths ( 30,451)
Canada
Cases ( 123,154)
Deaths ( 9,045)
China
Cases ( 84,871)
Deaths ( 4,634)
August 18, 2020
Coronavirus (Deaths per million)
UK ( 609)
US ( 529)
France ( 466)
Mexico ( 442)
Canada ( 239)
Germany ( 111)
India ( 38)
China ( 3)
Notice the ratios of deaths to coronavirus cases are 12.9%, 13.8% and 10.8% for the United Kingdom, France and Mexico respectively.
https://news.cgtn.com/news/2020-08-19/Chinese-mainland-reports-no-domestically-transmitted-cases-T4DtTylGJq/index.html
August 19, 2020
Chinese mainland reports 17 new COVID-19 cases, no new deaths
The Chinese mainland registered 17 new cases of COVID-19 on Tuesday – all from overseas, the Chinese health authority said on Wednesday.
No deaths linked to the coronavirus disease were recorded on Tuesday, while 43 patients were discharged from hospitals.
The total number of confirmed cases on the Chinese mainland stands at 84,888 and the cumulative death toll at 4,634, with 345 asymptomatic patients under medical observation.
Chinese mainland new locally transmitted cases
https://news.cgtn.com/news/2020-08-19/Chinese-mainland-reports-no-domestically-transmitted-cases-T4DtTylGJq/img/31bf47ea9e414bb4bf466142ffbd1a4f/31bf47ea9e414bb4bf466142ffbd1a4f.jpeg
Chinese mainland new imported cases
https://news.cgtn.com/news/2020-08-19/Chinese-mainland-reports-no-domestically-transmitted-cases-T4DtTylGJq/img/054b71774d954b7f946f9a1c2ee892dc/054b71774d954b7f946f9a1c2ee892dc.jpeg
Chinese mainland new asymptomatic cases
https://news.cgtn.com/news/2020-08-19/Chinese-mainland-reports-no-domestically-transmitted-cases-T4DtTylGJq/img/673df9ee69434c8797f6e5c19df93101/673df9ee69434c8797f6e5c19df93101.jpeg
Paul Krugman @paulkrugman
One really encouraging thing about the past few days is that nobody seems to care about the stock market hitting new highs. Good judgment! The stock market is not the economy. Still, is there a puzzle here? Less than you might imagine 1/
9:12 AM · Aug 19, 2020
In 2020, the stock market is dominated by a handful of tech giants that can expect to earn a steady stream of monopoly or quasi-monopoly rents for years to come. The value of these companies should depend on the discounted value of those streams 2/
What affects this discounted value? The expected state of the economy over the next few quarters *shouldn’t* matter much, as long as we’re eventually going to recover. What should matter a lot, however, is the discount rate 3/
That is, how much should an expected dollar of FAANG * profits 5 years from now be worth today? That depends on the returns on alternative assets — like, say, inflation-protected government bonds. And those returns are at record lows 4/
[ https://pbs.twimg.com/media/EfyU5DvWoAEwOdN?format=png&name=small ]
* Facebook, Amazon, Apple, Netflix and Google
So even if you think 2020-21 is going to be lousy, if you think Amazon will be making money in 2025 — and your alternative is govt bonds that yield 1% less than inflation — buying Amazon isn’t that strange 5/
Not saying that this is the whole story, but anyone talking about stocks without mentioning bond yields is missing a large part of what’s going on 6/
https://fred.stlouisfed.org/graph/?g=r2SX
January 15, 2018
Interest Rates on 10-Year Treasury Inflation-Indexed Bonds, 2017-2018
https://fred.stlouisfed.org/graph/?g=mwDU
January 15, 2018
Interest Rates on 10-Year Treasury Inflation-Indexed Bonds, 2007-2018
August 19, 2020
Coronavirus
US
Cases ( 5,658,074)
Deaths ( 175,122)
August 19, 2020
Coronavirus
US
Cases ( 5,662,189)
Deaths ( 175,301)
August 19, 2020
Coronavirus
US
Cases ( 5,667,040)
Deaths ( 175,491)
August 19, 2020
Should We Be More Worried About the Economy?
By Dean Baker
We are really in an unprecedented period where the economy is trying to recover from the shutdowns of April and May, while being faced with partial shutdowns due to the resurgence of the pandemic in large parts of the country. We are struggling to make sense of data, which often has a substantial lag. We are still getting data from July even as we are in the last weeks of August. Furthermore, when we have large monthly changes, the picture at the end of July could have been very different from the beginning of the month.
The Opportunity Insights program at Harvard University is trying to help navigate the storm with its Economic Tracker. * This provides much more current data on a variety of measures by relying on various industry sources. The latest picture is not good.
Starting with the one I find most troubling, their source on job posting shows a huge falloff in August. Nationally, we are almost back to the lows reached in May.
[Graph]
There is the qualification that these are posting at small businesses, so perhaps the story would look different if we included mid-sized and large businesses, but still this picture is not encouraging. Their data on small businesses that are open and revenue are also not good.
The other very disturbing item is their data on consumer spending, which is derived from credit and debit card spending.
[Graph]
The data show a healthy bounce back in June, but then spending levels off in July. Then, spending begins to trail off at the end of the month and start of August. Note that this is just as unemployment insurance supplements are ending.
These are new data sources that I and most other economists are not familiar with. That means that there can be quirks that explain the plunge in job postings and falloff in spending that we do know about. But on its face, these data suggest a recovery that is stalling, with many businesses closing and millions of workers not being able to go back to their jobs.
That should make the case for a new rescue package more urgent and also again remind us of the importance to the economy of bringing the pandemic under control.
* https://tracktherecovery.org/
What I consider an important economic tool, worth playing with for a while to understand:
https://tracktherecovery.org/
August 19, 2020
Coronavirus
US
Cases ( 5,681,160)
Deaths ( 175,814)
August 19, 2020
Coronavirus
Israel
Cases ( 97,969)
Deaths ( 781)
Deaths per million ( 85)
———————————–
July 4, 2020
Coronavirus
Israel
Cases ( 29,170)
Deaths ( 330)
Deaths per million ( 36)
The fierce, politically driven mistake of incautiously opening Israeli schools and businesses.
How severe the incautious opening of Israel has been, after the coronavirus spread had appeared to be controlled, can be understood in realizing that little Israel has experienced 97,969 infections in all now, while China has experienced 84,888.
August 19, 2020
Coronavirus
US
Cases ( 5,694,215)
Deaths ( 176,153)
August 19, 2020
Coronavirus
Dominican Republic
Cases ( 88,127)
Deaths ( 1,501)
Deaths per million ( 138)
———————————-
Cuba
Cases ( 3,482)
Deaths ( 88)
Deaths per million ( 8)
The Dominican Republic has been the faster growing country in GDP per capita in the Western Hemisphere since 1971. Cuba has been continually sanctioned economically by the US through these years, however Cuba has a far superior healthcare system as reflected now in the coronavirus experience of the countries and for years past in other critical healthcare reflections.
Correcting:
The Dominican Republic has been the fastest growing country in GDP per capita in the Western Hemisphere since 1971. Cuba has been continually sanctioned economically by the US through these years, however Cuba has a far superior healthcare system as reflected now in the coronavirus experience of the countries and for years past in a range of critical healthcare experiences.
https://www.chathamhouse.org/sites/default/files/2020-08-19-debunking-myth-debt-trap-diplomacy-jones-hameiri.pdf
August 19, 2020
Debunking the Myth of ‘Debt-trap Diplomacy’: How Recipient Countries Shape China’s Belt and Road Initiative
By Lee Jones and Shahar Hameiri
Summary
The Belt and Road Initiative (BRI) is seen by some as a geopolitical strategy to ensnare countries in unsustainable debt and allow China undue influence. However, the available evidence challenges this position: economic factors are the primary driver of current BRI projects; China’s development financing system is too fragmented and poorly coordinated to pursue detailed strategic objectives; and developing-country governments and their associated political and economic interests determine the nature of BRI projects on their territory.
The BRI is being built piecemeal, through diverse bilateral interactions. Political-economy dynamics and governance problems on both sides have led to poorly conceived and managed projects. These have resulted in substantial negative economic, political, social and environmental consequences that are forcing China to adjust its BRI approach.
In Sri Lanka and Malaysia, the two most widely cited ‘victims’ of China’s ‘debt-trap diplomacy’, the most controversial BRI projects were initiated by the recipient governments, which pursued their own domestic agendas. Their debt problems arose mainly from the misconduct of local elites and Western-dominated financial markets. China has faced negative reactions and pushback in both countries, though to a lesser extent than is commonly believed, given the high-level interests at stake in the recipient countries.
To improve the quality of BRI projects, Chinese policymakers should develop a coherent, integrated decision-making system with sufficient risk assessment capacities and strict, clear and enforceable rules. This would involve tackling vested interests within China, particularly among commercially oriented agencies and in the state-owned enterprise (SOE) sector.
Recipient governments must take greater responsibility for the evaluation of potential projects to ensure their viability and financial sustainability. They must also develop their ability to bargain with Chinese partners to make certain that local people benefit from the BRI. Since China continues to place great emphasis on host-country regulation, BRI partners must bolster their laws and regulatory environment.
Policymakers in non-BRI states should: avoid treating the fragmented activities of the BRI as if they were being strategically directed from the top down; provide alternative development financing options to recipient states; engage recipients and China to improve BRI governance; and help improve the transparency of ‘megaprojects’.
Civil society and political opposition groups in recipient countries should focus their efforts on demanding transparency and public participation around the design, feasibility, selection, pricing, tendering and management of megaprojects.
August 19, 2020
Coronavirus
US
Cases ( 5,700,931)
Deaths ( 176,337)
India
Cases ( 2,835,822)
Deaths ( 53,994)
Mexico
Cases ( 531,239)
Deaths ( 57,774)
UK
Cases ( 321,098)
Deaths ( 41,397)
Germany
Cases ( 229,700)
Deaths ( 9,314)
France
Cases ( 225,043)
Deaths ( 30,468)
Canada
Cases ( 123,490)
Deaths ( 9,049)
China
Cases ( 84,888)
Deaths ( 4,634)
August 19, 2020
Coronavirus (Deaths per million)
UK ( 609)
US ( 532)
France ( 467)
Mexico ( 447)
Canada ( 239)
Germany ( 111)
India ( 39)
China ( 3)
Notice the ratios of deaths to coronavirus cases are 12.9%, 13.5% and 10.9% for the United Kingdom, France and Mexico respectively.
https://news.cgtn.com/news/2020-08-20/Chinese-mainland-reports-seven-new-COVID-19-cases-all-from-overseas-T6iy7969R6/index.html
August 20, 2020
Chinese mainland reports 7 new COVID-19 cases, no new deaths
The Chinese mainland registered 7 new cases of COVID-19 on Wednesday – all from overseas, the Chinese health authority said on Thursday.
No deaths linked to the coronavirus disease were recorded on Wednesday, while 60 patients were discharged from hospitals.
The total number of confirmed cases on the Chinese mainland stands at 84,895 and the cumulative death toll at 4,634, with 352 asymptomatic patients under medical observation.
Chinese mainland new locally transmitted cases
https://news.cgtn.com/news/2020-08-20/Chinese-mainland-reports-seven-new-COVID-19-cases-all-from-overseas-T6iy7969R6/img/44506072d49f4ab2a3069c57b1fb17a4/44506072d49f4ab2a3069c57b1fb17a4.jpeg
Chinese mainland new imported cases
https://news.cgtn.com/news/2020-08-20/Chinese-mainland-reports-seven-new-COVID-19-cases-all-from-overseas-T6iy7969R6/img/997d9b7b9c6e4eec9c1a38543c2a7a61/997d9b7b9c6e4eec9c1a38543c2a7a61.jpeg
Chinese mainland new asymptomatic cases
https://news.cgtn.com/news/2020-08-20/Chinese-mainland-reports-seven-new-COVID-19-cases-all-from-overseas-T6iy7969R6/img/c247c4214c744f08b9b383e7fe1faa29/c247c4214c744f08b9b383e7fe1faa29.jpeg
August 20, 2020
The Burden of the Debt: Lessons for Biden Adviser Ted Kaufman
By DEAN BAKER
Top Biden adviser, and long-time personal friend, Ted Kaufman was seen * in the Wall Street Journal warning that the debt run up by the Trump administration will seriously limit what Biden will be able to do as president. This is wrong big time, and it is the sort of silly thing that no one in a Biden administration should ever be saying.
The government’s ability to spend is limited by the economy’s ability to produce, not the debt. If the government spends too much, it will lead to inflation. When we have a period of high unemployment, as is the case now and almost certainly will still be the case if Biden takes office in January, we are very far from hitting the economy’s inflation barriers.
It takes some very deliberate head-in-the-ground economics ** to argue that we are somehow limited by the size of the government debt. Japan provides a great model here. Its ratio of debt to GDP is more than 250 percent, more than twice the current U.S. level. Yet, the country is seeing new zero inflation and has a 0.03 percent interest rate on its long-term debt. The interest on its debt is near zero, since much of its debt carries a negative interest rate.
The idea that we would not address pressing needs, like climate change, child care, and health care because we are concerned about the debt burden is close to crazy. As long as the economy is not near its capacity, there is zero reason not to spend to address these priorities, and even when it does approach its capacity, we can impose higher taxes on the economy’s big winners over the last four decades.
I will also throw in one important item of logic that our deficit and debt hawks should be forced to deal with. When the government issues patent and copyright monopolies to pharmaceutical and software and other companies, this is a form of implicit debt. These monopolies are effectively private taxes that the government allows these companies to collect in exchange for their innovations or creative work.
The rent payments on these monopolies run into many hundreds of billions annually *** and quite possibly exceed $1 trillion annually. They dwarf interest payments on the debt. The debt whiners don’t get to exclude this implicit debt from their calculations just because they like the companies and individuals who benefit from these rents.
If people are having a hard time understanding the logic here, we can go back to pre-revolutionary France. To deal with its huge debt the government would sell off the right to collect specific taxes. I guess Mr. Kaufman and other deficit hawks would say this is fine since the country now had a lower debt burden, but that is not a serious position. It would be good if the economics profession could be united in explaining this simple logic to laypeople, but as is often said, economists are not very good at economics.
* https://www.wsj.com/articles/biden-united-the-democratsits-not-likely-to-last-11597847147
** https://cepr.net/debt-and-deficits-with-the-coronavirus/
*** https://www.cepr.net/images/stories/reports/ip-2018-10.pdf
August 19, 2020
Coronavirus
US
Cases ( 5,709,066)
Deaths ( 176,548)
August 19, 2020
Coronavirus
US
Cases ( 5,714,119)
Deaths ( 176,667)
August 20, 2020
Coronavirus
Israel
Cases ( 99,201)
Deaths ( 795)
Deaths per million ( 86)
———————————–
July 4, 2020
Coronavirus
Israel
Cases ( 29,170)
Deaths ( 330)
Deaths per million ( 36)
The fierce, politically driven mistake of incautiously opening Israeli schools and businesses. Then, an inability to comprehensively test for infections and isolate.
How severe the incautious opening of Israel has been, after the coronavirus spread had appeared to be controlled, can be understood in realizing that little Israel has experienced 99,201 infections in all now, while China has experienced 84,895.
August 19, 2020
Coronavirus
US
Cases ( 5,726,384)
Deaths ( 176,907)
https://www.nytimes.com/2020/08/20/opinion/stock-market-unemployment.html
August 20, 2020
Stocks Are Soaring. So Is Misery.
Optimism about Apple’s future profits won’t pay this month’s rent.
By Paul Krugman
On Tuesday, the S&P 500 stock index hit a record high. The next day, Apple became the first U.S. company in history to be valued at more than $2 trillion. Donald Trump is, of course, touting the stock market as proof that the economy has recovered from the coronavirus; too bad about those 173,000 dead Americans, but as he says, “It is what it is.”
But the economy probably doesn’t feel so great to the millions of workers who still haven’t gotten their jobs back and who have just seen their unemployment benefits slashed. The $600 a week supplemental benefit enacted in March has expired, and Trump’s purported replacement is basically a sick joke.
Even before the aid cutoff, the number of parents reporting that they were having trouble giving their children enough to eat was rising rapidly. That number will surely soar in the next few weeks. And we’re also about to see a huge wave of evictions, both because families are no longer getting the money they need to pay rent and because a temporary ban on evictions, like supplemental unemployment benefits, has just expired.
But how can there be such a disconnect between rising stocks and growing misery? Wall Street types, who do love their letter games, are talking about a “K-shaped recovery”: rising stock valuations and individual wealth at the top, falling incomes and deepening pain at the bottom. But that’s a description, not an explanation. What’s going on?
The first thing to note is that the real economy, as opposed to the financial markets, is still in terrible shape. The Federal Reserve Bank of New York’s weekly economic index suggests that the economy, although off its low point a few months ago, is still more deeply depressed than it was at any point during the recession that followed the 2008 financial crisis.
And this time around, job losses are concentrated among lower-paid workers — that is, precisely those Americans without the financial resources to ride out bad times.
What about stocks? The truth is that stock prices have never been closely tied to the state of the economy. As an old economists’ joke has it, the market has predicted nine of the last five recessions.
Stocks do get hit by financial crises, like the disruptions that followed the fall of Lehman Brothers in September 2008 and the brief freeze in credit markets back in March. Otherwise, stock prices are pretty disconnected from things like jobs or even G.D.P.
And these days, the disconnect is even greater than usual.
For the recent rise in the market has been largely driven by a small number of technology giants. And the market values of these companies have very little to do with their current profits, let alone the state of the economy in general. Instead, they’re all about investor perceptions of the fairly distant future.
Take the example of Apple, with its $2 trillion valuation. Apple has a price-earnings ratio — the ratio of its market valuation to its profits — of about 33. One way to look at that number is that only around 3 percent of the value investors place on the company reflects the money they expect it to make over the course of the next year. As long as they expect Apple to be profitable years from now, they barely care what will happen to the U.S. economy over the next few quarters.
Furthermore, the profits people expect Apple to make years from now loom especially large because, after all, where else are they going to put their money? Yields on U.S. government bonds, for example, are well below the expected rate of inflation.
And Apple’s valuation is actually less extreme than the valuations of other tech giants, like Amazon or Netflix.
So big tech stocks — and the people who own them — are riding high because investors believe that they’ll do very well in the long run. The depressed economy hardly matters.
Unfortunately, ordinary Americans get very little of their income from capital gains, and can’t live on rosy projections about their future prospects. Telling your landlord not to worry about your current inability to pay rent, because you’ll surely have a great job five years from now, will get you nowhere — or, more accurately, will get you kicked out of your apartment and put on the street.
So here’s the current state of America: Unemployment is still extremely high, largely because Trump and his allies first refused to take the coronavirus seriously, then pushed for an early reopening in a nation that met none of the conditions for resuming business as usual — and even now refuse to get firmly behind basic protective strategies like widespread mask requirements.
Despite this epic failure, the unemployed were kept afloat for months by federal aid, which helped avert both humanitarian and economic catastrophe. But now the aid has been cut off, with Trump and allies as unserious about the looming economic disaster as they were about the looming epidemiological disaster.
So everything suggests that even if the pandemic subsides — which is by no means guaranteed — we’re about to see a huge surge in national misery.
Oh, and stocks are up. Why, exactly, should we care?
August 20, 2020
Coronavirus
US
Cases ( 5,746,272)
Deaths ( 177,424)
India
Cases ( 2,904,329)
Deaths ( 54,975)
Mexico
Cases ( 537,031)
Deaths ( 58,481)
UK
Cases ( 322,280)
Deaths ( 41,403)
Germany
Cases ( 231,284)
Deaths ( 9,324)
Canada
Cases ( 123,873)
Deaths ( 9,054)
China
Cases ( 84,895)
Deaths ( 4,634)
August 20, 2020
Coronavirus (Deaths per million)
UK ( 609)
US ( 536)
Mexico ( 453)
Canada ( 240)
Germany ( 111)
India ( 40)
China ( 3)
Notice the ratios of deaths to coronavirus cases are 12.8% and 10.9% for the United Kingdom and Mexico respectively.
https://news.cgtn.com/news/2020-08-21/Chinese-mainland-reports-22-new-COVID-19-cases-all-from-overseas-T7Z0lT7Bzq/index.html
August 21, 2020
Chinese mainland reports 22 new COVID-19 cases, no new deaths
The Chinese mainland registered 22 new cases of COVID-19 on Thursday, all from overseas, the Chinese health authority said on Friday. This was the fifth consecutive day without domestic transmissions.
No deaths linked to the coronavirus disease were recorded on Thursday, while 47 patients were discharged from hospitals.
The total number of confirmed cases on the Chinese mainland stands at 84,917 and the cumulative death toll at 4,634, with 353 asymptomatic patients under medical observation.
Chinese mainland new locally transmitted cases
https://news.cgtn.com/news/2020-08-21/Chinese-mainland-reports-22-new-COVID-19-cases-all-from-overseas-T7Z0lT7Bzq/img/6ad7fb743cf54fe0a1694c8a4d61c81c/6ad7fb743cf54fe0a1694c8a4d61c81c.jpeg
Chinese mainland new imported cases
https://news.cgtn.com/news/2020-08-21/Chinese-mainland-reports-22-new-COVID-19-cases-all-from-overseas-T7Z0lT7Bzq/img/9558fd481abb41bc9e55f337ec7d24a1/9558fd481abb41bc9e55f337ec7d24a1.jpeg
Chinese mainland new asymptomatic cases
https://news.cgtn.com/news/2020-08-21/Chinese-mainland-reports-22-new-COVID-19-cases-all-from-overseas-T7Z0lT7Bzq/img/5ba7d1ec075e4957b1d85f330edcf9da/5ba7d1ec075e4957b1d85f330edcf9da.jpeg