Relevant and even prescient commentary on news, politics and the economy.

“Wow, that’s something,”

A presidential comment on New Mexico Governor Lujan Grisham concerns:

Grisham: “We’re seeing incredible spikes in the Navajo Nation, and this is going to be an issue where we’re going to have to figure that out and think about maybe testing and surveillance opportunities,

The rate of infection, at least on the New Mexico side — although we’ve got several Arizona residents in our hospitals — we’re seeing a much higher hospital rate, a much younger hospital rate, a much quicker go-right-to-the-vent rate for this population. And we’re seeing doubling in every day-and-a-half.

it could wipe out those tribal nations.”

Trump: “We’re gonna get you that hospital as quickly as we can,” while directing others in the Situation Room to look into the problem and rush work on the hospital. “Boy, that’s too bad for the Navajo nation – I’ve been hearing that.”

Maybe it is just the way he speaks or his mannerisms. I get the feeling he is smiling as he states his concern.

The Navajo Nation government declared a state of emergency on March 13. There were at least 128 cases and 2 deaths reported on the reservation, which has a population of over 250,000 and spans three states. Governor Grisham followed up on a request with President Trump, a request she made to the Department of Defense last Wednesday for a 248-bed U.S. Army combat support hospital (CSH) in Albuquerque, New Mexico. Grisham told Trump she had not yet received a response. from the Department of Defense yet.

Comments (2) | |

A last look at the 2009 – 2020 expansion

A last look at the 2009 – 2020 expansion by New Deal democrat

All of the most important economic from February has been reported. Since that was the last month before coronavirus derailed everything, I thought I would take a look back and see what shape the economy was in just before the moment of impact.

As usual, the 4 coincident indicators that the NBER usually looks for in determining whether the economy is in expansion or contraction are: industrial production, nonfarm payrolls, real sales, and real personal income minus government transfer receipts. Here’s what they look like through February, with each normed to a level of 100 as of August 2019, first in a longer term view:

And now focused on the past year:

Note that all 4 flattened or rolled over at the outset of the 2008 recession. In 2016, production turned down and income flattened, but both jobs and sales continued to increase. In the latter part of 2019 into early 2020, production and sales turned down, but jobs and income continued to increase.

Comments (1) | |

(Abbreviated) coronavirus dashboard for March 29

(Abbreviated) coronavirus dashboard for March 29 – by New Deal democrat

Here is the update through yesterday (March 28)

[NOTE: I am not including the State by State breakdown today, which is time-intensive to create. It will resume tomorrow.]

In order to succeed in containing the pandemic, I believe that the US needs 2 weeks of China (nearly complete lockdown) followed by at least a month of South Korea (very aggressive and widespread testing).

At minimum, that means at least 50% of the US population under lockdown and a ratio of 15:1 in tests to results showing infection. The recent exponential growth of about 35% per day must be stopped. Those three most important metrics are starred (***) below.

As of now, about 60% of the population is under total or business lockdown, and the rate of increase in new infections decelerated significantly – but is still growing at over 20%/day averaged over the last 5 days. The amount of testing continues to increase, but still is falling far short of what is necessary for a successful regimen.

Number and rate of increase of Reported Infections (from Johns Hopkins via arcgis.com)

• Number: up +19,849 to 124,686 (vs. +18,825 on March 27)
• ***Rate of increase: day/day: 19% (vs. 34.6% baseline and vs. 22% on March 27)

I have been using Jim Bianco’s excellent exponential projection of 34.5% growth from March 10 as my baseline. It appears that “social distancing” strategies as well as State-mandated partial and total lockdowns may have begun to put a dent in the exponential rate of increase, as the average rate of increase for the past 5 days has been 22%.

Note: Ben Engebreth, whose Department of Numbers used to track house prices back in the housing bubble days, has started tracking coronvirus infection and testing numbers, with graphs. You can find it here.

Number and rate of increase of testing (from COVID Tracking Project)

• Number: 109,071, up +1,742 vs. 107,329 on March 27 day/day
• Rate: increase of 2% vs. number of tests previous day

Comparison of rates of increase in documented infections vs. testing

• Infections +19% vs. Tests +2% day/day

Result: The rate of testing is failing to improve and is far, far below what is needed, which is probably now at least 200,000/day. Note this number is also increasing exponentially as we try to chase the number of exponentially increasing infections.

Ratio of tests to positives for infection (from COVID Tracking Project)

• Number: 109,071 new tests vs. 18,821 new diagnosed infections
• ***Ratio: 5.8:1

In South Korea, where aggressive testing has led to a near-total disappearance of new cases, the inflection point where the number of new daily cases plateaued was reached when the ratio of tests to new cases found reached 15:1. Any ratio less than that suggests that not enough testing is being done. Yesterday’s ratio of 5.8:1 is poor – and has been worsening for the past week, I.e., we are falling further and further behind in testing.

 

Comments (5) | |

Brace yourselves: the US is Setting Up a Ghastly “Natural Experiment”

Brace yourselves: the US is setting up a ghastly “natural experiment” – by New Deal democrat

When I began my “Coronavirus Dashboard,” I was hopeful that it would document the slow progress towards turning a bad situation around, and the ultimate tamping down of the pandemic. Surely increasingly intense and overwhelming public pressure would force a critical mass of government officials to do what was necessary?

Now I am not so sure. The number of cases continue to climb at a double-digit exponential rate, if a less aggressive one than earlier in March. But even more infuriating is that the President of the United States is all but advocating for letting the virus run free come Easter Sunday. This has had a marked effect. The march to universal Statewide lockdowns has almost screeched to a halt. Most importantly, GOP governors in the Confederacy and in the High Plains, plus Arizona, have completely put the brakes on any statewide “stay in place” orders.

And even in those States which have taken relatively aggressive efforts at containment, the level of testing, let alone isolation and quarantine of identified cases, is running far below what is necessary. In fact it looks like it is falling further and further behind.

In short, I suspect that my dashboard is instead going to document the catastrophe of a deadly pandemic allowed to get completely out of control.

Comments (17) | |

Weekly Indicators for March 23 – 27 at Seeking Alpha

Weekly Indicators for March 23 – 27 at Seeking Alpha by New Deal democrat

My Weekly Indicators post is up at Seeking Alpha.

As you might expect, almost all of the “hard” indicators have crashed. What sticks out is that consumer spending, as measured by chain store sales, has not – even though one week ago the coronavirus restrictions were very much in place in many regions.

As usual, clicking over and reading will bring you thoroughly up to date. It also helps reward me for my efforts, especially now that I have cut back on posting there in order to spend a lot of time documenting what is happening and what is likely to happen going forward with the coronavirus pandemic.

Comments (0) | |

Mass testing for Covid-19: economics, politics, and policy options

The Covid-19 epidemic is creating a painful dilemma for policymakers.  On the one hand, we need to practice social distancing to keep people healthy and to prevent our hospitals from being overwhelmed.  Unfortunately, this strategy is causing a severe economic contraction as people avoid contact with others.

An ideal response to this dilemma would have three basic components.  First, we would implement a hard, nation-wide lockdown to slow the spread of Covid-19.  This would “flatten the curve” and save lives by preventing hospitals from being inundated with patients in the next few weeks.  It would also buy time to put in place the testing, prevention, and surveillance measures we will need to start cautiously re-opening our economy.  Putting these measures in place should be the second element of our strategy.  Finally, as Paul Romer and Alan Garber argue, we need a major effort to increase our capacity to test for Covid-19, and to produce masks, gloves, and other forms of personal protective equipment (PPE) by an order of magnitude or more.  The ability to do mass testing and to provide masks and other PPE to most Americans will substantially reduce the risk that the epidemic drags on for many months and leads to an economic catastrophe.  (For further discussions, see here, here, and here.)

In this essay I explain why it is important to massively increase our ability to produce Covid-19 tests and PPE.  I also discuss how this can be done, considering the apparent reluctance of the Trump administration to lead this effort.  I make four basic points.

First, the ability to test millions of people daily for Covid-19 and to produce PPE for millions of Americans will require a large up-front capital investment by manufacturers that may turn out to be unneeded, but this investment is socially justified to lessen the risk of a severe and protracted economic shutdown.

Second, without firm contractual commitments from the government, businesses will not invest at the scale required to ensure that we can avoid a disaster.  Several factors will deter adequate investment by industry; the most important is probably the risk that the epidemic will abate and they will not be able to recover their investment costs.  The government can overcome this problem by agreeing to pay companies for tests and PPE even if the epidemic abates, by subsidizing investment in the capacity to produce tests and PPE, etc.  The critical point is that the government needs to make binding commitments NOW, it cannot wait to see if the epidemic can be brought under control using other means.  Valuable time has already been lost.

Third, the powers that the President has under the Defense Production Act to directly control the use of resources are not particularly useful if our goal is to spur investment in the capacity to produce tests and PPE.  We need to give firms incentives to invest in new capacity using contracts, competitions, and similar tools.

Fourth, an ambitious effort to expand production of tests and PPE will inevitably lead to genuine contracting failures and to situations that create the perception of failure.  Trump is clearly anxious to avoid setting ambitious goals and taking actions that might later be used to criticize him.  In response, Congressional Democrats want to force Trump to exercise his powers under the Defense Production Act.

This is a mistake.  Trump would likely veto any bill that tried to force him to act, and, in any event, it is very difficult for Congress to force a reluctant President to act.  Fortunately, there is no need for contracting efforts to be directed by the President.  Rather than trying to force a reluctant Trump to exercise his contracting powers under the DPA, Congress should either delegate the power to an agency, or it should create incentives itself, directly.  I will sketch out how this can be done.  The same point applies to efforts to organize mass testing, the distribution of equipment, and other activities where direct commands are an effective means of achieving our goals:  Congress should accept that Trump is unwilling (and arguably unable) to lead these efforts and try to work around him in ways that he can accept.

Mass testing and distribution of PPE mitigate the risk of economic disaster

Comments (0) | |

“Canceling Student Loans Now”

Alan Collinge of the Student Loan Justice Org. has a petition supporting the cancellation of Student Loan Debt.

If we can bail out corporations again, why not bailing out people with excessive student loan debt?

The student loan justice.org is counting on you and needs your help with President Trump: Cancel Student Loans NOW.”  Join student loan justice.org and the 116,064 signers of the petition calling for President Trump to cancel student loan debt.

President Trump is currently enacting economic stimulus measures in face of impending recession. He has no great options. The Fed Funds Rate is already close to zero. Taxes on corporations and the wealthy have already been cut to the bone. Suspending interest on student loans won’t hurt the economy, but won’t really help either. The measures that have been announced so far will add significantly to the national debt, or require an increase in taxes.

The president should immediately issue an executive order cancelling all of the loans that the federal government holds directly- about 85% of all student debt. This could be done without having to raise one dime in new tax revenue, or adding a penny to the national debt.

Angry Bear has posted Alan’s words over the years on Student Loans and the resulting Student Loan debt to which there is no bankruptcy relief; the same relief our president has enjoyed multiple times, abused by corporations who gambled on Wall Street and in every day business, unions, and ordinary citizens caught up in bad economies. There is a large economic potential in freeing them from the loan debt so as to be more productive.

Read it and if you can spare a signature, please add your name.

Comments (2) | |

Coronavirus dashboard for March 28: testing falls further behind

Coronavirus dashboard for March 28: testing falls further behind- by New Deal democrat

Here is the update through yesterday (March 27)

In order to succeed in containing the pandemic, I believe that the US needs 2 weeks of China (nearly complete lockdown) followed by at least a month of South Korea (very aggressive and widespread testing).

At minimum, that means at least 50% of the US population under lockdown and a ratio of 15:1 in tests to results showing infection. The recent exponential growth of about 35% per day must be stopped. Those three most important metrics are starred (***) below.

As of now, just over 50% of the population is under total or business lockdown, and the rate of increase in new infections decelerated significantly – but is still growing at near 25%/day. The amount of testing continues to increase, but still is falling far short of what is necessary for a successful regimen.

Number and rate of increase of Reported Infections (from Johns Hopkins via arcgis.com)

• Number: up +18,825 to 104,837 (vs. +16,815 on March 27)
• ***Rate of increase: day/day: 22% (vs. 34.6% baseline and vs. 24% on March 27)

I am using Jim Bianco’s excellent exponential projection of 34.5% growth from March 10 as my baseline. It appears that “social distancing” strategies as well as State-mandated partial and total lockdowns may have begun to put a dent in the exponential rate of increase, as the average rate of increase for the past 4 days has been 22.5%.

Comments (0) | |

Coronavirus Thoughts

I’m not even going to try to organize this post.

I am in self quarantine 6 days after having either the mildest cold I can remember or a mild case of Covid 19 (this means alone in an Air BnB away from my family too). The pattern is the same I have read about countless times on the web. A brief mild fever and 5 coughs. Then nothing for about a week. Now I can expect nothing or maybe my lungs seize up.

I am sure my experience is very common. When this rotten pandemic is over, I will get the antibody test to find out if I have had Covid 19 or not.

Last week I taught twice my normal load (I will Not say how little that is) all by web. I have read again and again that, when working from home, one should get out of bed and put pants on as a matter of … for some reason. I have ignored this advice (I show pdfs to the class as my disembodied voice explains them — they don’t see me).

I am now all alone and bored (just normal teaching next week starting 17.5 hours from now). I will bore you after the jump.

Comments (6) | |