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3.3 Million Americans Filed For Unemployment Last Week, Almost 5 Times The Record High

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Observers knew to brace themselves for historically bad news in Thursday’s unemployment numbers from the Department of Labor. According to data going back to 1967, no previous week had ever seen more than 695,000 people newly filing for unemployment,1 but many analysts expected this week’s number to rise into the millions.

Those fears were realized: The DOL report for the week ending March 21 saw a staggering 3.3 million people file initial unemployment insurance claims in the wake of the economic slowdown caused by the coronavirus pandemic, 4.7 times the previous high.

That eye-catching number helps represent the tangible human scale of what the coronavirus — along with the social distancing measures taken to prevent its spread — has done to the economy over the past several weeks. And it is probably actually undercounting the true number of Americans out of work in the middle of this crisis.

Policies vary from state to state, but self-employed people such as independent contractors and freelancers are typically not eligible for unemployment benefits, nor are many part-time workers, depending on the number of hours they’ve worked. (Though some states are relaxing these requirements during the coronavirus crisis.) In an economy that has increasingly shifted work away from full-time employees, the traditional measures of unemployment don’t fully describe the scope of the devastation.

And technological limitations are keeping even more out-of-work Americans from being counted in this measure. Michele Evermore, a senior policy analyst at the National Employment Law Project (a nonprofit devoted to labor and employment advocacy), told me via email that many people who have tried to file claims so far have been unable to, even if they qualify for unemployment. Evermore said state unemployment agencies weren’t set up to handle this volume of claims, and that has led to breakdowns in their filing systems. “I think they have responded admirably, but computer failures and glitches have been widely reported,” she wrote.

This implies that, on top of the current record-breaking numbers, the totals in future weeks could include a backlog of people who were unable to file their initial claims over the past few weeks. And that means more bad news to come in a statistic that is one of the bedrock indicators used by economists to gauge the state of the economy in real time.



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Economy

Strategic Review and Beyond: Rethinking Monetary Policy and Independence

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March 4, I was honored to give the Homer Jones lecture at the St. Louis Federal Reserve. Link here

Strategic Review and Beyond: Rethinking Monetary Policy and Independence.

I used the opportunity to put lots of thoughts together in condensed form, on how the Fed and other central banks should approach monetary policy, financial regulation, and ever-expanding mandates.  The link is to the html version. It will appear in prettier form in the April St. Louis Fed Review.

The conclusion

Should, and can, the Fed stimulate with strongly negative rates, immense QE asset purchases, and an arsenal of forward guidance speeches? I think not. What sort of target should it follow? A price-level target. The Fed should get out of the business of setting the level of nominal rates and target the price level directly. Price-level control will be much more effective with fiscal policy coordination. The Fed should offer a flat supply curve of interest-paying reserves, open basically to anyone, though the Treasury should take up much of that role directly. 

Going forward, the Fed and its international counterparts should disavow the temptation toward ever-expanding mandates and economic and financial dirigisme that would take them to “macroprudential” policy, discretionary credit cycle management, asset price targeting, and exploiting regulatory power to embrace social and political goals… today on climate change and inequality, perhaps tomorrow on immigration, trade restriction, China-isolation, or whatever the smart set at Davos wants to see. Only limited scope of action to areas of agreed technocratic competence will salvage the Fed’s, other central banks’, and international institutions’ useful independence.

Of course this effort arrives with spectacularly bad timing, as nobody is talking about anything but the Covid-19 virus. Still, life does go on, and I don’t see anything that is directly contradicted by current events. And perhaps you want to read and think about something other than virus crisis, and issues we will go back to thinking about when it’s all over.

In the final section (see the footnotes too) I discovered that our international institutions, BIS, IMF, FSB, and so forth were busy dragging banks into the partisan warfare over green new deal style climate policy and forced redistribution. I took a dim view of that. First of all, the idea that climate and inequality present financial risks is just fanciful. Most importantly these are political minefields that will doom independence.

I think this section holds up well. That the worthies who look in to the future and spot risks to the financial system, and drag banks into accounting for them via stress tests and regulatory accounting, found climate change and inequality the biggest run-provoking risks they could think of, not even mentioning pandemic, tells you volumes about the whole technocratic project.

If you like to watch videos, here is the actual lecture somewhat shorter than the written version.



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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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How not to lose your mind in the Covid-19 age

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here are as many responses to the Covid-19 pandemic as there are people to respond. Some have of us have children to home-school. Some of us have elderly relatives to worry about; some of us are the elderly relatives in question. Some of us have never been busier; others have already lost their jobs.

One experience is common, however: wherever the virus has started to spread, life is changing radically for almost everyone. It’s a strange and anxious time, and some of the anxiety is inevitable. For many people, however, much of the stress can be soothed with – if you will pardon the phrase – one weird trick.

First, a diagnosis. Most of us, consciously or not, have a long list of things to do. At the virus and the lockdowns have spread, many of the items on the to-do list have simply evaporated. At the same time, a swarm of new tasks have appeared, multiplying by the day: everything from the small-yet-unfamiliar (“get toilet paper” and “claim refund on cancelled holiday”) to the huge-and-intimidating (“organise an inspiring home-school curriculum” or “find a new job”).

The change is so fast and comprehensive that for most of us it is unprecedented. Even a divorce or an international relocation is more gradual. The death of a spouse might be the only experience that comes close. No wonder that even those of us who are safe and well and feel loved and financially secure find ourselves reeling at the scale of it all.

To the extent that the problem is that the to-do list is unrecognisable, the solution is oddly simple: get the to-list back in order. Here’s how.

Get a piece of paper. Make a list of all the projects that are on your mind. David Allen, author of the cult productivity manual Getting Things Done, defines a project as “any multistep outcome that can be completed within a year”. So, yes: anything from trying to source your weekly groceries to publishing a book.

That list should have three kinds of projects on it.

First, there are the old projects that make no sense in the new world. For those that can be mothballed until next year, write them down and file them away. Others will disappear forever. Say your goodbyes. Some part of your subconscious may have been clinging on, and I’m going to guess that ten seconds of acknowledging that the project has been obliterated will save on a vague sense of unease in the long run.

Second, there are the existing projects, some of which have become more complicated in the mid-pandemic world. Things that you might previously have done on automatic may now require a little thought. Again, a few moments with a pen and paper will often tell you all you need to know: what’s changed? What do I now need to do? What, specifically, is my next action? Write it down.

Third, there are brand new projects. For me, for example, I need to rewrite the introduction to my forthcoming book (‘How To Make The World Add Up, since you were wondering). It’s going to seem mighty strange without coronavirus references in it. Many of us need to devote more than a little attention to the sudden appearance of our children at home. Some of us need to hunt for new work; others, for a better home-office set-up. Many of us are now volunteering to look after vulnerable neighbours.  In each case, the drill is the same: sketch out the project, ask yourself what the very next step is, and write it down.

Occasionally, you may encounter something that’s on your mind – the fate of western civilisation, for example, or the fact that the health service desperately needs more ventilators and more protective equipment. For my family, it’s an elderly relative, suffering from dementia, in a locked-down nursing home. We can’t visit him. He can’t communicate on the phone or comprehend a video chat. There is, for now, literally nothing we can do but wait and hope. Acknowledging that fact – that there is no action to be taken – is itself a useful step.

I won’t pretend that in this frightening time, working through your to do list in a systematic way will resolve all anxieties. It won’t. But you may be surprised at how much mental energy it saves – and at the feeling of relief as all these confusing and barely-acknowledged new responsibilities take shape and feel more under your control.

Or so it seems to me. Good luck, and keep safe.

 

Oh – and in case it wasn’t obvious, this week’s Book of the Week is David Allen’s superb Getting Things Done.

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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