Bloomberg-BNN TalkIng Points on Economic Situation [feedly]

DeLong Talking points on Bloomberg
pretty good, and interesting, summary of progressive and sound economic questions surrounding best, and unanswered as yet, approaches to economic hits from the virus.  

Bloomberg-BNN TalkIng Points on Economic Situation
https://www.bradford-delong.com/2020/03/bloomberg-bnn-talking-points-on-economic-situation.html

• At the moment, we have a huge negative supply shock
• But as people lose their jobs as a result of this negative supply shock, it is going to turn into a demand shock
• And we also have a very powerful distribution shock as well
• We want to offset the demand shock without overdoing it
• We want to let the prices of goods and services in high demand rise to encourage people to produce more of them
• Hence an interesting policy problem:
  • The right inflation rate for the next 3 months is not 2%
  • The right inflation rate for the next 3 months is 2% + (share of the economy in high demand) x (how much prices need to rise to boost supply of commoditeis in high mand)/4
  • The right monetary policy is... stimulative, but uncertain...
  • The right fiscal policy is... stimulative, but uncertain...
  • The right distribution policy is... massive boost to unemployment insurance: 100% replacement for those who lose their jobs
  • The right lending policy is... lend enough on easy enough terms that businesses stay afloat, but not enough that stockholders make out like bandits—they are risk bearers, aren't they? Handsomely paid. Now is when they earn the money they earn in normal times...

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• I really wish the public health people were being louder and more forthcoming...
• Because we do not know where we are
• At the moment, 200 deaths in USA
  • Takes 4 weeks to die
  • At a 1% death rate, that means 20000 cases in U.S. on Feb 20
  • At a 3.33% death rate, that means 6000 cases in U.S. on Feb 20
• If cases have been doubling every 7 days...
  • Then at least 100000 cases in the U.S. right now (and our testing is missing 6 out of 7)
• If cases have been doubling every 4 days...
  • Then at most 2000000 cases in the U.S. right now (and our current testing is missing nearly everybody)
• We don't know which it is, because Trump said he didn't want bad numbers
  • At the moment, 12% of those being tested are coming out as positive
  • But to get the true fraction, you need to multiply that 12% by (those who have it who got tested)/(those who have it), and then divide the result by (those who don't have it who got tested)/(those who don't have it).
    • & because are testing is messed up AF, we have no idea what those two key ratios are...
• And the Trumpists saluted and slow-walked building up testing capacity
• He should have been impeached and removed from office last week for this High Crime alone...

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