J. Bradford DeLong's Blog, page 56

Heather Boushey: The Economist as Anesthetist: Putting th...

Heather Boushey: The Economist as Anesthetist: Putting the Economy Under and Bringing the Economy Back Up https://twitter.com/HBoushey/status/1242570985297117184: 'In response to the #coronavirus crisis, the nationwide economic shutdown has put the economy ���on ice��� so that it can be ramped back up after the health crisis is addressed. Concerns about falling into a deep and protracted #coronavirus recession are exacerbated by historically high economic inequality, which makes the United States particularly vulnerable to economic shocks. Policymakers should keep income flowing by helping small businesses pay their bills, ensuring any corporate assistance helps workers, boosting unemployment insurance, and providing #paidleave. The U.S. is one of only three industrialized countries that does not ensure every worker has access to paid time off when they are sick. We also need additional fiscal stimulus to ensure a recession does not turn into a full-scale economic depression. That means direct payments to families and more support for SNAP, Medicaid, and the Children���s Health Insurance Program. We need to remember that the economy isn���t something that happens to us���it���s the direct result of choices that policymakers make. The only entity with the power to mobilize resources and not further exacerbate rising inequality at such a large scale is the government...

#noted #2020-03-27

Claudia Sahm, Joel Slemrod, and Matthew Shapiro have the ...

Claudia Sahm, Joel Slemrod, and Matthew Shapiro have the baton on the effects of direct payments to people in cushioning the fall in aggregate demand during a recession. There are good reasons to fear that this supply shock induced recession will be different. But at the moment it is the best we got: Claudia Sahm: 'Research on payments to people in recessions... https://twitter.com/Claudia_Sahm/status/1243504127407243266 here are our past papers (with Joel Slemrod [and Matthew Shapiro]): 2008 payments: http://www-personal.umich.edu/~shapiro/papers/w15421.pdf. 2008 payments vs 2009-10 Making Work Pay tax credits: http://www-personal.umich.edu/~shapiro/papers/aejep2012.pdf. 2011-12 payroll tax cut: http://www-personal.umich.edu/~shapiro/papers/PayrollTaxes_SSS.pdf...

#noted #2020-03-27

Larry Kudlow: 100% Grifter, 100% of the Time

Shiv Ramdas : 'Reminder that this was the official US govt position 30 days ago...

#coronavirus #orangehairedbaboons #publichealth #2020-03-26

The Trump Administration���s Epic COVID-19 Failure: Project Syndicate

Project Syndicate: The Trump Administration���s Epic COVID-19 Failure https://www.project-syndicate.org/commentary/trump-covid19-testing-failure-by-j-bradford-delong-2020-03: 'Whereas many other countries afflicted by the COVID-19 pandemic have pursued mass testing, quarantines, and other measures to reduce community transmission, the Trump administration has simply dithered. Although America could still shut down for a month to overcome the crisis, the sad truth is that it won't. BERKELEY���Even to US President Donald Trump���s most ardent critics, his administration���s disastrous response to the COVID-19 pandemic has come as a surprise. Who would have guessed that Trump and his cronies would be so incompetent that merely testing for the disease would become a major bottleneck?

When the Chinese government shut down Wuhan on January 23, quarantined another 15 cities the next day, and then extended a nationwide social-distancing mandate until the end of the Lunar New Year, it was clear that the world was in trouble. By as early as January 31, Western health officials���including Anthony Fauci, the director of the US National Institute of Allergy and Infectious Diseases���had acknowledged that the coronavirus could be transmitted by people without symptoms.

As officials at the US Centers for Disease Control and other public-health bodies surely must have recognized, asymptomatic transmission means that the standard method of quarantining symptomatic travelers when they cross national (or provincial) borders is insufficient. It also means that we have known for almost two months that we were playing a long game against the virus. With its spread more or less inevitable, the primary task was always to reduce the pace of community transmission as much as possible, so that health-care systems would not be overwhelmed before a vaccine could be developed, tested, and deployed.

In the long game against a contagious virus, how to mitigate transmission is no secret. In Singapore, which has largely contained the outbreak within its borders, all travelers from abroad have been required to self-quarantine for 14 days, regardless of whether they have symptoms. In Japan, South Korea, and other countries, testing for COVID-19 has been conducted on a massive scale. These are the measures that responsible governments take. You test as many people as you can, and when you locate areas of community transmission, you lock them down. At the same time, you build a database of all those who have already developed immunity and thus may safely resume their normal routine.

In the two months since the threat of a pandemic became obvious, the United States has tested an estimated 484,062 people���South Korea has tested tens of thousands in a single day. There has been no nationwide random-sample time series constructed for the US. Many people who have shown up in health-care settings with symptoms have not been tested, and have instead been sent back into the community. Judging by the rate of growth in the number of reported cases, the US has performed worse than any other country, including Italy, Spain, and possibly even Iran.

Worse, the 80,000 cases reported in the US (as of March 26) are just the tip of the iceberg. From the 1,046 US deaths so far recorded, we can infer that 15,000-50,000 cases were active at the start of March, and that this figure will reach anywhere from 120,000 to one million in the next week. But that is just a guess; in the absence of testing, we really have no idea where we stand.

As such, the US has few options. The longer the government delays imposing a Wuhan-style lockdown, the less effective future social-distancing measures will be in the weeks and months ahead. Trump and Secretary of the Treasury Steven Mnuchin appear to want to roll the dice, placing an existential bet on America���s future by hoping that the pandemic will peter out with warmer weather. A more likely outcome is that many states��� health systems will collapse before that happens, leading to a spike in the COVID-19 mortality rate as the number of symptomatic cases soars���perhaps to as many as 50 million���in the coming months.

This potential disaster is entirely unnecessary. A lockdown could be rolled back within just three or four weeks if it is properly implemented. During that time, the public-health system could do its job: testing a random sample of the population, tracking the contacts of those with symptoms, and resupplying an already sapped health-care system while scaling up efforts to develop a vaccine and more effective treatments.

After a month or so of this, the businesses that were functioning as of March 1 could probably restart. The policy response could ensure that nobody loses their livelihood as a result of anything that happened between March 1 and May 1. In the meantime, the production and distribution of medical tests, food, utilities, and activities that do not involve human contact would represent the full extent of the economy. Absolutely everything else would be temporarily shut down.

After a month would come a Jubilee: the government would assume all debts incurred during the shutdown, sparing businesses from bankruptcy. The significant increase in government debt would then justify a highly progressive tax on income and wealth, both to reassure investors that long-term public finances are sound, and to recoup some of the unearned gains of those who have managed to profit from the lockdown.

Unfortunately, what the US should do is not what it will do. The country is desperately short of tests and other critical supplies, and the Trump administration has shown no inclination to do anything about it. Here in Berkeley, hospitals are running short of surgical masks and asking for donations. Their plight is symptomatic of an underlying condition that has inevitably aggravated the current public-health crisis.

#coronavirus #highlighted #orangehairedbaboons #publichealth #2020-03-26

Note to Self: The U.S. has now overtaken Italy in officia...

Note to Self: The U.S. has now overtaken Italy in officially-recorded coronavirus cases. That is all. We are now #2...

#coronavirus #orangehairedbaboons #publichealth #2020-03-26

It Looks as Though Very Evil People Named Kudlow, Laffer, and Moore Have Been Telling a Very Stupid President Very Misleading Things

The odds are that some very evil people���I��am looking at you, Steve Moore; I am looking at you, Larry Kudlow; I am looking at you, Art Laffer���have been telling a very stupid president very misleading things:

Donald Trump https://twitter.com/AaronBlake/status/1242941041143156736:

"[Some states] have virtually no problem or a very small problem..." "We don't have to test an entire state in the Middle West, or wherever they may be..." "A lot of those states could go back right now, and they probably will..."

The only states whose populations are less than 50% urban are Maine, Vermont, West Virginia, and Mississippi. For every case of coronavirus we see, there are likely more than 20 we do not currently see.

West Virginia's five largest cities���Charleston 47,215, Huntington 46,048, Morgantown 30,955, Parkersburg 29,675, Wheeling 26,771���might make it the only state in which they are still free from self-sustaining community transmission.

But probably not.

Probably there are about 200 cases in each of those cities, now spreading. And probably Kentucky, West Virginia, and Puerto Rico are the only states in which coronavirus is more than 15 days behind its pace and prevalence in New York. (Texas, Oklahoma, Kansas, and Virginia I see as most likely much closer to New York in time���they just have not been testing.)

https://www.icloud.com/numbers/0BQW1nH3Sk2kadzMnYOIFic_w

#coronavirus #highlighted #moralresponsibility #orqngehairedbaboons #publichealth #2020-03-25

Are all right-wing politicians and writers (save Mitt Rom...

Are all right-wing politicians and writers (save Mitt Romney) confirmed atheists? Certain that this is all here is, so you have to grab all the goodies you can with both hands right now? Is that any way to live?: Kevin Drum: Trump Says Jump; Wingers Ask How High https://www.motherjones.com/kevin-drum/2020/03/trump-says-jump-wingers-ask-how-high/: 'Modern conservative politics is remarkable. Two days ago it felt like everyone was totally on board with school closings and quarantines and social distancing. It was the new reality. Then Donald Trump announced that he didn���t really believe the experts after all and wanted to re-open the economy. Within 24 hours I swear that practically every conservative in the country was suddenly in agreement���or seriously considering it at the very least. All Trump had to do was open his mouth to produce a right-wing U-turn so violent you could almost hear the necks snapping. How has Trump done this?...

#noted #2020-03-25

Louisiana, thanks to Mardi Gras, is now the second most i...

Louisiana, thanks to Mardi Gras, is now the second most intensive coronavirus hot spot in terms of reported cases (behind NY-NJ) in America. What must it be like being John Bel Edwards right now? Did he not see what was coming when he decided to not cancel Mardi Gras on Feb 25? Or was he scared?:

Office of Governor John Bel Edwards https://gov.louisiana.gov/page/meet-the-governor: 'On January 11, 2016, John Bel Edwards was sworn in as the 56th Governor of Louisiana. In his first official act, Gov. Edwards signed an executive order to expand Medicaid coverage to 430,000 of the state���s working poor. The decision to expand Medicaid cut Louisiana���s uninsured rate from 24 percent to just 10 percent, saving lives and improving the quality of life for citizens across the state. Gov. Edwards considers this the easiest big decision he���s had to make as Governor...

Mitch Smith & al.: Coronavirus in the U.S.: Latest Map and Case Count https://www.nytimes.com/interactive/2020/us/coronavirus-us-cases.html: 'At the start of March, with large outbreaks already reported on both coasts, officials in Louisiana had not yet identified a single case of the coronavirus. But in the days since, the state has been pummeled. By Tuesday morning, 1,793 Louisianans had been infected and at least 65 had died. "Our trajectory is basically the same as what they had in Italy,��� Gov. John Bel Edwards said last week as he restricted public gatherings and urged people to stay inside...

#noted #2020-03-25

Dealing with Coronavirus: The Hunker Down and the Jubilee

The problem of dealing with the economic policy consequences of the current coronavirus public health emergency is best analyzed in two pieces: the Jubilee, and the Hunker Down.

 

Bringing the Jubilee

What is the Jubilee? It happens after we have managed to get the virus under control, so that normal public health measures of (1) testing a random panel sample periodically to understand where we are, (2) testing the symptomatic, (3) tracing and testing their contacts, and (4) hospitalizing patients with serious illnesses can manage the situation as best as it can be managed.

Note: I say ���managed��� rather than eliminated. The extent of asymptomatic transmission means that this disease will not be eliminated. It will become endemic. The task is to delay until our virologists can work their miracles. The task is to delay so that the medical care system is not overwhelmed so that we can keep mortality from the disease at 1% rather than 5% or more.

Once the virus is under control���by June 1, say���we will want every job that existed on February 1 and every business that was running on February 1 to resume. We will want no business to have received a ���bankruptcy shut down��� from the market system. We will want no worker to have a received a ���you are not wanted��� signal from the market economy.

There is a side constraint on the Jubilee: whatever policies we adopt need to be crafted to minimize unjust enrichment. Perhaps the second biggest economic policy mistake committed by the Obama administration was that its policies to deal with the great recession were both inadequate out of the fear of being perceived to contribute to unjust enrichment, and yet somehow also managed to generate a huge amount of unjust enrichment for the financial sector.

 

Hunkering Down

Then there is the question of how to manage the Hunker Down. In the Hunker Down, social distancing needs to reach a level that reduces the caseload to what the medical system can currently handle, but should not be pushed far beyond that point. Beyond that point, the benefits of generating a situation in which our ICUs and emergency rooms have excess capacity are low and the costs are high. In the Hunker Down, as many people as possible need to be given financial incentives to move into new productive occupations that provide useful goods and services without disrupting social distance. And in the hunker down, everyone needs to receive the income flow they need to pay their bills.

Managing the Hunker Down and bringing the Jubilee are two separate problems that need to be designed and implemented separately. We need to think about both. We need to keep worries about bringing the Jubilee from damaging our ability to undertake the Hunker Down. We need to keep inplementing the Hunker Down from impairing our power to bring the Jubilee.

#coronavirus #economics #highlighted #macro #politicaleconomy #publichealth #2020-03-24

Rad Geek: The Infovore���s Dilemma https://radgeek.com/gt...

Rad Geek: The Infovore���s Dilemma https://radgeek.com/gt/2020/03/23/the-infovores-dilemma/: 'In circumstances that lead to a high risk of groupthink and overreach, it���s a reason to explicitly employ evidential markers when reporting claims; it���s a reason to cite and link to specific sources for specific claims rather than simply repeating them or presenting them as What Experts Are Saying, and it���s a reason for readers to spend some time following links and footnotes where they have been made available, or to significantly discount stories that don���t bother to provide them.... In a high info-garbage environment, it is often worthwhile to deliberately limit, compartmentalize or substitute the consumption of certain kinds of low-quality or risky information. In particular, to restrict your intake of information where the persuasive power of the presentation is especially likely to outrun its real evidential import.... You are almost certainly better off reading the abstract and a paragraph or two of one scientific paper than you are reading through an explainer article attempting to gloss the conclusion of that paper while weaving it together narratively with interviews from two or three other pronouncements by experts in the field. Commentary is prone to be less valuable than reporting, and reporting less valuable than sources or data.... The sources to be most selective about will often be the ones that seem the most appealing from the standpoint of your own social and ideological starting-points. Consume thoughtful discussion and information, not too much, mostly data...

#noted #2020-03-24