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Playing Scrooge in “The Best Economy Ever”

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@TBPInvictus here:

On Presidents Day, it is noteworthy that the current President feels compelled to cap the salaries of those employees who work for the government, who perform duties in the national interest, and  operate essential services for the benefit of the nation.

Salary increases limited to 1% annually. That ought to teach the Deep State!

Read Trump’s February 11 tweet below and try to reconcile it with the Feb 10 excerpt from a White House transmittal to Congress the day before.

Trump tells us — constantly and incessantly — that he has created the “best economy in history.” Let’s ignore the fact that he inherited  a robust GFC recovery from Obama, and then temporarily goosed it with an unfunded trillion dollar tax cut that never got us over 3% GDP on a sustainable basis, and which has since worn off, leaving us at a 2% or so GDP.

While we’re all enjoying the greatest economy ever, could he possibly – unilaterally, no less – cut the proposed pay increases (to 1.0%) for the nation’s Federal employees?

I don’t profess to have any other answer than that the man is a stone-cold hypocrite and liar. I’m open to other possibilities.

The previous day, February 10, 2020 (emphasis mine):

I am transmitting an alternative plan for pay adjustments for civilian Federal employees covered by the General Schedule and certain other pay systems in January 2021.

Title 5, United States Code, authorizes me to implement alternative plans for pay adjustments for civilian Federal employees covered by the General Schedule and certain other pay systems if, because of “national emergency or serious economic conditions affecting the general welfare,” I view the increases that would otherwise take effect as inappropriate.

[…]

We must maintain efforts to put our Nation on a fiscally sustainable course; Federal agency budgets cannot sustain such increases. Accordingly, I have determined that it is appropriate to exercise my authority to set alternative pay adjustments for 2021 pursuant to 5 U.S.C. 5303(b) and 5 U.S.C. 5304a.

Specifically, I have determined that for 2021 the across-the-board base pay increase will be limited to 1.0 percent and locality pay percentages will remain at their 2020 levels. This alternative pay plan decision will not materially affect our ability to attract and retain a well‑qualified Federal workforce.

This is rank hypocrisy. I don’t know who else is flagging this, but:

 

Greatest. Economy. Ever.

The post Playing Scrooge in “The Best Economy Ever” appeared first on The Big Picture.



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From Torsten Slok’s excellent email links:

Jonathan Dingel and Brent Neiman: The places hardest hit by the virus are also the places where most jobs can be done at home.

Also the highest wage occupations are easiest to do at home. Good for GDP, bad for people with low wages.

New York Fed Weekly Economic Index

But it’s not just a fall, it’s also a radical shift in demand. A list of lots and lots of job openings, in all the places you’d guess. The instinct to just pay people to sit at home has downsides.

LA times via Marginal Revolution

They were ready to roll whenever disaster struck California: three 200-bed mobile hospitals that could be deployed to the scene of a crisis on flatbed trucks and provide advanced medical care to the injured and sick within 72 hours.

Each hospital would be the size of a football field, with a surgery ward, intensive care unit and X-ray equipment. Medical response teams would also have access to a massive stockpile of emergency supplies: 50 million N95 respirators, 2,400 portable ventilators and kits to set up 21,000 additional patient beds wherever they were needed.

…in 2011, the administration of a fiscally minded Democratic governor, Jerry Brown, who came into office facing a $26-billion deficit. And so, that year, the state cut off the money to store and maintain the stockpile of supplies and the mobile hospitals. 

… The annual savings for eliminating both programs? No more than $5.8 million per year, according to state budget records, a tiny fraction of the 2011 budget, which totaled $129 billion.

My emphasis. 50 million is a lot. A lesson in what government can do, and I hope will do next time.

Not to rub it in, but Gov. Brown did want to spend $80,000 million on a high speed train, all to lower the average global temperature by about 0.0001 (?) degree in the year 2100. Which is not a personal observation so much as an observation about the probabilities of various events that all of our elite intelligentsia assumed.

Amit Seru and Luigi Zingales want to save capitalism from the cares act. Besides the prospect of direct bailouts to big business, the Fed’s actions are truly gargantuan and under reported. Vastly oversimplifying,  the Fed is prepared to lend about $4 trillion dollars of newly printed money (really newly printed government debt) directly to businesses, and to backstop the entire non-bank financial system. Good or bad? Let us hope it doesn’t come to that.



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Cases and Deaths from Coronavirus Doubling Every Three Days Is Very Bad News Indeed

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I confess I am positively unmanned by the every-three-days doubling of reported cases and deaths here in the United States. I had thought that we would see true cases doubling every seven days. And back when reported cases started doubling every three days, I was encouraged, because I thought it meant that we were catching up on testing, and so getting closer to detecting the bulk of the symptomatic cases.

But now it looks like that was wrong: reported cases were doubling every three days because true cases were doubling every three days—that is what deaths tell us was happening to true cases up until three weeks ago. The lack of case curve-bending makes me think that testing is not improving. It makes me think that reported cases are doubling every three days because true cases are doubling every three days.

That means that the Trump administration has only 40% as much time to get its ass in gear as I thought it did.

And that means the chances it will are very very low indeed:

I must confess it had never occurred to me back when China shut down Wuhan that we would simply not test everyone who presented with symptoms—and then backtrace their contacts. It is really looking now as though China—even with its authoritarian blindness fumbling of the intitial response (see Zeynep Tufekci: https://www.theatlantic.com/technology/archive/2020/02/coronavirus-and-blindness-authoritarianism/606922/ is going to be studied in the future as a positive model of public health in the 21st century, while the Trump Administration’s reaction—currently on track as the worst in the world in handling coronavirus <https://www.evernote.com/l/AAFzPq9AJoFHFr_nrTPi1QyseD8WSAe0y00B/image.png>—will be studied in the future as a negative example: Brad DeLong: The Trump Administration’s Epic COVID-19 Failure https://www.bradford-delong.com/2020/03/the-trump-administrations-epic-covid-19-failure-project-syndicate.html: '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…


#coronavirus #highlighted #orangehairedbaboons #publichealth #2020-03-27



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Why it’s too tempting to believe good news about the coronavirus

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Wishful thinking is a powerful thing. When I read about a new disease-modelling study from the University of Oxford, I desperately wanted to believe. It is the most prominent exploration of the “tip-of-the-iceberg hypothesis”, which suggests that the majority of coronavirus infections are so mild as to have passed unrecorded by the authorities and perhaps even un­noticed by the people infected.

If true, many of us — perhaps most of us in Europe — have already had the virus and probably developed some degree of immunity. If true, the lockdowns have served a valuable purpose in easing an overwhelming strain on intensive care units, but they will soon become unnecessary. If true.

But is it true? If it is, it stands in stark contrast to the far grimmer modelling from a group at Imperial College London, which concluded that if the epidemic was not aggressively contained, half a million people would die in the UK — and more than 2m in the US. Models such as this one helped to persuade the British government to follow much of continental Europe in putting the economy into a coma.

The differing perspectives are made possible by the fact that the data we have so far are not very good. Testing has been sporadic — in some places, shambolic — and everyone agrees that large numbers of cases never reach official notice. We do have solid statistics about deaths, and as the epidemiologist Adam Kucharski, author of The Rules of Contagion, observes, a wide variety of scenarios are consistent with the deaths we’ve seen so far. Perhaps Covid-19 is uncommon and deadly; perhaps it is ubiquitous and kills only a tiny proportion of those it affects. Deaths alone cannot tell us.

This uncertainty is unnerving. John Ioannidis, an iconoclastic epidemiologist, wrote on March 17 that Covid-19 “might be a one-in-a-century evidence fiasco”. Prof Ioannidis’s argument is that some infections are being missed, and we have little idea how many. Therefore we have little idea how deadly Covid-19 really is.

He speculates that the fatality rate could plausibly lie between one in 100 and one in 2,000 cases. Either way, it is dangerous; but the difference is vast. And if the scale of our ignorance about coronavirus may seem hard to swallow, bear in mind that the fatality rate for the H1N1 swine flu pandemic in 2009 was still being debated years later.

Prof Ioannidis has form: 15 years ago he published a study with the title “Why Most Published Research Findings Are False”. That claim seemed outrageous at the time, but subsequent efforts to reproduce famous experiments in psychology have revealed that he was on to something important. We know less than we think.

But we are not completely ignorant. Alongside the death total, there are other clues to the truth. For example, thousands of people were evacuated from Wuhan city in late January and February and most of them were tested. A few tested positive and several were indeed symptom-free, but not the large majority that the Oxford version of the tip-of-the-iceberg hypothesis would imply.

The entire population of the town of Vò in Italy was repeatedly tested and, while half of the positive cases were asymptomatic, that is still much less than the Oxford model might lead us to expect.

So while it is possible that most of us could have been infected without ever knowing — and that herd immunity is within easy reach — it is not likely. That may explain why neutral experts have responded to the Oxford study with caution, and some concern that it might provoke a reckless response from individuals or policymakers.

So, what now? First: stay indoors if you want to save many lives and prevent health systems from being overwhelmed. The bitter experience of Italy and Spain demonstrates the importance of flattening the peak of the epidemic. That remains true even if, as we might hope, the epidemic is much milder and more widespread than we currently believe. It might have been tempting to wait and gather more evidence — but faced with an exponentially rising pile of corpses, “wait and see” is not an option.

Second: health systems should expand capacity, buying more ventilators and more protective equipment for doctors and nurses. In all but the most optimistic scenarios we will need them now, we will need them later in the year and we will need them from time to time in the future. This crisis is teaching us that we should have had more spare capacity all along, despite the cost.

Third: test, test, test — and not only using the current tests to detect infection, but new ones for antibodies that should show whether people have already had the virus and have developed some degree of immunity. Sunetra Gupta, a professor on the Oxford team, says that such tests may start to produce results in a matter of days.

The epidemiologists are doing their best, but they are not omniscient. They need facts with which to work. Gathering those facts systematically is one of many urgent tasks ahead of us.

 

Written for and first published in the Financial Times on 27 March 2020.

My NEW book The Next Fifty Things That Made the Modern Economy is out in the UK in May and available to pre-order; please consider doing so online or at your local bookshop – pre-orders help other people find the book and are a huge help.

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