Monday, September 21, 2020

Are Red State Governors Getting Their People Killed to Help Donald Trump’s Re-election Chances? [feedly]

The kind of Baker post I love.

Are Red State Governors Getting Their People Killed to Help Donald Trump's Re-election Chances?

This is an incredibly ghoulish question that would be absurd to ask in normal times. But these are not normal times. We know Donald Trump has staffed the top levels of his administration with people who unhesitatingly put Donald Trump's political prospects above the well-being of the people. It is certainly plausible that Republican governors have similar priorities.

A simple test for the governors is to look at their positive test rates for the coronavirus. Test rates are a good measure of how serious the governors are in trying to bring the pandemic under control. While they can take measures to limit the actual spread, such as longer and stronger lockdowns and mask requirements, many factors determining the spread are outside their control.

For example, New York, New Jersey, and other states in the Northeast were hard hit early because they had a large number of international travelers. More recently, North Dakota has seen a huge spike in infections because Kristi Noem, the governor of neighboring South Dakota, thought it was clever to have a huge week long motorcycle rally in the middle of a pandemic.

However, positive rates are largely under the control of the state. If the governor makes more of an effort to find positive cases, the state will have a lower positive rate. In states with high positive rates, governors have been less concerned about tracking the spread of the pandemic.

This is a matter of life and death for tens of thousands of people, since if a person knows they are infected, they can take steps to protect their co-workers, friends, and family. If they don't know, they will likely get many of these people infected as well.

It is not hard to imagine that Republican governors would deliberately limit testing so that they find fewer cases. Donald Trump explicitly saidat a campaign rally that he told his staff to "slow the testing down." He subsequently insisted that he was not joking.

In this context, it is perfectly reasonable to ask whether there is evidence that Republican governors have decided to deliberately slow testing, knowing that it will mean that more people in their states get sick and die, just so that Donald Trump will have fewer reported cases.

Here is the story. The chart shows the ten states with the highest positive rates and the ten states with the lowest rates. (The data are seven-day averages, given for September 20th, by the John Hopkins University Coronavirus Resource Center.)    




Eight of the ten states with the highest positive rates have Republican governors. The exceptions are Wisconsin and Kansas. Wisconsin stands out as being the worst state by this measure.  This could be the fault of its Democratic governor, Tony Evers, but the Republican controlled legislature may also be a factor. The legislature has repeatedly taken steps to thwart Evers' effort to contain the virus, as has the state's Supreme Court.

We see pretty much the opposite picture when we look at the states with low positive rates, although the relationship is not as strong. Six of the ten states have Democratic leaders. The four exceptions are Phil Scott in Vermont, which has the second lowest rate, Charlie Baker, in Massachusetts, which has the third lowest positive rate, Chris Sununu in New Hampshire, with seventh lowest rate,  and Mike Dunleavy in Alaska, which scrapes in with the tenth lowest positive rate.

The sharp contrast, with blue states having very low positive rates, and red states having very high positive rates, does not prove that Republican governors are deliberately restricting testing. However, it is certainly consistent with this story and should be the basis for some serious questioning of these governors.

(Correction: this post has been corrected to reflect the fact that Kansas has a Democratic governor and Vermont and New Hampshire have Republican governors.)

The post Are Red State Governors Getting Their People Killed to Help Donald Trump's Re-election Chances? appeared first on Center for Economic and Policy Research.

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Coal’s Last Refuge Crumbles With China’s Renewables Plan [feedly]

Coal's Last Refuge Crumbles With China's Renewables Plan

Coal-fired power has been dying everywhere except where it poses the greatest threat.

Draw a line down the world around the longitude of the Nile. The region to the west — encompassing Europe, Africa and the Americas — has seen coal consumption drop by a quarter over the past decade. In the U.S., demand fell 43% on an energy-equivalent basis between 2009 and 2019, according to BP Plc's latest statistical review of energy. In Europe, it slipped 23%. The U.K., cradle of the coal-fired industrial revolution, saw a 79% decline that has left its few remaining thermal plants barely operating since spring. 

The trouble is what's happening east of the line. Consumption there rose by a quarter over the same period, and since the region already accounted for about 70% of coal demand, that has driven the global tally up by nearly 10%. If Asia — and in particular China, which accounts for about half the world's coal consumption — can't break the habit, devastating climate change will be unavoidable.

Image without a caption

On that front, good news may finally be emerging. Beijing is lifting its energy-transition ambitions in its 14th five-year plan, running from 2021 to 2025, people familiar with the matter have told Bloomberg News. A plan to derive 20% of its primary energy from non-fossil fuels may be brought forward by five years from 2030 and the share of coal in the energy mix cut to 52% by the same date from 57.5% this year, according to the report.

You need to decode those numbers a little to see why such apparently modest changes are a big deal. "Primary energy" is a concept that's a little baffling to non-specialists, including not just the power delivered as electricity but the stuff that's burned in vehicle engines and industrial boilers. It also makes no adjustment for the fact that the relatively low efficiency of turbines means only about 40% of the primary energy that goes into a thermal power station as fuel comes out as electricity. 

Adjust the figures according to those rules of thumb, and things come more into focus. Electricity accounts for about 48% of China's final energy mix. If 20% is going to come from non-fossil fuels, that means about 42% of China's grid in 2025 will be renewable- or nuclear-powered, up from about 32% at present.

Image without a caption

Assuming current rates of electricity demand growth of about 5% or so a year continue, that's going to require a blistering build-out of wind, solar, nuclear and hydro-electric generation — especially the first two. At present, China has about 241 gigawatts of wind turbines, 180GW of utility-scale solar and 86GW of rooftop photovoltaic panels. The government's target would require 80GW to 115GW of new solar to be installed every year, as well as 36GW to 45GW of wind, according to a note from Industrial Securities Co. No wonder shares of Chinese renewables companies have been surging as reports of the plans have spread.

China already has more than a third of the world's wind and solar generation capacity. Meeting those levels of installations would almost double its installed wind base in five years, and leave solar facilities more than three times the size of the current utility-scale fleet.

The most important issue is what that would do to its coal plants. As we've written, China shows signs of being more addicted to solid fuel than even to oil. Unlike petroleum, there are abundant domestic reserves of coal at a time when Beijing is increasingly mistrustful of foreign countries.


Building coal-fired power plants is also a time-honored way for provincial authorities to juice the economy, however much central government may prefer to decarbonize the energy mix. China has about 250GW of new coal power plants under development, greater than the coal fleets of the U.S. or India, Global Energy Monitor, a group backing the phaseout of fossil fuels, wrote in a June report.

If China does succeed in deploying wind and solar at the rates estimated by Industrial Securities, all that extra coal power will be for nothing. Renewables already appear to enjoy priority over fossil fuels in China where grid access is available, thanks to their lower costs. Assuming that they run the same percentage of the time as current facilities, that scale of building should be sufficient to accommodate almost all electricity demand growth by 2025, even if consumption from the grid increases by 30% over last year's levels.

That's not enough on its own. China produces more greenhouse gases than the U.S. and Europe put together. Like those regions, it needs to be decommissioning its coal-fired power fleet, not just holding current levels of generation constant — especially because renewables now deliver electricity that's cheaper as well as less polluting.


Still, the prospect of a juggernaut of Chinese solid fuel destroying the world's climate goals — a very real prospect, given some of the pro-coal noises that have emerged while the five-year plan has been under development — is looking more remote. China has been the world's most important redoubt of lingering coal demand. As those defenses crumble, the prospect of keeping the world's emissions within more manageable limits looks a little brighter.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

David Fickling is a Bloomberg Opinion columnist covering commodities, as well as industrial and consumer companies. He has been a reporter for Bloomberg News, Dow Jones, the Wall Street Journal, the Financial Times and the Guardian.

For more articles like this, please visit us at

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Friday, September 18, 2020

Enlighten Radio:Talkin Socialism: All Around the World

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Wednesday, September 16, 2020

Chinese Communist Party Wants Stronger Role in Private Sector [feedly]

Chinese Communist Party Wants Stronger Role in Private Sector

China's Communist Party is looking to strengthen its leadership and control of the country's growing private sector and its employees by extending the work of the United Front further into the business community.

The party called on the United Front to improve the government's leadership role in the nation's private sector, according to guidelines issued by the General Office of the CPC's Central Committee on Tuesday. The front is an umbrella organization that aims to increase the party's influence and control both domestically and internationally.

The move aims to address emerging challenges and risks as the scale of private enterprises increases and private businesspeople have more diverse values and interests. The policy will "strengthen ideological guidance" and "create a core group of private sector leaders who can be relied upon during critical times."

Read more: China Steps Up Communist Party Control in State-Owned Firms

While it's unclear what the new policy will mean for China's millions of private firms, it comes as the state and party are pushing for greater control and influence over more of the economy. That increasingly unclear dividing line between public and private sector is one of the factors behind rising tensions with the U.S. and other states, with ostensibly private firms such as Huawei Technologies Co. seen overseas as tools of Chinese state power.

"The document shows China is trying to mobilize more resources around the national strategy amid the economic slowdown caused by the pandemic and the deterioration of diplomatic and trade relations with the US," said Yue Su, China economist at the Economist Intelligence Unit, based in Shanghai. "The authorities will give priority to companies that assist in realizing policy goals when allocating financial and policy resources," she said.

Private businesses account for 60% of China's economic output and create 80% of urban jobs, but their position has been difficult in recent years, with the perception that the government under President Xi Jinping favored the state sector. In addition, they have borne the brunt of the U.S.-China trade war as many are export-oriented manufacturers. The Covid-19 outbreak and economic slump have added to their woes this year.

Read more: China's Talk of 'Two Unwaverings' Reveals Private Sector Fears

Notable Details

  • This change is in response to profound flux in international and domestic situations
  • The CPC will support and serve private businesses to help drive their high-quality growth
  • The work of the United Front should cover all private businesspeople including investors, managers, stakeholders, and people from Hong Kong and Macau who invest in the mainland
  • The United Front will build a database and talent pool of private businesspeople

— With assistance by Lucille Liu, Yinan Zhao, and Kari Soo Lindberg

(Updates details in third paragraph, analyst's comment in fourth paragraph.)

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State and local governments still desperately need federal fiscal aid to prevent harmful austerity measures [feedly]

State and local governments still desperately need federal fiscal aid to prevent harmful austerity measures

In March and April of this year, the economy lost an unprecedented 22.1 million jobs. From May to August, 10.6 million of these jobs returned. But nobody should take excess comfort in the fast pace of job growth in those months. It was widely expected that the first half of jobs lost due to the COVID-19-driven shutdowns were going to be relatively easy to get back. But even with the jobs gained since April, the economy remains 11.5 million jobs below its pre-pandemic level in February, and the low-hanging fruit have been largely plucked. One of the key factors that will radically slow the pace of job growth in coming months is the looming state and local fiscal crisis. Using data from the recovery from the Great Recession, we simply show how state and local austerity and job loss can be a lagging indicator, putting severe downward pressure on growth even years after the official recession ends. We find:

  • From the beginning of the Great Recession in January 2008 to the trough of state and local government employment, 566,000 state and local government jobs were lost.
  • The state and local employment trough occurred in July 2013, more than five-and-a-half years after the official start of the Great Recession.
  • During the official recession from January 2008 to June 2009, state and local governments actually added 142,000 jobs.
  • In the first year of recovery (from June 2009 to June 2010), the state and local sector lost 215,000 jobs. The 73,000 jobs lots between December 2007 and June 2010 constituted just 0.3% of state and local employment. Even a year after the recession officially ended, cuts in the state and local sector were greatly softened by the substantial federal fiscal aid included in the American Relief and Recovery Act (ARRA).
  • In the second year of recovery (from June 2010 to June 2011), the state and local sector lost 368,000 jobs. Job losses continued through July 2013, with another 250,000 jobs lost.
  • State and local governments have already lost jobs during this contraction and are recovering slower than the private sector. Without federal aid now, more jobs—in both the public and private sectors—will be lost down the line.

These data are presented below in Figure A. Figure B presents job-losses for state and local and private sector jobs, both indexed to their December 2007 business cycle peak. The upshot of this analysis for today's policymakers is clear: the severe blow to state and local budgets caused by the coronavirus shock is going to drag on growth for years to come absent bold action from federal policymakers. In the case of the Great Recession, the combined effect of job cuts and cuts to other state and local spending delayed a full recovery to pre-Great Recession unemployment rates by more than four years. The lessons could not be clearer: without substantial federal aid to state and local governments, and soon, our near-term economic future will be substantially worse.

Figure A
Figure B

Too many policymakers have become far too complacent about the economy's near-term. Between the pulling back of enhanced unemployment insurance (UI) benefits and the near-total inaction on aiding state and local governments' fiscal situation, the next few months will see the economy suffer the effects of having sailed over a pronounced fiscal cliff. So far, the macroeconomic effects of this fiscal cliff have been blunted by the fact that the enormous increase in household savings undertaken during the COVID-19-driven shutdowns has been unwinding. Private, household spending has been the main engine lifting the economy out of the deep well it was in during March and April. It is highly unlikely that this private savings alone can be drawn on enough to neutralize the coming effect of state and local contractions.

Unlike the Great Recession, state and local government employment has already suffered enormously during the contraction phase of this business cycle, seeing 1.5 million in losses in March, April, and May (some surely related to the sudden shutdown of school systems). But this employment is already lagging private sector growth in the recovery as well. While the private sector has recovered nearly half of the jobs lost in the early months of the pandemic, state and local government jobs have likely only regained about a quarter of their losses. Looking at not-seasonally-adjusted data, employment in these sectors in August 2020 is still 1.1 million below employment in in the same month in 2019. Figure C displays the over-the-year change in state and local government employment as of July—the most recent month available.

Figure C

These losses cause particular harm to women and Black workers, since they are disproportionately represented in the state and local government workforce. Any impending state and local budget cuts will fall heavily on their shoulders.

Gutting state and local spending during the current recovery would be particularly perverse given how crucial the health and education sectors will be in living with COVID-19 over the next year. School systems will need to spend more, not less, to effectively and safely teach children in the face of hybrid or online learning. Federal dysfunction in getting the virus under control has put huge burdens for doing the right things on virus suppression on state and local governments.

The response to COVID-19 from policymakers has been a repeated series of getting caught behind the curve. Some of this was likely inevitable in dealing with an unforeseen pandemic. But failing to provide state and local aid would be a completely foreseen and unforced blunder, one that will greatly hamper recovery and cause unnecessary suffering.

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Saturday, September 12, 2020

States Expect More Damaging Cuts Without More Federal Aid [feedly]

States Expect More Damaging Cuts Without More Federal Aid

State policymakers will soon begin addressing shortfalls that have already arisen in their current budgets even as they prepare next year's budgets, and many states are bracing to make deeper, more damaging cuts than they've already imposed if they don't receive additional federal fiscal aid.

State and local tax revenues have plummeted as people have less income, shop less, and reduce their economic activity in other ways due to the coronavirus and the worst economic downturn since the Great Depression. For example, state sales tax collections in the second quarter of 2020 (April through June) dropped over 14 percent compared to the same quarter a year ago; in a typical year, they'd grow 3 to 5 percent.

Six states (Massachusetts, New Jersey, Pennsylvania, Rhode Island, South Carolina, and Vermont) have delayed adopting a full budget for fiscal year 2021 (which started on July 1 in most states), and the fiscal year hasn't started in Alabama, Michigan, and the District of Columbia. But many states that have adopted their budgets assumed much higher revenues than they now expect and didn't fully account for recent cost increases due to the pandemic. These and other states will undoubtedly revisit their budgets as COVID-19's budgetary toll and the likelihood of more federal aid become clearer. For example:

  • California's just-adopted budget includes $11 billion in spending cuts and payment delays that will take effect unless the state receives substantial new federal fiscal aid.
  • Colorado, which closed a $3 billion shortfall in its current budget through spending cuts and other measures, faces more cuts next year. "For those of you who haven't heard the news flash, next year is going to be worse," said Rep. Daneya Esgar, chair of the Joint Budget Committee (JBC). "We just did a lot of one-time budget tricks that we did just because we had to — and those will not be at our disposal next year," said Senator Rachel Zenzinger, a JBC member.
  • Connecticut Governor Ned Lamont called on agencies to identify at least 10 percent in cuts in the next biennial budget.
  • FloridGovernor Ron DeSantis recently asked agencies to identify at least 8.5 percent in further cuts in the current budget, beyond the $1 billion DeSantis already cut by veto.
  • Hawai'i Governor David Ige said, "I'm just concerned that [federal policymakers] are not going to provide additional funds," warning that the state will have to impose pay cuts or furloughs for public workers unless it gets more federal help or more flexibility to use CARES Act funding to close its budget hole. U.S. Senator Brian Schatz noted, "As we try to get through this, both in terms of public health and the economy, there's just no way we can handle the pandemic if state and county governments are forced to do layoffs in the fall."
  • Michigan's budget director, Chris Kolb, noted that projected revenues over this fiscal year and next have fallen by $4.2 billion since the coronavirus hit. "These are large revenue losses that will require difficult decisions without additional federal aid, especially in fiscal year 2022," he said. "Tough decisions will still be required in the next five weeks."
  • Texas Governor Greg Abbott called on agencies to propose a 5 percent cut from their current two-year budget, which produced harmful proposals such as a $133 million cut in health services related to women's health, family violence prevention, and services for individuals with traumatic brain injuries.
  • Wyoming Governor Mark Gordon called on agencies to propose cuts of up to 30 percent from their current budget to offset crashing revenues due to the recession and falling revenue from natural resource extraction. "The cuts we've talked about here are getting close to the bone," he said. "In some cases we really are talking about the bone. We will talk about some very precious programs and some very valuable people. I don't look forward to any of this."

Some states have already made deep cuts to offset huge revenue shortfalls triggered by COVID-19 and the recession. The initial cuts of spring and early summer caused sizable harm through layoffs, furloughs, and cuts to vital public services. States and localities already have laid off or furloughed over a million workers, far more than in the Great Recession of a decade ago and its aftermath. Without a new round of flexible federal aid, the cuts will only grow, harming families, communities, and businesses and delaying the economic recovery.

States will try to shield K-12 public schools and health services, but it's nearly impossible to protect them entirely over time, since education and health make up more than half of state spending nationwide. Indeed, several states have already slashed crucial health programs, such as substance use treatment and prevention.

As the President and Congress negotiate a new relief package, the House-approved Heroes Act offers a sound starting point. It includes close to $900 billon in grants to states, localities, territories, and tribal governments and would boost the share of Medicaid costs that the federal government pays. More fiscal aid is essential for communities nationwide, especially those hit hardest by the unprecedented events of recent months.

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Medicaid Enrollment Continues to Rise [feedly]

Medicaid Enrollment Continues to Rise

Medicaid enrollment rose 8.4 percent from February to July as millions of Americans lost their jobs or experienced sharp income losses due to the COVID-19 recession. That's in the 30 states for which we have data, which if we extrapolate nationwide would mean about 6 million more people enrolled in Medicaid — and likely more, given continued increases in August in states with available data. The growing need for Medicaid coincides with a large and growing state budget crisis, which has already prompted some states to cut Medicaid and will likely prompt more to do so unless the federal government provides more aid to states.

Before the pandemic and recession, Medicaid enrollment was flat or falling in most states. It has risen steadily since then, as the figure below shows.

Medicaid Enrollment Rising Steadily in COVID-19 Recession

These data include groups for whom enrollment is generally not responsive to economic conditions, such as elderly people and people with disabilities who are enrolled in both Medicare and Medicaid. Enrollment increases among adults covered through the Affordable Care Act's Medicaid expansion have been much larger — 12.7 percent through July in the 17 states with expansion enrollment data — with Medicaid providing a safety net as millions of adults have lost jobs or income.

These Medicaid enrollment figures are based on preliminary estimates from state websites, as of September 8. Complete enrollment figures for all states from the Centers for Medicare & Medicaid Services (CMS) are available only through April, but the state-reported data to which we have access largely match the CMS data for the months where both are available.

We included further details and sources in an earlier analysis, which this blog post updates. These are the states for which we now have data, and through which month:

  • August: Alaska, Arizona, Arkansas, Iowa, Kentucky, Maine, Minnesota, New Mexico, New York, North Carolina, Oregon, Virginia, and West Virginia;
  • July: Colorado, Connecticut, Florida, Illinois, Indiana, Kansas, Maryland, Mississippi, Missouri, Nevada, New Hampshire, New Jersey, Oklahoma, South Dakota, Tennessee, Washington, and Wisconsin;
  • June: Massachusetts, Montana, Ohio, Texas, and Utah;
  • May: Michigan.

Other data confirm that Medicaid enrollment has grown sharply. Second-quarter financial statements from the major health insurance companies serving Medicaid enrollees — Aetna, Anthem, Centene, Molina, and UnitedHealthcare — all show a significant rise in Medicaid enrollment. And most of these companies note that they anticipate further Medicaid enrollment growth as the full impact of job losses takes hold.

Medicaid enrollment increases typically lag increases in people receiving unemployment insurance or SNAP (food stamp) benefits, because people losing jobs or income often focus on their most urgent needs (like food and rent) first, and because people don't always lose job-based coverage immediately upon losing a job. During the current crisis, Medicaid enrollment may lag even further, because COVID-19 has persuaded people to defer non-urgent medical visits, which are often an impetus to enroll in coverage, especially since providers can help people apply. That means that Medicaid enrollment will likely continue to grow in the months ahead.

These increases are almost certainly mitigating the large spikes in uninsurance rates that would otherwise occur as millions lose job-based coverage or can't afford private plan premiums due to the recession. But enrollment growth is also adding to the pressure on state budgets. As states begin to exhaust their options to defer budget cuts, they will likely make deeper and more widespread cuts to Medicaid and other health programs unless federal policymakers provide more funds and maintain strong protections for Medicaid enrollees.

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