Dan Little: The assault on democracy by the right [feedly]

The assault on democracy by the right
http://understandingsociety.blogspot.com/2020/03/the-assault-on-democracy-by-right.html

A democracy depends crucially upon a core set of normative commitments that are accepted on all sides -- political parties, citizens, government officials, judges, legislators. Central among these is the idea of the political equality of all citizens and the crucial importance of maintaining equality in the availability of access to formal political involvement in democratic processes. In particular, the right to vote must be inviolate for every citizen, without regard to region, religion, gender, race, national origin, or any other criterion. John Rawls encapsulates these commitments within his conception of the political values of a just society in Political Liberalism.

The third feature of a political conception of justice is that its content is expressed in terms of certain fundamental ideas seen as implicit in the public political culture of a democratic society. This public culture comprises the political institutions of a constitutional regime and the public traditions of their interpretation (including those of the judiciary), as well as historic texts and documents that are common knowledge. (13) … A sense of justice is the capacity to understand, to apply, and to act from the public conception of justice which characterizes the fair terms of social cooperation. Given the nature of the political conception as specifying a public basis of justification, a sense of justice also expresses a willingness, if not the desire, to act in relation to others on terms that they also can publicly endorse. (18)

The Voting Rights Act in 1965 was an important step in the development of racial equality in the United States for a number of reasons; but most important was the clear statement it made guaranteeing voting rights to African-American citizens, and the judicial remedies it established for addressing efforts made in various states or localities to limit or block the exercise of those rights. The act prohibited literacy tests for voting rights and other practices that inhibited or prevented voter registration and voter participation in elections.

However, the Supreme Court decision in 2013 (Shelby County v Holder) eliminated the fundamental force of the 1965 act by removing the foundation of the requirement of pre-clearance of changes in voting procedures in certain states and jurisdictions. This action appears to have had the effect of allowing states to take steps that reduce participation in elections by under-served minorities (link).

Also important is the idea that the formal decisions within a democracy should depend upon citizens' preferences, not the expenditure of money in favor of or against a given candidate or act of legislation. The Supreme Court's decision in 2010 in the case of Citizens United v Federal Election Commission found the 2002 Bipartisan Campaign Reform Act to be unconstitutional because it restricted the freedom of speech of legal persons (corporations and unions). This ruling gave essentially unlimited rights to corporations to provide financial support to candidate and legislative initiatives; this decision in one stroke diminished the political voice of ordinary voters to a vanishing level. Big money in politics became the decisive factor in determining the outcomes of political disagreements within our democracy. (Here is a summary from the Washington Post on the effects of Citizens United on campaign spending; link.)

The 2014 book by Doug McAdam and Karina Kloos, Deeply Divided: Racial Politics and Social Movements in Postwar America, is profoundly alarming for a number of reasons. They make clear the pivotal role that the politics of race have played in American electoral politics since the Nixon presidency. Most recently, the Tea Party social movement appears to be substantially motivated by racism.

The question is: where did this upsurge in "old-fashioned racism" come from? Based on the best survey data on support for the Tea Party, it seems reasonable to credit the movement for at least some of the infusion of more extreme racial views and actions into American politics. We begin by considering the racial attitudes of Tea Party supporters and what that suggests about the animating racial politics of the movement wing of the Republican Party. In this, we rely on two sources of data: the multi-state surveys of support for the Tea Party conducted by Parker and Barreto in 2010 and 2011 and Abramowitz's analysis of the October 2010 wave of the American National Election Studies. (KL 5008)

Based on this survey data, they conclude:

Support for the Tea Party is thus decidedly not the same thing as conventional conservatism or traditional partisan identification with the Republican Party. Above all else, it is race and racism that runs through and links all three variables discussed here. Whatever else is motivating supporters, racial resentment must be seen as central to the Tea Party and, by extension, to the GOP as well in view of the movement's significant influence within the party. (KL 5053)

Most alarming is the evidence McAdam and Kloos offer of a deliberate, widespread effort to suppress the voting rights of specific groups. Voter suppression occurs through restrictions on the voting process itself; and more systemically, it occurs through the ever-more-impactful ability of state legislators to engage in data-supported strategies of gerrymandering. And they connect the dots from these attitudes about race to political strategies by elected officials reflecting this movement:

Nor is the imprint of race and racism on today's GOP only a matter of attitudes. It was also reflected in the party's transparent efforts to disenfranchise poor and minority voters in the run-up to the 2012 election. It may well be that the country has never seen a more coordinated national effort to constrain the voting rights of particular groups than we saw in 2012. Throughout the country, Republican legislators and other officials sought to enact new laws or modify established voting procedures which, in virtually all instances, would have made it harder—in some cases, much harder—for poor and minority voters to exercise the franchise. (KL 5053)

Through gerrymandering the votes of a large percentage of the electorate are functionally meaningless; they live in districts that have been designed as "safe districts" in which the candidates of one party (most commonly the Republican Party, though there are certainly examples of Democratic gerrymandering as well) are all but certain to win election. Consider these completely deranged districts from Illinois, Georgia, Louisiana, and North Carolina:

And nation-wide, the power of state legislatures to create gerrymandered districts has led to a lopsided political map, where only a few districts are genuinely competitive:

So the preferences of a given block of voters among candidates in a Republican safe district have zero likelihood of bringing about the election of the competing candidate. McAdam and Kloos are very explicit about the threat to democracy these efforts and the deliberateness with which the Republican Party has carried out these strategies over the past several decades. They are explicit as well in documenting the goal of these efforts: to suppress votes by racial groups who have traditionally supported Democratic candidates for office.

The efforts at voter suppression documented by McAdam and Kloos have continued unabated, even accelerated, since the 2014 publication of their book.

The hard question raised by Deeply Divided is not answered in the book, because it is very hard to answer at all: how will the public manage to claim back its rights of equality and equal participation? How will democracy be restored as the operative principle of our country?  

 -- via my feedly newsfeed

Bernie Sanders: Coronavirus highlights the flaws in our health care and economic systems Opinion by Bernie Sanders

Bernie Sanders: Coronavirus highlights the flaws in our health care and economic systems

via CNN: https://www.cnn.com/2020/03/15/opinions/bernie-sanders-opinion-coronavirus-health-care-economic-system-flaws/index.html

Opinion by Bernie Sanders

text only

Our country is facing a medical and economic crisis the likes of which we've not seen in generations. And our response must meet the enormous scale of the pandemic.


It is at this moment that we must remember that we are all in this together. If our neighbor or co-worker gets sick, we have the potential to get sick. If our neighbors lose their jobs, then our local economies suffer, and we may lose our jobs. If doctors and nurses do not have the equipment and staffing capacity they need now, people we know and love may die.
Now is the time for solidarity, and robust action.

In the short term, we must respond with unprecedented measures to make sure we protect all people regardless of their income.
First and foremost, that means our response must be guided by the decisions of doctors, scientists, and researchers — not politicians.

At their direction, we must immediately increase the availability of coronavirus test kits and accelerate the processing of those tests. We must build out more intensive care units and obtain additional ventilators, while doing whatever we can to support and protect medical personnel. And we must significantly improve our communication and collaboration with other countries to ensure that we are learning everything that we can about the novel coronavirus.
But as we struggle with this crisis, we must remember how we arrived at this moment of peril, and then we must take long-term steps to make sure we are far better prepared for similar emergencies in the future.

When it comes to health care, we must finally do what every other major country does and guarantee health care to all our people as a human right, not a privilege.
Even before this public health crisis, many Americans were already asking: How is it possible that we spend twice as much per capita as the people of Canada and other major countries, while 87 million of us are uninsured or underinsured. Today, the pandemic puts an even brighter spotlight on the shortcomings of the current corporate-run system.
In this current system, people who are sick or experiencing symptoms of the coronavirus may not go to a doctor because they simply cannot afford it. And when somebody is not treated for the virus, that means the infection can spread to many others, putting whole communities at risk.
So, it is not just a question that in normal times — tragically, unbelievably — 13% of Americans, or about 34 million people, say a friend or family member recently passed away after being unable to afford treatment for a condition, according to a poll from Gallup and West Health. Now, during the coronavirus outbreak, the lack of health care threatens all of us, showing that we are only as safe as the least insured person in America.
This gets to a fundamental point that is so often lost in our democratic debate: No matter how politically divided we are, we are all in this together. As the Rev. Dr. Martin Luther King Jr. put it, "We are all caught in an inescapable network of mutuality, tied into a single garment of destiny — whatever affects one directly, affects all indirectly."

It is the same principle when it comes to paid family and medical leave.
Today, there are potentially thousands of workers who may be ill and should be staying home but continue to go to work to earn the wages they need to afford necessities like food and housing. Many of these workers are in the restaurant, transportation, tourism and retail industries, and may unknowingly spread the virus in their interactions with the public.
People should not be going to work when they are sick — it is unfair to them and it is unfair to the people they are in contact with. We must join every other major country in the world and guarantee paid family and medical leave to all workers.
Finally, from a national security perspective, it is incomprehensible that we are dependent on China and other countries for masks, prescription drugs, surgical gloves, and medical equipment like ventilators.
As a result of globalization and our disastrous trade policies — which I have opposed — we have been outsourcing millions of jobs and factories overseas that have gutted our economy. Now we are seeing another tragic and devastating result of those policies, as we find ourselves dependent on other countries to provide the most essential things that we need to combat a pandemic and protect American lives.
Trade is a good thing, but it must protect American workers and protect our national security so that we can produce what we need in the event of a national crisis. That means we must enact fair trade policies that bring production and manufacturing back to the United States, so that we are never in this vulnerable position again.

The days ahead will be difficult and challenging. As we take urgent short-term measures to address the immediate emergency, we must put in place these far-reaching policies to fundamentally transform our country for the better.
That is what our presidential campaign has been all about — and that is what our whole country must be about in the months ahead.--

John Case
Harpers Ferry, WV

Enlighten Radio

Socialist Economics

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Coronavirus Cost to Businesses and Workers: ‘It Has All Gone to Hell’ [feedly]

an anecdotal, but potent survey of the speed of expanding economic damage.

Coronavirus Cost to Businesses and Workers: 'It Has All Gone to Hell'
https://www.nytimes.com/2020/03/15/business/economy/coronavirus-economy-impact.html

By Ben Casselman, Patricia Cohen, Stacy Cowley, Conor Dougherty, Nicholas Kulish, David McCabe and Karen Weise

March 15, 2020,


A week ago, Mark Canlis's restaurant in Seattle was offering a $135 tasting menu to a bustling dining room every night. Eileen Hornor's inn on the Maine coast was booking rooms for the busy spring graduation season. And Kalena Masching, a real estate agent in California, was fielding multiple offers on a $1.2 million home.

Then the coronavirus outbreak changed everything.

Today, Mr. Canlis's restaurant is preparing to become a drive-through operation serving burgers. Ms. Hornor is bleeding cash as she refunds deposits for scores of canceled reservations. And Ms. Masching is scrambling to save her sale after one offer after another fell through.

"Last week, I would have told you nothing had changed," she said. "This week, it has all gone to hell."

For weeks, forecasters have warned of the coronavirus's potential to disrupt the American economy. But there was little hard evidence beyond delayed shipments of goods from China and stomach-churning volatility in financial markets.


Now the effects are showing up in downtown nightspots and suburban shopping centers from coast to coast.



Not since the attacks of Sept. 11, 2001, has a crisis enveloped so much of the economy so quickly. Broadway is dark. The college basketball tournaments are canceled and professional sports are on indefinite hold. Conferences, concerts and St. Patrick's Day parades have been called off or postponed. Even Disneyland — which stayed open through a recession a decade ago that wiped out millions of American jobs and trillions of dollars in wealth — is shuttered.

"This hits the heart of the economy, and it hits the economy on all sides," said Diane Swonk, chief economist at Grant Thornton. "It's not just that we're slowing down things. We're actually hitting the pause button, and there is no precedent, there is no mold for that."


The effects are being felt even in places that the outbreak itself has not yet reached. Maine had not had a single diagnosed case of the virus when Ms. Hornor learned Wednesday that Bowdoin College, which accounts for 80 percent of her business, was calling off in-person classes and sending students home. Yet by midday the next day, she had lost 84 bookings, with more cancellations all but certain. At a somber staff meeting on Thursday, she told her 10 employees that she would try to avoid layoffs but that cuts in hours were inevitable.



"I have people who rely on me to be able to pay their rent," she said. "Not only do I have no money coming in, I'm kind of hemorrhaging cash in terms of refunds for everyone."

Get an informed guide to the global outbreak with our daily coronavirus newsletter.

Now that the outbreak is hitting the consumers, the damage is all but certain to spread. JPMorgan Chase said Thursday that it expected the U.S. economy to contract in the first two quarters of the year, which would meet a common definition of a recession. A survey of prominent academic economists, also released Thursday, found that a majority thought the outbreak was likely to cause a "major recession."

For caterers, function halls and others whose business depends on large groups of people gathering together, business dried up nearly overnight.

"It started Tuesday," said Elizabeth Perez, the co-owner and marketing director for the Pavilion Grille in Boca Raton, Fla. "They were canceling Thursday night with a dinner for 47 people, and that was the first one." Then an Ultimate Chefs' dinner for 120 scheduled for March 22 was postponed. A bar mitzvah for 150 on May 30 canceled. "That's at least $10,000," Ms. Perez said. She normally employs 20 people at an event to serve food and bus tables. Since they are hourly workers, if there is no event, there is no pay.

It isn't just the outbreak itself that is causing damage. The turmoil it has caused in the financial markets is also starting to spill over into the real economy.

Image
Kong's Tavern in Oklahoma City on what would normally be a busy Friday afternoon. With no customers, Chris James, a cook, watched as President Trump spoke on television about the coronavirus outbreak.Credit...Nick Oxford for The New York Times



Last weekend, Ms. Masching, a broker with Redfin in Silicon Valley, got three offers on a $1.2 million home she had listed in Mountain View. But by Monday, two people had rescinded their offers and the third tried to back out, citing stock market losses, after her client had accepted. At the same time, she said, prospective buyers are deciding to hold back offers on the belief that the carnage could eventually lead to lower home prices.

"Most of our clients are using stock for their down payment, and they don't have the purchasing power they did even two weeks ago," she said.

In much of the country, offices remain open, restaurants remain full and day-to-day life remains relatively normal, albeit with fewer handshakes and more hand washing. But in places where the virus is already widespread, the downturn is well underway.

In Seattle, the place hit hardest so far by the outbreak in the United States, the normally bustling South Lake Union neighborhood has been eerily quiet since Amazon and other tech companies with headquarters in the area told their employees to work from home. That has been a disaster for Tom Douglas, a local chef with a dozen restaurants. Business is down 90 percent from usual.

On Wednesday, Mr. Douglas told his staff that dinner service on Sunday would be the last for two or three months. He was shuttering his restaurants and laying off almost all of the roughly 800 employees. He planned to apply for unemployment himself and research federal disaster or small business loans.

"This is a serious natural disaster — I don't think a lot of people are thinking about it that way just because there's no winds and there's no floods," he said. "But this is a real natural disaster that's affecting people at the most basic level."



The pullback from public life is sending shock waves beyond the hospitality industry. When restaurants close their doors, they no longer need tablecloths delivered by linen services or beer from local brewers. When people stop flying, they no longer need taxis to the airport or $5 bottles of water from the airport newsstand.

Baden Sports, a sporting-goods manufacturer in the Seattle suburb of Renton, provides basketballs and baseballs for youth leagues and college tournaments, many of which are now being canceled. Jake Licht, who runs the company, has imposed a hiring freeze and is drawing up a budget in preparation for a recession.

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The Showbox in downtown Seattle has canceled or postponed every show until April. Credit...Chona Kasinger for The New York Times

"This is moving so fast," Mr. Licht said. "We had meetings and planning sessions three days ago that have already been invalidated. This is an hour-by-hour management challenge."

The speed of the crisis has outpaced economists' ability to track it. As the stock market gyrated in recent days, economic data — most of it from February, before the outbreak was widespread in the United States — continued to look rosy. Even indicators that usually serve as early-warning systems have yet to catch up: New claims for unemployment insurance actually fell last week and remain near a multidecade low.

Still, there are early signs of a crisis that is still gaining steam. Measures of consumer sentiment fell sharply in early March, and indexes of business conditions have cratered. Airlines, ports, hotels and other directly affected industries have already announced layoffs or employee furloughs. Postings for restaurant jobs were down 26 percent last week compared with the same week a year ago, according to data from the job marketplace ZipRecruiter. Job listings in catering were down 39 percent and those in aviation down 44 percent.

"The behavior changes that could set off an economic cascade that will eventually be seen in the labor market are really being put into motion now," said Julia Pollak, a labor economist at ZipRecruiter.


Image
The empty Amazon campus in Seattle's South Lake Union neighborhood.Credit...Chona Kasinger for The New York Times

The workers who are feeling the effects of the pullback first are the ones least able to afford it: low-wage, hourly employees, many of whom aren't paid if they miss work. Only one-third of leisure and hospitality workers have access to any paid time off, according to data from the Bureau of Labor Statistics.

Wallace McLeod has worked at TapWerks Ale House in Oklahoma City's Bricktown district for five years, but he had never seen business as slow at the bar as it was on Thursday night. With 212 taps split between two stories, the pub would have been rocking with patrons heading to the Cher concert at the Chesapeake Energy Arena a few blocks away. "I wouldn't be able to talk to you right now if the concert were going on," he said in an interview.

Instead, Cher's event was postponed, the bar was largely empty and a night that should have brought in as much as $13,000 in sales would be lucky to reach $4,000 if the regulars toughed it out. Bartenders expecting to make over $200 for the night would be lucky to bring home $80, Mr. McLeod said — which meant they, too, would rein in their spending.

"You have less money," Mr. McLeod said, noting he would have to put off a birthday party for his daughter. "You can't do as many things as you're used to doing."

I

The strength of the economy before the coronavirus hit may provide some protection. Companies that have spent recent years struggling to attract and retain workers may be reluctant to lay them off, especially if they expect a relatively rapid rebound.


Many businesses are doing whatever they can to hold on until then.

Canlis is one of Seattle's highest-end restaurants, with a piano player who entertains customers at the bar and a four-course tasting menu that runs $135 a person. But when the outbreak began to spread in Seattle, business started to dry up. Mr. Canlis, one of the owners, realized that his business was "one headline away" from putting 100-plus employees out of a job.

So over a three-hour meeting in an apartment overlooking the city, the managers worked out a new plan. This week, the restaurant will start selling bagel sandwiches in the morning, running a drive-through serving burgers and veggie melts for lunch and delivering dinner to the doorsteps of Seattle residents.

"Fine dining is not what Seattle needs right now," the restaurant said in an Instagram post announcing the change.

 -- via my feedly newsfeed

Sick Pay Benefits: A Labor Market and Public Health Issue [feedly]

deeper economic analysis of the sick pay issue from Tim Taylor

Sick Pay Benefits: A Labor Market and Public Health Issue
http://conversableeconomist.blogspot.com/2020/03/sick-pay-benefits.html

Providing sick pay to workers is often discussed in terms of fairness or social insurance against the risk of declining income, but it also has an important public health dimension. Employers might prefer that sick workers remain at home, rather than passing on their illness to the rest of the workforce. But workers who do not have sick pay won't get paid if they don't show up.

Most high-income countries in the world have government-required provision of sick pay. Researchers at the World Policy Analysis Center at UCLA compiled data in a 2018 report "Paid Leave for Personal Illness: A Detailed Look at Approaches Across OECD Countries."  They write that of 34 OECD countries, only the US and Korea do not have a guarantee of paid leave for personal illness. The details of implementation vary across  countries, of course. For example, two of these countries make employers solely responsible for paying for sick leave, nine countries have government solely responsible, and 21 have a mixture of the two. In the mixed systems, a common pattern is that employers pay for the first few weeks of sick leave, and then government takes over after that up to some limit like three or six months. A common pattern in these countries is that sick leave is 80% of regular pay.

In the US, sick leave is much less likely in lower-paying jobs. Here's a figure showing the pattern from the Kaiser Family Foundation:


Efforts to have federal sick pay rule in the US have gone nowhere. However, starting with San Franciso in 2007, a number of state and local governments have passed such rules in the last few years. Twelve states now have such laws, and a couple of dozen more cities, including New York City, Chicago, Philadelphia, Washington DC, Seattle, and Portland.  The typical pattern for these laws is that all employees earn  one hour of paid sick leave for every 30 to 40 hours worked. Of course, the idea behind this design is that a worker can't take a job and then immediately take paid sick leave, but a worker will accumulate roughly a day of paid sick leave for every 8 weeks worked. For a detailed and updated  "Interactive Overview of Paid Sick Time Laws in the United States," see the A Better Balance website.

What are the effects of these laws? Stefan Pichler and Nicolas R. Ziebarth have written "Labor Market Effects of U.S. Sick Pay Mandates,"forthcoming in the Spring 2020 issue of the Journal of Human Resources(55:2, pp. 611–659). They look at employment and wage data over a time frame from 2001 to 2016 for nine cities and four states that have enacted sick pay rules. They create what is called a "synthetic control group," which is a set of cities and states that historically have followed the same patterns of employment and wages, but did not adopt a sick pay rule. Then, they can see whether adopting sick pay causes a change in  employment and wages compared to this control group. They find no evidence of such a change.

In a follow-up study, Johanna Catherine Maclean, Stefan Pichler, and Nicolas R. Ziebarth have published a working paper, "Mandated Sick Pay: Coverage, Utilization, and Welfare Effects" (March 2020, NBER Working Paper #26832, not freely available, but readers may have access through their institutiosn).  This study focuses on state-level sick-pay mandates, with data from 2009-2017. During this time, states are adopting sick pay mandates at different times. Thus, for these states and in comparison with other states, one can look for how patterns of sick leave coverage change when sick-pay mandates are adopted. They find:

Within the first two years following mandate adoption, the probability that an employee has access to paid sick leave increases by 18 percentage points from a base coverage rate of 66%. The increase in coverage persists for at least four years without rising further. Over all post-mandate periods covered by this paper, we find a 13 percentage point higher coverage rate attributable to state mandates. As a result of the increased access to paid sick leave, employees take more sick days ...  newly covered employees take two additional sick days per year. Employer sick leave costs also increase, but effect sizes are modest. On average, the increase amounts to 2.7 cents per hour worked ... Further, we find little evidence that sick pay mandates crowd-out non-mandated benefits such as paid vacation or holidays. Likewise, we find no evidence that employers curtail the provision of group policies such as health, dental, or disability insurance.

These studies are focused on labor market issues, and do not take public health effects into account. However, in a different working paper, Stefan Pichler, Katherine Wen,  Nicolas R. Ziebarth study 
"Positive Health Externalities of Mandating Paid Sick Leave" (February 2020).  Looking at state-level data, they find that in the first year after a state enacts sick pay, rates of doctor-certified influenza-like illness fell by about 11%.

This offered broad confirmation of results from an earlier study by Stefan Pichler and Nicolas R. Ziebarth, "The pros and cons of sick pay schemes: Testing for contagious presenteeism and noncontagious absenteeism behavior" (Journal of Public Economics, December 2017, pp. 14-33).  Looking at Google Flu data, they found that when U.S. employees gain access to paid sick leave, the general flu rate in the population decreases significantly, which suggests the possibility of less transmission of flu at work.

They also look at sick pay outcomes in Germany, a country with generous sick pay provisions. However, when Germany legislative changes allowed some flexibility to reduce sick pay from 100% of previous salary to 80%, the result was a large drop in more nebulous claims sickness claims like "back pain" but little drop for sickness claims related to infectious illnesses. This pattern suggests a plausible tradeoff: very generous sick pay can lead to workers taking time off for reasons not related to public health, but as sick pay becomes less generous, it will also lead to "contagious presenteeism" where contagious workers become more likely to show up at the job.

(In passing, I was also struck by this historical comment about Germany sick pay in the Pichler and Ziebarth 2017 paper: "Historically, paid sick leave was actually one of the first social insurance pillars worldwide; this policy was included in the first federal health insurance legislation. Under Otto van Bismarck, the Sickness Insurance Law of 1883 introduced social health insurance in Germany, which included 13 weeks of paid sick leave along with coverage for medical bills. The costs associated with paid sick leave initially made up more than half of all program costs, given the limited availability of (expensive) medical treatments in the nineteenth century ...") 

Some US companies are now discovering that sick pay may matter to their business: for example,
"Amazon announces up to 2 weeks of paid sick leave for all workers and a 'relief fund' for delivery drivers amid coronavirus outbreak."  But the kinds of sick pay laws that have been gradually spreading through certain states and cities are partial and incomplete. The novel coronovirus outbreak suggests that a national sick pay policy--probably with employers responsible for the first weeks and then government serving as a back-up--is an issue with broad public health consequences, not just an argument over whether government should require companies to provide certain benefits. Sitting here in March 2020, it would have been nice to have a national sick-pay policy in place a few years ago, as a way of reducing the spread of coronavirus and cushioning the loss of income for those who become sick. But it's not too early to start prepping for the next pandemic.  

 -- via my feedly newsfeed

Oil Slump Worsens Lowflation Risks Central Banks Can't Ignore [feedly]

Here is something not seen before: prices of oil and gas are tanking. Normally this would b e a boost for travel. But travel is crashing too, cuz of pandemic. If prices AND sales crash together, even the big, highly profitable majors, may be less likely to buy up and consolidate the severly damaged shale, and many smaller or debt ridden firms.  

Oil Slump Worsens Lowflation Risks Central Banks Can't Ignore
https://www.bloomberg.com/news/articles/2020-03-14/oil-slump-worsens-lowflation-risks-central-banks-can-t-ignore

Global central banks already struggling to spur inflation amid the spreading coronavirus are facing a fresh challenge -- the oil crash.

The price war between Saudi Arabia and Russia that has given crude its worst week since 2008 will put heavy downward pressure on inflation just as the coronavirus outbreak hits consumer spending. It's undoing the years of effort that monetary authorities have put in, along with trillions of dollars of stimulus, trying to hit their price-stability targets.

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The question now is whether they have the capacity to respond as strongly as needed. Market-based gauges of future inflation have slumped, suggesting that investors doubt they can, or that governments will provide sufficient support.

Central bankers tend to skirt over energy-price shocks if they think they'll be temporary, pointing instead to "core" inflation measures that exclude volatile components. After so many years of low inflation despite massive monetary stimulus, though, there's a risk that companies and households decide this is just the latest sign that prices will stay flat.

"There is a tendency to say oil is a temporary factor that central banks will look through, and won't affect their view of the appropriate stance of policy," said Jacob Nell, an economist at Morgan Stanley, who sees the oversupply of oil persisting. "It's harder for central banks to look through a fall in inflation when inflation expectations are so far off the target. They have to be more ready to respond, or they could risk credibility and it will be that much harder to get inflation back to target in future."

While an oil slump would normally boost purchasing power in the world's biggest economies -- Japan and the euro zone both import most of their energy, and the U.S. status as a net petroleum exporter is nascent and fragile -- this time the coronavirus outbreak is simultaneously hitting consumption and travel.

Brent crude prices were down about 24% this week despite monetary easing by central banks and pledges of fiscal support by governments. JPMorgan Chase & Co. economists say a 20% drop would typically add close to 1% to global output the next quarter, but now customers might not spend the windfall.

"Given the pullback in consumer demand in travel and entertainment, the actual boost to household purchasing power from falling oil prices could be less than usual," they said in a note. "In addition, falling oil prices raises financial-market risks by expanding the set of small and medium-sized enterprises facing concentrated credit stresses in the coming months."

Read more... Bond Market's Dire Inflation View Gets Even Darker on Oil Rout Oil-Hedge Strategy That Failed Shale in 2014 Burns It Again

Disinflation, as slowing inflation is know, isn't a given. Oil prices could rebound if Russia and Saudi Arabia resolve their differences. The coronavirus might actually prove inflationary if it disrupts companies so much that supply of goods and services falls more than demand.

Even after the virus outbreak subsides though, inflation still will be pressured by the trade war, depressed immigration into the U.S., automation, and other longer-term trends, according to David Mann, Singapore-based global chief economist of Standard Chartered Plc.

While productivity investment is expected to pick up sometime in the next decade, alongside implementation of 5G technologies especially in Asia, there's no reason to expect that ramp-up right now.

Euro-zone inflation slowed to just 1.2% in February, compared with a goal of just under 2%, and that was before the oil shock. The Bank of England says U.K. inflation rate could drop below 1%, to less than half its target.

Aside from India, where inflation remains above the 2%-6% target range, Asian economies broadly face weak pressures. Core consumer prices in China are rising at their slowest pace in almost a decade. Japanese inflation is 0.7%, and gains through February were actually driven by rising gasoline costs. Inflation gauges for Indonesia, Thailand and Singapore are all below-target or in the lower end of target ranges.

At Deutsche Bank AG, economists led by Matthew Luzzetti have dusted off a 2017 report which showed the oil price shocks of the mid-1980s and 2014-15 led to persistent declines in inflation expectations that were never unwound. They worry a third episode has now begun which will complicate the work of central banks.

"Inflation expectations at this point are extremely low -- arguably too low," said Mann of Standard Chartered. "They might not pick up for some time."

 -- via my feedly newsfeed

Five Early-Warning Economic Indicators Show U.S. Virus Shock [feedly]

Five Early-Warning Economic Indicators Show U.S. Virus Shock
https://www.bloomberg.com/news/articles/2020-03-14/five-early-warning-economic-indicators-show-u-s-virus-shock

Official U.S. indicators for employment, inflation and gross domestic product might seem badly out-of-date as the rapidly spreading coronavirus outbreak wreaks havoc on the economy.

Key data points after often a month behind. To give a more timely snapshot, below are five high-frequency indicators tracking how consumers are reacting to the crisis.

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Consumer spending makes up 70% of the economy, so any suspension can devastate growth -- or cause a contraction, as economists see as a growing risk. Some sectors are already seeing all activity stop.

1. Hotels

U.S. hotel occupancy fell to 61.8% in the week ended March 7, from 66.6% a year earlier on drops across hard-hit states like California, New York and Washington, according to industry tracker STR. In Seattle, which had the first big U.S. outbreak, the occupancy rate fell to 52.3%, the lowest among the top 25 markets. Rooms also emptied out in Southern California's Anaheim-Santa Ana area around Disneyland, which will be closed from Saturday.

Room at the Inn

Seattle occupancy plunges and other cities see significant declines

STR

Hotel occupancy for week ended March 7 compared with year earlier week.

Personal spending on lodging equals 0.8% of gross domestic product, Commerce Department data show. Those expenditures could plunge by half if the Sept. 11 terrorist attacks are any guide, according to Neil Dutta, head of U.S. economics at Renaissance Macro Research.

The White House is considering a raft of measures to help the country's hard-hit tourism industry including offering more support to hotels, as well as airlines and travel firms.

2. Retail sales

Johnson Redbook's weekly retail sales report continues to be a bright spot showing consumers are still shopping, though they have shifted some purchases to emergency supplies in response to the outbreak.

Month-to-date sales in the week ended March 7 rose 6%, though that reflected a big increase in sales at discount stores, while department stores suffered declines. "Sales were led by pharmaceuticals, cleaning products, household supplies, consumables, bottled water and food," the report noted.

3. Box office

The cinema industry, from the biggest chains to independent owners, are reducing capacity as part of the fight against coronavirus.

AMC Entertainment Holdings Inc., the market leader, said Friday that it would cut in half the number of tickets it sells for each showing, going beyond what's required in places with restrictions on gatherings, such as New York, California and Washington.

While many are avoiding crowds as public health officials advise, the appeal of the movies matters too in drawing an audience. Studios are pushing back some major releases, such as the James Bond feature "No Time to Die" and Disney's "Mulan," a move likely to keep movie theater seats emptier for longer.

4. Broadway Tickets

New York Governor Andrew Cuomo closed Broadway theaters Thursday and banned large gatherings to slow the spread of the virus. Performances will be suspended through April 12, according to the Broadway League. In the week ended March 8, Broadway attendance was down 6.5% from a year earlier, the group said. Even so, many hit shows like "Hamilton" were packed prior to the order.

Broadway Is Dark

Popular Broadway shows were packed before the closure

Broadway League

Theater seats occupied in the week ended March 8.

The closure of theaters reflects a broader halt to cultural attractions. New York's Metropolitan Museum, Carnegie Hall, and Met Opera have shut their doors, in addition other such shuttered sites nationwide.

5. Consumer comfort

U.S. consumer confidence deteriorated for a sixth straight week, the longest such stretch since 2015, according to Bloomberg's Consumer Comfort index. The measure of how consumers view their personal finances took a hit following the plunge in stock prices. Yet consumers are persevering and confidence remains at elevated levels compared with the last recession.

 -- via my feedly newsfeed

White House, House Democrats reach deal on coronavirus economic relief package, Pelosi announces

https://www.washingtonpost.com/us-policy/2020/03/13/paid-leave-democrats-trump-deal-coronavirus/?fbclid=IwAR24qAFF5wLV3R5QOqi3xb03EBqFCv6gsf5MMQVUzXDAPKYgtSuTMhpDYU4  

The White House and House Democrats reached agreement Friday on a coronavirus relief package to spend tens of billions of dollars on sick leave, unemployment insurance, food stamps and other measures to address the unfolding crisis.

House Speaker Nancy Pelosi (D-Calif.) announced the agreement in a letter to fellow House Democrats. "We are proud to have reached an agreement with the Administration to resolve outstanding challenges, and now will soon pass the Families First Coronavirus Response Act."

A vote to pass the legislation was expected later Friday in the House, and in the Senate next week.

The development came after a roller-coaster day that started with a deal seeming imminent, before it looked like it was unraveling over successive hours. House Republicans voiced concerns and Trump himself voiced opposition, complaining at an afternoon news conference that Democrats were "not doing what's right for the country."

At one point Pelosi announced that Democrats would be moving forward with a vote, with or without Republicans on board.

But behind the scenes, Pelosi and Treasury Secretary Steven Mnuchin continued negotiations that began earlier this week, By early Friday evening they had spoken by phone 13 times that day alone.

Pelosi praised the legislation in a televised address Friday afternoon. "Put families first — today, we are passing a bill that does just that," she said, laying out provisions of the legislation such as free coronavirus testing, paid sick and family leave, and food assistance for poor families.

"Our nation, our great nation, has faced crises before," she said. "And every time, thanks to the courage and optimism, patriotism and perseverance of the American people, we have prevailed. Now, working together, we will once again prevail, and we will come out stronger than before."

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House moves toward quick vote on Democratic coronavirus package

House Republicans had appeared uneasy about some provisions in the package, which would expand federal spending on Medicaid and provide for federal reimbursement for paid sick leave as well as family and medical leave.

Compounding the GOP concern was Trump's insistence on instituting a broad payroll tax cut to stimulate the economy. He said in a morning tweet that such a cut, increasing paychecks by 7.65 percent for most wage earners, was essential to any recovery package. "Only that will make a big difference!" he wrote.

Lawmakers in both parties have reacted coolly to the proposal, expressing qualms about its cost and the fact that it is not targeted to those directly affected by the pandemic. The legislation negotiated between Pelosi and Mnuchin did not include a payroll tax cut, and that omission emerged as one of the obstacles to reaching a deal, according to the senior administration official.

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Trump pitches payroll tax cut through election to skeptical GOP senators

Last week, Congress passed an $8.3 billion emergency spending plan to address public health needs arising from the crisis. But as the crisis mushroomed through the economy, with schools closing, planes and trains half-empty and major sports and entertainment events canceled, lawmakers increasingly saw the need for a major economic relief package -- probably a series of them. Thursday's massive stock market sell-off rattled lawmakers, although stocks were back up on Friday.

There are now over 1,200 confirmed coronavirus cases in the United States and more than three dozen deaths, numbers that are expected to exponentially rise. Trump declared a national emergency Friday to free up funds, and lawmakers themselves have been announcing plans in growing numbers to shut down their offices and self-quarantine after brushes with infected individuals. For the second day in a row on Friday, McCarthy convened a conference call with House Republicans rather than meeting with them in person, a step he said helped with health concerns.

Live updates: Trump to declare a national emergency in response to coronavirus

The emerging agreement builds upon a bill House Democrats released late Wednesday that included a number of provisions Republicans opposed, setting off hours of frenzied negotiations on Capitol Hill to reach bipartisan consensus.

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A final hang-up was over a provision for paid family and medical leave, with Republicans pushing to structure it in a way so it could be implemented quickly and avoid undue burdens on employers.

As originally introduced, the House bill included a $2 billion boost to state unemployment insurance programs, more than $1 billion in nutritional aid, a new paid-leave benefit for employees affected by the outbreak and an increase in federal Medicaid spending, as well as a guarantee of free coronavirus testing.

Republicans viewed the initial legislation as overly broad, and through hours of phone calls and staff-level negotiations Thursday, Pelosi and Mnuchin agreed to narrow the legislation to focus more squarely on impacts from the coronavirus and those hurt by it.

The initial proposals underwent significant changes over the hours of talks, and toward the end negotiators were haggling over a less ambitious proposal for family and medical leave from Rep. Robert C. "Bobby" Scott (D-Va.) that would expand the number of workers who can take up to 12 weeks of job-protected leave under the Family and Medical Leave Act while drawing down wage replacement. Employees would get two-thirds of their salary replaced up to $4,000 a month, and employees would be reimbursed by the federal government. Separately, employees would also be able to take 14 days of paid sick leave, with the government reimbursing employers for part of the cost.

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Another controversial provision in the original bill would have increased the percentage of Medicaid spending borne by the federal government by eight percentage points through Sept. 30, 2021. That would be a welcome relief to states, which could see an influx of Medicaid enrollees in a time of economic crisis. But the price tag for the federal government could have been vast — stretching easily into the tens of billions of dollars.

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John Case
Harpers Ferry, WV

Enlighten Radio

Socialist Economics

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